Federal Register / Vol. 74, No. 158 / Tuesday, August 18, 2009 / Notices 41773 

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

2 17 CFR 240.19b–4. 

3FLEX currency options are long-term U.S. 

dollar-settled foreign currency options (‘‘FCOs’’) 

that are up to three years in length. See Rule 

1079(a)(6). FCOs are also known as World Currency 

Options (‘‘WCOs’’). See also Rule 1012 (Exchange 

may list FCOs having up to three years from the 

time they are listed until expiration). 

4See Securities Exchange Act Release Nos. 54989 

(December 21, 2006), 71 FR 78506 (December 29, 

2006) (SR–Phlx–2006–34) (approval order regarding 

the listing and trading of U.S. dollar-settled FCOs 

on the British pound and the Euro); and 56034 (July 

10, 2007), 72 FR 38853 (July 16, 2007) (SR–Phlx– 

2007–34) (approval order regarding the listing and 

trading of U.S. dollar-settled FCOs on the 

Australian dollar, the Canadian dollar, the Swiss 

franc, and the Japanese yen). 

5See Securities Exchange Act Release No. 60196 

(June 24, 2009), 74 FR 31782 (July 2, 2009) 

(approval order regarding the listing and trading of 

the Mexican peso, the Brazilian real, the Chinese 

yuan, the Danish krone, the New Zealand dollar, 

the Norwegian krone, the Russian ruble, the South 

African rand, the South Korean won, and the 

Swedish krona). 

6 In contrast, physical delivery foreign currency 

options, so named because settlement could involve 

delivery of the underlying currency, were listed and 

traded on the exchange through early 2007; all open 

interest in physical delivery options was traded out 

or expired by the end of March 2007. 

7See Rule 1079(a)(9)(B). 

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

9 15 U.S.C. 78f(b)(5). 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(6)(iii). 

12For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

Continued 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60486; File No. SR–Phlx– 

2009–68] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX PHLX, Inc. Relating to Settlement 

of FLEX Currency Options 

August 12, 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 August 6, 

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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to clarify Phlx 

Rule 1079 (FLEX Index, Equity and 

Currency Options) regarding settlement 

of FLEX currency options 3 in U.S. 

dollars. The text of the proposed rule 

change is available on the Exchange’s 

Web site at http:// 

nasdaqomxphlx.cchwallstreet.com/ 

NASDAQOMXPHLX/Filings/, 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 clarify Phlx Rule 1079 

regarding settlement of FLEX currency 

options in U.S. dollars. 

In 2007, the Exchange listed and 

began trading six U.S. dollar-settled 

FCOs.4 In July 2009, the Commission 

approved the Exchange’s filing to list 

and trade ten additional U.S. dollarsettled FCOs (the ‘‘New Currencies’’).5

The Exchange’s 2009 filing, in addition 

to providing the capability to list and 

trade the New Currencies, among other 

things established position limits and 

spelled out a uniform pricing 

convention (methodology) for all U.S. 

dollar-settled FCOs. 

Currently, sixteen FCOs are listed and 

traded on the Exchange. The defining 

characteristic of all FCOs is that they are 

all U.S. dollar-settled, that is, they do 

not require delivery of an underlying 

foreign currency and settle only in U.S. 

dollars.6 Each of these FCOs can be 

traded as long-term FLEX currency 

options. FLEX currency options, which 

are U.S. dollar-settled FCOs that have 

long expiration dates up to three years 

in length, also settle in U.S. dollars.7

This filing clarifies Rule 1079 

indicating that FLEX currency options 

settle in U.S. dollars. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 8 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 9

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 

clarifying the settlement of FLEX 

currency options in U.S. dollars. 

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 

The Exchange believes that the 

foregoing proposed rule change may 

take effect upon filing with the 

Commission pursuant to Section 

19(b)(3)(A) 10 of the Act and Rule 19b– 

4(f)(6)(iii) thereunder 11 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 from the date on 

which it was filed, or such shorter time 

as the Commission may designate. 

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. 

The Exchange has asked the 

Commission to waive the 30-day 

operative delay set forth in Rule 19b– 

4(f)(6)(iii). The Commission believes 

investors will be best served by 

clarifying without delay that FLEX 

currency options settle in U.S. dollars 

on the Exchange. The Commission also 

notes that the proposed rule change 

presents no novel issues. For these 

reasons, the Commission believes it is 

consistent with the protection of 

investors and the public interest to 

waive the 30-day operative delay, and 

hereby grants such waiver.12


jlentini on DSKJ8SOYB1PROD with NOTICES
41774 Federal Register / Vol. 74, No. 158 / Tuesday, August 18, 2009 / Notices 

proposed rule change’s impact on efficiency, 

competition, and capital formation. 15 U.S.C. 78c(f). 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The current FINRA rulebook consists of (1) 

FINRA Rules; (2) NASD Rules; and (3) rules 

incorporated from NYSE (‘‘Incorporated NYSE 

Rules’’) (together, the NASD Rules and Incorporated 

NYSE Rules are referred to as the ‘‘Transitional 

Rulebook’’). While the NASD Rules generally apply 

to all FINRA members, the Incorporated NYSE 

Rules apply only to those members of FINRA that 

are also members of the NYSE (‘‘Dual Members’’). 

The FINRA Rules apply to all FINRA members, 

unless such rules have a more limited application 

by their terms. For more information about the 

rulebook consolidation process, see FINRA 

Information Notice, March 12, 2008 (Rulebook 

Consolidation Process). 

4The term ‘‘financial institution’’ includes 

Federal and State-chartered banks, savings and loan 

associations, savings banks, credit unions, and the 

service corporations of such institutions required by 

law. 

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–2009–68 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–2009–68. 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 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 

offices 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– 

2009–68, and should be submitted on or 

before September 8, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19744 Filed 8–17–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60475; File No. SR–FINRA– 

2009–047] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change To Adopt 

FINRA Rule 3160 (Networking 

Arrangements Between Members and 

Financial Institutions) in the 

Consolidated FINRA Rulebook 

August 11, 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 July 21, 

2009, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) (f/k/a 

National Association of Securities 

Dealers, Inc. (‘‘NASD’’)) 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 

substantially prepared by FINRA. 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 

FINRA is proposing to adopt NASD 

Rule 2350 (Broker/Dealer Conduct on 

the Premises of Financial Institutions) 

as FINRA Rule 3160 in the consolidated 

FINRA rulebook, subject to certain 

amendments. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, at the principal 

office of FINRA 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, 

FINRA 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. FINRA 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 

As part of the process of developing 

a new consolidated rulebook 

(‘‘Consolidated FINRA Rulebook’’),3

FINRA is proposing to adopt NASD 

Rule 2350 (Broker/Dealer Conduct on 

the Premises of Financial Institutions), 

subject to certain amendments, as 

FINRA Rule 3160 (Networking 

Arrangements Between Members and 

Financial Institutions). The details of 

the proposed rule change are described 

below. 

NASD Rule 2350 

NASD Rule 2350 governs the 

activities of broker-dealers on the 

premises of financial institutions.4 Also 

known as the ‘‘bank broker-dealer rule,’’ 

Rule 2350 generally requires brokerdealers that conduct business on the 

premises of a financial institution where 

retail deposits are taken to: (1) Enter 

into a written agreement with the 

financial institution specifying each 

party’s responsibilities and the terms of 

compensation (networking agreement); 

(2) segregate the securities activities 

conducted on the premises of the 

financial institution from the retail 

deposit-taking area; (3) allow access for 

inspection and examination by the SEC 

and FINRA; (4) ensure that 

communications with customers clearly 

identify that the broker-dealer services 

are provided by the member; (5) 

disclose to customers that the securities 

products offered by the broker-dealer 

are not insured like other banking 

products; and (6) make reasonable 


jlentini on DSKJ8SOYB1PROD with NOTICES