Federal Register / Vol. 73, No.

6 / Wednesday, January 9, 2008 / Notices 1657

the protection of investors or the public Paper Comments SECURITIES AND EXCHANGE
interest; (2) impose any significant COMMISSION
burden on competition; and (3) become • Send paper comments in triplicate
operative for 30 days from the date on to Nancy M. Morris, Secretary,
[Release No. 34–57086; File No. SR–Phlx–
which it was filed, or such shorter time Securities and Exchange Commission,
2007–90]
as the Commission may designate if 100 F Street, NE., Washington, DC
consistent with the protection of 20549–1090. Self-Regulatory Organizations;
investors and the public interest, it has All submissions should refer to File Philadelphia Stock Exchange, Inc.;
become effective pursuant to section Number SR–NYSEArca–2008–01. This Notice of Filing of Proposed Rule
19(b)(3)(A) of the Act 9 and Rule 19b– file number should be included on the Change and Amendment No. 1 Thereto
4(f)(6) thereunder.10 subject line if e-mail is used. To help the Relating to the $1 Strike Pilot Program
NYSE Arca has requested that the Commission process and review your
Commission waive the 30-day operative January 2, 2008.
comments more efficiently, please use
delay and designate the proposed rule only one method. The Commission will Pursuant to section 19(b)(1) of the
change to become operative on January post all comments on the Commission’s Securities Exchange Act of 1934
2, 2008. The proposal would Internet Web site (http://www.sec.gov/ (‘‘Act’’) 1 and Rule 19b–4 thereunder,2
synchronize the closing time for options rules/sro.shtml). Copies of the notice is hereby given that on December
on ETFs with the time at which the submission, all subsequent 12, 2007, the Philadelphia Stock
underlying ETF closes in the core amendments, all written statements Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’)
trading session of the primary listing with respect to the proposed rule filed with the Securities and Exchange
exchange. The Commission notes that change that are filed with the Commission (‘‘Commission’’) the
the present proposal is similar to CBOE Commission, and all written proposed rule change as described in
Rule 6.1. Therefore, the Commission Items I, II, and III below, which Items
communications relating to the
designates the proposed rule change as have been substantially prepared by the
proposed rule change between the
operative on January 2, 2008.11 Exchange. On December 28, 2007, the
Commission and any person, other than
At any time within 60 days of the those that may be withheld from the Exchange filed Amendment No. 1 to the
filing of such proposed rule change, the public in accordance with the proposed rule change.3 The Commission
Commission may summarily abrogate provisions of 5 U.S.C. 552, will be is publishing this notice to solicit
such rule change if it appears to the available for inspection and copying in comments on the proposed rule change,
Commission that such action is the Commission’s Public Reference as amended, from interested persons.
necessary or appropriate in the public Room, 100 F Street, NE., Washington,
interest, for the protection of investors, I. Self-Regulatory Organization’s
DC 20549, on official business days Statement of the Terms of Substance of
or otherwise in the furtherance of the
between the hours of 10 a.m. and 3 p.m. the Proposed Rule Change
purposes of the Act.
Copies of such filing also will be
IV. Solicitation of Comments available for inspection and copying at The Exchange proposes to amend
the principal office of the Exchange. All Commentary .05 to Phlx Rule 1012
Interested persons are invited to comments received will be posted (Series of Options Open for Trading) to
submit written data, views, and without change; the Commission does expand the $1 Strike Pilot Program (‘‘$1
arguments concerning the foregoing, not edit personal identifying Pilot’’) and to request permanent
including whether the proposed rule information from submissions. You approval of the $1 Pilot.4 The text of the
change is consistent with the Act. should submit only information that proposed rule change is available at the
Comments may be submitted by any of
you wish to make available publicly. All Exchange, the Commission’s Public
the following methods:
submissions should refer to File Reference Room, and http://
Electronic Comments Number SR–NYSEArca–2008–01 and www.phlx.com.
should be submitted on or before
• Use the Commission’s Internet January 30, 2008.
comment form (http://www.sec.gov/ 1 15 U.S.C. 78s(b)(1).
rules/sro.shtml); or For the Commission, by the Division of 2 17 CFR 240.19b–4.
Trading and Markets, pursuant to delegated 3 The Exchange states that Amendment No. 1 to
• Send an e-mail to rule- authority.12 the proposed rule change supersedes and replaces
[email protected]. Please include File the original filing in its entirety.
Florence E. Harmon,
Number SR–NYSEArca–2008–01 on the 4 The Commission approved the $1 Pilot on June
subject line. Deputy Secretary.
11, 2003. See Securities Exchange Act Release No.
[FR Doc. E8–135 Filed 1–8–08; 8:45 am] 48013 (June 11, 2003), 68 FR 35933 (June 17, 2003)
9 15 U.S.C. 78s(b)(3)(A). BILLING CODE 8011–01–P (SR–Phlx–2002–55). The $1 Pilot has subsequently
10 17 CFR 240.19b–4(f)(6). The Exchange has been extended through June 5, 2008. See Securities
requested that the Commission waive the Exchange Act Release Nos. 49801 (June 3, 2004), 69
requirement that the Exchange provide the FR 32652 (June 10, 2004) (SR–Phlx–2004–38)
Commission written notice of its intent to file the (extending the $1 Pilot until June 5, 2005); 51768
proposed rule change, along with a brief description (May 31, 2005), 70 FR 33250 (June 7, 2005) (SR–
and text of the proposed rule change, at least five Phlx–2005–35) (extending the $1 Pilot until June 5,
business days prior to the date on which the 2006); 53938 (June 5, 2006), 71 FR 34178 (June 13,
Exchange filed the proposed rule change pursuant
2006) (SR–Phlx–2006–36) (extending the $1 Pilot
to Rule 19b–4(f)(6)(iii). The Commission hereby
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grants this request. until June 5, 2007); and 55666 (April 25, 2007), 72
11 For the purposes only of waiving the operative FR 23879 (May 1, 2007) (SR–Phlx–2007–29)
date of this proposal, the Commission has (extending the $1 Pilot until June 5, 2008). The
considered the proposed rule’s impact on other options exchanges have similar $1 strike price
efficiency, competition, and capital formation. See listing programs that were likewise extended
15 U.S.C. 78c(f). 12 17 CFR 200.30–3(a)(12). through June 5, 2008.

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 1658 Federal Register / Vol. 73, No. 6 / Wednesday, January 9, 2008 / Notices

II. Self-Regulatory Organization’s and permanent $1 Pilot would be specifically,8 in that it is designed to
Statement of the Purpose of, and known as the ‘‘$1 Strike Program.’’ The promote just and equitable principles of
Statutory Basis for, the Proposed Rule Exchange notes that the existing trade, to perfect the mechanism of a free
Change restrictions on listing $1 strikes would and open market and the national
In its filing with the Commission, the continue to apply; i.e., no $1 strike price market system, and, in general, to
Exchange included statements may be listed that is greater than $5 protect investors and the public interest.
concerning the purpose of, and basis for, from the underlying stock’s closing The proposal should achieve this by
the proposed rule change and discussed price in its primary market on the allowing continued listing of options at
any comments it received on the previous day or that would result in $1 strike price intervals within certain
proposed rule change. The text of these strike prices being $0.50 apart. parameters, thereby stimulating
statements may be examined at the As stated in the Commission order customer interest in options overlying
places specified in Item IV below. The approving Phlx’s $1 Pilot and in the the lowest tier of stocks and creating
Exchange has prepared summaries, set subsequent extensions of the $1 Pilot,5 greater trading opportunities and
forth in sections A, B, and C below, of the Exchange believes that $1 strike flexibility and providing customers with
the most significant aspects of such price intervals provide greater trading the ability to more closely tailor
statements. flexibility to investors so that they may investment strategies to the precise
better achieve their investment movement of the underlying stocks.
A. Self-Regulatory Organization’s objectives. The Exchange states that its
Statement of the Purpose of, and B. Self-Regulatory Organization’s
member firms representing customers
Statutory Basis for, the Proposed Rule Statement on Burden on Competition
have requested that Phlx seek to expand
Change the $1 Pilot both in terms of the number The Exchange does not believe that
1. Purpose of classes that can be selected by the the proposed rule change will impose
Exchange and the range in which $1 any burden on competition that is not
The purpose of the proposed rule necessary or appropriate in furtherance
change is to expand the number of strikes may be listed.
Phlx’s last $1 Pilot report (the of the purposes of the Act.
options classes eligible for the $1 Pilot
and to request permanent approval of ‘‘Report’’) reviewed the Exchange’s C. Self-Regulatory Organization’s
the $1 Pilot and thereby provide positive experience with the $1 Pilot.6 Statement on Comments on the
investors with greater flexibility in the The Exchange states that the Report Proposed Rule Change Received From
trading of equity options that overlie showed the strength and efficacy of the Members, Participants, or Others
lower priced stocks and allow equity $1 Pilot on the Exchange, as reflected by
the increase in the percentage of $1 The Exchange states that no written
options positions that are better tailored comments on the proposed rule change
to meet investment objectives. strikes in comparison to total options
volume traded on Phlx at $1 strike price were either solicited or received.
The $1 Pilot, under the terms set forth
in Commentary .05 to Phlx Rule 1012, intervals and other options volume and III. Date of Effectiveness of the
currently allows the Exchange to the continuing robust open interest of Proposed Rule Change and Timing for
establish $1 strike price intervals on options traded on Phlx at $1 strike price Commission Action
options classes overlying no more than intervals. With regard to the impact on
systems capacities, Phlx’s analysis of Within 35 days of the date of
five individual stocks designated by the publication of this notice in the Federal
Exchange where: (1) The underlying the $1 Pilot showed that the impact on
Phlx’s, OPRA’s, and market data Register or within such longer period (i)
stock closes below $20 on the primary as the Commission may designate up to
market on the trading day before vendors’ respective automated systems
has been negligible. The Exchange states 90 days of such date if it finds such
selection by the Exchange; (2) the $1 longer period to be appropriate and
strike price is from $3 to $20; (3) the $1 that, as indicated in the Report, the $1
Pilot has not created, and in the future publishes its reasons for so finding or
strike price is no more than $5 above or (ii) as to which the Exchange consents,
below the closing price of the should not create, capacity problems for
the systems of OPRA. Phlx represents the Commission will:
underlying stock on the preceding day; A. By order approve such proposed
and (4) the $1 strike price is not within that it has sufficient capacity to handle
an expansion of the $1 Pilot, as rule change, or
$0.50 of an existing $2.50 strike price in B. Institute proceedings to determine
the same series. The Exchange may not proposed.
whether the proposed rule change
list long-term option series (‘‘LEAPS’’) Finally, because the $1 Pilot has been
should be disapproved.
at $1 strike price intervals for any class very successful in allowing investors to
selected for the $1 Pilot. In addition, establish equity options positions that IV. Solicitation of Comments
pursuant to the $1 Pilot, the Exchange are better tailored to meeting their Interested persons are invited to
may list $1 strike prices on any other investment objectives, Phlx requests submit written data, views, and
option classes if those classes are that the $1 Pilot, as expanded, be arguments concerning the foregoing,
specifically designated by other approved on a permanent basis. including whether the proposed rule
securities exchanges that employ a 2. Statutory Basis change is consistent with the Act.
similar $1 strike price program under Comments may be submitted by any of
their respective rules. The Exchange believes that its
the following methods:
The Exchange proposes to expand the proposal is consistent with section 6(b)
$1 Pilot to allow it to select a total of of the Act,7 in general, and furthers the Electronic Comments
10, instead of the current 5, individual objectives of section 6(b)(5), • Use the Commission’s Internet
stocks on which option series may be comment form (http://www.sec.gov/
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5 See id.
listed at $1 strike price intervals. rules/sro.shtml); or
6 See Securities Exchange Act Release No. 55666
Additionally, the Exchange proposes to
(April 25, 2007), 72 FR 23879 (May 1, 2007) (SR–
• Send an e-mail to rule-
expand the price range on which it may Phlx–2007–29) (enclosing the Report as Exhibit 3 to [email protected]. Please include File
list $1 strikes to $3–$50, instead of the the filing).
current $3–$20. The proposed expanded 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5).

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 Federal Register / Vol. 73, No. 6 / Wednesday, January 9, 2008 / Notices 1659

Number SR–Phlx–2007–90 on the SECURITIES AND EXCHANGE II. Self-Regulatory Organization’s

subject line. COMMISSION Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Paper Comments [Release No. 34–57090; File No. SR–Phlx– Change
2007–94]
• Send paper comments in triplicate In its filing with the Commission, the
to Nancy M. Morris, Secretary, Self-Regulatory Organizations; Exchange included statements
Securities and Exchange Commission, Philadelphia Stock Exchange, Inc.; concerning the purpose of and basis for
100 F Street, NE., Washington, DC Notice of Filing and Immediate the proposed rule change, and discussed
20549–1090. Effectiveness of a Proposed Rule any comments it received on the
Change Amending the Examinations proposed rule change. The text of these
All submissions should refer to File Fee statements may be examined at the
Number SR–Phlx–2007–90. This file places specified in Item IV below. The
number should be included on the January 3, 2008. Exchange has prepared summaries, set
subject line if e-mail is used. To help the Pursuant to section 19(b)(1) of the forth in sections A, B, and C below, of
Commission process and review your Securities Exchange Act of 1934 the most significant aspects of such
comments more efficiently, please use (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 statements.
only one method. The Commission will notice is hereby given that on December
28, 2007, the Philadelphia Stock A. Self-Regulatory Organization’s
post all comments on the Commission’s Statement of the Purpose of, and
Internet Web site (http://www.sec.gov/ Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’)
Statutory Basis for, the Proposed Rule
rules/sro.shtml). Copies of the filed with the Securities and Exchange
Change
submission, all subsequent Commission (‘‘Commission’’) the
amendments, all written statements proposed rule change as described in 1. Purpose
with respect to the proposed rule Items I, II, and III below, which Items Currently, the Exchange implements a
change that are filed with the have been substantially prepared by the tiered Examinations Fee based on the
Exchange. The Exchange has designated number of off-floor traders in the same
Commission, and all written
this proposal as one establishing or member/participant organization for
communications relating to the
changing a due, fee, or other charge whom the Exchange is the DEA.6
proposed rule change between the imposed by Phlx under section
Commission and any person, other than Specifically, a member/participant
19(b)(3)(A)(ii) of the Act 3 and Rule 19b– organization is assessed $2,100 per
those that may be withheld from the 4(f)(2) thereunder,4 which renders the
public in accordance with the month for one to ten off-floor traders;
proposal effective upon filing with the $2,600 per month for 11 to 50 off-floor
provisions of 5 U.S.C. 552, will be Commission. The Commission is traders; $5,000 per month for 51 to 200
available for inspection and copying in publishing this notice to solicit off-floor traders; and $12,500 per month
the Commission’s Public Reference comments on the proposed rule change for over 200 off-floor traders. However,
Room, 100 F Street, NE., Washington, from interested persons. the following member organizations are
DC 20549, on official business days currently exempt from the assessment of
between the hours of 10 a.m. and 3 p.m. I. Self-Regulatory Organization’s
Statement of the Terms of Substance of the Examinations Fee: (1) Inactive
Copies of the filing also will be available organizations; 7 and (2) organizations
the Proposed Rule Change
for inspection and copying at the operating through one or more Phlx
principal office of the Exchange. All Phlx proposes to expand its current markets that demonstrated that 25% or
comments received will be posted Examinations Fee in order to assess this more of its revenue as reflected on the
without change; the Commission does fee on: (1) Member organizations and most recently submitted FOCUS report
not edit personal identifying participant organizations,5 for whom the or transactions as reflected on its
information from submissions. You Exchange is the Designated Examining purchase and sales blotter are derived
should submit only information that Authority (‘‘DEA’’), that do not employ from securities transactions on the Phlx.
you wish to make available publicly. All any off-floor traders; and (2) ‘‘inactive The Exchange proposes to assess the
submissions should refer to File organizations.’’ While changes to the Examinations Fee on those member/
Exchange’s fee schedule pursuant to this participant organizations who do not
Number SR–Phlx–2007–90 and should
proposal are effective upon filing, the have any off-floor traders because the
be submitted on or before January 30,
Exchange has designated that the Exchange must examine those member/
2008.
proposed changes become operative participant organizations for whom the
For the Commission, by the Division of beginning January 1, 2008. The text of Exchange is the DEA.8 Member/
Trading and Markets, pursuant to delegated the proposed rule change is available at
authority.9 the Exchange, on its Web site at http:// 6 In connection with charges assessed in

Florence E. Harmon, phlx.com/exchange/phlx_rule_fil.html, connection with the trading of equity securities on

XLE (the Exchange’s equity trading system),
Deputy Secretary. and at Commission’s Public Reference Sponsored Participants are not included in the
[FR Doc. E8–136 Filed 1–8–08; 8:45 am] Room. calculation of the number of off-floor traders in a
Sponsoring Member Organization. See Securities
BILLING CODE 8011–01–P 1 15 Exchange Act Release No. 54941 (December 14,
U.S.C. 78s(b)(1).
2 17
2006), 71 FR 77079 (December 22, 2006) (SR–Phlx–
CFR 240.19b–4. 2006–70).
3 15 U.S.C. 78s(b)(3)(A)(ii).
7 An inactive organization is defined as one that
4 17 CFR 240.19b–4(f)(2).
has no securities transaction revenue, as
5 For purposes of this proposed rule change, the determined by Financial and Operational Combined
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term ‘‘participant organization’’ means Foreign Uniform Single Report (‘‘FOCUS reports’’) or other
Currency Options Participant Organization, as that financial filings, as long as the member/participant
term is defined in Section 1–1(l) of Phlx’s By-Laws. organization continues to have no such revenue
See telephone conversation between Cynthia each month.
Hoekstra, Vice President, Phlx, and Christopher 8 Member/participant organizations that have

Chow, Special Counsel, Division of Trading and operated without an off-floor trader generally rely
9 17 CFR 200.30–3(a)(12). Markets, Commission, on December 31, 2007. Continued

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