51630 Federal Register / Vol. 74, No. 193 / Wednesday, October 7, 2009 / Notices 

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

17 17 CFR 240.19b–4(f)(6). 

18 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the self-regulatory organization 

to submit to the Commission written notice of its 

intent to file the proposed rule change, along with 

a brief description and text of 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. 

19 17 CFR 240.19b–4(f)(6). 

20 17 CFR 240.19b–4(f)(6)(iii). 

21For purposes only of waiving the operative 

delay for this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

completion of the 19b–4 approval 

process. 

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 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 

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 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 16 and Rule 

19b–4(f)(6) thereunder.17 Because the 

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 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

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

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder.18

A proposed rule change filed under 

Rule 19b–4(f)(6) 19 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),20 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. 

The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. The 

Commission notes that because the pilot 

programs will expire on October 1, 

2009, waiver of the operative delay is 

necessary so that no interruption of the 

pilot programs will occur. In addition, 

the Commission notes that the Exchange 

has requested extensions of the pilots to 

allow the Exchange time to formally 

request permanent approval for the 

pilots. 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 

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–NYSE–2009–100 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–NYSE–2009–100. 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 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–NYSE– 

2009–100 and should be submitted on 

or before October 28, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–24083 Filed 10–6–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60751; File No. SR– 

NYSEAmex–2009–67] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Extending the Pilot 

Period To Receive Inbound Routes of 

Orders from Archipelago Securities 

LLC 

September 30, 2009. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) and Rule 19b–4 thereunder,2

notice is hereby given that, on 

September 30, 2009, NYSE Amex LLC 

(‘‘NYSE Amex’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II, 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 Exchange proposes to extend the 

pilot period of the Exchange’s prior 

approvals to receive inbound routes of 

orders from Archipelago Securities LLC 


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Federal Register / Vol. 74, No. 193 / Wednesday, October 7, 2009 / Notices 51631 

3See Securities Exchange Act Release No. 59009 

(November 24, 2008), 73 FR 73363 (December 2, 

2008) (order approving SR–NYSEALTR–2008–07); 

see also, Securities and Exchange Act Release No. 

34–59473 (February 27, 2009) 74 FR 9853 (March 

6, 2009) (order approving SR–NYSEALTR–2009– 

18). 

4See Securities Exchange Act Release No. 34– 

55590 (April 5, 2007), 72 FR 18707 (April 13, 2007) 

(notice of immediate effectiveness of SR–NYSE– 

2007–29); see also, Securities and Exchange Act 

Release No. 34–58680 (September 29, 2008), 73 FR 

58283 (October 6, 2008) (order approving SR– 

NYSE–2008–76). See Securities Exchange Act 

Release No. 34–53238 (July 28, 2006), 71 FR 44758 

(August 7, 2006) (order approving SR–NYSEArca– 

2006–13); see also, Securities Exchange Act Release 

No. 52497 (September 22, 2005), 70 FR 56949 

(September 29, 2005) (SR–PCX–2005–90); see also, 

Securities Exchange Act Release No. 44983 (October 

25, 2001), 66 FR 55225 (November 1, 2001) (SR– 

PCX–00–25); see also, Securities Exchange Act 

Release No. 58681 (September 29, 2008), 73 FR 

58285 (October 6, 2008) (order approving 

NYSEArca–2008–90). 

5See Securities Exchange Act Release No. 34– 

58673 (September 29, 2008), 73 FR 57707 (October 

3, 2008) (order approving SR–Amex–2008–62). See 

also, Securities Exchange Act Release No. 34–58705 

(October 1, 2008), 73 FR 58995 (October 8, 2008) 

(order approving SR–AMEX–2008–63). 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). 

10 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires that a self-regulatory 

organization submit to the Commission written 

notice of its intent to file the proposed rule change, 

along with a brief description and text of 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. 

11 Id. 

12See SR–NYSEAmex–2009–67, Item 7. 

13For the 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). 

(‘‘Arca Securities’’), an NYSE Amex 

affiliated member. A copy of this filing 

is available on the Exchange’s Web site 

at http://www.nyse.com, at the 

Exchange’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 

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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Currently, Arca Securities is the 

approved outbound order routing 

facility of the Exchange.3 Arca 

Securities is also the approved 

outbound order routing facility of the 

New York Stock Exchange (‘‘NYSE’’) 

and NYSE Arca, Inc (‘‘NYSE Arca’’).4

The Exchange has also been previously 

approved to receive inbound routes of 

orders by Arca Securities in its capacity 

as an order routing facility of NYSE 

Arca and the NYSE.5 The Exchange’s 

authority to receive inbound routes of 

orders by Arca Securities was subject to 

a pilot period ending September 29, 

2009. The Exchange hereby seeks to 

extend the previously approved pilot 

period (with the attendant obligations 

and conditions) for an additional 3 

months, through December 31, 2009. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 6 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’), in general, and furthers the 

objectives of Section 6(b)(5) 7 in 

particular in that it is 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 facilitating 

transactions in securities, and to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system. 

Specifically, the proposed rule change 

will allow the Exchange to continue 

receiving inbound routes of equities 

orders from Arca Securities acting in its 

capacity as a facility of the NYSE and 

NYSE Arca, in a manner consistent with 

prior approvals and established 

protections. The Exchange believes that 

extending the previously approved pilot 

period for three months is of sufficient 

length to permit both the Exchange and 

the Commission to assess the impact of 

the Exchange’s authority to receive 

direct inbound routes of equities orders 

via Arca Securities (including the 

attendant obligations and conditions). 

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 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 

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 rule change 

does not: (1) Significantly affect the 

protection of investors or the public 

interest; (2) impose any significant 

burden on competition; and (3) become 

operative for 30 days after the date of 

this filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 8 and Rule 19b– 

4(f)(6) thereunder.9

A proposed rule change filed under 

19b–4(f)(6) normally may not become 

operative prior to 30 days after the date 

of filing.10 However, Rule 19b– 

4(f)(6)(iii) 11 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange has requested that the 

Commission waive the 30-day operative 

delay. The Exchange notes that the 

proposal will allow the Exchange to 

continue receiving inbound routes of 

equities orders from Arca Securities, in 

a manner consistent with prior 

approvals and established protections, 

while also permitting the Exchange and 

the Commission to assess the impact of 

the pilot.12 The Commission believes 

that waiving the 30-day operative delay 

is consistent with the protection of 

investors and the public interest 

because such waiver would allow the 

pilot period to be extended without 

interruption through December 31, 

2009. For this reason, the Commission 

designates the proposed rule change to 

be operative upon filing with the 

Commission.13

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 proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 


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51632 Federal Register / Vol. 74, No. 193 / Wednesday, October 7, 2009 / Notices 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Under CBOE Rule 5.8, LEAPS expire from 12– 

39 months from the time they are listed. 

4On September 15, 2009, CBOE filed SR–CBOE– 

2009–069 for immediate effectiveness, which filing 

establishes a $.50 Strike Program. 

5More information is available on this trading 

strategy at CBOE’s Web site at http:// 

www.cboe.com/Institutional/DOOM.aspx. 

6The delisting policy includes a provision that 

states CBOE may grant member requests to add 

strikes and/or maintain strikes in series of options 

classes traded pursuant to the Program that are 

eligible for delisting. 

7See SEC Release No. 34–58630 (September 24, 

2008), approving Amendment No. 2 to the OLPP. 

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–NYSEAmex–2009–67 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–NYSEAmex–2009–67. 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 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– 

NYSEAmex–2009–67 and should be 

submitted on or before October 28, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–24080 Filed 10–6–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60749; File No. SR–CBOE– 

2009–068] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing of a 

Proposed Rule Change To Amend the 

$1 Strike Program To Allow Low-Strike 

LEAPS 

September 30, 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 16, 2009, the Chicago Board 

Options Exchange, Incorporated (the 

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

Securities and Exchange Commission 

(the ‘‘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 the 

$1 Strike Program. The text of the 

proposed rule change is available on the 

Exchange’s Web site (http:// 

www.cboe.org/Legal), at the Office of the 

Secretary, CBOE 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 

The purpose of the proposed rule 

change is to expand the $1 Strike 

Program (‘‘Program’’) in a limited 

fashion to allow CBOE to list new series 

in $1 intervals up to $5 in long-term 

option series (‘‘LEAPS’’) in up to 200 

option classes on individual stocks.3

Currently, under the Program, CBOE 

may not list LEAPS at $1 strike price 

intervals for any class selected for the 

Program. CBOE also is restricted from 

listing any series that would result in 

strike prices being $0.50 apart, unless 

the series are part of the $.50 Strike 

Program.4 (See CBOE Rule 5.5.01.) 

CBOE believes that this proposal is 

appropriate and will allow investors to 

establish option positions that are better 

tailored to meet their investment 

objectives, vis-a`-vis credit risk, using 

deep out-of-the-money put options. 

Deep out-of-the money put options are 

viewed as a viable, liquid alternative to 

OTC-traded credit default swaps 

(‘‘CDS’’). These options do not possess 

the negative characteristics associated 

with CDS, namely, lack of transparency, 

insufficient collateral requirements, and 

inefficient trade processing. Moreover, 

deep out-of-the money put options and 

CDS are functionally similar, as there is 

a high correlation between low-strike 

put prices and CDS spreads.5

CBOE notes that its proposal is 

limited in scope, as $1 strikes in LEAPS 

may only be listed up to $5 and in only 

up to 200 option classes. As is currently 

the case, CBOE would not list series 

with $1.00 intervals within $0.50 of an 

existing $2.50 strike price in the same 

series. As a result, CBOE does not 

believe that this proposal will cause a 

significant increase in quote traffic. 

Moreover, as the SEC is aware, CBOE 

has adopted various quote mitigation 

strategies in an effort to lessen the 

growth rate of quotations. When it 

expanded the Program several months 

ago, CBOE included a delisting policy 

that would be applicable with regard to 

this proposed expansion.6 CBOE and 

the other options exchanges amended 

the Options Listing Procedures Plan 

(‘‘OLPP’’) in 2008 to impose a minimum 

volume threshold of 1,000 contracts 

national average daily volume per 

underlying class to qualify for an 

additional year of LEAP series.7 Most 

recently, CBOE, along with the other 

options exchanges, amended the OLPP 


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