Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Extension of a Pilot Program Concerning Non Firm Quote Conditions, 59275-59277 [E9-27464]

Download as PDF Federal Register / Vol. 74, No. 220 / Tuesday, November 17, 2009 / Notices 59275 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 FINRA. 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 publicly available. All submissions should refer to File Number SR–FINRA–2009–061 and should be submitted on or before December 8, 2009. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–27463 Filed 11–16–09; 8:45 am] 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–FINRA–2009–061 on the subject line. SECURITIES AND EXCHANGE COMMISSION 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. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments were neither solicited nor received. mstockstill on DSKH9S0YB1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) by order approve such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. 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–FINRA–2009–061. 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,19 all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written 19 The text of the proposed rule change is available on the Commission’s Web site at https:// www.sec.gov/. VerDate Nov<24>2008 20:50 Nov 16, 2009 Jkt 220001 BILLING CODE 8011–01–P [Release No. 34–60951; File No. SR–Phlx– 2009–95] Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Extension of a Pilot Program Concerning Non Firm Quote Conditions November 6, 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 October 29, 2009, NASDAQ OMX PHLX, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘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 comments on the proposed rule change from interested persons. 20 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00163 Fmt 4703 Sfmt 4703 The Exchange proposes to extend, until September 30, 2010, a pilot program under which the Exchange disseminates option quotations with a price of $0.00 or $200,000, and a size of one contract, when the Exchange’s disseminated size on one side of the market is exhausted (the ‘‘pilot’’). The current pilot is scheduled to expire November 30, 2009. The text of the proposed rule change is available on the Exchange’s Web site at https://www.nasdaqtrader.com/ micro.aspx?id=PHLXRulefilings, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 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 extend the pilot through September 30, 2010. In June 2009, the Exchange added several significant enhancements to its automated options trading platform (known as PHLX XL II), and adopted rules to reflect those enhancements.3 As part of the system enhancements, the Exchange proposed to disseminate a quote condition of ‘‘non-firm’’ on a single bid quotation or offer quotation when the size associated with such bid or offer was exhausted on the Exchange and there were no new quotations submitted on the exhausted side of the market in the affected series. The nonexhausted side of the Exchange’s disseminated quotation would remain firm up to its disseminated size. Currently, however, while the Options 3 See Securities Exchange Act Release No. 59995 (May 28, 2009), 74 FR 26750 (June 3, 2009) (SR– Phlx–2009–32). E:\FR\FM\17NON1.SGM 17NON1 59276 Federal Register / Vol. 74, No. 220 / Tuesday, November 17, 2009 / Notices mstockstill on DSKH9S0YB1PROD with NOTICES Price Reporting Authority (‘‘OPRA’’) disseminates option quotations for which both sides of the quotation are marked ‘‘non-firm,’’ OPRA currently does not disseminate a ‘‘non-firm’’ condition for one side of a quotation while the other side of the quotation remains firm. Accordingly, the Exchange proposed, for a pilot period scheduled to expire November 30, 2009, to disseminate quotations in such a circumstance with (i) a bid price of $0.00, with a size of one contract if the remaining size is a seller, or (ii) an offer price of $200,000, with a size of one contract if the remaining size is a buyer. The relevant sections of the following rules are effective for a pilot period scheduled to expire November 30, 2009: Proposed Rules 1082(a)(ii)(B)(3)(b); 1082(a)(ii)(B)(3)(g)(iv)(A)(3); 1082(a)(ii)(B)(3)(g)(iv)(A)(4); 1082(a)(ii)(B)(3)(g)(iv)(B)(2); 1082(a)(ii)(B)(3)(g)(iv)(C); 1082(a)(ii)(B)(4)(b); and 1082(a)(ii)(B)(4)(d)(iv)(E). The Exchange proposes to amend these rules to reflect the extension of the pilot through September 30, 2010. In its proposed rule change adopting the system enhancements and rules, the Exchange represented that it would work with OPRA during the pilot period to explore the development of a ‘‘nonfirm’’ condition for one side of a quotation while the other side of the quotation remains firm. The Exchange represents that it has worked with OPRA during the pilot period and currently OPRA does not support the ‘‘non-firm’’ condition for one side of a quotation. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 4 in general, and furthers the objectives of Section 6(b)(5) of the Act 5 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, by ensuring the orderly continuity of the pilot. In the situations described herein where the Exchange disseminates quotations with a price of $0.00 or $200,000 and a size of one contract, the Exchange is relieved of its obligations under the SEC Quote Rule.6 The fact that there is no quote from any Phlx XL 4 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 6 17 CFR 242.602. 5 15 VerDate Nov<24>2008 20:50 Nov 16, 2009 Jkt 220001 II participant is an unusual market condition which requires the Phlx XL II system to disseminate a market with a price of $0.00 or $200,000 to indicate that there is a non-firm condition on the side of the market that is exhausted. Currently, OPRA disseminates option quotations for which both sides of the quotation are marked ‘‘non-firm.’’ OPRA currently does not disseminate a ‘‘nonfirm’’ condition for one side of a quotation while the other side of the quotation remains firm. The current rule and functionality is simply a method for indicating that one side of the Phlx disseminated market is firm while the other side is in a non-firm condition. This unusual market condition renders the Exchange incapable of collecting, processing, and making available to vendors the requisite data for a particular option series in a manner that accurately reflects the current state of the market on the Exchange. The $0.00 or $200,000 quote with a size of one contract will notify all ‘‘specified persons’’ of the determination that one side of the quotation is in a non-firm condition. Accordingly, in this circumstance, the Exchange is relieved of its obligations under Rules 602(a)(1) 7 and (2) 8 under the Act.9 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 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, it has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b– 4(f)(6) 11 thereunder. 7 17 CFR 242.602(a)(1). CFR 242.602(a)(2). 9 17 CFR 242.602(a)(3). 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give 8 17 PO 00000 Frm 00164 Fmt 4703 Sfmt 4703 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–2009–95 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–2009–95. 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 the Commission written notice of its intent to file 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. Phlx has satisfied this requirement. E:\FR\FM\17NON1.SGM 17NON1 Federal Register / Vol. 74, No. 220 / Tuesday, November 17, 2009 / Notices 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–2009–95 and should be submitted on or before December 8, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–27464 Filed 11–16–09; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Strike Price Intervals of $0.50 for Options on Stocks Trading at or Below $3.00 on the NASDAQ Options Market November 6, 2009. 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 3, 2009, The NASDAQ Stock Market LLC (‘‘Nasdaq’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed 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. mstockstill on DSKH9S0YB1PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Nasdaq is filing a proposal for the NASDAQ Options Market (‘‘NOM’’ or ‘‘Exchange’’) to modify the Supplementary Material of Chapter IV, Section 6 of the Exchange’s rules, in order to establish strike price intervals of $0.50, beginning at $1, for certain options classes whose underlying security closed at or below $3 in its primary market on the previous trading day. The text of the proposed rule change is available from Nasdaq’s Web site at https://nasdaq.cchwallstreet.com, at CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 20:50 Nov 16, 2009 1. Purpose The purpose of the proposed rule change is to expand the ability of investors to hedge risks associated with stocks trading at or under $3. Currently, Supplementary Material .01 to Chapter IV, Section 6 provides that the interval of strike prices of series of options on individual stocks may be $2.50 or greater where the strike price is $25 or less. Additionally, Supplementary Material .02 to Section 6 allows the Exchange to establish $1 strike price intervals (the ‘‘$1 Strike Program’’) on options classes overlying no more than fifty-five individual stocks designated by the Exchange. In order to be eligible for selection into the $1 Strike Program, the underlying stock must close below $50 in its primary market on the previous trading day. If selected for the $1 Strike Program, the Exchange may list strike prices at $1 intervals from $1 to $50, but no $1 strike price may be listed that is greater than $5 from the underlying stock’s closing price in its primary market on the previous day. The Exchange may also list $1 strikes on any other option class designated by another securities exchange that employs a similar $1 Strike Program to its own rules.3 The Exchange is restricted from listing any series that would result in strike prices being within $0.50 of an existing $2.50 strike price. The Exchange is now proposing to add new section .05 to the Supplementary Material to Chapter IV, Section 6, to establish strike prices of $1, $1.50, $2, $2.50, $3 and $3.50 for 3 The Exchange may not list long-term option series (‘‘LEAPS’’) at $1 strike price intervals for any class selected for the Program. 1 15 VerDate Nov<24>2008 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 self-regulatory organization 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 those 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 parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change [Release No. 34–60952; File No. SR– NASDAQ–2009–099] 12 17 Nasdaq’s principal office, and at the Commission’s Public Reference Room. Jkt 220001 PO 00000 Frm 00165 Fmt 4703 Sfmt 4703 59277 certain stocks that trade at or under $3.00.4 The listing of these strike prices will be limited to options classes whose underlying security closed at or below $3 in its primary market on the previous trading day, and which have national average daily volume that equals or exceeds 1,000 contracts per day as determined by The Options Clearing Corporation during the preceding three calendar months. The listing of $0.50 strike prices would be limited to options classes overlying no more than 5 individual stocks (the ‘‘$0.50 Strike Program’’) as specifically designated by the Exchange. The Exchange would also be able to list $0.50 strike prices on any other option classes if those classes were specifically designated by other securities exchanges that employed a similar $0.50 Strike Program under their respective rules. Currently, the Exchange may list options on stocks trading at $3 at strike prices of $1, $2, $3, $4, $5, $6, $7 and $8 if they are designated to participate in the $1 Strike Program.5 If these stocks have not been selected for the Exchange’s $1 Strike Program, the Exchange may list strike prices of $2.50, $5, $7.50 and so forth as provided in Supplementary Material .01, but not strike prices of $1, $2, $3, $4, $6, $7 and $8.6 The Exchange is now proposing to amend the Article IV, Chapter 6 Supplementary Material by adding new section .05 to list strike prices on options on a number of qualifying stocks that trade at or under $3.00, not simply those stocks also participating in the $1 Strike Program, in finer intervals of $0.50, beginning at $1 up to $3.50. Thus, a qualifying stock trading at $3 would have option strike prices established not just at $2.50, $5.00, $7.50 and so forth (for stocks not in the Exchange’s $1 Strike Program) or just at $1, $2, $3, $4, $5, $6, $7 and $8 (for stocks designated to participate in the $1 Strike Program), but rather at strike 4 The Exchange recently amended Chapter IV, Section 4 (Securities Traded on NOM) of its options rules to eliminate the $3 market price per share requirement for continued approval for an underlying security. The amendment eliminated the prohibition against listing additional series or options on an underlying security at any time when the price per share of such underlying security is less than $3. See Securities Exchange Act Release No. 59485 (March 2, 2009), 74 FR 10324 (March 10, 2009) (SR–Nasdaq–2009–16). 5 Additionally, market participants may be able to trade $2.50 strikes on the same option at another exchange, if that exchange has elected not to select the stock for participation in its own similar $1 Strike Program. 6 Again, market participants may also be able to trade the option at $1 strike price intervals on other exchanges, if those exchanges have selected the stock for participation in their own similar $1 Strike Program. E:\FR\FM\17NON1.SGM 17NON1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 74, Number 220 (Tuesday, November 17, 2009)]
[Notices]
[Pages 59275-59277]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-27464]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60951; File No. SR-Phlx-2009-95]


Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
the Extension of a Pilot Program Concerning Non Firm Quote Conditions

November 6, 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 October 29, 2009, NASDAQ OMX PHLX, Inc. (``Phlx'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``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 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 proposes to extend, until September 30, 2010, a pilot 
program under which the Exchange disseminates option quotations with a 
price of $0.00 or $200,000, and a size of one contract, when the 
Exchange's disseminated size on one side of the market is exhausted 
(the ``pilot''). The current pilot is scheduled to expire November 30, 
2009.
    The text of the proposed rule change is available on the Exchange's 
Web site at https://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings, 
at the principal office of the Exchange, and at the Commission's Public 
Reference Room.

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 extend the pilot 
through September 30, 2010.
    In June 2009, the Exchange added several significant enhancements 
to its automated options trading platform (known as PHLX XL II), and 
adopted rules to reflect those enhancements.\3\ As part of the system 
enhancements, the Exchange proposed to disseminate a quote condition of 
``non-firm'' on a single bid quotation or offer quotation when the size 
associated with such bid or offer was exhausted on the Exchange and 
there were no new quotations submitted on the exhausted side of the 
market in the affected series. The non-exhausted side of the Exchange's 
disseminated quotation would remain firm up to its disseminated size. 
Currently, however, while the Options

[[Page 59276]]

Price Reporting Authority (``OPRA'') disseminates option quotations for 
which both sides of the quotation are marked ``non-firm,'' OPRA 
currently does not disseminate a ``non-firm'' condition for one side of 
a quotation while the other side of the quotation remains firm.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 59995 (May 28, 
2009), 74 FR 26750 (June 3, 2009) (SR-Phlx-2009-32).
---------------------------------------------------------------------------

    Accordingly, the Exchange proposed, for a pilot period scheduled to 
expire November 30, 2009, to disseminate quotations in such a 
circumstance with (i) a bid price of $0.00, with a size of one contract 
if the remaining size is a seller, or (ii) an offer price of $200,000, 
with a size of one contract if the remaining size is a buyer.
    The relevant sections of the following rules are effective for a 
pilot period scheduled to expire November 30, 2009: Proposed Rules 
1082(a)(ii)(B)(3)(b); 1082(a)(ii)(B)(3)(g)(iv)(A)(3); 
1082(a)(ii)(B)(3)(g)(iv)(A)(4); 1082(a)(ii)(B)(3)(g)(iv)(B)(2); 
1082(a)(ii)(B)(3)(g)(iv)(C); 1082(a)(ii)(B)(4)(b); and 
1082(a)(ii)(B)(4)(d)(iv)(E). The Exchange proposes to amend these rules 
to reflect the extension of the pilot through September 30, 2010.
    In its proposed rule change adopting the system enhancements and 
rules, the Exchange represented that it would work with OPRA during the 
pilot period to explore the development of a ``non-firm'' condition for 
one side of a quotation while the other side of the quotation remains 
firm. The Exchange represents that it has worked with OPRA during the 
pilot period and currently OPRA does not support the ``non-firm'' 
condition for one side of a quotation.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \4\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \5\ 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, 
by ensuring the orderly continuity of the pilot.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In the situations described herein where the Exchange disseminates 
quotations with a price of $0.00 or $200,000 and a size of one 
contract, the Exchange is relieved of its obligations under the SEC 
Quote Rule.\6\ The fact that there is no quote from any Phlx XL II 
participant is an unusual market condition which requires the Phlx XL 
II system to disseminate a market with a price of $0.00 or $200,000 to 
indicate that there is a non-firm condition on the side of the market 
that is exhausted. Currently, OPRA disseminates option quotations for 
which both sides of the quotation are marked ``non-firm.'' OPRA 
currently does not disseminate a ``non-firm'' condition for one side of 
a quotation while the other side of the quotation remains firm. The 
current rule and functionality is simply a method for indicating that 
one side of the Phlx disseminated market is firm while the other side 
is in a non-firm condition.
---------------------------------------------------------------------------

    \6\ 17 CFR 242.602.
---------------------------------------------------------------------------

    This unusual market condition renders the Exchange incapable of 
collecting, processing, and making available to vendors the requisite 
data for a particular option series in a manner that accurately 
reflects the current state of the market on the Exchange. The $0.00 or 
$200,000 quote with a size of one contract will notify all ``specified 
persons'' of the determination that one side of the quotation is in a 
non-firm condition. Accordingly, in this circumstance, the Exchange is 
relieved of its obligations under Rules 602(a)(1) \7\ and (2) \8\ under 
the Act.\9\
---------------------------------------------------------------------------

    \7\ 17 CFR 242.602(a)(1).
    \8\ 17 CFR 242.602(a)(2).
    \9\ 17 CFR 242.602(a)(3).
---------------------------------------------------------------------------

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 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, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) 
\11\ thereunder.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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. 
Phlx has satisfied this requirement.
---------------------------------------------------------------------------

    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-2009-95 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-2009-95. 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

[[Page 59277]]

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-2009-95 and should be submitted on or before 
December 8, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-27464 Filed 11-16-09; 8:45 am]
BILLING CODE 8011-01-P

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