Federal Register / Vol. 76, No. 163 / Tuesday, August 23, 2011 / Notices 52729 

8 17 CFR 200.30–3(a)(12). 

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

2See Securities Exchange Act Release No. 64788 

(July 1, 2011), 76 FR 40415 (‘‘Notice’’). 

3See Securities Exchange Act Release No. 63860 

(February 7, 2011), 76 FR 7888 (February 11, 2011) 

(SR–Phlx–2010–176). 

4The Commission previously approved the 

listing and trading of options on Alpha Indexes 

based on the following Alpha Pairs: AAPL/SPY, 

AMZN/SPY, CSCO/SPY, F/SPY, GE/SPY, GOOG/ 

SPY, HPQ/SPY, IBM/SPY, INTC/SPY, KO/SPY, 

MRK/SPY, MSFT/SPY, ORCL/SPY, PFE/SPY, 

RIMM/SPY, T/SPY, TGT/SPY, VZ/SPY and WMT/ 

SPY. See supra note 3. In connection with its 

proposed rule change to list and trade this initial 

set of Alpha Index options, the Exchange 

represented that it would not list Alpha Index 

options on any other Alpha Pairs without filing a 

proposed rule change seeking Commission 

approval. See id. 

5Rule 1009A(f) requires that options on Alpha 

Indexes meet the following criteria: (1) Alpha Index 

options will be A.M.-settled. The exercise 

settlement value will be based upon the opening 

prices of the individual stock or ETF from the 

primary listing market on the last trading day prior 

to expiration (usually a Friday); (2) at the time of 

listing an Alpha Index option, options on each 

underlying component of an Alpha Index will also 

be listed and traded on the Exchange and will meet 

the requirements of Rule 1009, Criteria for 

Underlying Securities. Additionally, each 

underlying component’s trading volume (in all 

markets in which the underlying security is traded) 

must have averaged at least 2,250,000 shares per 

day in the preceding twelve months; (3) following 

the listing of an Alpha Index option, options on 

each of the component securities of the Alpha Index 

will continue to meet the continued listing 

standards set forth by Phlx Rule 1010, Withdrawal 

of Approval of Underlying Securities or Options. 

Additionally, each underlying component’s trading 

volume (in all markets in which the underlying 

security is traded) must have averaged at least 

2,000,000 shares per day in the preceding twelve 

months; and (4) no Alpha Index option will be 

listed unless and until options overlying each of the 

Alpha Index component securities have been listed 

and traded on a national securities exchange with 

an average daily options trading volume during the 

three previous months of at least 10,000 contracts. 

Following the listing of an Alpha Index option, 

options on each of the component securities of the 

Alpha Index must continue to meet this options 

average daily volume standard. 

6The Exchange will not, however, list options on 

any such Alpha Pairs without filing a proposed rule 

change seeking Commission approval. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–21466 Filed 8–22–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–65149; File No. SR–Phlx– 

2011–89] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Order 

Granting Approval of Proposed Rule 

Change Relating to Alpha Index 

Options 

August 17, 2011. 

I. Introduction 

On June 23, 2011, NASDAQ OMX 

PHLX LLC (the ‘‘Exchange’’ or ‘‘Phlx’’) 

filed with the Securities and Exchange 

Commission (the ‘‘Commission’’), 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 a proposed rule change to list 

and trade options on a number of new 

Alpha Indexes and to amend Exchange 

Rule 1001A, Position Limits, with 

respect to certain Alpha Index options. 

The proposed rule change was 

published for comment in the Federal 

Register on July 8, 2011.2 The 

Commission received no comment 

letters on the proposed rule change. 

This order approves the proposed rule 

change. 

II. Description 

On February 7, 2011, the Commission 

approved the Exchange’s proposed rule 

change to list and trade options on a 

number of Alpha Indexes.3 Alpha 

Indexes measure relative total returns of 

one underlying stock or exchange traded 

fund (‘‘ETF’’) share against another 

underlying stock or ETF share 

underlying options which are also 

traded on the Exchange (each such 

combination of two components is 

referred to as an ‘‘Alpha Pair’’). The first 

component identified in an Alpha Pair 

(the ‘‘Target Component’’) is measured 

against the second component identified 

in the Alpha Pair (the ‘‘Benchmark 

Component’’). Total return measures 

performance (rate of return) of price 

appreciation plus dividends over a 

given evaluation period. 

The Alpha Index options that the 

Commission has previously approved 

for listing and trading on the Exchange 

are limited to specific Alpha Indexes the 

Target Component of which is a single 

stock.4 The Exchange proposes to 

expand the number of Alpha Indexes on 

which options can be listed to include 

certain Alpha Indexes based on the 

following Alpha Pairs: DIA/SPY, EEM/ 

SPY, EWJ/SPY, EWZ/SPY, FXI/SPY, 

GLD/SPY, IWM/SPY, QQQ/SPY, SLV/ 

SPY, TLT/SPY, XLE/SPY and XLF/SPY. 

In these Alpha Indexes, the Target 

Component as well as the Benchmark 

Component is an ETF share. The 

proposed Alpha Index options will 

enable investors to trade the relative 

performance of the market sectors 

represented by the Target Components 

as compared with the overall market 

performance represented by the 

Benchmark Component SPY. 

As with each initial Alpha Index 

option, each proposed new Alpha Index 

option will meet the criteria set forth in 

Exchange Rule 1009A(f).5 Further, 

following the listing of these Alpha 

Index options, options on each of the 

component securities of the Alpha 

Index must continue to meet the 

continued listing standards set forth by 

Exchange Rule 1010, Withdrawal of 

Approval of Underlying Securities or 

Options. 

Position Limits 

The Exchange also proposes to amend 

section (f) of Exchange Rule 1001A to 

establish a 15,000 contract position 

limit in options on Alpha Indexes in 

which the Target Component is an ETF 

share. This 15,000 contract position 

limit would apply not only to the 

specific Alpha Index options proposed 

herein, but also to any options the 

Exchange may list in the future on 

Alpha Indexes in which the Target 

Component is an ETF share.6 For 

purposes of determining compliance 

with position limits, positions in Alpha 

Index options will be aggregated with 

positions in equity options on the 

underlying securities. All position limit 

hedge exemptions will apply. 

Clearing 

Like the Alpha Index options that are 

currently trading, the proposed new 

Alpha Index options are ‘‘Strategy Based 

Options’’ that will be cleared by the 

Options Clearing Corporation. 

Surveillance 

Surveillance for opening price 

manipulation will be in place for the 

launch of these new Alpha Index 

options and other existing surveillance 

patterns will be utilized to monitor 

trading in these options. The Exchange 

represents that these surveillance 

procedures are adequate to monitor the 

trading of the new Alpha Index options. 

For surveillance purposes, the Exchange 

will have complete access to 

information regarding trading activity in 

the pertinent underlying securities and 

options thereon. 

Margin 

The Exchange will set customer 

margin levels for the new Alpha Index 

options at the higher of the margin 

required for options on the Target 

Component or the margin required for 

options on the Benchmark Component. 

Systems Capacity 

Additionally, the Exchange affirms 

that it possesses the necessary systems 

capacity to support new series that 

would result from the introduction of 

these new Alpha Index options. The 

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52730 Federal Register / Vol. 76, No. 163 / Tuesday, August 23, 2011 / Notices 

7 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. 

8 15 U.S.C. 78f(b)(5). 

9 15 U.S.C. 78f(b)(1). 

10See NASD Rule 2320. 

11See Exchange Rule 1029. 

12See Exchange Rule 1026. See also Exchange 

Rules 1024 and 1025. 

13The Commission has previously approved the 

listing and trading of options on the following 

Alpha Indexes: AAPL/SPY, AMZN/SPY, CSCO/ 

SPY, F/SPY, GE/SPY, GOOG/SPY, HPQ/SPY, IBM/ 

SPY, INTC/SPY, KO/SPY, MRK/SPY, MSFT/SPY, 

ORCL/SPY, PFE/SPY, RIMM/SPY, T/SPY, TGT/ 

SPY, VZ/SPY and WMT/SPY. See supra note 3. The 

Commission is now approving the listing and 

trading of options on the following Alpha Indexes 

only: DIA/SPY, EEM/SPY, EWJ/SPY, EWZ/SPY, 

FXI/SPY, GLD/SPY, IWM/SPY, QQQ/SPY, SLV/ 

SPY, TLT/SPY, XLE/SPY and XLF/SPY. 

14 15 U.S.C. 78s(b)(2). 15 17 CFR 200.30–3(a)(12). 

Exchange also has been informed that 

the Options Price Reporting Authority 

(‘‘OPRA’’) has the capacity to support 

such new series. 

Customer Protection 

Exchange rules designed to protect 

public customers trading in options 

would apply to the new Alpha Index 

options. Phlx Rule 1026 is designed to 

ensure that options, including Alpha 

Index options, are sold only to 

customers capable of evaluating and 

bearing the risks associated with trading 

in the instruments. Phlx Rule 1024, 

applicable to the conduct of accounts, 

Phlx Rule 1025 relating to the 

supervision of accounts, Phlx Rule 1028 

relating to confirmations, and Phlx Rule 

1029 relating to the delivery of options 

disclosure documents also apply to 

trading in Alpha Index options. 

Exchange Rules Applicable 

All other Exchange rules applicable to 

Alpha Index options will also apply to 

the Alpha Index options proposed 

herein. 

III. Discussion 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.7 Specifically, the 

Commission finds that the proposal is 

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

Act,8 which requires, among other 

things, that the rules of a national 

securities exchange be designed to 

prevent fraudulent and manipulative 

acts and practices, 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. 

As a national securities exchange, 

Phlx is required, under Section 6(b)(1) 

of the Act,9 to enforce compliance by its 

members, and persons associated with 

its members, with the provisions of the 

Act, Commission rules and regulations 

thereunder, and its own rules. In 

addition, brokers that trade the new 

Alpha Index options will also be subject 

to best execution obligations and FINRA 

rules.10 Applicable Exchange rules also 

require that customers receive 

appropriate disclosure before trading 

any Alpha Index option.11 Furthermore, 

brokers opening accounts and 

recommending options transactions 

must comply with relevant customer 

suitability standards.12

Exchange rules applicable to Alpha 

Index options will also apply to the 

Alpha Index options proposed herein. 

As stated in the previous approval for 

the listing and trading of Alpha Index 

options, the Commission believes that 

the listing rules for Alpha Index options 

are consistent with the Act. Further, the 

Commission notes that Alpha Index 

options will be listed only on the 

specific Alpha Indexes approved by the 

Commission.13 The Exchange has 

represented that it will not list options 

on any new Alpha Indexes without 

filing a proposed rule change seeking 

Commission approval. 

The Commission notes that the 

Exchange has represented that it will 

have adequate surveillance procedures 

in place for trading in the new Alpha 

Index options. Opening price 

manipulation surveillance will be in 

place for the launch of the new options 

on Alpha Indexes and other existing 

surveillance patterns will be utilized to 

monitor trading in options on each new 

Alpha Index. In addition, for 

surveillance purposes, the Exchange 

will have complete access to 

information regarding trading activity in 

the pertinent underlying securities and 

options thereon. Further, the 

Commission believes that the 

Exchange’s proposed position and 

exercise limits for the new Alpha Index 

options are appropriate and consistent 

with the Act. 

Lastly, the Commission notes that the 

Exchange has affirmed that it possesses 

the necessary systems capacity to 

support any new series that would 

result from the introduction of the new 

Alpha Index options. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,14 that the 

proposed rule change (SR–Phlx–2011– 

89) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–21486 Filed 8–22–11; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

Reporting and Recordkeeping 

Requirements Under OMB Review 

AGENCY: Small Business Administration. 

ACTION: Notice of Reporting 

Requirements Submitted for OMB 

Review. 

SUMMARY: Under the provisions of the 

Paperwork Reduction Act (44 U.S.C. 

Chapter 35), agencies are required to 

submit proposed reporting and 

recordkeeping requirements to OMB for 

review and approval, and to publish a 

notice in the Federal Register notifying 

the public that the agency has made 

such a submission. 

DATES: Submit comments on or before 

September 22, 2011. If you intend to 

comment but cannot prepare comments 

promptly, please advise the OMB 

Reviewer and the Agency Clearance 

Officer before the deadline. 

Copies: Request for clearance (OMB 

83–1), supporting statement, and other 

documents submitted to OMB for 

review may be obtained from the 

Agency Clearance Officer. 

ADDRESSES: Address all comments 

concerning this notice to: Agency 

Clearance Officer, Jacqueline White, 

Small Business Administration, 409 3rd 

Street, SW., 5th Floor, Washington, D.C. 

20416; and OMB Reviewer, Office of 

Information and Regulatory Affairs, 

Office of Management and Budget, New 

Executive Office Building, Washington, 

DC 20503. 

FOR FURTHER INFORMATION CONTACT: 

Jacqueline White, Agency Clearance 

Officer, (202) 205–7044. 

SUPPLEMENTARY INFORMATION:

Title: ‘‘Personal Financial Statement’’. 

Frequency: On Occasion. 

SBA Form Number: 413. 

Description of Respondents: 

Participating Lenders. 

Responses: 44,588. 

Annual Burden: 66,882. 

Title: Quarterly Reports file by 

Grantees of the Drug Free Workplace 

Program. 

Frequency: On Occasion. 

SBA Form Number: N/A. 

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