Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of Filing of Proposed Rule Change To Establish Strike Price Intervals and Trading Hours for Options on Index-Linked Securities, 13614-13616 [2010-6113]

Download as PDF 13614 Federal Register / Vol. 75, No. 54 / Monday, March 22, 2010 / Notices SECURITIES AND EXCHANGE COMMISSION [File No. 500–1] In the Matter of Talisman Enterprises, Inc., Tangent Solutions, Inc., Telepanel Systems, Inc., Telesis North Communications, Inc., Telzuit Medical Technologies, Inc., Tengtu International Corp., Thomaston Mills, Inc., Three D Departments, Inc., Tiger Telematics, Inc., and TIS Mortgage Investment Co.; Order of Suspension of Trading pwalker on DSK8KYBLC1PROD with NOTICES March 18, 2010. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Talisman Enterprises, Inc. because it has not filed any periodic reports since the period ended September 30, 2000. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Tangent Solutions, Inc. because it has not filed any periodic reports since the period ended March 31, 2003. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Telepanel Systems, Inc. because it has not filed any periodic reports since the period ended January 31, 2002. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Telesis North Communications, Inc. because it has not filed any periodic reports since the period ended February 28, 2002. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Telzuit Medical Technologies, Inc. because it has not filed any periodic reports since the period ended September 30, 2007. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Tengtu International Corp. because it has not filed any periodic reports since the period ended March 31, 2005. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Thomaston Mills, Inc. because it has not filed any periodic reports since the period ended December 30, 2000. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information VerDate Nov<24>2008 16:41 Mar 19, 2010 Jkt 220001 concerning the securities of Three D Departments, Inc. because it has not filed any periodic reports since the period ended August 1, 1998. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Tiger Telematics, Inc. because it has not filed any periodic reports since the period ended September 30, 2005. It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of TIS Mortgage Investment Co. because it has not filed any periodic reports since the period ended September 30, 2004. The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed companies. Therefore, it is ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading in the securities of the above-listed companies is suspended for the period from 9:30 a.m. EDT on March 18, 2010, through 11:59 p.m. EDT on March 31, 2010. By the Commission. Jill M. Peterson, Assistant Secretary. [FR Doc. 2010–6315 Filed 3–18–10; 11:15 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61695; File No. SR–Phlx2010–40] Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of Filing of Proposed Rule Change To Establish Strike Price Intervals and Trading Hours for Options on IndexLinked Securities March 12, 2010. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on March 1, 2010, 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 prepared by the Exchange. The Commission is publishing this notice to solicit comments on the 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00132 Fmt 4703 Sfmt 4703 proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing with the Commission a proposal to amend: Phlx Rule 1012 (Series of Options Open for Trading) to establish strike-price intervals for options on Index-Linked Securities; 3 and Phlx Rule 101 (Hours of Business) to establish trading hours for these products. The text of the proposed rule change is available on Phlx’s Web site at https:// nasdaqomxphlx.cchwallstreet.com/ NASDAQOMXPHLX/Filings/, on the Commission’s Web site at https:// www.sec.gov, at Phlx, 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 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 Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this proposal is to amend Rules 1012 and 101 to establish 3 Index-Linked Securities, also known as exchange-traded notes, are long-term notes that are the non-convertible debt of an issuer with a term of at least one year but not greater than thirty years. These exchange-traded securities are designed for investors who desire to participate in a specific market segment by providing exposure to one or more identifiable underlying securities, commodities, currencies, derivative instruments or market indexes. The Exchange’s listing standards for options on Index-Linked Securities were established in September 2008. See Securities Exchange Act Release No. 58571 (September 17, 2008), 73 FR 55188 (September 24, 2008) (SR–Phlx– 2008–60) (notice of filing and immediate effectiveness). Other exchanges have established similar listing standards. See Securities Exchange Act Release Nos. 59923 (May 14, 2009), 74 FR 23902 (May 21, 2009) (SR–NASDAQ–2009–046) (notice of filing and immediate effectiveness); 58204 (July 22, 2008), 73 FR 43807 (July 28, 2008) (SR–CBOE–2008–64) (approval order); 58203 (July 22, 2008), 73 FR 43812 (July 28, 2008) (SR– NYSEArca–2008–57) (approval order); and 58985 (November 20, 2008), 73 FR 72538 (November 28, 2008) (SR–ISE–2008–86) (notice of filing and immediate effectiveness). E:\FR\FM\22MRN1.SGM 22MRN1 Federal Register / Vol. 75, No. 54 / Monday, March 22, 2010 / Notices strike price intervals and trading hours for options on Index-Linked Securities (‘‘ILS’’), also known as exchange-traded notes (‘‘ETN’’), prior to the Exchange proposing to list and trade these new products. The Commission has approved the Exchange’s proposal, as well as the proposals of other options exchanges, to enable the listing and trading of options on ILS (ETN).4 Options trading has not commenced to date and is contingent upon the Commission’s approval of The Options Clearing Corporation’s (‘‘OCC’’) proposed supplement to the Options Disclosure Document (‘‘ODD’’) that will provide disclosure regarding options on Index-Linked Securities.5 $1 Strikes for ILS (ETN) Options Prior to the commencement of trading options on Index-Linked Securities, the Exchange is proposing to establish that strike price intervals of $1 will be permitted where the strike price is less than $200. Where the strike price is greater than $200, $5 strikes will be permitted. These proposed changes are reflected by the addition of Commentary .05(a)(v) to Rule 1012. The Exchange is seeking to establish $1 strikes for ILS (ETN) options where the strike price is less than $200 because the Exchange believes the marketplace and investors will be expecting these types of options to trade in a similar manner to options on exchange-traded funds (‘‘ETFs’’). Strike prices for ETF options are permitted in $1 or greater intervals where the strike price is $200 or less and $5 or greater where the strike price is greater than $200.6 Accordingly, the Exchange believes that the rationale for permitting $1 strikes for ETF options equally applies to permitting $1 strikes for ILS (ETN) options, and that investors will be better served if $1 strike price intervals are available for ILS (ETN) options where the strike price is less than $200. The Exchange believes that $1 strike price intervals for options on Index-Linked Securities will provide investors with greater flexibility by allowing them to establish positions that are better tailored to meet their investment objectives. pwalker on DSK8KYBLC1PROD with NOTICES Trading Hours for ILS (ETN) Options The Exchange proposes to amend Supplementary Material .01 to Rule 101 to provide that options on exchange4 See supra note 3. previously received Commission approval to clear options based on Index-Linked Securities. See Securities Exchange Act Release No. 60872 (October 23, 2009), 74 FR 55878 (October 29, 2009) (SR–OCC–2009–14) (approval order). 6 See proposed Commentary .05(a)(iv) of Rule 1012, which is renumbered for internal consistency. 5 OCC VerDate Nov<24>2008 16:41 Mar 19, 2010 Jkt 220001 traded notes including Index-Linked Securities may be traded on the Exchange until 4:15 p.m. each business day. This will establish similar trading hours for ILS (ETN) options as the currently-established trading hours for ETF options.7 The Exchange has analyzed its capacity and believes the Exchange and the Options Price Reporting Authority (‘‘OPRA’’) have the necessary systems capacity to handle the additional traffic associated with the listing and trading of $1 strikes where the strike price is less than $200 for ILS (ETN) options. The Exchange expects that other option exchanges that have adopted rules providing for the listing and trading of options on Index-Linked Securities will submit similar proposals.8 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 9 in general, and furthers the objectives of Section 6(b)(5) of the Act 10 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanisms of a free and open market and a national market system, by having strike price intervals and trading hours established prior to the commencement of trading in options on Index-Linked Securities and thereby lessening the likelihood for investor confusion. 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. 7 See Rule 101. for example, Securities Exchange Act Release No. 61466 (February 2, 2010), 75 FR 6243 (February 8, 2010) (SR–CBOE–2010–005) (notice of filing). 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). 8 See, PO 00000 Frm 00133 Fmt 4703 Sfmt 4703 13615 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 the proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. 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 No. SR–Phlx–2010–40 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–Phlx–2010–40. 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 Web site viewing and printing in the Commission’s Public Reference Room, on official business days between the hours of 10 a.m. and E:\FR\FM\22MRN1.SGM 22MRN1 13616 Federal Register / Vol. 75, No. 54 / Monday, March 22, 2010 / Notices 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 Number SR–Phlx–2010–40 and should be submitted on or before April 6, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–6113 Filed 3–19–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61697; File No. SR– NYSEArca–2010–04] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Accelerated Approval of Proposed Rule Change Relating to the WisdomTree Real Return Fund March 12, 2010. I. Introduction On January 25, 2010, NYSE Arca, Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to list and trade the shares (‘‘Shares’’) of the WisdomTree Real Return Fund (‘‘Fund’’) under NYSE Arca Equities Rule 8.600. The proposed rule change was published for comment in the Federal Register on February 23, 2010.3 The Commission received no comment letters on the proposed rule change. This order approves the proposed rule change on an accelerated basis. pwalker on DSK8KYBLC1PROD with NOTICES II. Description of the Proposed Rule Change The Exchange proposes to list and trade the Shares pursuant to NYSE Arca Equities Rule 8.600, which governs the listing and trading of Managed Fund Shares on the Exchange.4 The Fund will 11 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 61519 (February 16, 2010), 75 FR 8164 (‘‘Notice’’). 4 Managed Fund Shares are defined as securities that (a) represent an interest in a registered investment company organized as an open-end 1 15 VerDate Nov<24>2008 16:41 Mar 19, 2010 Jkt 220001 be an actively-managed exchange traded fund, and the Shares will be offered by the WisdomTree Trust (‘‘Trust’’), a Delaware statutory trust that is registered with the Commission as an investment company.5 WisdomTree Asset Management, Inc. (‘‘Adviser’’) will be the investment adviser to the Fund and is not affiliated with any brokerdealer. The Mellon Capital Management Corporation (‘‘Sub–Adviser’’), which will serve as the sub–adviser for the Fund, is affiliated with multiple brokerdealers and, accordingly, has implemented a ‘‘fire wall’’ with respect to such broker-dealers regarding access to information concerning the composition and/or changes to the Fund’s portfolio.6 The Bank of New York Mellon will be the administrator, custodian and transfer agent for the Fund, and ALPS Distributors, Inc. will serve as the distributor for the Fund. The Exchange states that the Shares will be subject to the initial and continued listing criteria under NYSE Arca Equities Rule 8.600(d) applicable to Managed Fund Shares 7 and that the Shares will comply with Rule 10A–3 under the Act,8 as provided by NYSE Arca Equities Rule 5.3. management investment company or similar entity that invests in a portfolio of securities selected by the investment company’s investment adviser consistent with the investment company’s investment objectives and policies; (b) are issued in a specified aggregate minimum number in return for a deposit of a specified portfolio of securities and/ or a cash amount with a value equal to the next determined net asset value; and (c) when aggregated in the same specified minimum number, may be redeemed at a holder’s request, which holder will be paid a specified portfolio of securities and/or cash with a value equal to the next determined net asset value. See NYSE Arca Equities Rule 8.600(c)(1). 5 See Trust Registration Statement on Form N–1A filed on October 28, 2009 (File Nos. 333–132380 and 811–21864) (‘‘Registration Statement’’). 6 See Commentary .07 to NYSE Arca Equities Rule 8.600 (requiring the use of ‘‘fire walls’’ between investment advisers and affiliated broker-dealers with respect to access to information concerning the composition and/or changes to the fund portfolio). The Exchange represents that the Adviser and the Sub–Adviser of the Funds, and their respective related personnel, are subject to Rule 204A–1 under the Investment Advisers Act of 1940 (‘‘Advisers Act’’), which generally requires investment advisers to adopt a code of ethics that reflects the fiduciary nature of the relationship to clients as well as compliance with other applicable securities laws. Accordingly, procedures designed to prevent the communication and misuse of non-public information by an investment adviser must be consistent with Rule 204A–1 under the Advisers Act. 7 The Exchange states that a minimum of 100,000 Shares will be outstanding at the commencement of trading on the Exchange, and the Exchange will obtain a representation from the issuer of the Shares that the net asset value (‘‘NAV’’) per share for the Fund will be calculated daily and that the NAV and the Disclosed Portfolio will be made available to all market participants at the same time. 8 See 17 CFR 240.10A–3. PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 The Fund will seek to provide investors with total returns that exceed the rate of inflation over long-term investment horizons. To achieve its objective, the Fund intends to invest in a portfolio of inflation-linked securities, such as U.S. Treasury Inflation Protected Securities (‘‘TIPS’’) and other investment-grade fixed income securities. The Fund will have targeted exposure to commodities and commodity strategies. While the Fund intends to invest up to 70% or more of the value of its portfolio in TIPS, the Fund may invest in other types of inflation-linked fixed income securities, such as investmentgrade, floating-rate fixed income securities linked to U.S. inflation rates that are issued by the U.S. government, government agencies, or corporations. The Fund may also invest in inflationlinked swaps, securities linked to inflation rates outside the U.S., including securities or instruments linked to rates in emerging market countries, and fixed income securities that are not linked to inflation, such as U.S. government securities. While the Fund intends to invest primarily in investment-grade securities, the Fund may invest up to 10% of its net assets in securities rated ‘‘BB’’ or lower by at least two nationally recognized statistical rating organizations or, if unrated, deemed to be of equivalent quality. The Fund may invest in securities with effective or final maturities of any length and will seek to keep the average effective duration of its portfolio between two and ten years. The Fund may adjust its portfolio holdings or average effective duration based on actual or anticipated changes in interest rates or credit quality. The Fund also intends to have targeted exposure to commodities across a number of sectors, such as energy, precious metals, and agriculture, primarily through its investments in the WisdomTree Real Return Investment Portfolio, Inc. (‘‘Subsidiary’’),9 a whollyowned subsidiary organized in the Cayman Islands,10 as well as in 9 The Fund intends to invest up to 25% of its assets in the Subsidiary. The Subsidiary intends to invest all of its assets in Commodity-Linked Instruments and/or fixed income securities that serve as collateral for its commodity exposure. The Subsidiary’s investments will be consolidated into the Fund’s financial statements, and the Fund’s and Subsidiary’s holdings will be publicly available on a daily basis. 10 The Exchange states that the Subsidiary is subject to the same investment restrictions as the Fund and will operate in the same manner as the Fund with regard to applicable compliance policies and procedures (other than investments in Commodity-Linked Instruments). Although the Subsidiary is not registered as an investment company under the Investment Company Act of E:\FR\FM\22MRN1.SGM 22MRN1

Agencies

[Federal Register Volume 75, Number 54 (Monday, March 22, 2010)]
[Notices]
[Pages 13614-13616]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-6113]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61695; File No. SR-Phlx-2010-40]


Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of 
Filing of Proposed Rule Change To Establish Strike Price Intervals and 
Trading Hours for Options on Index-Linked Securities

March 12, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on March 1, 2010, 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 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 is filing with the Commission a proposal to amend: 
Phlx Rule 1012 (Series of Options Open for Trading) to establish 
strike-price intervals for options on Index-Linked Securities; \3\ and 
Phlx Rule 101 (Hours of Business) to establish trading hours for these 
products. The text of the proposed rule change is available on Phlx's 
Web site at https://nasdaqomxphlx.cchwallstreet.com/NASDAQOMXPHLX/Filings/, on the Commission's Web site at https://www.sec.gov, at Phlx, 
and at the Commission's Public Reference Room.
---------------------------------------------------------------------------

    \3\ Index-Linked Securities, also known as exchange-traded 
notes, are long-term notes that are the non-convertible debt of an 
issuer with a term of at least one year but not greater than thirty 
years. These exchange-traded securities are designed for investors 
who desire to participate in a specific market segment by providing 
exposure to one or more identifiable underlying securities, 
commodities, currencies, derivative instruments or market indexes. 
The Exchange's listing standards for options on Index-Linked 
Securities were established in September 2008. See Securities 
Exchange Act Release No. 58571 (September 17, 2008), 73 FR 55188 
(September 24, 2008) (SR-Phlx-2008-60) (notice of filing and 
immediate effectiveness). Other exchanges have established similar 
listing standards. See Securities Exchange Act Release Nos. 59923 
(May 14, 2009), 74 FR 23902 (May 21, 2009) (SR-NASDAQ-2009-046) 
(notice of filing and immediate effectiveness); 58204 (July 22, 
2008), 73 FR 43807 (July 28, 2008) (SR-CBOE-2008-64) (approval 
order); 58203 (July 22, 2008), 73 FR 43812 (July 28, 2008) (SR-
NYSEArca-2008-57) (approval order); and 58985 (November 20, 2008), 
73 FR 72538 (November 28, 2008) (SR-ISE-2008-86) (notice of filing 
and immediate effectiveness).
---------------------------------------------------------------------------

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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this proposal is to amend Rules 1012 and 101 to 
establish

[[Page 13615]]

strike price intervals and trading hours for options on Index-Linked 
Securities (``ILS''), also known as exchange-traded notes (``ETN''), 
prior to the Exchange proposing to list and trade these new products.
    The Commission has approved the Exchange's proposal, as well as the 
proposals of other options exchanges, to enable the listing and trading 
of options on ILS (ETN).\4\ Options trading has not commenced to date 
and is contingent upon the Commission's approval of The Options 
Clearing Corporation's (``OCC'') proposed supplement to the Options 
Disclosure Document (``ODD'') that will provide disclosure regarding 
options on Index-Linked Securities.\5\
---------------------------------------------------------------------------

    \4\ See supra note 3.
    \5\ OCC previously received Commission approval to clear options 
based on Index-Linked Securities. See Securities Exchange Act 
Release No. 60872 (October 23, 2009), 74 FR 55878 (October 29, 2009) 
(SR-OCC-2009-14) (approval order).
---------------------------------------------------------------------------

$1 Strikes for ILS (ETN) Options
    Prior to the commencement of trading options on Index-Linked 
Securities, the Exchange is proposing to establish that strike price 
intervals of $1 will be permitted where the strike price is less than 
$200. Where the strike price is greater than $200, $5 strikes will be 
permitted. These proposed changes are reflected by the addition of 
Commentary .05(a)(v) to Rule 1012.
    The Exchange is seeking to establish $1 strikes for ILS (ETN) 
options where the strike price is less than $200 because the Exchange 
believes the marketplace and investors will be expecting these types of 
options to trade in a similar manner to options on exchange-traded 
funds (``ETFs''). Strike prices for ETF options are permitted in $1 or 
greater intervals where the strike price is $200 or less and $5 or 
greater where the strike price is greater than $200.\6\ Accordingly, 
the Exchange believes that the rationale for permitting $1 strikes for 
ETF options equally applies to permitting $1 strikes for ILS (ETN) 
options, and that investors will be better served if $1 strike price 
intervals are available for ILS (ETN) options where the strike price is 
less than $200. The Exchange believes that $1 strike price intervals 
for options on Index-Linked Securities will provide investors with 
greater flexibility by allowing them to establish positions that are 
better tailored to meet their investment objectives.
---------------------------------------------------------------------------

    \6\ See proposed Commentary .05(a)(iv) of Rule 1012, which is 
renumbered for internal consistency.
---------------------------------------------------------------------------

Trading Hours for ILS (ETN) Options
    The Exchange proposes to amend Supplementary Material .01 to Rule 
101 to provide that options on exchange-traded notes including Index-
Linked Securities may be traded on the Exchange until 4:15 p.m. each 
business day. This will establish similar trading hours for ILS (ETN) 
options as the currently-established trading hours for ETF options.\7\
---------------------------------------------------------------------------

    \7\ See Rule 101.
---------------------------------------------------------------------------

    The Exchange has analyzed its capacity and believes the Exchange 
and the Options Price Reporting Authority (``OPRA'') have the necessary 
systems capacity to handle the additional traffic associated with the 
listing and trading of $1 strikes where the strike price is less than 
$200 for ILS (ETN) options.
    The Exchange expects that other option exchanges that have adopted 
rules providing for the listing and trading of options on Index-Linked 
Securities will submit similar proposals.\8\
---------------------------------------------------------------------------

    \8\ See, for example, Securities Exchange Act Release No. 61466 
(February 2, 2010), 75 FR 6243 (February 8, 2010) (SR-CBOE-2010-005) 
(notice of filing).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \9\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \10\ in particular, in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, and to remove impediments to and perfect the mechanisms of 
a free and open market and a national market system, by having strike 
price intervals and trading hours established prior to the commencement 
of trading in options on Index-Linked Securities and thereby lessening 
the likelihood for investor confusion.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 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

    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 the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 No. SR-Phlx-2010-40 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2010-40. 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 Web site viewing and 
printing in the Commission's Public Reference Room, on official 
business days between the hours of 10 a.m. and

[[Page 13616]]

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 Number SR-Phlx-2010-40 and should be submitted on 
or before April 6, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-6113 Filed 3-19-10; 8:45 am]
BILLING CODE 8011-01-P
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