Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 9823 

11 15 U.S.C. 78s(b)(3)(A). 12 17 CFR 240.19b–4(f)(6). 13 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. NYSE Arca has satisfied the five-day 

pre-filing notice requirement. 14 Id. 15For 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). 

16 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). 

4 17 CFR 240.19b–4(f)(6). 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the forgoing 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 11 and Rule 19b–

4(f)(6) thereunder.12

A proposed rule change filed under 

19b–4(f)(6) normally may not become 

operative prior to 30 days after the date 

of filing.13 However, Rule 19b–

4(f)(6)(iii) 14 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 Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest 

because such waiver would permit the 

Exchange rules to immediately reflect 

the new Trading Phase Date, March 5, 

2007. For this reason, the Commission 

designates the proposed rule change to 

be operative upon filing with the 

Commission.15

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: 

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–NYSEArca–2007–18 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE, Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NYSEArca–2007–18. 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 NYSE Arca. 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–NYSEArca–2007–18 and 

should be submitted on or before March 

26, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3740 Filed 3–2–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55347; File No. SR–

NYSEArca–2007–19] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Extend the 

Exchange’s Standard Position and 

Exercise Limit Pilot Program 

February 26, 2007. 

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 February 

23, 2007, the NYSE Arca, Inc. (‘‘NYSE 

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

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been 

substantially prepared by the Exchange. 

The Exchange has filed the proposal as 

a ‘‘non-controversial’’ rule change 

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

Act 3 and Rule 19b–4(f)(6) thereunder,4

which renders it 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 

NYSE Arca proposes to amend its 

rules to extend the time period in NYSE 

Arca Rule 6.8(a), which covers the 

position limit and exercise limits pilot 

program for equity option contracts and 

options on the Nasdaq–100 Tracking 

Stock (‘‘QQQQ’’) (‘‘Pilot Program’’). The 

text of the proposed rule change is 

available at NYSE Arca, the 

Commission’s Public Reference Room, 

and http://www.nysearca.com. 


erjones on PRODPC74 with NOTICES
9824 Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 

5The Pilot Program, which was effective upon 

filing on February 25, 2005 and subsequently 

extended, is due to expire on March 1, 2007. See 

Securities Exchange Act Release No. 51286 (March 

1, 2005), 70 FR 11297 (March 8, 2005) (SR–PCX–

2003–55) (‘‘Pilot Program Notice’’). See also 

Securities Exchange Act Release Nos. 54385 

(August 30, 2006), 71 FR 53150 (September 8, 2006) 

(SR–NYSEArca–49); 53350 (February 22, 2006), 71 

FR 10582 (March 1, 2006) (SR–PCX–2006–08); and 

52263 (August 15, 2005), 70 FR 49003 (August 22, 

2005) (SR–PCX–2005–95). 

6Except when the Pilot Program is in effect. 

7See Pilot Program Notice, supra note 5. 

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

9 15 U.S.C. 78f(b)(5). 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(6). 

12 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. NYSEArca has satisfied the five-day 

pre-filing requirement. 

13 Id. 

14For purposes only of waiving the operative 

delay, the Commission has considered the proposed 

rule’s impact on efficiency, competition, and capital 

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

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

NYSE Arca 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. NYSE 

Arca 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 this proposal is to 

extend the period for the Exchange’s 

Pilot Program relating to standard 

position and exercise limits for equity 

option contracts and for options on 

QQQQs until September 1, 2007.5

Specifically, the Pilot Program increased 

the applicable position and exercise 

limits for equity options and options on 

the QQQQ in accordance with the 

following levels: 

Current equity option contract limit 6 Pilot Program Equity Option Contract Limit 

13,500 25,000 

22,500 50,000 

31,500 75,000 

60,000 200,000 

75,000 250,000 

Current QQQQ option contract limit Pilot program QQQQ option contract limit 

300,000 900,000 

The Exchange believes that extending 

the Pilot Program until September 1, 

2007 is warranted due to the positive 

feedback from OTP Holders and for the 

reasons cited in the original rule filing 

that proposed the Pilot Program.7 The 

Exchange has not encountered any 

problems or difficulties relating to the 

Pilot Program since its inception. For 

these reasons, the Exchange requests 

that the Commission extend the Pilot 

Program until September 1, 2007. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations 

thereunder and, in particular, the 

requirements of Section 6(b) of the Act.8

Specifically, the Exchange believes the 

proposed rule change is consistent with 

Section 6(b)(5) of the Act 9 that requires 

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 perfect the 

mechanism for a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

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 

Written comments on the proposed 

rule change were neither solicited nor 

received. 

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 from 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 10 and Rule 19b–

4(f)(6) thereunder.11

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing.12 However, Rule 19b–

4(f)(6)(iii) 13 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 Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and in the public interest 

because it will allow the Pilot Program 

to continue uninterrupted.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 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: 


erjones on PRODPC74 with NOTICES
Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices 9825 

15 17 CFR 200.30–3(a)(12). 

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

2Securities Exchange Act Release No. 54898 

(December 8, 2006), 71 FR 75287. 

3Securities Exchange Act Release Nos. 55258 

(February 8, 2007), 72 FR 7701 [File No. SR–OCC–

2006–01] (order approving proposed rule change to 

revise stock options adjustment methodology) and 

53400 (March 2, 2006), 71 FR 12226 [File No. SR–

OCC–2006–01] (notice of filing of proposed rule 

change to revise stock options adjustment 

methodology). 

4The notice and order for SR–OCC–2006–01 

describes OCC’s proposed changes to and the 

rationale for the rule change to its adjustment rules 

for stock options. 5 15 U.S.C. 78q–1(b)(3)(F). 

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 

No. SR–NYSEArca–2007–19 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File No. 

SR–NYSEArca–2007–19. 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 such filing will also be 

available for inspection and copying at 

the principal office of NYSE Arca. 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 No. 

SR–NYSEArca-2007–19 and should be 

submitted on or before March 26, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3745 Filed 3–2–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55349; File No. SR–OCC–

2006–08] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Order 

Approving Proposed Rule Change To 

Revise Stock Futures Adjustment 

Methodology 

February 26, 2007. 

I. Introduction 

On May 19, 2006, The Options 

Clearing Corporation (‘‘OCC’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) proposed 

rule change SR–OCC–2006–08 pursuant 

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

Exchange Act of 1934 (‘‘Act’’).1 Notice 

of the proposal was published in the 

Federal Register on December 14, 

2006.2 The Commission received no 

comment letters. For the reasons 

discussed below, the Commission is 

approving the proposed rule change. 

II. Description 

OCC is seeking to amend Article XII 

(Futures and Futures Options), Section 

3 (Adjustments to Futures and Futures 

Options) of OCC’s By-Laws to conform 

to the changes adopted in rule change 

SR–OCC–2006–01, which amended 

Article VI (Clearance of Exchange 

Transactions), Section 11A 

(Adjustments for Stock Option 

Contracts).3

On January 12, 2006, OCC filed with 

the Commission proposed rule change 

SR–OCC–2006–01. Pursuant to SR–

OCC–2006–01, OCC proposed, among 

other things, to amend its adjustment 

rules in Article VI, Section 11A for stock 

option contracts with respect to stock 

dividends, stock distributions, and stock 

splits. Subject to the Commission 

approving proposed rule change SR–

OCC–2006–01, OCC proposed to amend 

Article XII, Section 3 to ensure stock 

futures contracts can be adjusted in a 

manner consistent with adjustments 

made to stock option contracts on the 

same underlying security. 

As described in rule change SR–OCC–

2006–01, OCC amended certain of its 

adjustment rules with respect to stock 

option contracts to eliminate the need to 

round strike prices and/or units of 

trading in the event of certain stock 

dividends, stock distributions, and stock 

splits.4 The adjustment rules for stock 

futures as currently provided in Article 

XII, Section 3 parallel the adjustment 

rules for stock options provided in 

Article VI, Section 11A. Uniformity of 

the two provisions would ensure that 

stock futures contracts can be adjusted 

in a manner consistent with adjustments 

made to stock option contracts on the 

same underlying security. The changes 

to Article XII, Section 3 that are the 

subject of this proposed rule change are 

made solely to track the changes made 

to Article VI, Section 11A and are 

intended to ensure that adjustments to 

stock options and to stock futures made 

for stock dividends, stock distributions, 

and stock splits will remain consistent 

with respect to an underlying security. 

As noted above, the central purpose of 

the rule change in SR–OCC–2006–01 

was to eliminate inequities which 

resulted from certain rounding practices 

previously required by OCC’s By-Laws 

because stock option strike prices are 

quoted in and are therefore rounded to 

the nearest one-eighth. Stock futures do 

not have the same inequities because 

they are quoted in decimals. 

Nevertheless, in order to ensure 

adjustments for stock options and for 

stock futures remain consistent, OCC 

proposes to revise the adjustment rules 

with respect to stock futures to match 

the revised adjustment rules with 

respect to stock options for stock 

dividends, stock distributions, and stock 

splits. 

OCC will implement the proposed 

rule change described herein 

concurrently with the implementation 

of the changes approved in SR–OCC–

2006–01. 

III. Discussion 

Section 19(b) of the Act directs the 

Commission to approve a proposed rule 

change of a self-regulatory organization 

if it finds that such proposed rule 

change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

such organization. Section 17A(b)(3)(F) 

of the Act requires that the rules of a 

clearing agency be designed, in general, 

to protect investors and the public 

interest.5 The Commission believes that 

OCC’s rule change is consistent with 

this Section because it is intended 

solely to keep the adjustment rules for 

stock futures with respect to stock 


erjones on PRODPC74 with NOTICES