Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX, Inc. Relating to Temporarily Increasing the Number of Additional Quarterly Option Series in Exchange-Traded Fund Options, 70398-70400 [E8-27578]

Download as PDF 70398 Federal Register / Vol. 73, No. 225 / Thursday, November 20, 2008 / Notices indicate that in addition to there being ten (10) FXCMMs for each currency pair listed for trading by the Exchange, there shall also be ten (10) FXCMMs for each foreign currency index option the Exchange may list in the future and that the Exchange will conduct one (1) FXCMM trading license auction per each currency pair and per each foreign currency index option. Finally, members will be limited to holding no more than one (1) FXCMM trading license per currency pair and no more than one (1) FXCMM trading license per foreign currency index option. 2. Statutory Basis The basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) that an exchange have rules that are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. In particular, the proposed rule change will strengthen the Exchange’s foreign currency products by providing them with permanent market making support. A permanent allocation of foreign currency products will also allow FXPMMs to create and execute a longterm strategy to promote growth and trading in the foreign currency product that has been allocated to it. B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. rwilkins on PROD1PC63 with NOTICES C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action This proposed rule change does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and, by its terms, does not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if VerDate Aug<31>2005 18:26 Nov 19, 2008 Jkt 217001 consistent with the protection of investors and the public interest. The Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing the proposed rule change as required by Rule 19b–4(f)(6).9 For the foregoing reasons, the Exchange believes the proposed rule filing qualifies for immediate effectiveness as a ‘‘noncontroversial’’ rule change under paragraph (f)(6) of Rule 19b–4 of the Act. The proposed rule change does not make any substantive changes to the current rule other than to make allocations of FX Options to market makers permanent. In doing so, the proposed rule change will strengthen the Exchange’s foreign currency products to the benefit of all market participants. For the foregoing reason, the Exchange believes the proposed rule change is non-controversial, does not raise any new, unique or substantive issues, and is beneficial for competitive purposes and to promote a free and open market for the benefit of investors. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–ISE–2008–83 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–ISE–2008–83. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–ISE– 2008–83 and should be submitted on or before December 11, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Acting Secretary. [FR Doc. E8–27597 Filed 11–19–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58943; File No. SR–Phlx– 2008–78] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX, Inc. Relating to Temporarily Increasing the Number of Additional Quarterly Option Series in Exchange-Traded Fund Options November 13, 2008. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on November 12, 2008, NASDAQ OMX PHLX, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 9 17 PO 00000 CFR 240.19b–4(f)(6). Frm 00090 Fmt 4703 Sfmt 4703 E:\FR\FM\20NON1.SGM 20NON1 70399 Federal Register / Vol. 73, No. 225 / Thursday, November 20, 2008 / Notices rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange, pursuant to Section 19(b)(1) of the Act 3 and Rule 19b–4 thereunder,4 proposes to amend Phlx Rule 1012, Series of Options Open for Trading, to temporarily increase the number of additional Quarterly Option Series (‘‘QOS’’) in exchange-traded fund (‘‘ETF’’) options from sixty (60) to one hundred (100) that may be added by the Exchange pursuant to Phlx’s QOS pilot program (the ‘‘Pilot Program’’) 5. The text of the proposed rule change is available on the Exchange’s Web site at http://www.phlx.com/regulatory/ reg_rulefilings.aspx. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose This proposed rule change is based on a recent Chicago Board Options Exchange, Incorporated (‘‘CBOE’’) filing.6 The purpose of this proposed rule change is to temporarily increase the number of additional QOS in ETF options from sixty (60) to one hundred (100) that may be added by the Exchange. To effect this change, the Exchange is proposing to add new subparagraph (h) to Commentary .08 of its Rule 1012. Because of the current, unprecedented market conditions, the Exchange has received requests from market participants to add lower priced strikes for QOS in the Energy Select Sector SPDR (‘‘XLE’’), the DIAMONDS Trust, Series 1 (‘‘DIA’’) and the Standard and Poor’s Depositary Receipts/SPDRs (‘‘SPY’’). For example, for December 2008 expiration, there is demand for strikes (a) ranging from $20 up through and including $40 for XLE, (b) ranging from $60 up through and including $75 for DIA, and (c) ranging from $74 up through and including $85 for SPY. These strikes are much lower than those ETF 10/27/08 IWM .................................................................................. QQQQ .............................................................................. SPY .................................................................................. DIA ................................................................................... XLE .................................................................................. The additional series will enable the Exchange to list in-demand, lower priced strikes. It is expected that other options exchanges that have adopted the QOS Pilot Program will submit similar proposals.7 The Exchange represents that it has the necessary systems capacity to support the new options series that will result from this proposal. Further, as proposed, the Exchange notes that these rwilkins on PROD1PC63 with NOTICES 3 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 5 Phlx’s Pilot Program was established in 2007, see Securities Exchange Act Release No. 55301 (February 15, 2007), 72 FR 8238 (February 23, 2007)(SR–Phlx–2007–08), and extended through July 10, 2009, see Securities Exchange Act Release No. 58039 (June 26, 2008), 73 FR 38284 (July 3, 4 17 VerDate Aug<31>2005 18:26 Nov 19, 2008 Jkt 217001 44.86 28.69 83.95 80.26 40.86 10/13/08 currently listed for which there is open interest. However, under current Commentary .08 to Phlx Rule 1012, the Exchange cannot honor these requests because the maximum number of additional series, sixty (60), has already been listed. The Exchange is therefore seeking to temporarily increase to one hundred (100) the number of additional QOS that may be added. The increase of additional series would be permitted immediately for expiration months currently listed and for expiration months added throughout the last quarter of 2008, including the new expiration month added after December 2008 expiration. The Exchange believes that this proposal is reasonable and will allow for more efficient risk management. The Exchange believes this proposal will facilitate the functioning of the Exchange’s market and will not harm investors or the public interest. The Exchange believes that user demand and the recent downward price movements in the underlying ETFs warrant a temporary increase in the number of strikes for all QOS in ETF options. Currently, the Exchange list QOS in five ETF options: (1) iShares Russell 2000Index Fund (‘‘IWM’’); (2) Nasdaq-100 Index Tracking Stock (‘‘QQQQ’’); (3) SPY; (4) DIA; and (5) XLE. The chart below provides the historical closing prices of these ETFs over the past couple of months: 10/6/08 56.98 35.13 101.35 95.03 50.55 9/30/08 59.72 34.86 104.72 99.90 54.89 68.00 38.91 115.99 108.36 63.30 8/29/08 73.87 46.12 128.79 115.45 74.65 7/31/08 71.32 45.46 126.83 113.70 74.40 series would temporarily become part of the pilot program and will be considered by the Commission when the Exchange seeks to renew or make permanent the Pilot Program in the future. In addition, the Exchange states that in the event that current market volatility continues, it may seek to continue (through a rule filing) the time period during which the additional series proposed by this filing may be added. 2. Statutory Basis 2008)(SR–Phlx–2008–44). The American Stock Exchange LLC (‘‘AMEX’’), the Boston Stock Exchange, Inc. (‘‘BSE’’), the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’), the International Stock Exchange LLC (‘‘ISE’’), the Nasdaq Stock Market LLC (‘‘NOM’’), and NYSEArca, Inc. (‘‘NYSEArca,’’ formerly the Pacific Stock Exchange, Inc. or ‘‘PCX’’) have similar pilot programs (the pilot programs, together with Phlx’s Pilot Program, are together known as the ‘‘QOS Pilot Programs’’). 6 See Securities Exchange Act Release No. 58887 (October 30, 2008), 73 FR 66083 (November 6, 2008)(SR–CBOE–2008–111). 7 See e.g., Securities Exchange Act Release No. 58926 (November 10, 2008) (SR–ISE–2008–82). PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 Because the rule proposal is responsive to the current, unprecedented market conditions, is limited in scope as to QOS in ETF options and as to time, and because the additional new series can be added without presenting capacity problems, the Exchange believes the rule proposal is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange and, in E:\FR\FM\20NON1.SGM 20NON1 70400 Federal Register / Vol. 73, No. 225 / Thursday, November 20, 2008 / Notices particular, the requirements of Section 6(b) of the Act.8 Specifically, the Exchange believes that the proposed rule change is consistent with the Section 6(b)(5) of the Act 9 requirements that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts and, in general, to protect investors and the public interest. Therefore, the Commission designates the proposal operative upon filing. At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; or (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b–4(f)(6) thereunder.11 The Exchange has asked the Commission to waive the operative delay to permit the proposed rule change to become operative prior to the 30th day after filing. The Commission has determined that waiving the 30-day operative delay of the Exchange’s proposal is consistent with the protection of investors and the public interest because such waiver will enable the Exchange to better meet customer demand in light of recent increased volatility in the marketplace.12 8 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to provide the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Commission deems this requirement to be met. 12 For purposes only of waiving the 30-day operative delay, the Commission has considered the rwilkins on PROD1PC63 with NOTICES 9 15 VerDate Aug<31>2005 18:26 Nov 19, 2008 Jkt 217001 Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–Phlx–2008–78 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–Phlx–2008–78. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR–Phlx–2008–78 and should be submitted on or before December 11, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Acting Secretary. [FR Doc. E8–27578 Filed 11–19–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58953; File No. SR–NSX– 2008–20] Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend NSX Rule 11.23(a) Which Defines the Phrase ‘‘Riskless Principal Transaction’’ November 14, 2008. Pursuant to section 19(b)(3)(A) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on November 13, 2008, National Stock Exchange, Inc. (‘‘NSX’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change, as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comment on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend NSX Rule 11.23(a), which defines the phrase ‘‘riskless principal transaction,’’ to make clear that the definition includes transactions where an ETP Holder receives orders that may be executed in whole or in part in other market venues. As explained in further detail below, this amendment will clarify the scope of the exception to NSX’s Customer Priority rule contained in Rule 12.6(d), and will more closely align NSX’s rules with those used by other self-regulatory organizations (‘‘SROs’’). 13 17 proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\20NON1.SGM 20NON1

Agencies

[Federal Register Volume 73, Number 225 (Thursday, November 20, 2008)]
[Notices]
[Pages 70398-70400]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-27578]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58943; File No. SR-Phlx-2008-78]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX, Inc. Relating 
to Temporarily Increasing the Number of Additional Quarterly Option 
Series in Exchange-Traded Fund Options

November 13, 2008.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on November 12, 2008, NASDAQ OMX PHLX, Inc. (``Phlx'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed

[[Page 70399]]

rule change as described in Items I and II below, which Items have been 
prepared by the Exchange. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange, pursuant to Section 19(b)(1) of the Act \3\ and Rule 
19b-4 thereunder,\4\ proposes to amend Phlx Rule 1012, Series of 
Options Open for Trading, to temporarily increase the number of 
additional Quarterly Option Series (``QOS'') in exchange-traded fund 
(``ETF'') options from sixty (60) to one hundred (100) that may be 
added by the Exchange pursuant to Phlx's QOS pilot program (the ``Pilot 
Program'') \5\.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78s(b)(1).
    \4\ 17 CFR 240.19b-4.
    \5\ Phlx's Pilot Program was established in 2007, see Securities 
Exchange Act Release No. 55301 (February 15, 2007), 72 FR 8238 
(February 23, 2007)(SR-Phlx-2007-08), and extended through July 10, 
2009, see Securities Exchange Act Release No. 58039 (June 26, 2008), 
73 FR 38284 (July 3, 2008)(SR-Phlx-2008-44). The American Stock 
Exchange LLC (``AMEX''), the Boston Stock Exchange, Inc. (``BSE''), 
the Chicago Board Options Exchange, Incorporated (``CBOE''), the 
International Stock Exchange LLC (``ISE''), the Nasdaq Stock Market 
LLC (``NOM''), and NYSEArca, Inc. (``NYSEArca,'' formerly the 
Pacific Stock Exchange, Inc. or ``PCX'') have similar pilot programs 
(the pilot programs, together with Phlx's Pilot Program, are 
together known as the ``QOS Pilot Programs'').
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.phlx.com/regulatory/reg_rulefilings.aspx.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    This proposed rule change is based on a recent Chicago Board 
Options Exchange, Incorporated (``CBOE'') filing.\6\
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 58887 (October 30, 
2008), 73 FR 66083 (November 6, 2008)(SR-CBOE-2008-111).
---------------------------------------------------------------------------

    The purpose of this proposed rule change is to temporarily increase 
the number of additional QOS in ETF options from sixty (60) to one 
hundred (100) that may be added by the Exchange. To effect this change, 
the Exchange is proposing to add new subparagraph (h) to Commentary .08 
of its Rule 1012.
    Because of the current, unprecedented market conditions, the 
Exchange has received requests from market participants to add lower 
priced strikes for QOS in the Energy Select Sector SPDR (``XLE''), the 
DIAMONDS Trust, Series 1 (``DIA'') and the Standard and Poor's 
Depositary Receipts/SPDRs (``SPY''). For example, for December 2008 
expiration, there is demand for strikes (a) ranging from $20 up through 
and including $40 for XLE, (b) ranging from $60 up through and 
including $75 for DIA, and (c) ranging from $74 up through and 
including $85 for SPY. These strikes are much lower than those 
currently listed for which there is open interest.
    However, under current Commentary .08 to Phlx Rule 1012, the 
Exchange cannot honor these requests because the maximum number of 
additional series, sixty (60), has already been listed. The Exchange is 
therefore seeking to temporarily increase to one hundred (100) the 
number of additional QOS that may be added. The increase of additional 
series would be permitted immediately for expiration months currently 
listed and for expiration months added throughout the last quarter of 
2008, including the new expiration month added after December 2008 
expiration. The Exchange believes that this proposal is reasonable and 
will allow for more efficient risk management. The Exchange believes 
this proposal will facilitate the functioning of the Exchange's market 
and will not harm investors or the public interest.
    The Exchange believes that user demand and the recent downward 
price movements in the underlying ETFs warrant a temporary increase in 
the number of strikes for all QOS in ETF options. Currently, the 
Exchange list QOS in five ETF options: (1) iShares Russell 2000Index 
Fund (``IWM''); (2) Nasdaq-100 Index Tracking Stock (``QQQQ''); (3) 
SPY; (4) DIA; and (5)
XLE. The chart below provides the historical closing prices of these 
ETFs over the past couple of months:

----------------------------------------------------------------------------------------------------------------
                ETF                   10/27/08     10/13/08     10/6/08      9/30/08      8/29/08      7/31/08
----------------------------------------------------------------------------------------------------------------
IWM...............................        44.86        56.98        59.72        68.00        73.87        71.32
QQQQ..............................        28.69        35.13        34.86        38.91        46.12        45.46
SPY...............................        83.95       101.35       104.72       115.99       128.79       126.83
DIA...............................        80.26        95.03        99.90       108.36       115.45       113.70
XLE...............................        40.86        50.55        54.89        63.30        74.65        74.40
----------------------------------------------------------------------------------------------------------------

    The additional series will enable the Exchange to list in-demand, 
lower priced strikes.
    It is expected that other options exchanges that have adopted the 
QOS Pilot Program will submit similar proposals.\7\
---------------------------------------------------------------------------

    \7\ See e.g., Securities Exchange Act Release No. 58926 
(November 10, 2008) (SR-ISE-2008-82).
---------------------------------------------------------------------------

    The Exchange represents that it has the necessary systems capacity 
to support the new options series that will result from this proposal. 
Further, as proposed, the Exchange notes that these series would 
temporarily become part of the pilot program and will be considered by 
the Commission when the Exchange seeks to renew or make permanent the 
Pilot Program in the future. In addition, the Exchange states that in 
the event that current market volatility continues, it may seek to 
continue (through a rule filing) the time period during which the 
additional series proposed by this filing may be added.
2. Statutory Basis
    Because the rule proposal is responsive to the current, 
unprecedented market conditions, is limited in scope as to QOS in ETF 
options and as to time, and because the additional new series can be 
added without presenting capacity problems, the Exchange believes the 
rule proposal is consistent with the Act and the rules and regulations 
thereunder applicable to a national securities exchange and, in

[[Page 70400]]

particular, the requirements of Section 6(b) of the Act.\8\ 
Specifically, the Exchange believes that the proposed rule change is 
consistent with the Section 6(b)(5) of the Act \9\ requirements that 
the rules of an exchange be designed to promote just and equitable 
principles of trade, to prevent fraudulent and manipulative acts and, 
in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing rule does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; or (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) 
thereunder.\11\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to provide the Commission 
with written notice of its intent to file the proposed rule change, 
along with a brief description and text of the proposed rule change, 
at least five business days prior to the date of filing of the 
proposed rule change, or such shorter time as designated by the 
Commission. The Commission deems this requirement to be met.
---------------------------------------------------------------------------

    The Exchange has asked the Commission to waive the operative delay 
to permit the proposed rule change to become operative prior to the 
30th day after filing. The Commission has determined that waiving the 
30-day operative delay of the Exchange's proposal is consistent with 
the protection of investors and the public interest because such waiver 
will enable the Exchange to better meet customer demand in light of 
recent increased volatility in the marketplace.\12\ Therefore, the 
Commission designates the proposal operative upon filing.
---------------------------------------------------------------------------

    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-Phlx-2008-78 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-Phlx-2008-78. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File No. SR-Phlx-2008-78 and should be 
submitted on or before December 11, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-27578 Filed 11-19-08; 8:45 am]
BILLING CODE 8011-01-P