5704 Federal Register / Vol. 74, No. 19 / Friday, January 30, 2009 / Notices 

106 15 U.S.C. 78s(b)(2). 

107See supra note 3. 

108 15 U.S.C. 78s(b)(2). 109 15 U.S.C. 78s(b)(2). 

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

2 17 CFR 240.19b–4. 

3Premium Products is defined in the Schedule of 

Fees as the products enumerated therein. 

which enables them to compete with 

Non-Customers who are registered 

broker-dealers—the same transaction 

fees that it charges to such NonCustomers. 

C. Accelerated Approval of Proposed 

Rule Change, as Modified by 

Amendment Nos. 1 and 2 

Pursuant to Section 19(b)(2) of the 

Act,106 the Commission may not 

approve any proposed rule change, or 

amendment thereto, prior to the 30th 

day after the date of publication of 

notice of the filing thereof, unless the 

Commission finds good cause for so 

doing and publishes its reasons for so 

finding. The Commission hereby finds 

good cause for approving the proposed 

rule change, as modified by Amendment 

Nos. 1 and 2, before the 30th day after 

the date of publication of notice of filing 

thereof in the Federal Register.107 The 

Commission notes that the proposal, as 

modified by Amendment No. 1, was 

published for comment in the Federal 

Register on February 7, 2008. The 

revisions made to the proposal in 

Amendment No. 2 deleted proposed 

changes to ISE Rules 715 and ISE Rule 

723(d)(2). These revisions appropriately 

clarify that the proposed rule change 

would not limit a Public Customer’s 

access to the Exchange’s PIM. 

Accordingly, pursuant to Section 

19(b)(2) of the Act,108 the Commission 

finds good cause to approve the 

proposed rule change, as modified by 

Amendment Nos. 1 and 2, on an 

accelerated basis. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change, as modified by Amendment 

Nos. 1 and 2, 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–ISE–2006–26 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–ISE–2006–26. 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 available publicly. All 

submissions should refer to File 

Number SR–ISE–2006–26 and should be 

submitted on or before February 20, 

2009. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,109 that the 

proposed rule change (SR–ISE–2006– 

26), as modified by Amendment Nos. 1 

and 2, be, and it hereby is, approved on 

an accelerated basis. 

By the Commission. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–1979 Filed 1–29–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59288; File No. SR–ISE– 

2009–03] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to Fee Changes 

January 23, 2009. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on January 

15, 2009, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) filed with the Securities and 

Exchange Commission the proposed 

rule change, as described in Items I, II, 

and III 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 ISE is proposing to amend its 

Schedule of Fees to establish fees for 

transactions in options on 4 Premium 

Products.3 The text of the proposed rule 

change is available on the Exchange’s 

Web site (http://www.ise.com), 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 

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 these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization 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 Exchange is 

proposing to amend its Schedule of Fees 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 74, No. 19 / Friday, January 30, 2009 / Notices 5705 

4 ‘‘NASDAQ–100 Index’’ is a trademark of the 

NASDAQ Stock Markets, Inc. (‘‘NASDAQ’’) and has 

been licensed for use for certain purposes by 

ProShares Trust. All other trademarks and service 

marks are the property of their respective owners. 

The Short QQQ ProShares (‘‘PSQ’’) is not 

sponsored, endorsed, sold or promoted by 

NASDAQ. NASDAQ has not licensed or authorized 

ISE to (i) engage in the creation, listing, provision 

of a market for trading, marketing, and promotion 

of options on PSQ or (ii) to use and refer to any 

of their trademarks or service marks in connection 

with the listing, provision of a market for trading, 

marketing, and promotion of options on PSQ or 

with making disclosures concerning options on 

PSQ under any applicable federal or state laws, 

rules or regulations. NASDAQ does not sponsor, 

endorse, or promote such activity by ISE and is not 

affiliated in any manner with ISE. 

5 ‘‘Standard & Poor’s,’’ ‘‘S&P,’’ ‘‘S&P 500,’’ 

‘‘Standard & Poor’s 500,’’ ‘‘500’’ are trademarks of 

The McGraw-Hill Companies, Inc. (‘‘McGraw-Hill’’) 

and have been licensed for use for certain purposes 

by ProShares Trust. All other trademarks and 

service marks are the property of their respective 

owners. The Short S&P500 ProShares (‘‘SH’’) is not 

sponsored, endorsed, sold or promoted by Standard 

& Poor’s, (‘‘S&P’’), a division of McGraw-Hill. S&P 

has not licensed or authorized ISE to (i) engage in 

the creation, listing, provision of a market for 

trading, marketing, and promotion of options on SH 

or (ii) to use and refer to any of their trademarks 

or service marks in connection with the listing, 

provision of a market for trading, marketing, and 

promotion of options on SH or with making 

disclosures concerning options on SH under any 

applicable federal or state laws, rules or regulations. 

S&P does not sponsor, endorse, or promote such 

activity by ISE and is not affiliated in any manner 

with ISE. 

6 ‘‘Lehman Brothers’’ and ‘‘Lehman Brothers Inc.’’ 

are trademarks of Lehman Brothers Inc. (‘‘Lehman’’) 

and have been licensed for use for certain purposes 

by ProShares Trust. All other trademarks and 

service marks are the property of their respective 

owners. The UltraShort Lehman 20+ Year Treasury 

ProShares (‘‘TBT’’) is not sponsored, endorsed, sold 

or promoted by Lehman. Lehman has not licensed 

or authorized ISE to (i) engage in the creation, 

listing, provision of a market for trading, marketing, 

and promotion of options on TBT or (ii) to use and 

refer to any of their trademarks or service marks in 

connection with the listing, provision of a market 

for trading, marketing, and promotion of options on 

TBT or with making disclosures concerning options 

on TBT under any applicable federal or state laws, 

rules or regulations. Lehman does not sponsor, 

endorse, or promote such activity by ISE and is not 

affiliated in any manner with ISE. 

7The PowerShares DB U.S. Dollar Bearish Fund 

(‘‘UDN’’) is based on the Deutsche Bank Short U.S. 

Dollar Index (USDX®) Futures IndexTM (‘‘DB Short 

USD Futures Index’’). The sponsor of the DB Short 

USD Futures Index is Deutsche Bank AG, London 

(‘‘DB AG’’). UDN is managed by DB Commodity 

Services LLC. U.S. Dollar Index® and USDX® are 

registered service marks of 

IntercontinentalExchange, Inc. PowerShares® is a 

registered service mark of PowerShares Capital 

Management LLC (‘‘PowerShares’’). UDN is not 

sponsored, endorsed, sold or promoted by DB AG, 

and DB AG makes no representation regarding the 

advisability of investing in UDN. Neither DB AG 

nor PowerShares has licensed or authorized ISE to 

(i) engage in the creation, listing, provision of a 

market for trading, marketing, and promotion of 

options on UDN or (ii) to use and refer to any of 

their trademarks or service marks in connection 

with the listing, provision of a market for trading, 

marketing, and promotion of options on UDN or 

with making disclosures concerning options on 

UDN under any applicable federal or state laws, 

rules or regulations. DB AG and PowerShares do 

not sponsor, endorse, or promote such activity by 

ISE and are not affiliated in any manner with ISE. 

8These fees will be charged only to Exchange 

members. Under a pilot program that is set to expire 

on July 31, 2009, these fees will also be charged to 

Linkage Principal Orders (‘‘Linkage P Orders’’) and 

Linkage Principal Acting as Agent Orders (‘‘Linkage 

P/A Orders’’). The amount of the execution fee 

charged by the Exchange for Linkage P Orders and 

Linkage P/A Orders is $0.24 per contract side and 

$0.15 per contract side, respectively. See Securities 

Exchange Act Release No. 58143 (July 11, 2008), 73 

FR 41388 (July 18, 2008) (SR–ISE–2008–52). 

9Public Customer Order is defined in Exchange 

Rule 100(a)(39) as an order for the account of a 

Public Customer. Public Customer is defined in 

Exchange Rule 100(a)(38) as a person or entity that 

is not a broker or dealer in securities. 

10The Exchange applies a sliding scale, between 

$0.01 and $0.18 per contract side, based on the 

number of contracts an ISE market maker trades in 

a month. 

11The amount of the execution fee for non-ISE 

Market Maker transactions executed in the 

Exchange’s Facilitation and Solicitation 

Mechanisms is $0.19 per contract. 

12 15 U.S.C. 78f. 

13 15 U.S.C. 78f(b)(4). 

14 15 U.S.C. 78s(b)(3)(A). 

15 17 CFR 240.19b–4(f)(2). 

to establish fees for transactions in 

options on the Short QQQ ProShares 

(‘‘PSQ’’),4 the Short S&P500 ProShares 

(‘‘SH’’),5 the UltraShort Lehman 20+ 

Year Treasury ProShares (‘‘TBT’’),6 and 

the PowerShares DB U.S. Dollar Bearish 

Fund (‘‘UDN’’).7 The Exchange 

represents that PSQ, SH, TBT and UDN 

are eligible for options trading because 

they constitute ‘‘Exchange-Traded Fund 

Shares,’’ as defined by ISE Rule 502(h). 

All of the applicable fees covered by 

this filing are identical to fees charged 

by the Exchange for all other Premium 

Products. Specifically, the Exchange is 

proposing to adopt an execution fee for 

all transactions in options on PSQ, SH, 

TBT and UDN.8 The amount of the 

execution fee for products covered by 

this filing shall be $0.18 per contract for 

all Public Customer Orders 9 and $0.20 

per contract for all Firm Proprietary 

orders. The amount of the execution fee 

for all ISE Market Maker transactions 

shall be equal to the execution fee 

currently charged by the Exchange for 

ISE Market Maker transactions in equity 

options.10 Finally, the amount of the 

execution fee for all non-ISE Market 

Maker transactions shall be $0.45 per 

contract.11 Further, since options on 

PSQ, SH, TBT and UDN are multiplylisted, the Exchange’s Payment for 

Order Flow fee shall apply to all these 

products. The Exchange believes the 

proposed rule change will further the 

Exchange’s goal of introducing new 

products to the marketplace that are 

competitively priced. 

(b) Basis—The Exchange believes that 

the proposed rule change is consistent 

with the objectives of Section 6 of the 

Act,12 in general, and furthers the 

objectives of Section 6(b)(4),13 in 

particular, in that it is designed to 

provide for the equitable allocation of 

reasonable dues, fees and other charges 

among its members and other persons 

using its facilities. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

impose any burden on competition that 

is 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 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3) of 

the Act 14 and Rule 19b–4(f)(2) 15

thereunder. At any time within 60 days 

of the filing of such 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 proposal 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 

No. SR–ISE–2009–03 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 No. 

SR–ISE–2009–03. This file number 

should be included on the subject line 

mstockstill on PROD1PC66 with NOTICES

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