9988 Federal Register / Vol. 75, No. 42 / Thursday, March 4, 2010 / Notices 

14 15 U.S.C. 78q–1(b)(3)(F). 

15 15 U.S.C. 78q–1. 

16 15 U.S.C. 78s(b)(2). 

17 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

18 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 61326 

(January 11, 2010), 75 FR 2902 (‘‘Notice’’). 

4The SIG Indexes noted herein are trademarks of 

SIG Indices, LLLP. 5Specifically, Phlx Rule 1001A(b)(i) currently 

provides for the following position limits for 

narrow-based index options: (1) 18,000 contracts if 

the Exchange determines that any single underlying 

stock accounted, on average, for 30% or more of the 

index value during the 30-day period immediately 

preceding the semi-annual review of the pertinent 

index option required by Phlx Rule 1001A(b)(ii); (2) 

24,000 contracts if the Exchange determines, at the 

time of the required semi-annual review, that any 

single underlying stock accounted, on average, for 

20% or more of the index value or that any five 

underlying stocks together accounted, on average, 

for more than 50% of the index value, but that no 

single stock in the group accounted, on average, for 

30% or more of the index value, during the 30-day 

period immediately preceding the review; or (3) 

31,500 contracts if the Exchange determines that the 

conditions specified above which would require the 

establishment of a lower limit have not occurred. 

In addition, the rule provides that position limits 

with respect to options on the KBW Bank Index are 

44,000 contracts. 

6Phlx exercise limits in Phlx Rule 1002A, 

Exercise Limits, are established by reference to 

position limits. The proposed increase in position 

limits for the Specified Index Options would 

therefore effectively increase exercise limits for 

these options. See Phlx Rule 1002A. 

7 In approving this rule, the Commission notes 

that it has considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

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

9The Exchange states that it dedicates substantial 

resources to monitoring the markets for evidence of 

manipulation or disruption caused by investors 

with positions at or near current position or 

exercise limits, and that the proposed increased 

position limits would not diminish the surveillance 

function in this regard. See Notice, supra note 3. 

10 15 U.S.C. 78s(b)(2). 

11 17 CFR 200.30–3(a)(12). 

Section 17A(b)(3)(F),14 which requires, 

among other things, that the rules of a 

clearing agency are designed to provide 

for the safekeeping of securities and 

funds under its possession or control or 

for which it is responsible. 

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposal is 

consistent with the requirements of the 

Act and in particular with the 

requirements of Section 17A of the 

Act 15 and the rules and regulations 

thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,16 that the 

proposed rule change (File No. SR– 

DTC–2009–17) be, and hereby is, 

approved.17

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–4457 Filed 3–3–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61590; File No. SR–Phlx– 

2009–113] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Order 

Granting Approval of Proposed Rule 

Change Relating to Index Option 

Position Limits 

February 25, 2010. 

On December 29, 2009, NASDAQ 

OMX PHLX, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) 

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 increase the position limits 

for certain narrow-based (industry) 

index option contracts. The Commission 

published the proposed rule change for 

comment in the Federal Register on 

January 19, 2010.3 The Commission 

received no comments on the proposed 

rule change. This order approves the 

proposed rule change. 

The Exchange proposes to revise the 

three tiered levels of position limits that 

are set forth in Phlx Rule 1001A by 

increasing those limits for options on 

the PHLX Oil Service Sector, PHLX 

Semiconductor Sector, PHLX Utility 

Sector, PHLX Gold/Silver Sector, PHLX 

Housing Sector, SIG Energy MLP Index, 

SIG Oil Exploration & Production Index, 

and the NASDAQ China Index 

(collectively, the ‘‘Specified Index 

Options’’).4 Currently, the Specified 

Index Options are subject to position 

limits of 18,000, 24,000, or 31,500 

contracts based generally on the degree 

of concentration of a single component 

stock or groups of component stocks 

comprising the index.5 The Exchange 

proposes to increase these limits to 

54,000, 72,000, and 94,500 contracts, 

respectively, for the Specified Index 

Options. In addition, the Exchange 

proposes to delete certain obsolete 

references in Rule 1001A.6

The Exchange states that it recognizes 

that the purpose of position limits is to 

prevent manipulation and protect 

against disruption of the markets for 

both the option as well as the 

underlying security. The Exchange 

states that it has considered the effects 

of increased position limits for the 

Specified Index Options on the 

marketplace, and believes that 

manipulation and disruption concerns 

are addressed by a combination of 

existing surveillance functions and the 

implementation of tiered position 

limits. 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder that 

are applicable to a national securities 

exchange.7 In particular, the 

Commission believes that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,8 which requires, 

among other things, that the rules of a 

national securities exchange be 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

The Commission believes that the 

Exchange’s proposal to increase the 

three tiered levels of position limits for 

the Specified Index Options is 

reasonable. Specifically, the 

Commission believes that increasing the 

three tiered levels of position limits for 

the Specified Index Options may bring 

additional depth and liquidity to these 

index options classes without 

significantly increasing concerns 

regarding manipulation or disruption of 

the market for index options or the 

underlying component securities.9

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,10 that the 

proposed rule change (SR–Phlx–2009– 

113) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–4458 Filed 3–3–10; 8:45 am] 

BILLING CODE 8011–01–P 

mstockstill on DSKH9S0YB1PROD with NOTICES