Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Margin Requirements for Foreign Currency Options, 5706-5707 [E9-1978]
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5706
Federal Register / Vol. 74, No. 19 / Friday, January 30, 2009 / Notices
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 (https://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 ISE. 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–ISE–2009–03 and should be
submitted on or before February 20,
2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–2061 Filed 1–29–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59283; File No. SR–Phlx–
2009–01]
Self-Regulatory Organizations;
NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Margin Requirements for Foreign
Currency Options
mstockstill on PROD1PC66 with NOTICES
January 23, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1, and Rule 19b–4 2 thereunder,
notice is hereby given that on January
15, 2009, NASDAQ OMX PHLX, Inc.
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
16 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Nov<24>2008
16:54 Jan 29, 2009
Jkt 217001
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III, below, which Items have been
substantially prepared by the Exchange.
Phlx has filed the proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6) thereunder,4
which renders the proposed rule change
effective upon filing with the
Commission. 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 5 and Rule 19b–4
thereunder,6 proposes to amend Phlx
Rule 721, Proper and Adequate Margin,
to add margin requirements for U.S.
dollar-settled foreign currency options
(‘‘FCOs’’).7
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.nasdaqtrader.com/
micro.aspx?id=PHLXRulefilings.
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
The purpose of the proposed rule
change is to add margin requirements
for U.S. dollar-settled FCOs (‘‘FCO
margin requirements’’ or ‘‘FCO margin’’)
in Phlx Rule 721(c).
The FCO margin requirements
proposed are substantially similar to
prior Commentary .16 to Phlx Rule 722,
which was removed in a recent filing to
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
5 15 U.S.C. 78s(b)(1).
6 17 CFR 240.19b–4.
7 FCOs are currently traded on the Exchange
under the name World Currency Options.
4 17
PO 00000
Frm 00073
Fmt 4703
Sfmt 4703
simplify Phlx’s margin rules.8 The FCO
margin requirements are also
substantially similar to current ISE Rule
1202(d).
Accordingly, under proposed Phlx
Rule 721(c), the Exchange will calculate
the margin requirement for customers
that assume short FCO positions by
adding a percentage of the current
market value of the underlying foreign
currency contract to the option
premium price less an adjustment for
the out-of-the-money amount of the
option contract. On a quarterly calendar
basis, the Exchange will review five-day
price changes over the preceding threeyear period for each underlying
currency and set the add-on percentage
at a level which would have covered
those price changes at least 97.5% of the
time (the ‘‘confidence level’’).
If the results of subsequent reviews
show that the current margin level
provides a confidence level below 97%,
the Exchange will increase the margin
requirement for that individual currency
up to a 98% confidence level. If the
confidence level is between 97% and
97.5%, the margin level will remain the
same but will be subject to monthly
follow-up reviews until the confidence
level exceeds 97.5% for two consecutive
months. If, during the course of the
monthly follow-up reviews, the
confidence level drops below 97%, the
margin level will be increased to a 98%
level and if it exceeds 97.5% for two
consecutive months, the currency will
be taken off monthly reviews and will
be put back on the quarterly review
cycle. If the currency exceeds 98.5%,
the margin level will be reduced to a
98% confidence level during the most
recent 3 year period.
Finally, in order to account for large
price movements outside the
established margin level, if the quarterly
review shows that the currency had a
price movement, either positive or
negative, greater than two times the
margin level during the most recent 3
year period, the margin requirement
will be set at a level to meet a 99%
confidence level (‘‘Extreme Outlier
Test’’).9 These parameters are identical
to prior Commentary .16 to Phlx Rule
722.
8 See Exchange Act Release No. 58340 (August 11,
2008), 73 FR 48268 (August 18, 2008) (SR–Phlx–
2007–33). Pursuant to this filing, Rule 721 was
amended to add subsection (b) requiring Exchange
members to make an election to be bound by either
CBOE or NYSE margin rules, and Phlx Rule 722
was shortened.
9 The Exchange will inform its members and the
public of the margin levels for each currency option
immediately following the quarterly reviews
described in Rule 721(c).
E:\FR\FM\30JAN1.SGM
30JAN1
Federal Register / Vol. 74, No. 19 / Friday, January 30, 2009 / Notices
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 10 in general, and furthers the
objectives of Section 6(b)(5) of the Act 11
in particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest. The
Exchange believes that the proposal is
consistent with these obligations
because clarification of the Exchange’s
FCO margin rules should benefit
investors and traders and be in the
public interest.
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.
II. Date of Effectiveness of the Proposed
Rule Change and Timing for
Commission Action
Because the forgoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days after the date of
the filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act 12 and Rule 19b–4(f)(6)
thereunder.13
A proposed rule change filed under
Rule 19b–4(f)(6) normally may not
become operative prior to 30 days after
the date of filing. However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
10 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
12 15 U.S.C. 78s(b)(3)(A).
13 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
Exchange has fulfilled this requirement.
mstockstill on PROD1PC66 with NOTICES
11 15
VerDate Nov<24>2008
16:54 Jan 29, 2009
Jkt 217001
investors and the public interest.14 Phlx
requests that the Commission waive the
30-day operative delay. The proposed
rule change is substantially similar to an
ISE rule relating to margin for foreign
currency options.15 The Commission
believes that this proposed rule change
does not raise any new, unique or
substantive issues from those raised in
the approved ISE filing. The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest because such waiver will
allow the Phlx to apply FCO margin
rules that are similar to those of other
options exchanges.16 Therefore, the
Commission designates the proposal
operative upon filing.
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–Phlx–2009–01 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–Phlx–2009–01. 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
14 17
CFR 240.19b–4(f)(6).
Act. Release No. 55575 (April 3,
2007), 72 FR 17963 (April 10, 2007) (SR–ISE–2006–
59).
16 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition and capital formation. See
15 U.S.C. 78c(f).
15 Exchange
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
5707
post all comments on the Commission’s
Internet Web site (https://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 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–Phlx–2009–01 and should
be submitted on or before February 20,
2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–1978 Filed 1–29–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Release No. 34–59290; File No. SR–NYSE–
2009–05]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Introduce a
Pilot Program for NYSE Trades
January 23, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on January
16, 2009, the New York Stock Exchange,
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by NYSE. NYSE has
designated the proposed rule change as
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\30JAN1.SGM
30JAN1
]]>Agencies
[Federal Register Volume 74, Number 19 (Friday, January 30, 2009)]
[Notices]
[Pages 5706-5707]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-1978]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59283; File No. SR-Phlx-2009-01]
Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Margin Requirements for Foreign Currency Options
January 23, 2009.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby given
that on January 15, 2009, NASDAQ OMX PHLX, Inc. (``Phlx'' or
``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 substantially prepared by the
Exchange. Phlx has filed the proposal as a ``non-controversial''
proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and
Rule 19b-4(f)(6) thereunder,\4\ which renders the proposed rule change
effective upon filing with the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
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 \5\ and Rule
19b-4 thereunder,\6\ proposes to amend Phlx Rule 721, Proper and
Adequate Margin, to add margin requirements for U.S. dollar-settled
foreign currency options (``FCOs'').\7\
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78s(b)(1).
\6\ 17 CFR 240.19b-4.
\7\ FCOs are currently traded on the Exchange under the name
World Currency Options.
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
Web site at https://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings.
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
The purpose of the proposed rule change is to add margin
requirements for U.S. dollar-settled FCOs (``FCO margin requirements''
or ``FCO margin'') in Phlx Rule 721(c).
The FCO margin requirements proposed are substantially similar to
prior Commentary .16 to Phlx Rule 722, which was removed in a recent
filing to simplify Phlx's margin rules.\8\ The FCO margin requirements
are also substantially similar to current ISE Rule 1202(d).
---------------------------------------------------------------------------
\8\ See Exchange Act Release No. 58340 (August 11, 2008), 73 FR
48268 (August 18, 2008) (SR-Phlx-2007-33). Pursuant to this filing,
Rule 721 was amended to add subsection (b) requiring Exchange
members to make an election to be bound by either CBOE or NYSE
margin rules, and Phlx Rule 722 was shortened.
---------------------------------------------------------------------------
Accordingly, under proposed Phlx Rule 721(c), the Exchange will
calculate the margin requirement for customers that assume short FCO
positions by adding a percentage of the current market value of the
underlying foreign currency contract to the option premium price less
an adjustment for the out-of-the-money amount of the option contract.
On a quarterly calendar basis, the Exchange will review five-day price
changes over the preceding three-year period for each underlying
currency and set the add-on percentage at a level which would have
covered those price changes at least 97.5% of the time (the
``confidence level'').
If the results of subsequent reviews show that the current margin
level provides a confidence level below 97%, the Exchange will increase
the margin requirement for that individual currency up to a 98%
confidence level. If the confidence level is between 97% and 97.5%, the
margin level will remain the same but will be subject to monthly
follow-up reviews until the confidence level exceeds 97.5% for two
consecutive months. If, during the course of the monthly follow-up
reviews, the confidence level drops below 97%, the margin level will be
increased to a 98% level and if it exceeds 97.5% for two consecutive
months, the currency will be taken off monthly reviews and will be put
back on the quarterly review cycle. If the currency exceeds 98.5%, the
margin level will be reduced to a 98% confidence level during the most
recent 3 year period.
Finally, in order to account for large price movements outside the
established margin level, if the quarterly review shows that the
currency had a price movement, either positive or negative, greater
than two times the margin level during the most recent 3 year period,
the margin requirement will be set at a level to meet a 99% confidence
level (``Extreme Outlier Test'').\9\ These parameters are identical to
prior Commentary .16 to Phlx Rule 722.
---------------------------------------------------------------------------
\9\ The Exchange will inform its members and the public of the
margin levels for each currency option immediately following the
quarterly reviews described in Rule 721(c).
---------------------------------------------------------------------------
[[Page 5707]]
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \10\ in general, and furthers the objectives of Section
6(b)(5) of the Act \11\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest. The Exchange believes that the proposal is consistent with
these obligations because clarification of the Exchange's FCO margin
rules should benefit investors and traders and be in the public
interest.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 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.
II. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the forgoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) thereunder.\13\
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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 Exchange has fulfilled this requirement.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest.\14\ Phlx requests that the
Commission waive the 30-day operative delay. The proposed rule change
is substantially similar to an ISE rule relating to margin for foreign
currency options.\15\ The Commission believes that this proposed rule
change does not raise any new, unique or substantive issues from those
raised in the approved ISE filing. The Commission believes that waiving
the 30-day operative delay is consistent with the protection of
investors and the public interest because such waiver will allow the
Phlx to apply FCO margin rules that are similar to those of other
options exchanges.\16\ Therefore, the Commission designates the
proposal operative upon filing.
---------------------------------------------------------------------------
\14\ 17 CFR 240.19b-4(f)(6).
\15\ Exchange Act. Release No. 55575 (April 3, 2007), 72 FR
17963 (April 10, 2007) (SR-ISE-2006-59).
\16\ For purposes only of waiving the operative delay for this
proposal, 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 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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-Phlx-2009-01 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2009-01. 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 (https://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 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-Phlx-2009-01 and
should be submitted on or before February 20, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------
\17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-1978 Filed 1-29-09; 8:45 am]
BILLING CODE 8011-01-P
