Federal Register / Vol. 74, No. 185 / Friday, September 25, 2009 / Notices 49055 

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

10 15 U.S.C. 78f(b)(5). 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

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. The Exchange has satisfied this 

requirement. 

13See Securities Exchange Act Release No. 60694 

(September 18, 2009) (SR–Phlx–2009–65) (order 

approving a $0.50 strike program substantially the 

same as the $0.50 Strike Program proposed by 

CBOE). 

14For 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). 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

number of series as proposed by this 

filing. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 9 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 10

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 

expanding the ability of investors to 

hedge risks associated with stocks 

trading at or under $3. The proposal 

should create greater trading and 

hedging opportunities and flexibility, 

and provide customers with the ability 

to more closely tailor investment 

strategies to the price movement of the 

underlying stocks, trading in many of 

which is highly liquid. 

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 

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 after the date of 

the filing, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, it has 

become effective pursuant to 19(b)(3)(A) 

of the Act11 thnsp; and Rule 19b– 

4(f)(6) thereunder.12

The Exchange has requested that the 

Commission waive the 30-day operative 

delay to permit the Exchange to respond 

promptly to demand by market 

participants to list qualifying options 

series at $0.50 intervals at about the 

same time that NASDAQ OMX PHLX, 

Inc. does once that exchange receives 

Commission approval of its proposed 

rule change. The Commission today has 

approved SR–Phlx–2009–65,13 and 

therefore finds that waiver of the 

operative delay is consistent with the 

protection of investors and the public 

interest because such waiver will 

encourage fair competition among the 

exchanges. Therefore, the Commission 

designates the proposal operative upon 

filing.14

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–ISE–2009–65 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–2009–65. 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–ISE–2009–65 and should be 

submitted on or before October 16, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–23113 Filed 9–24–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60695; File No. SR–CBOE– 

2009–069] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Strike Price 

Intervals of $0.50 for Options on 

Stocks Trading at or Below $3.00 

September 18, 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 

September 17, 2009, the Chicago Board 

Options Exchange, Incorporated 

(‘‘Exchange’’ or ‘‘CBOE’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 


jlentini on DSKJ8SOYB1PROD with NOTICES
49056 Federal Register / Vol. 74, No. 185 / Friday, September 25, 2009 / Notices 

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

4 17 CFR 240.19b–4(f)(6). 

5See Exchange Act Release No. 60466 (August 10, 

2009), 74 FR 41475 (August 17, 2009) (SR–Phlx– 

2009–65) (comment period expired September 8, 

2009). 

6The Exchange may not list long-term option 

series (‘‘LEAPS’’) at $1 strike price intervals for any 

class selected for the Program. 

7The Exchange recently amended Rule 5.4.01, 

Withdrawal of Approval of Underlying Securities, to 

eliminate the $3 market price per share requirement 

for continued approval for an underlying security. 

The amendment eliminated the prohibition against 

listing additional series or options on an underlying 

security at any time when the price per share of 

such underlying security is less than $3. The 

Exchange explained in that proposed rule change 

that the market price for a large number of 

securities has fallen below $3 in the current volatile 

market environment. See Securities Exchange Act 

Release No. 59336 (February 2, 2009), 74 FR 6332 

(February 6, 2009) (SR–CBOE–2008–127). 

8Additionally, market participants may be able to 

trade $2.50 strikes on the same option at another 

exchange, if that exchange has elected not to select 

the stock for participation in its own similar $1 

Strike Program. 

9Again, market participants may also be able to 

trade the option at $1 strike price intervals on other 

exchanges, if those exchanges have selected the 

stock for participation in their own similar $1 Strike 

Program. 

10Current sections (b), (c) and (d) would be 

renumbered as sections (c), (d) and (e) respectively. 

11The option on the qualifying stock could also 

have strike prices set at $5, $7.50 and so forth at 

$2.50 intervals (pursuant to Interpretation and 

Policy .01(a) to Rule 5.5) or, if it has been selected 

for the $1 Strike Program, at $4, $5, $6, $7 and $8. 

12As of September 10, 2009, stocks trading at or 

below $3 include E*Trade Financial Corporation, 

Ambac Financial Group, Inc., Federal Home Loan 

Mortgage Corporation (Freddie Mac), Federal 

National Mortgage Association (Fannie Mae) and 

Sirius XM Radio, Inc. A number of these stocks are 

widely held and actively traded equities, and the 

options overlying these stocks also trade actively on 

CBOE. 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange filed the 

proposal as a ‘‘non-controversial’’ 

proposed rule change pursuant to 

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

Rule 19b–4(f)(6) thereunder.4 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 

CBOE proposes to amend 

Interpretation and Policy .01 to Rule 5.5, 

Series of Options Open for Trading, in 

order to establish strike price intervals 

of $0.50, beginning at $1, for certain 

options classes whose underlying 

security closed at or below $3 in its 

primary market on the previous trading 

day. The Exchange is also proposing to 

make a technical change to Rule 5.5. 

The text of the rule proposal is available 

on the Exchange’s Web site (http:// 

www.cboe.org/legal), at the Exchange’s 

Office of the Secretary and at the 

Commission. 

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 

This proposed rule change is based on 

a filing submitted by NASDAQ OMX 

PHLX, Inc (‘‘Phlx’’) that was recently 

noticed for comment by the 

Commission.5

The purpose of the proposed rule 

change is to expand the ability of 

investors to hedge risks associated with 

stocks trading at or under $3. Currently, 

Interpretation and Policy .01(b) to Rule 

5.5 provides that the interval of strike 

prices of series of options on individual 

stocks may be $2.50 or greater where the 

strike price is $25 or less. Additionally, 

Interpretation and Policy .01(a) to Rule 

5.5 allows the Exchange to establish $1 

strike price intervals (the ‘‘$1 Strike 

Program’’) on options classes overlying 

no more than fifty-five individual stocks 

designated by the Exchange. In order to 

be eligible for selection into the $1 

Strike Program, the underlying stock 

must close below $50 in its primary 

market on the previous trading day. If 

selected for the $1 Strike Program, the 

Exchange may list strike prices at $1 

intervals from $1 to $50, but no $1 strike 

price may be listed that is greater than 

$5 from the underlying stock’s closing 

price in its primary market on the 

previous day. The Exchange may also 

list $1 strikes on any other option class 

designated by another securities 

exchange that employs a similar $1 

Strike Program its own rules.6 The 

Exchange is restricted from listing any 

series that would result in strike prices 

being within $0.50 of a strike price set 

pursuant to Interpretation and Policy 

.01(a) to Rule 5.5 at intervals of $2.50. 

The Exchange is now proposing to 

establish strike prices of $1, $1.50, $ 2, 

$2.50, $3 and $3.50 for certain stocks 

that trade at or under $3.00.7 The listing 

of these strike prices will be limited to 

options classes whose underlying 

security closed at or below $3 in its 

primary market on the previous trading 

day, and which have national average 

daily volume that equals or exceeds 

1000 contracts per day as determined by 

The Options Clearing Corporation 

during the preceding three calendar 

months. The listing of $0.50 strike 

prices would be limited to options 

classes overlying no more than 5 

individual stocks (the ‘‘$0.50 Strike 

Program’’) as specifically designated by 

the Exchange. The Exchange would also 

be able to list $0.50 strike prices on any 

other option classes if those classes 

were specifically designated by other 

securities exchanges that employed a 

similar $0.50 Strike Program under their 

respective rules. 

Currently, the Exchange may list 

options on stocks trading at $3 at strike 

prices of $1, $2, $3, $4, $5, $6, $7 and 

$8 if they are designated to participate 

in the $1 Strike Program.8 If these stocks 

have not been selected for the 

Exchange’s $1 Strike Program, the 

Exchange may list strike prices of $2.50, 

$5, $7.50 and so forth as provided in 

Interpretation and Policy .01(a) to Rule 

5.5, but not strike prices of $1, $2, $3, 

$4, $6, $7 and $8.9

The Exchange is now proposing to 

amend Interpretation and Policy .01(b) 

to Rule 5.5 by adding new section (b) to 

list strike prices on options on a number 

of qualifying stocks that trade at or 

under $3.00, not simply those stocks 

also participating in the $1 Strike 

Program, in finer intervals of $0.50, 

beginning at $1 up to $3.50.10 Thus, a 

qualifying stock trading at $3 would 

have option strike prices established not 

just at $2.50, $5.00, $7.50 and so forth 

(for stocks not in the Exchange’s $1 

Strike Program) or just at $1, $2, $3, $4, 

$5, $6, $7 and $8 (for stocks designated 

to participate in the $1 Strike Program), 

but rather at strike prices established at 

$1, $1.50, $2, $2.50 $3 and $3.50.11

The Exchange believes that current 

market conditions demonstrate the 

appropriateness of the new strike prices. 

Recently the number of securities 

trading below $3.00 has increased 

dramatically.12 Unless the underlying 

stock has been selected for the $1 Strike 

Program, there is only one possible inthe-money call (at $2.50) to be traded if 

an underlying stock trades at $3.00. 

Similarly, unless the underlying stock 

has been selected for the $1 Strike 

Program, only one out-of-the-money 

strike price choice within 100% of a 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 185 / Friday, September 25, 2009 / Notices 49057 

13See Exchange Act Release No. 40166 (July 2, 

1998), 63 FR 37430 (July 10, 1998) (SR–CBOE–97– 

03). 

14See Exchange Act Release No. 46507 

(September 17, 2002), 67 FR 60266 (September 25, 

2002) (SR–CBOE–2002–54). 

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

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

17 15 U.S.C. 78f(b)(5). 

18 15 U.S.C. 78s(b)(3)(A). 

19 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

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. The Exchange has satisfied this 

requirement. 

20See Securities Exchange Act Release No. 60694 

(September 18, 2009) (SR–Phlx–2009–65) (order 

approving a $0.50 strike program substantially the 

same as the $0.50 Strike Program proposed by 

CBOE). 

21For 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). 

stock price of $3 is available if an 

investor wants to purchase out-of-the 

money calls. Stated otherwise, a 

purchaser would need over a 100% 

move in the underlying stock price in 

order to have a call option at any strike 

price other than the $5 strike price 

become in-the-money. If the stock is 

selected for the $1 Strike Program, the 

available strike price choices are 

somewhat broader, but are still greatly 

limited by the proximity of the $3 stock 

price to zero, and the very large percent 

gain or loss in the underlying stock 

price, relative to a higher priced stock, 

that would be required in order for 

strikes set at $1 or away from the stock 

price to become in-the-money and serve 

their intended hedging purpose. 

As a practical matter, a low-priced 

stock by its very nature requires narrow 

strike price intervals in order for 

investors to have any real ability to 

hedge the risks associated with such a 

security or execute other related options 

trading strategies. The current 

restriction on strike price intervals, 

which prohibits intervals of less than 

$2.50 (or $1 for stocks in the $1 Strike 

Program) for options on stocks trading at 

or below $3, could have a negative effect 

on investors. The Exchange believes that 

the proposed $0.50 strike price intervals 

would provide investors with greater 

flexibility in the trading of equity 

options that overlie lower priced stocks 

by allowing investors to establish equity 

option positions that are better tailored 

to meet their investment objectives. The 

proposed new strike prices would 

enable investors to more closely tailor 

their investment strategies and 

decisions to the movement of the 

underlying security. As the price of 

stocks decline below $3 or even $2, the 

availability of options with strike prices 

at intervals of $0.50 could provide 

investors with opportunities and 

strategies to minimize losses associated 

with owning a stock declining in price. 

With regard to the impact on system 

capacity, CBOE has analyzed its 

capacity and represents that it and the 

Options Price Reporting Authority have 

the necessary systems capacity to 

handle the additional traffic associated 

with the listing and trading of an 

expanded number of series as proposed 

by this filing. 

Technical Change 

The Exchange is proposing to clean 

up the strike setting parameters for 

options on exchange traded funds 

(‘‘ETFs’’) (also referred to as ‘‘Units’’ in 

Interpretation and Policy .06 to Rule 

5.3), which are codified in two different 

Interpretations and Policies to Rule 5.5. 

In 1997, when the Exchange originally 

proposed trading ETF options, the 

Exchange amended Interpretation and 

Policy .01 to Rule 5.5. to provide that 

the minimum strike price intervals for 

ETF options would be $2.50 where the 

strike price is $200 or less and $5.00 

where the strike price is over $200.13 In 

2002, the Exchange proposed permitting 

$1 strike price intervals for ETF options 

where the strike price is at $200 or less 

(and maintaining $5.00 strike price 

intervals where the strike price is over 

$200).14 The ability to list $1 strike price 

intervals for ETF options was codified at 

new Interpretation and Policy .08 to 

Rule 5.5 and no amendments were made 

to the existing strike setting parameters 

for ETF options set forth in 

Interpretation and Policy .01 to Rule 5.5. 

Accordingly, the Exchange is now 

proposing to amend Interpretations and 

Policies .01 and .08 to Rule 5.5 to set 

forth the strike setting parameters for 

ETF options in a single Interpretation 

and Policy (.08). This proposed change 

is technical in nature and makes no 

substantive changes to the strike setting 

parameters for ETF options. The 

Exchange is attempting to harmonize its 

rules by clarifying the strike setting 

parameters for ETF option in a single 

place. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 15

and the rules and regulations 

thereunder and, in particular, the 

requirements of Section 6(b) of the 

Act.16 Specifically, the Exchange 

believes the proposed rule change is 

consistent with the Section 6(b)(5) 17

requirements that the rules of an 

exchange be designed to promote just 

and equitable principles of trade, to 

prevent fraudulent and manipulative 

acts, to remove impediments to and to 

perfect the mechanism for a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest, by 

expanding the ability of investors to 

hedge risks associated with stocks 

trading at or under $3. The proposal 

should create greater trading and 

hedging opportunities and flexibility, 

and provide customers with the ability 

to more closely tailor investment 

strategies to the price movement of the 

underlying stocks, trading in many of 

which is highly liquid. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE 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 solicited 

or received with respect to the proposed 

rule change. 

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) become 

operative for 30 days after the date of 

the filing, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, it has 

become effective pursuant to 19(b)(3)(A) 

of the Act18 and Rule 19b–4(f)(6) 

thereunder.19

The Exchange has requested that the 

Commission waive the 30-day operative 

delay to permit the Exchange to 

compete effectively with Phlx by being 

able to list the same strike prices that 

will be permitted when SR–Phlx–2009– 

65 is approved. The Commission today 

has approved SR–Phlx–2009–65,20 and 

therefore finds that waiver of the 

operative delay is consistent with the 

protection of investors and the public 

interest because such waiver will 

encourage fair competition among the 

exchanges. Therefore, the Commission 

designates the proposal operative upon 

filing.21

At any time within 60 days of the 

filing of the proposed rule change, the 


jlentini on DSKJ8SOYB1PROD with NOTICES
49058 Federal Register / Vol. 74, No. 185 / Friday, September 25, 2009 / Notices 

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3An SQT is an Exchange Registered Options 

Trader (‘‘ROT’’) who has received permission from 

the Exchange to generate and submit options 

quotations electronically through AUTOM in 

eligible options to which such SQT is assigned. An 

SQT may only submit such quotations while such 

SQT is physically present on the floor of the 

Exchange. See Exchange Rule 1014(b)(ii)(A). 

4An RSQT is a ROT that is a member or member 

organization with no physical trading floor 

presence who has received permission from the 

Exchange to generate and submit option quotations 

electronically through AUTOM in eligible options 

to which such RSQT has been assigned. An RSQT 

may only submit such quotations electronically 

from off the floor of the Exchange. See Exchange 

Rule 1014(b)(ii)(B). 

5The Exchange notes that a separate proposed 

rule change has been pre-filed (the ‘‘separate 

filing’’) that would amend various Exchange rules, 

including certain portions of Rule 507. The instant 

proposed amendments to Commentary .02 of Rule 

507 are not affected by, and do not affect, the 

proposed amendments in the separate filing. The 

term ‘‘no change’’ used in this proposal applies 

only to the instant proposed rule change and does 

not override or negate any proposed changes in the 

separate filing. 6Commentary .05 to Rule 507 states that the 

Exchange may increase the MNQ levels established 

in this Commentary by submitting to the SEC a rule 

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

Exchange Act. The Exchange may decrease the 

MNQ levels established in this Commentary upon 

SEC approval of a rule filing submitted pursuant to 

Section 19(b)(2) of the Exchange Act. 7When initially adopted, Commentary .02(a)–(c) 

established MNQ levels of 20 market participants 

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–CBOE–2009–069 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–CBOE–2009–069. 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–CBOE–2009–069 and 

should be submitted on or before 

October 16, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–23111 Filed 9–24–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60688; File No. SR–Phlx– 

2009–82] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX PHLX, Inc. Relating to the 

Maximum Number of Quoters (‘‘MNQ’’) 

Permitted To Be Assigned in Equity 

Options 

September 18, 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 17, 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 

Exchange Rule 507, Application for 

Approval as an SQT or RSQT and 

Assignment in Options, which governs 

the assignment of options to Streaming 

Quote Traders (‘‘SQTs’’).3 and Remote 

Streaming Quote Traders (‘‘RSQTs’’),4

by establishing a higher maximum 

number of quoting participants 

(‘‘Maximum Number of Quoters’’ or 

‘‘MNQ’’) in equity options.5

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, 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 provide additional liquidity 

in equity options on the Exchange by 

increasing the MNQ in equity options.6

Currently, the Exchange limits the 

number of participants that may be 

assigned to a particular equity option at 

any one time based upon each option’s 

monthly national volume. Commentary 

.02 to Rule 507 currently sets forth 

tiered MNQ levels permitting 

assignment of trading privileges to 22 

market participants for the top 5% most 

actively traded options; 17 market 

participants for next 10% most actively 

traded options, and 15 market 

participants for all other options.7 The 


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