5706 Federal Register / Vol. 74, No. 19 / Friday, January 30, 2009 / Notices 

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b–4(f)(6). 

5 15 U.S.C. 78s(b)(1). 

6 17 CFR 240.19b–4. 

7FCOs are currently traded on the Exchange 

under the name World Currency Options. 

8See Exchange Act Release No. 58340 (August 11, 

2008), 73 FR 48268 (August 18, 2008) (SR–Phlx– 

2007–33). Pursuant to this filing, Rule 721 was 

amended to add subsection (b) requiring Exchange 

members to make an election to be bound by either 

CBOE or NYSE margin rules, and Phlx Rule 722 

was shortened. 

9The Exchange will inform its members and the 

public of the margin levels for each currency option 

immediately following the quarterly reviews 

described in Rule 721(c). 

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 (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of such filing also will be 

available for inspection and copying at 

the principal office of the ISE. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File No. 

SR–ISE–2009–03 and should be 

submitted on or before February 20, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–2061 Filed 1–29–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59283; File No. SR–Phlx– 

2009–01] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Margin Requirements for Foreign 

Currency Options 

January 23, 2009. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1, and Rule 19b–4 2 thereunder, 

notice is hereby given that on January 

15, 2009, NASDAQ OMX PHLX, Inc. 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III, below, which Items have been 

substantially prepared by the Exchange. 

Phlx has filed the proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f)(6) thereunder,4

which renders the proposed rule change 

effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange, pursuant to Section 

19(b)(1) of the Act 5 and Rule 19b–4 

thereunder,6 proposes to amend Phlx 

Rule 721, Proper and Adequate Margin, 

to add margin requirements for U.S. 

dollar-settled foreign currency options 

(‘‘FCOs’’).7

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to add margin requirements 

for U.S. dollar-settled FCOs (‘‘FCO 

margin requirements’’ or ‘‘FCO margin’’) 

in Phlx Rule 721(c). 

The FCO margin requirements 

proposed are substantially similar to 

prior Commentary .16 to Phlx Rule 722, 

which was removed in a recent filing to 

simplify Phlx’s margin rules.8 The FCO 

margin requirements are also 

substantially similar to current ISE Rule 

1202(d). 

Accordingly, under proposed Phlx 

Rule 721(c), the Exchange will calculate 

the margin requirement for customers 

that assume short FCO positions by 

adding a percentage of the current 

market value of the underlying foreign 

currency contract to the option 

premium price less an adjustment for 

the out-of-the-money amount of the 

option contract. On a quarterly calendar 

basis, the Exchange will review five-day 

price changes over the preceding threeyear period for each underlying 

currency and set the add-on percentage 

at a level which would have covered 

those price changes at least 97.5% of the 

time (the ‘‘confidence level’’). 

If the results of subsequent reviews 

show that the current margin level 

provides a confidence level below 97%, 

the Exchange will increase the margin 

requirement for that individual currency 

up to a 98% confidence level. If the 

confidence level is between 97% and 

97.5%, the margin level will remain the 

same but will be subject to monthly 

follow-up reviews until the confidence 

level exceeds 97.5% for two consecutive 

months. If, during the course of the 

monthly follow-up reviews, the 

confidence level drops below 97%, the 

margin level will be increased to a 98% 

level and if it exceeds 97.5% for two 

consecutive months, the currency will 

be taken off monthly reviews and will 

be put back on the quarterly review 

cycle. If the currency exceeds 98.5%, 

the margin level will be reduced to a 

98% confidence level during the most 

recent 3 year period. 

Finally, in order to account for large 

price movements outside the 

established margin level, if the quarterly 

review shows that the currency had a 

price movement, either positive or 

negative, greater than two times the 

margin level during the most recent 3 

year period, the margin requirement 

will be set at a level to meet a 99% 

confidence level (‘‘Extreme Outlier 

Test’’).9 These parameters are identical 

to prior Commentary .16 to Phlx Rule 

722. 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 74, No. 19 / Friday, January 30, 2009 / Notices 5707 

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

11 15 U.S.C. 78f(b)(5). 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

provide the Commission with written notice of its 

intent to file the proposed rule change, along with 

a brief description and text of the proposed rule 

change, at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. The 

Exchange has fulfilled this requirement. 

14 17 CFR 240.19b–4(f)(6). 

15Exchange Act. Release No. 55575 (April 3, 

2007), 72 FR 17963 (April 10, 2007) (SR–ISE–2006– 

59). 

16For purposes only of waiving the operative 

delay for this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition and capital formation. See 

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

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 10 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 11

in particular, in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general to protect 

investors and the public interest. The 

Exchange believes that the proposal is 

consistent with these obligations 

because clarification of the Exchange’s 

FCO margin rules should benefit 

investors and traders and be in the 

public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

II. Date of Effectiveness of the Proposed 

Rule Change and Timing for 

Commission Action 

Because the forgoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days after the date of 

the filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, it has become effective 

pursuant to Section 19(b)(3)(A) of the 

Act 12 and Rule 19b–4(f)(6) 

thereunder.13

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing. However, Rule 19b– 

4(f)(6)(iii) permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest.14 Phlx 

requests that the Commission waive the 

30-day operative delay. The proposed 

rule change is substantially similar to an 

ISE rule relating to margin for foreign 

currency options.15 The Commission 

believes that this proposed rule change 

does not raise any new, unique or 

substantive issues from those raised in 

the approved ISE filing. The 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest because such waiver will 

allow the Phlx to apply FCO margin 

rules that are similar to those of other 

options exchanges.16 Therefore, the 

Commission designates the proposal 

operative upon filing. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–Phlx–2009–01 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–Phlx–2009–01. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room, 100 F Street, NE., Washington, 

DC 20549 on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of the filing also will be available 

for inspection and copying at the 

principal office of the Exchange. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. 

All submissions should refer to File 

Number SR–Phlx–2009–01 and should 

be submitted on or before February 20, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–1978 Filed 1–29–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Release No. 34–59290; File No. SR–NYSE– 

2009–05] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Introduce a 

Pilot Program for NYSE Trades 

January 23, 2009. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 

16, 2009, the New York Stock Exchange, 

LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by NYSE. NYSE has 

designated the proposed rule change as 

mstockstill on PROD1PC66 with NOTICES