Federal Register / Vol. 74, No. 185 / Friday, September 25, 2009 / Notices 49049 

7Current sections (ii), (iii) and (iv) will be 

renumbered as sections (iii), (iv) and (v) 

respectively. 

8The option on the qualifying stock could also 

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

$2.50 intervals (pursuant to Commentary .05(a)(ii) 

to Phlx Rule 1012) or, if it has been selected for the 

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

9 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

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

11 15 U.S.C. 78s(b)(2). 

12 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)(i). 

4 17 CFR 240.19b–4(f)(1). 

during the preceding three calendar 

months. The listing of $0.50 strike 

prices will be limited to options classes 

overlying no more than five individual 

stocks as specifically designated by the 

Exchange. The Exchange also will be 

able to list $0.50 strike prices on any 

other option classes if those classes 

were specifically designated by other 

securities exchanges that employ 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. 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 

Commentary .05(a), but not strike prices 

of $1, $2, $3, $4, $6, $7 and $8. The 

proposed amendments to Commentary 

.05 to Phlx Rule 1012 will permit the 

Exchange to list strike prices on options 

on qualifying stocks that trade at or 

under $3.00, which may include stocks 

also participating in the $1 Strike 

Program, in finer intervals of $0.50, 

beginning at $1 up to $3.50.7 Thus, a 

stock trading at $3 that is selected for 

the $0.50 Strike Program 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 $3.50.8

In its filing with the Commission, the 

Exchange stated that the number of 

securities trading below $3.00 has 

increased dramatically recently and that 

the Exchange therefore believes that 

new strike prices for securities trading 

at or below $3.00 are appropriate. 

According to the Exchange, as the price 

of a stock declines 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. In addition, the 

Exchange represented that it and the 

Options Price Reporting Authority 

(‘‘OPRA’’) have the necessary systems 

capacity to handle the additional traffic 

associated with the expanded number of 

options series proposed to be listed and 

traded. 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.9 In 

particular, the Commission believes that 

the proposed rule change is consistent 

with Section 6(b)(5) of the Act,10 which 

requires, among other things, that the 

rules of a national securities exchange 

be 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. 

Specifically, the Commission believes 

that the proposal to permit the Exchange 

to select a total of 5 individual 

underlying stocks trading at or under $3 

on which option series may be listed at 

$0.50 strike intervals should provide 

investors with added flexibility in the 

trading of equity options and further the 

public interest by allowing investors to 

establish equity options positions that 

are better tailored to meet their 

investment objectives. The Commission 

also believes that the proposal strikes a 

reasonable balance between the 

Exchange’s desire to accommodate 

market participants by offering a wider 

array of investment opportunities and 

the need to avoid unnecessary 

proliferation of options series and the 

corresponding increase in quotes. The 

Commission expects that the Exchange 

will monitor the trading volume 

associated with the additional options 

series listed as a result of this proposal 

and the effect of these additional series 

on market fragmentation and on the 

capacity of the Exchange’s, OPRA’s and 

vendors’ automated systems. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,11 that the 

proposed rule change (SR–Phlx–2009– 

65) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–23098 Filed 9–24–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60690; File No. SR–MSRB– 

2009–14] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Consisting of an Interpretive 

Notice Regarding MSRB Rule G–15(a), 

on Customer Confirmations 

September 18, 2009. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on 

September 15, 2009, the Municipal 

Securities Rulemaking Board (‘‘Board’’ 

or ‘‘MSRB’’), filed with the Securities 

and Exchange Commission 

(‘‘Commission’’ or ‘‘SEC’’) the proposed 

rule change as described in Items I, II 

and III below, which Items have been 

prepared by the Board. The MSRB has 

designated the proposed rule change as 

constituting a stated policy, practice, or 

interpretation with respect to the 

meaning, administration, or 

enforcement of an existing rule of the 

self-regulatory organization pursuant to 

Section 19(b)(3)(A)(i) of the Act,3 and 

Rule 19b–4(f)(1) thereunder,4 which 

renders the proposal 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 MSRB has filed with the 

Commission a proposed rule change 

consisting of an interpretive notice 

regarding MSRB Rule G–15(a), on 

customer confirmations, concerning use 

of electronic confirmations produced by 

a clearing agency or qualified vendor to 

satisfy the requirements of Rule G–15(a). 

The text of the proposed rule change is 

available on the MSRB’s Web site 

(http://www.msrb.org/msrb1/sec.asp), at 

the MSRB’s principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

MSRB included statements concerning 

the purpose of and basis for the 


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49050 Federal Register / Vol. 74, No. 185 / Friday, September 25, 2009 / Notices 

5 15 U.S.C. 78o–4(b)(2)(C). 

6 15 U.S.C. 78s(b)(3)(A)(i). 

7 17 CFR 240.19b–4(f)(1). 

8See Section 19(b)(3)(C) of the Act, 15 U.S.C. 

78s(b)(3)(C). 9 17 CFR 200.30–3(a)(12). 

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 MSRB 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 MSRB received an interpretive 

request concerning the written 

confirmation requirements of MSRB 

Rule G–15(a), on customer 

confirmations of transactions in 

municipal securities transactions, in 

which the MSRB was asked whether 

dealers could rely on a confirmation 

sent by a Clearing Agency or Qualified 

Vendor, as defined in MSRB Rule G– 

15(d)(ii)(B), where disclosures 

customarily provided on the back of 

paper confirmations are provided 

electronically using a URL link to satisfy 

their confirmation delivery obligations 

to customers under MSRB Rule G–15(a). 

The MSRB recognizes that the speed 

and efficiencies offered by electronic 

confirmation delivery are of benefit to 

the municipal securities industry. 

Therefore, the MSRB has interpreted the 

requirement in Rule G–15(a) to provide 

a customer with a written confirmation 

to be satisfied by an electronic 

confirmation for DVP/RVP transactions 

sent by a Clearing Agency or Qualified 

Vendor, as defined in MSRB Rule G– 

15(d)(ii)(B), where disclosures 

customarily provided on the back of 

paper confirmations are provided 

electronically using a URL link when 

the following conditions are met: (i) the 

confirmation sent includes all of the 

information required by Rule G–15(a); 

and (ii) all of the requirements and 

conditions concerning the use of the 

electronic confirmation service 

expressed in applicable SEC no-action 

letters concerning Rule 10b–10 continue 

to be met. 

2. Statutory Basis 

The MSRB believes that the proposed 

rule change is consistent with Section 

15B(b)(2)(C) of the Act,5 which provides 

that the MSRB’s rules shall: 

be designed to prevent fraudulent and 

manipulative acts and practices, to promote 

just and equitable principles of trade, to 

foster cooperation and coordination with 

persons engaged in regulating, clearing, 

settling, processing information with respect 

to, and facilitating transactions in municipal 

securities, to remove impediments to and 

perfect the mechanism of a free and open 

market in municipal securities, and, in 

general, to protect investors and the public 

interest. 

The MSRB believes that the proposed 

rule change is consistent with the Act 

because the speed and efficiencies 

offered by electronic confirmation 

delivery are of benefit to the municipal 

securities industry. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The MSRB does not believe that the 

proposed rule change will impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, since it 

would apply equally to all brokers, 

dealers and municipal securities 

dealers. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The proposed rule change has become 

effective pursuant to Section 

19(b)(3)(A)(i) of the Act 6 and Rule 19b– 

4(f)(1) thereunder,7 in that the proposed 

rule change constitutes a stated policy, 

practice, or interpretation with respect 

to the meaning, administration, or 

enforcement of an existing rule of the 

MSRB. 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.8

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–MSRB–2009–14 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–MSRB–2009–14. 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 MSRB. 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–MSRB–2009–14 and should 

be submitted on or before October 16, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–23163 Filed 9–24–09; 8:45 am] 

BILLING CODE 8010–01–P 


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