Federal Register / Vol. 72, No. 91 / Friday, May 11, 2007 / Notices 26853 

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). 

5See Securities Exchange Act Release No. 48024 

(June 12, 2003), 68 FR 36617 (June 18, 2003) (SR–

Amex–2003–36) (‘‘Pilot Approval Order’’). 

6See Securities Exchange Act Release Nos. 49813 

(June 4, 2004), 69 FR 33088 (June 14, 2004) (SR–

Amex–2004–45); 51770 (May 31, 2005), 70 FR 

33226 (June 7, 2005) (SR–Amex–2005–40); and 

53843 (May 19, 2006), 71 FR 30455 (May 26, 2006) 

(collectively, ‘‘Pilot Program Extension Notices’’). 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meetings. Certain 

staff members who have an interest in 

the matters may also be present. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), (9)(B), and 

(10) and 17 CFR 200.402(a)(3), (5), (7), 

9(ii) and (10), permit consideration of 

the scheduled matters at the Closed 

Meetings. 

Commissioner Atkins, as duty officer, 

voted to consider the items listed for the 

closed meeting in closed session. 

The subject matter of the Closed 

Meeting scheduled for Tuesday, May 15, 

2007 will be: 

Formal orders of investigations; 

Institution and settlement of injunctive 

actions; 

Institution and settlement of 

administrative proceedings of an 

enforcement nature; 

An adjudicatory matter; and 

Other matters related to enforcement 

proceedings. 

The subject matter of the Closed 

Meeting scheduled for Thursday, May 

17, 2007 will be: 

Institution and settlement of injunctive 

actions; and 

Institution and settlement of 

administrative proceedings of an 

enforcement nature; 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted or postponed, please 

contact: 

The Office of the Secretary at (202) 

551–5400. 

May 8, 2007. 

Nancy M. Morris, 

Secretary. 

[FR Doc. E7–9181 Filed 5–10–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55714; File No. SR–Amex–

2007–43] 

Self-Regulatory Organizations; 

American Stock Exchange LLC; Notice 

of Filing and Immediate Effectiveness 

of a Proposed Rule Change Relating to 

a One-Year Extension of the $1 Strike 

Price Pilot Program 

May 7, 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 April 30, 

2007, the American Stock Exchange LLC 

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

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

substantially prepared by Amex. 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 

The Exchange seeks to extend the $1 

strike price pilot program (‘‘Pilot 

Program’’) for one year through June 5, 

2008. The text of the proposed rule 

change is available at Amex, the 

Commission’s Public Reference Room, 

and http://www.amex.com. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

Amex 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. Amex 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 Pilot Program was established in 

June 2003,5 with three one-year 

extensions granted by the Commission 

in June 2004, June 2005, and May 2006.6

The Exchange believes that the Pilot 

Program has operated as designed, 

providing investors with greater 

flexibility in achieving their investment 

strategies in connection with stocks 

trading below $20. Accordingly, the 

Exchange believes that a one-year 

extension is reasonable and consistent 

with the intent of the Pilot Program. 

The Pilot Program permits the 

Exchange to select a total of five 

individual stocks on which options 

series may be listed at $1 strike price 

intervals. To be eligible for the Pilot 

Program, an underlying stock must close 

below $20 on its primary market on the 

previous trading day. If selected, the 

Exchange may list $1 strike prices at $1 

intervals from $3 to $20, however, a $1 

strike price may not be listed that is 

greater than $5 from the underlying 

stock’s closing price on its primary 

market on the previous day. The 

Exchange may also list $1 strikes on any 

other options class designated by 

another options exchange that employs 

a similar pilot program approved by the 

Commission. 

The Pilot Program prohibits the 

Exchange from listing $1 strikes on any 

series of individual equity options 

classes that have greater than nine 

months until expiration. In addition, the 

Exchange is also restricted from listing 

any series that would result in strike 

prices being $0.50 apart. 

To date, the Exchange believes that 

the Pilot Program has been beneficial to 

investors and the options market by 

providing investors with greater 

flexibility in the trading of equity 

options that overlie stocks trading below 

$20. In this manner, options investors 

are able to better tailor their strategies 

through the availability of $1 strikes. 

The Pilot Program Report, attached as 

Exhibit 3 to the proposal, provides data 

regarding the Pilot Program as required 


ycherry on PROD1PC64 with NOTICES
26854 Federal Register / Vol. 72, No. 91 / Friday, May 11, 2007 / Notices 

7See Pilot Program Extension Notices, supra note 

6. 

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). Rule 19b–4(f)(6) also 

requires the self-regulatory organization to give the 

Commission 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. Amex has satisfied the five-day prefiling requirement. As set forth in the Commission’s 

initial approval of the Pilot Program, if Amex 

proposes to: (1) Extend the Pilot Program; (2) 

expand the number of options eligible for inclusion 

in the Pilot Program; or (3) seek permanent 

approval of the Pilot Program, it must submit a Pilot 

Program report to the Commission along with the 

filing of its proposal to extend, expand, or seek 

permanent approval of the Pilot Program. Amex 

must file any proposal to expand or seek permanent 

approval of the Pilot Program and the Pilot Program 

report with the Commission at least 60 days prior 

to the expiration of the Pilot Program. The Pilot 

Program report must cover the entire time the Pilot 

Program was in effect and must include: (1) Data 

and written analysis on the open interest and 

trading volume for options (at all strike price 

intervals) selected for the Pilot Program; (2) delisted 

options series (for all strike price intervals) for all 

options selected for the Pilot Program; (3) an 

assessment of the appropriateness of $1 strike price 

intervals for the options Amex selected for the Pilot 

Program; (4) an assessment of the impact of the 

Pilot Program on the capacity of Amex’s, the 

Options Price Reporting Authority’s, and vendors’

automated systems; (5) any capacity problems or 

other problems that arose during the operation of 

the Pilot Program and how Amex addressed them; 

(6) any complaints that Amex received during the 

operation of the Pilot Program and how Amex 

addressed them; and (7) any additional information 

that would help to assess the operation of the Pilot 

Program. See Pilot Approval Order, supra note 5. 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

in the Pilot Program Extension Notices.7

Amex notes that, as the data indicates, 

the $1 strikes exhibited higher volume 

and open interest than the ‘‘standard’’

strike price intervals. Specifically, the 

five options classes selected by Amex 

for $1 strikes had a trading volume of 

327,115 contracts, while the ‘‘standard’’

strikes for the same options classes had 

a trading volume 290,191 contracts. Of 

even greater significance is the 

difference in open interest between the 

$1 strikes and ‘‘standard’’ strikes. As of 

April 30, 2007, $1 strikes open interest 

totaled 685,808 contracts versus 396,777 

contracts for ‘‘standard’’ strikes. Given 

the limited nature of the Pilot Program, 

the Exchange submits that the impact on 

systems has been minimal. Accordingly, 

Amex believes that an extension of the 

Pilot Program for one year through June 

5, 2008, is warranted. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the Section 6(b) of the Act,8 in general, 

and furthers the objective of Section 

6(b)(5) of the Act,9 in particular, in that 

it is designed to promote just and 

equitable principles of trade and to 

remove impediments to and perfect the 

mechanism of a free and open market. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange believes that the 

proposed rule change will impose no 

burden on competition that is not 

necessary or appropriate in the 

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 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 Act10 and Rule 19b–

4(f)(6) thereunder.11

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 

No. SR–Amex–2007–43 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 No. 

SR–Amex–2007–43. 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 Amex. 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–Amex–2007–43 and should be 

submitted on or before June 1, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–9076 Filed 5–10–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55715; File No. SR–ISE–

2007–26] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Extend a Pilot Program 

That Allows the Listing of Strike Prices 

at One-Point Intervals for Stocks 

Trading Under $20 

May 7, 2007. 

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

Securities Exchange Act of 1934 

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


ycherry on PROD1PC64 with NOTICES