Federal Register / Vol. 74, No. 183 / Wednesday, September 23, 2009 / Notices 48619 

22For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3FLEX options are flexible exchange-traded 

options contracts that overly index, equity, and 

currency securities. FLEX options provide investors 

with the ability to customize basic option features 

including size, expiration date, exercise style, and 

certain exercise prices. FLEX options may have long 

expiration dates within five years for FLEX index 

options and three years for FLEX equity options and 

FLEX currency options. See Rule 1079. 

4For example, under current Rule 1079, 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. 

5See Rule 1079(a)(6)(A). 

6Proposed Rule 1079(a)(6) states that the 

expiration date for FLEX options is: Any month, 

business day and year within five years for FLEX 

index options and within three years for FLEX 

currency options, except that (i) a FLEX index 

option that expires on or within two business days 

prior or subsequent to a third Friday-of-the-month 

expiration day for a non-FLEX option (except 

quarterly expiring index options) or underlying 

currency may only have an exercise settlement 

Continued 

exemptions granted by other exchanges, 

when appropriately documented— 

without unnecessary delay. For this 

reason, the Commission designates the 

proposed rule change as operative under 

upon filing.22

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–2009–79 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–2009–79. 

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. 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–2009–79 and should 

be submitted on or before October 14, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–22876 Filed 9–22–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60679; File No. SR–Phlx– 

2009–81] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

FLEX Option Expirations 

September 16, 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 15, 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 and II 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 Rule 1079 (FLEX Index, Equity and 

Currency Options) regarding 

permissible expiration dates for FLEX 

options.3

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 modify the permissible 

expiration dates for FLEX options in 

Phlx Rule 1079. 

Under current Rule 1079, FLEX 

options may not expire on any business 

day that falls on, or within two business 

days of an expiration day for any nonFLEX option on the same underlying 

security (an ‘‘Expiration Friday’’).4

However, subject to aggregation 

requirements 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’’ or ‘‘Quarterly Options’’) 

expire.5

The Exchange is now proposing to 

eliminate the expiration date restriction 

so that FLEX options may expire on any 

given business day.6 Although the 

mstockstill on DSKH9S0YB1PROD with NOTICES

48620 Federal Register / Vol. 74, No. 183 / Wednesday, September 23, 2009 / Notices 

value on the expiration date determined by 

reference to the reported level of the index as 

derived from the opening prices of the component 

securities (‘‘a.m. settlement’’) and (ii) all FLEX 

currency options will expire at 11:59 p.m. eastern 

time on their designated expiration date. 

7Position and equity limits for non-FLEX equity, 

currency, and index options are governed by Rules 

1001, 1002, 1001A, and 1002A. 

8Contracts 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’’). Currency options expire on the 

same days. 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. 

9The Exchange represents that it has appropriate 

surveillances in place to monitor transactions in 

FLEX options. 

10The Exchange also proposes technical changes 

in Rule 1079 such as, for example, a definitional 

cross-reference in subsection (a)(2); updating 

language to reflect the proper trading system name 

and deletion of an obsolete reference to AUTOM in 

(b); deletion of a reference to settlement currency 

in respect of index options because they settle in 

U.S. dollars in (b)(1); deletion of position limits for 

products that no longer trade on the Exchange in 

(d)(1); and deletion of an obsolete rule references 

(sic) in (d)(2). 

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

12 15 U.S.C. 78f(b)(5). 

13 15 U.S.C. 78s(b)(3)(A)(iii). 

14 17 CFR 240.19b–4(f)(6). 

expiration date restrictions would be 

eliminated, the Exchange notes that all 

other requirements for FLEX options in 

Rule 1079 would continue to apply. 

FLEX options remain subject to position 

limits under Rule 1079(d) and exercise 

limits under Rule 1079(e). Moreover the 

margin requirements in Rule 721 

continue to apply and the Exchange has 

the authority, pursuant to Rule 

1079(d)(2), to impose additional margin 

requirements as deemed advisable. 

The Exchange is also proposing an 

aggregation requirement under Rule 

1079(d) 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 underlying 

security in the case of a FLEX equity 

option, and the underlying index in the 

case of a FLEX index option) (referred 

to as ‘‘comparable non-FLEX options’’). 

Such FLEX options and comparable 

non-FLEX options would be subject to 

the position and exercise limits that are 

applicable to the non-FLEX options.7

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 

as non-FLEX options that are already 

available for trading on the same 

underlying security or index. The 

proposed rule change also provides that 

FLEX options will be permitted before 

(but not after) the options are listed for 

trading as non-FLEX options. Once and 

if an option series is listed for trading 

as a non-FLEX option series, then: (i) 

All existing open positions established 

under the FLEX trading procedures 

shall be fully fungible with transactions 

in the respective non-FLEX options 

series, and (ii) any further trading in the 

series would be as non-FLEX options 

subject to the Exchange’s non-FLEX 

trading procedures and rules. 

For example, a FLEX trader could 

establish a FLEX options position in a 

European-style, a.m. settled MNX 210 

call option series with an expiration of 

August 19, 2011 (which will be an 

Expiration Friday). In such instance, 

once and if the non-FLEX, Europeanstyle, a.m. settled MNX 210 call option 

series that expires on August 19, 2011 

is listed for trading, the established 

FLEX option position would be fully 

fungible with transactions in the nonFLEX option series. Any further trading 

in the series would be as non-FLEX 

options subject to non-FLEX option 

trading procedures. 

The Exchange will report any undue 

effects or unanticipated consequences 

that may occur due to the elimination of 

the three business day expiration 

restriction (blackout period). 

The Exchange believes that expanding 

the eligible dates for FLEX expirations 

is important and necessary to the 

Exchange’s efforts to create a product 

and market that provides market 

participants on the Exchange including 

investors interested in FLEX-type 

options with an improved but 

comparable alternative to the over-thecounter (‘‘OTC’’) market in customized 

options, which can take on contract 

characteristics similar to FLEX options 

but are not subject to the same 

restrictions (such as the three business 

day expiration restriction or the p.m. 

settlement restriction).9 By expanding 

the eligible expiration dates for FLEX 

options, market participants will now 

have greater flexibility in determining 

whether to execute their customized 

options in an exchange environment or 

in the OTC market. The Exchange 

believes that market participants benefit 

from being able to trade these 

customized options in an exchange 

environment in several ways, including, 

but not limited to, the following: (1) 

Enhanced efficiency in initiating and 

closing out positions; (2) increased 

market transparency; and (3) heightened 

contra-party creditworthiness because of 

the role of The Options Clearing 

Corporation (‘‘OCC’’) as issuer and 

guarantor of FLEX options.10

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 11 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 12

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 

providing additional opportunities to 

trade customized FLEX options in an 

exchange environment. 

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 has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 13 and Rule 

19b–4(f)(6) thereunder.14 Because the 

foregoing rule 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 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 74, No. 183 / Wednesday, September 23, 2009 / Notices 48621 

15The Exchange has fulfilled this five day 

requirement. 

16 15 U.S.C. 78s(b)(3)(A). 

17 17 CFR 240.19b–4(f)(6). 

18 Id. 

19For purposes only of waiving the operative 

delay of this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). See also 17 CFR 200.30–3(a)(59). 

20Securities Exchange Act Release No. 59417 

(February 18, 2009), 74 FR 8591 (February 25, 2009) 

(SR–CBOE–2008–115). 21 17 CFR 200.30–3(a)(12). 

designate if consistent with the 

protection of investors and the public 

interest, provided that the selfregulatory organization has given the 

Commission written notice of its intent 

to file 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,15 the proposed rule 

change has become effective pursuant to 

Section 19(b)(3)(A) of the Act 16 and 

Rule 19b–4(f)(6) thereunder.17

Under Rule 19b–4(f)(6) of the Act,18 a 

proposal does not become operative for 

30 days after the date of its filing, or 

such shorter time as the Commission 

may designate if consistent with the 

protection of investors and the public 

interest. 

The Exchange has requested that the 

Commission waive the 30-day operative 

date. The Exchange notes that the 

proposed rule change is based on the 

rules of another self-regulatory 

organization and raises no new policy 

issues. 

The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest, and 

thus designates the proposal as 

operative upon filing.19 The 

Commission notes that the Exchange’s 

proposal is based on a similar proposed 

rule change adopted by the Chicago 

Board Options Exchange.20 That 

proposal was subject to full notice and 

comment and no comments were 

received. Based on this, the Commission 

believes that it is appropriate to 

designate 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–2009–81 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–2009–81. 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. 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–2009–81 and should 

be submitted on or before October 14, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–22877 Filed 9–22–09; 8:45 am] 

BILLING CODE 8010–01–P 

SOCIAL SECURITY ADMINISTRATION 

[Docket No. SSA 2008–0060] 

Social Security Ruling, SSR 85–3.; 

Rescission of Social Security Ruling 

85–3 

AGENCY: Social Security Administration. 

ACTION: Notice of Rescission of Social 

Security Ruling. 

SUMMARY: In accordance with 20 CFR 

402.35(b)(1), the Commissioner of Social 

Security gives notice of the rescission of 

Social Security Ruling (SSR) 85–3. 

DATES: Effective Date: This rescission 

will be effective October 23, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Joann S. Anderson, Office of Income 

Security Programs, Social Security 

Administration, 6401 Security 

Boulevard, Baltimore, MD 21235–6401, 

(410) 965–6716 or TTY 410–966–5609, 

for information about this notice. For 

information on eligibility or filing for 

benefits, call our national toll-free 

number, 1–800–772–1213 or TTY 1– 

800–325–0778, or visit our Internet site, 

Social Security Online, at http:// 

www.socialsecurity.gov. 

SUPPLEMENTARY INFORMATION: SSRs 

make available to the public 

precedential decisions relating to the 

Federal old-age, survivors, disability, 

supplemental security income, special 

veterans benefits, and black lung 

benefits programs. SSRs may be based 

on determinations or decisions made at 

all levels of administrative adjudication, 

Federal court decisions, Commissioner’s 

decisions, opinions of the Office of the 

General Counsel, or other 

interpretations of the law and 

regulations. 

SSR 85–3 states that we do not need 

to authorize a representative’s fee when 

the following conditions are met: 

1. The claimant or beneficiary 

(including any auxiliaries) is not liable 

to pay a fee or any expenses, or any part 

thereof, directly or indirectly, to the 

representative or to someone else. 

2. The entity which pays the fee and 

expenses incurred, if any, on behalf of 

the claimant(s) or beneficiary(ies) is a 

nonprofit organization or a Federal, 

State, county, or city agency. 

3. The payment of the fee and any 

expenses is made from funds provided 

or administered by a government entity. 

4. The representative submits to SSA 

a written statement waiving the right to 

charge and collect a fee and expenses 

from the claimant or beneficiary. 

We are publishing a final rule, 

Authorization of Representative Fees, in 

today’s Federal Register that 

incorporates this policy as revised at 20 

mstockstill on DSKH9S0YB1PROD with NOTICES