47634 Federal Register / Vol. 74, No. 178 / Wednesday, September 16, 2009 / Notices 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Regarding $1 strike price intervals for MNX, see 

Securities Exchange Act Release Nos. 58924 

(November 10, 2008), 73 FR 68464 (November 18, 

2008) (SR–CBOE–2008–96) (approval order); 58997 

(November 21, 2008), 73 FR 72887 (December 1, 

2008) (SR–ISE–2008–88) (notice of filing and 

immediate effectiveness); 59129 (December 22, 

2008), 73 FR 79945 (December 30, 2008) (SR–BSE– 

2008–57) (notice of filing and immediate 

effectiveness); and 60156 (June 22. 2009), 74 FR 

31077 (June 29, 2009) (SR–Phlx-2009–46) (notice of 

filing and immediate effectiveness). Regarding $1 

and smaller strike price intervals for other index 

options, see Securities Exchange Act Release Nos. 

39011 (September 3, 1997), 62 FR 47840 (September 

11, 1997) (SR–CBOE–1997–26) (approval order 

regarding $0.50 strike price intervals for DJIA 

options); and 58207 (July 29, 2008), 73 FR 43963 

(July 22, 2008) (SR–CBOE–2008–26) (approval order 

regarding $1 strike price intervals for BXM options). 

4Regarding $2.50 strike price intervals, see 

Securities Exchange Act Release Nos. 35993 (July 

19, 1995), 60 FR 38073 (July 25, 1995) (approving 

File Nos. SR–Phlx-95–08, SR–Amex-95–12, SR– 

PSE–95–07, SR–CBOE–95–19, and SR–NYSE–95– 

12 and approving the $2.50 pilot program); and 

40662 (November 12, 1998), 63 FR 64297 

(November 19, 1998) (approving File Nos. SR– 

Amex-98–21, SR–CBOE–98–29, SR–PCX–98–31, 

and SR–Phlx-98–26 and permanently approving the 

$2.50 pilot). 

5The SIG Indexes noted herein are trademarks of 

SIG Indices, LLLP. 

6The KBW Bank Index is also known as the 

PHLX/KBW Bank Index. See SR–Phlx-2009–58 

(clarifying the name as KBW Bank Index). 

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–FINRA–2009–056 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–FINRA–2009–056. 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 FINRA. 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–FINRA–2009–056 and 

should be submitted on or before 

October 7, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–22246 Filed 9–15–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60637; File No. SR–Phlx– 

2009–77] 

Self-Regulatory Organizations; Notice 

of Filing of Proposed Rule Change by 

NASDAQ OMX PHLX, Inc. Regarding 

Listing Certain Options at $1 Strike 

Price Intervals Below $200 and Listing 

Certain Options at $2.50 Strike Price 

Intervals Below $200 

September 9, 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 

September 4, 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 amend 

Phlx Rules 1012 (Series of Options 

Open for Trading) and 1101A (Terms of 

Option Contracts) regarding listing 

certain options at $1 strike price 

intervals below $200. The proposal also 

amends Rule 1101A regarding listing 

certain options on indexes at $2.50 

strike price intervals below $200. 

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 rule changes proposed herein are 

consistent with existing rules and 

practices that allow Phlx and other 

options exchanges to list and trade 

Mini-NDX (MNX) and other index 

options at $1 strike price intervals,3 and 

to trade index options at $2.50 strike 

price intervals.4

The purpose of the proposed rule 

change is to amend Phlx Rules 1012 and 

1101A so that the Exchange may list 

eight index options at $1 strike price 

intervals below $200. The purpose is 

also to amend Rule 1101A so that the 

Exchange may list options on two 

indexes at $2.50 strike price intervals 

below $200. 

The indexes underlying options in 

respect of which the Exchange is 

proposing $1 strike price intervals in 

this filing, which are also known as 

sector indexes, are: PHLX Gold/Silver 

Index (option symbol XAU), PHLX 

Housing Index (option symbol HGX), 

PHLX Oil Service Index (option symbol 

OSX), SIG Oil Exploration & Production 

IndexTM (option symbol EPXSM),5 PHLX 

Semiconductor Index (option symbol 

SOX), KBW Bank Index (option symbol 

BKX),6 SIG Energy MLP IndexSM (option 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 74, No. 178 / Wednesday, September 16, 2009 / Notices 47635 

7Reduced Value Russell 2000® Options are also 

known as mini-Russell options. Russell 2000® is a 

trademark and service mark of the Frank Russell 

Company, used under license. Neither Frank 

Russell Company’s publication of the Russell 

Indexes nor its licensing of its trademarks for use 

in connection with securities or other financial 

products derived from a Russell Index in any way 

suggests or implies a representation or opinion by 

Frank Russell Company as to the attractiveness of 

investment in any securities or other financial 

products based upon or derived from any Russell 

Index. Frank Russell Company is not the issuer of 

any such securities or other financial products and 

makes no express or implied warranties of 

merchantability or fitness for any particular 

purpose with respect to any Russell Index or any 

data included or reflected therein, nor as to results 

to be obtained by any person or any entity from the 

use of the Russell Index or any data included or 

reflected therein. 

8Rule 1101A(b)(v) also discusses, among other 

things, that the strike prices of options pursuant to 

the Quarterly Options Series Program (‘‘Quarterly 

Options Series’’) will be fixed at a price per share, 

with at least two, but not more than five, strike 

prices above and at least two, but not more than 

five, strike prices below the value of the underlying 

security at the time that a Quarterly Options Series 

is opened for trading on the Exchange. For strike 

price intervals for non-index options, see Rule 

1012. 

9See subsections (v), (vi), (vii), (viii), (xxii), 

(xxiii), and proposed subsections (xxxii) and (xxxiv) 

of Rule 1101A(a). 

10And, as noted, if the strike price is $200 or 

above, the Exchange may list Index options at $2.50 

or higher strike prices. Rule 1101A. 

11This is consistent with Rule 1101A(a). 

12The language of proposed Commentary .09 to 

Rule 1012 and proposed subsection (xxxvi) of Rule 

1101A(a) in respect of Nasdaq 100® Options is 

conformed. 

13 During the preceding year, each of the $1 

Indexes have lost 50% or more in value, and four 

lost more than 65% in value. While there has been 

some recovery so that as of August 2009 the average 

overall value loss was around 23%, the significant 

losses continue, with two of the indexes continuing 

to show greater than 40% value losses. 

14More than a decade ago, the Commission 

approved $1 strike price intervals for options on 

different products that are sometimes used by 

traders and their customers in lieu of options on 

index funds, namely options on Exchange Traded 

Fund Shares (‘‘ETFs’’). See Securities Exchange Act 

Release Nos. 40157 (July 1, 1998), 63 FR 37426 (July 

10, 1998) (SR–Amex–96–44) (approval order 

regarding $1 strike price intervals for ETFs); 44055 

(March 8, 2001), 66 FR 15310 (March 16, 2001) 

(notice of filing and immediate effectiveness). See 

also Commentary .05 to Rule 1012. 

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

16 15 U.S.C. 78f(b)(5). 

symbol SVOTM), and Reduced Value 

Russell 2000 ® Index (option symbol 

RMN) 7 (these eight indexes are together 

known as the ‘‘$1 Indexes’’ and 

individually as the ‘‘$1 Index’’). The 

indexes underlying options in respect of 

which the Exchange is proposing $2.50 

strike price intervals are the NASDAQ 

China IndexSM (option symbol CNZ) 

and the Reduced Value Russell 2000®

Index (option symbol RMN). 

Strike price intervals for options on 

indexes are established in Rule 

1101A(a) at three levels: (a) At no less 

than $5 generally, (b) at no less than 

$2.50 for options on indexes that are 

specifically listed in the rule; and (c) at 

no less than $1 for Reduced Value 

Nasdaq 100® Options (MNX), which are 

based on 1/10th the value of the Nasdaq 

100® Index (NDX).8 Thus, the $1 

Indexes can be listed at $2.50 strike 

price intervals, as long as the strike 

price is below $200.9

The Exchange now proposes, in 

Commentary .03 to Rule 1101A, that the 

minimum strike price interval for $1 

Indexes will be $1 or greater, as long as 

the strike price is below $200. The 

Exchange believes that $1 strike price 

intervals in these option series will 

provide investors with greater flexibility 

by allowing them to establish positions 

that are better tailored to meet their 

investment objectives. 

For initial series, the Exchange would 

list at least two strike prices above and 

two strike prices below the current 

value of the $1 Index at or about the 

time a series is opened for trading on 

the Exchange. As part of this initial 

listing, the Exchange would list strike 

prices that are within five (5) points 

from the closing value of the $1 Index 

on the preceding day. 

As for additional series, the Exchange 

would be permitted to add series when 

the Exchange deems it necessary to 

maintain an orderly market, to meet 

customer demand or when the 

underlying $1 Index moves 

substantially from the initial exercise 

price or prices. To the extent that any 

additional strike prices are listed by the 

Exchange, such additional strike prices 

shall be within thirty percent (30%) 

above or below the closing value of the 

$1 Index. The Exchange would also be 

permitted to open additional strike 

prices that are more than 30% above or 

below the current $1 Index value 

provided that demonstrated customer 

interest exists for such series, as 

expressed by institutional, corporate or 

individual customers or their brokers. 

Market-Makers trading for their own 

account would not be considered when 

determining customer interest. In 

addition to the initial listed series, the 

Exchange may list up to sixty (60) 

additional series per expiration month 

for each series in $1 Index options. In 

all cases, however, $1 strike price 

intervals may be listed on $1 Index 

options only where the strike price is 

less than $200.10

The Exchange confirms that it shall 

not list LEAPS on $1 Index options at 

intervals less than $2.50.11

The Exchange is also proposing to set 

forth a delisting policy with respect to 

$1 Index options. Specifically, for each 

$1 Index the Exchange will regularly 

review series that are outside a range of 

five (5) strikes above and five (5) strikes 

below the current value of the $1 Index 

and may delist series with no open 

interest in both the put and the call 

series having a: (i) Strike higher than the 

highest strike price with open interest in 

the put and/or call series for a given 

expiration month; and (ii) strike lower 

than the lowest strike price with open 

interest in the put and/or call series for 

a given expiration month. 

Notwithstanding the proposed 

delisting policy, customer requests to 

add strikes and/or maintain strikes in $1 

Index options in series eligible for 

delisting may be granted. 

The Exchange also proposes to clarify 

Commentary .09 to Rule 1012 with an 

internal cross reference stating that the 

intervals between strike prices for 

options on the Reduced Value Russell 

2000® Index would be determined in 

accordance with proposed new 

Commentary .03 to Rule 1101A.12

Phlx has analyzed its capacity and 

represents that it believes the Exchange 

and the Options Price Reporting 

Authority have the necessary systems 

capacity to handle the additional traffic 

associated with listing and trading $1 or 

greater strikes in $1 Index options. 

The Exchange has received numerous 

requests this year from traders of the $1 

Index options for trading in $1 strike 

price increments. The Exchange 

believes that allowing the listing of 

these options at $1 increments as 

proposed, particularly in the current 

economic climate with downward 

pressure on pricing of the $1 Indexes 

discussed herein,13 should enable 

traders of such options and their 

customers to make more accurate and 

tailored trading and hedging 

decisions.14

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 15 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 16

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 

allowing the Exchange to list $1 Index 

options at $1 or greater strike price 

intervals. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 


srobinson on DSKHWCL6B1PROD with NOTICES
47636 Federal Register / Vol. 74, No. 178 / Wednesday, September 16, 2009 / Notices 

17 17 CFR 200.30–3(a)(12). 

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 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission will: (a) By order 

approve such proposed rule change, or 

(b) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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–2009–77 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–2009–77. 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–2009–77 and should 

be submitted on or before October 7, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–22243 Filed 9–15–09; 8:45 am] 

BILLING CODE 8010–01–P 

DEPARTMENT OF STATE 

[Public Notice 6762] 

Additional Designation of Two Entities 

Pursuant to Executive Order 13382 

AGENCY: Department of State. 

ACTION: Designation of North Korea’s 

General Bureau of Atomic Energy 

(GBAE) and Korea Tangun Trading 

Corporation (Tangun) Pursuant to 

Executive Order 13382. 

SUMMARY: Pursuant to the authority in 

section 1(ii) of Executive Order 13382, 

‘‘Blocking Property of Weapons of Mass 

Destruction Proliferators and Their 

Supporters’’, the State Department, in 

consultation with the Secretary of the 

Treasury and the Attorney General, has 

determined that two North Korean 

entities, the General Bureau of Atomic 

Energy (GBAE) and Korea Tangun 

Trading Corporation, have engaged, or 

attempted to engage, in activities or 

transactions that have materially 

contributed to, or pose a risk of 

materially contributing to, the 

proliferation of weapons of mass 

destruction or their means of delivery 

(including missiles capable of delivering 

such weapons), including any efforts to 

manufacture, acquire, possess, develop, 

transport, transfer or use such items, by 

any person or foreign country of 

proliferation concern. 

DATES: The designation by the Under 

Secretary of State of the entities 

identified in this notice pursuant to 

Executive Order 13382 is effective on 

September 3, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Director, Office of Counterproliferation 

Initiatives, Bureau of International 

Security and Nonproliferation, 

Department of State, Washington, DC 

20520, tel.: 202–647–5193. 

Background: 

On June 28, 2005, the President, 

invoking the authority, inter alia, of the 

International Emergency Economic 

Powers Act (50 U.S.C. 1701–1706) 

(‘‘IEEPA’’), issued Executive Order 

13382 (70 FR 38567, July 1, 2005) (the 

‘‘Order’’), effective at 12:01 a.m. eastern 

daylight time on June 30, 2005. In the 

Order the President took additional 

steps with respect to the national 

emergency described and declared in 

Executive Order 12938 of November 14, 

1994, regarding the proliferation of 

weapons of mass destruction and the 

means of delivering them. 

Section 1 of the Order blocks, with 

certain exceptions, all property and 

interests in property that are in the 

United States, or that hereafter come 

within the United States or that are or 

hereafter come within the possession or 

control of United States persons, of: (1) 

The persons listed in the Annex to the 

Order; (2) any foreign person 

determined by the Secretary of State, in 

consultation with the Secretary of the 

Treasury, the Attorney General, and 

other relevant agencies, to have 

engaged, or attempted to engage, in 

activities or transactions that have 

materially contributed to, or pose a risk 

of materially contributing to, the 

proliferation of weapons of mass 

destruction or their means of delivery 

(including missiles capable of delivering 

such weapons), including any efforts to 

manufacture, acquire, possess, develop, 

transport, transfer or use such items, by 

any person or foreign country of 

proliferation concern; (3) any person 

determined by the Secretary of the 

Treasury, in consultation with the 

Secretary of State, the Attorney General, 

and other relevant agencies, to have 

provided, or attempted to provide, 

financial, material, technological or 

other support for, or goods or services 

in support of, any activity or transaction 

described in clause (2) above or any 

person whose property and interests in 

property are blocked pursuant to the 

Order; and (4) any person determined 

by the Secretary of the Treasury, in 

consultation with the Secretary of State, 

the Attorney General, and other relevant 

agencies, to be owned or controlled by, 


srobinson on DSKHWCL6B1PROD with NOTICES