44414 Federal Register / Vol. 74, No. 166 / Friday, August 28, 2009 / Notices 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b-4. 

3March 5, 2007, is the effective date for SR– 

NASD–2007–018 infra and June 17, 2009 is the 

effective date for SR–FINRA–2009–043. 

4See Securities Exchange Act Release No. 55538 

(March 27, 2007), 72 FR 15924 (April 3, 2007). 

5See Securities Exchange Act Release No. 60168 

(June 24, 2009), 74 FR 31471 (July 1, 2009). 

6See Securities Exchange Act Release No. 60239 

(July 2, 2009), 74 FR 33492. 

7 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

8 15 U.S.C. 78o–3(b)(6). 

9See footnote 4, supra. 

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 

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) 

becomes operative for 30 days from the 

date on which it was filed, or such 

shorter time as the Commission may 

designate, it has become effective 

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

Act 8 and Rule 19b–4(f)(6) thereunder.9

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–2009–70 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–2009–70. 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 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 publicly available. All 

submissions should refer to File 

Number SR–Phlx–2009–70 and should 

be submitted on or before September 18, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–20784 Filed 8–27–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60560; File No. SR–FINRA– 

2009–045] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving 

Proposed Rule Change Relating to 

Transaction-Related Charges for Trade 

Reporting to the OTC Reporting 

Facility 

August 21, 2009. 

On July 1, 2009, Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

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 amend Rule 7710, OTC 

Reporting Facility. The proposed rule 

change clarifies the application of 

transaction-related charges for trade 

reporting to the OTC Reporting Facility 

(‘‘ORF’’) by deleting the reference to 

‘‘OTC Equity Security’’ in Rule 7710 to 

clarify that, from March 5, 2007, until 

June 17, 2009,3 the trade reporting 

charges imposed by the rule applied to 

trade reports in any security sent to the 

ORF that were not subject to 

comparison through the ORF. This 

change to the rule is necessary to correct 

an inadvertent mistake made in SR– 

NASD–2007–018.4 In SR–NASD–2007– 

018, FINRA deleted a catch-all phrase 

from Rule 7010(g) which had the effect 

of excluding from the rule securities 

such as PORTAL equity securities, 

which are specifically excluded from 

the definition of OTC Equity Security. 

On June 17, 2009, FINRA filed SR– 

FINRA–2009–043 5 to correct this 

mistake prospectively. The change made 

in the instant rule filing corrects the 

mistake for the period from March 5, 

2007 until June 17, 2009, the date of 

effectiveness of SR–FINRA–2009–043. 

The proposed rule change was 

published for comment in the Federal 

Register on July 13, 2009.6 The 

Commission received no comments on 

the proposal. 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

association.7 In particular, the 

Commission finds that the proposed 

rule change is consistent with the 

provisions of Section 15A(b)(6) of the 

Act,8 which requires, among other 

things, that FINRA rules be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, and, in 

general, to protect investors and the 

public interest. The Commission 

believes that the proposed rule change 

does not raise any novel issues; it is 

merely designed to accurately reflect 

FINRA’s intent when it filed SR–NASD– 

2007–018,9 as well as its members’ 

understanding of the coverage of the 

rule. The proposal clarifies that the 

charges that FINRA assessed with 

respect to transactions that were 

reported to the ORF from March 5, 2007, 

until June 17, 2009 are consistent with 


hsrobinson on DSK69SOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 166 / Friday, August 28, 2009 / Notices 44415 

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

11 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4FLEX Options provide investors with the ability 

to customize basic option features including size, 

expiration date, exercise style, and certain exercise 

prices. FLEX Options can be FLEX Index Options 

or FLEX Equity Options. FLEX Index Options Series 

may be approved and open for trading on any index 

that has been approved for Non-FLEX Options 

trading on the Exchange. FLEX Equity Options may 

be on underlying securities that have been 

approved by the Exchange in accordance with 

NYSE Arca Rule 5.3, which includes but is not 

limited to stock options and exchange-traded fund 

options. Both FLEX Index Options and FLEX Equity 

Options are subject to the FLEX rules in Section 4. 

5For example, under the current rule, a FLEX 

Option could expire on the Tuesday before 

Expiration Friday, but could not expire on the 

Wednesday or Thursday before Expiration Friday. 

Similarly, a FLEX Option could expire on the 

Wednesday after Expiration Friday, but could not 

expire on the Monday or Tuesday after Expiration 

Friday. This restriction is hereinafter referred to as 

the ‘‘three business day’’ expiration restriction. 

6See NYSE Arca Rule 5.35(b). 

7Position Limits for Non-FLEX equity options are 

governed by NYSE Arca Rule 6.8; Exercise Limits 

for Non-FLEX equity options are governed by NYSE 

Arca Rule 6.9; Position Limits for Non FLEX index 

options are governed by Rules 5.15 and 5.16; 

Exercise Limits for Non Flex index options are 

governed by Rule 5.18. 

8The expiration of the contracts for stock index 

futures, stock index options, and stock options all 

expire on the same days occurring on the third 

Friday of March, June, September, and December 

(which is referred to as ‘‘triple witching’’). The 

Exchange’s proposed limitations on p.m. exercise 

settlement values and exercise settlement values 

based on a specified average would apply during 

triple witching expirations, as well as on all other 

Expiration Fridays. 

FINRA’s intent when it filed SR–NASD– 

2007–018. 

It is therefore ordered, pursuant to 

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

proposed rule change (SR–FINRA– 

2009–045) 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. E9–20783 Filed 8–27–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60549; File No. SR– 

NYSEArca–2009–75] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Arca, Inc. Amending Permissible 

Expiration Dates for Flexible Exchange 

Options 

August 20, 2009. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on August 

12, 2009, NYSE Arca, Inc. (‘‘NYSE 

Arca’’ or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. 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 amend its 

rules regarding permissible expiration 

dates for Flexible Exchange Options 

(‘‘FLEX Options’’).4 The text of the 

proposed rule change is available on the 

Exchange’s Web site at http:// 

www.nyse.com, at the Exchange’s 

principal office 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this proposal is to 

correct certain cross-references and 

modify the permissible expiration dates 

for FLEX Options. These options are 

governed by Flexible Exchange Options, 

Section 4 pursuant to the Rules of NYSE 

Arca, Inc. Under current NYSE Arca 

Rule 5.32, FLEX options may not expire 

on any business day that falls on, or 

within two business days of, a third 

Friday-of-the-month expiration day for 

any Non-FLEX Options (an ‘‘Expiration 

Friday’’).5 However, subject to 

aggregation requirements 6 for cash 

settled options, the current FLEX Rules 

do permit the expiration of FLEX 

Options on the same day that Non-FLEX 

quarterly index options (‘‘QIX’’) expire. 

The Exchange is now proposing to 

eliminate the expiration date restriction 

so that FLEX Options may expire on any 

given business day. Although the 

expiration date restrictions would be 

eliminated, the Exchange notes that 

position and exercise limits under 

applicable NYSE Arca rules will 

continue to apply. FLEX Index Options 

remain subject to position limits under 

NYSE Arca Rules 6.8 and 5.35, as 

applicable. Additionally, all FLEX 

Options remain subject to the position 

reporting requirements of NYSE Arca 

Rule 6.8. Moreover, the Exchange has 

the authority, pursuant to NYSE Arca 

Rule 5.25, to impose additional margin 

requirements as deemed advisable. 

Beyond the above described position 

limit and reporting requirements for 

FLEX Options that expire on Expiration 

Friday, the proposed rule change 

includes an aggregation requirement 

under NYSE Arca Rule 5.35 for position 

limit purposes. Specifically, for as long 

as the options positions remain open, 

positions in FLEX Options that expire 

on Expiration Friday shall be aggregated 

with positions in Non-FLEX options on 

the same underlying (e.g., the same 

underlying security in the case of a 

FLEX Equity Option and the same 

underlying index in the case of a FLEX 

Index Option) (referred to as 

‘‘Comparable Non-FLEX options’’). Such 

FLEX Options and comparable NonFLEX options would be subject to the 

position and exercise limits that are 

applicable to the Non-FLEX Options.7

The aggregation requirement would 

apply to both cash and physically 

settled options. 

In addition, in the case of FLEX Index 

Options only, the proposed rule change 

provides that FLEX Index Options 

expiring on or within two business days 

of an Expiration Friday may not have an 

exercise settlement value on the 

expiration date determined by reference 

to the closing price of the index or 

specified averages. Therefore, the 

exercise settlement value on such 

expiration dates may only be 

determined by a.m. settlement values. 

These limitations on exercise settlement 

value calculations are intended to serve 

as a safeguard against potential adverse 

effects that might be associated with 

triple witching.8

In conjunction with the elimination of 

the expiration date restriction, the 

proposed rule change also states that, 

provided the options on an underlying 

security or index are otherwise eligible 

for FLEX trading, FLEX Options will be 

permitted in puts and calls that do not 

have the same exercise style, same 

expiration date and same exercise price 


hsrobinson on DSK69SOYB1PROD with NOTICES