27346 Federal Register / Vol. 72, No. 93 / Tuesday, May 15, 2007 / Notices 

11 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). 

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

6 15 U.S.C. 78f(b)(5). 

7 15 U.S.C. 78s(b)(3)(A). 

8 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. NYSE Arca has satisfied the five-day 

pre-filing requirement. As set forth in the 

Commission’s initial approval of the Pilot Program 

and in its order extending the operation of the Pilot 

Program through June 5, 2005, if NYSE Arca 

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. NYSE 

Arca 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 NYSE Arca selected for the 

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

the Pilot Program on the capacity of NYSE Arca’s, 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File number 

SR–NASDAQ–2007–047 and should be 

submitted on or before June 5, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–9249 Filed 5–14–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55718; File No. SR–

NYSEArca–2007–42] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Extend the $1 Strike 

Pilot Program for an Additional Year 

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 May 3, 

2007, NYSE Arca, Inc. (‘‘NYSE Arca’’ 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 NYSE Arca. 

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 $1 strike pilot 

program (‘‘Pilot Program’’) for an 

additional year. The text of the 

proposed rule change is available at 

NYSE Arca, the Commission’s Public 

Reference Room, and 

www.nysearca.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, the 

Exchange 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. The 

Exchange 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 Exchange proposes to extend its 

Pilot Program for one year. The current 

Pilot Program expires on June 5, 2007. 

NYSE Arca notes that OTP Firms have 

expressed a continued interest in listing 

additional strike prices on low-priced 

stocks so that they can provide their 

customers with greater flexibility in 

their investment choices. For this 

reason, the Exchange proposes to extend 

the Pilot Program. The Exchange notes 

that the Pilot Program will remain 

unchanged in all material respects, 

including: The procedures for adding $1 

strike intervals; the procedures for 

phasing out $2.50 strike price intervals; 

the prohibition against listing long-term 

options (‘‘LEAPS’’) in equity option 

classes at $1 strike intervals; the 

procedures for adding expiration 

months; and the procedures for deleting 

$1 strike intervals. In support of the 

Exchange’s proposal to extend the Pilot 

Program until June 5, 2008, the 

Exchange is submitting a report to the 

Commission (‘‘Pilot Program Report’’), 

attached as Exhibit 3 to the proposal, 

offering detailed data from, and analysis 

of, the Pilot Program. 

2. Statutory Basis 

The Exchange believes that the 

continuing the Pilot Program will 

stimulate customer interest in options 

overlying lower-priced stocks by 

creating greater trading opportunities 

and flexibility. The Exchange further 

believes that continuing the Pilot 

Program will provide customers with 

the ability to more closely tailor 

investment strategies to the precise 

movement of the underlying security. 

For these reasons, the Exchange believes 

the proposed rule change is consistent 

with Section 6(b) of the Act,5 in general, 

and furthers the objectives of Section 

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

it is designed to facilitate transactions in 

securities, to promote just and equitable 

principles of trade, and 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 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 

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 7 and Rule 19b–

4(f)(6) thereunder.8


cprice-sewell on PROD1PC62 with NOTICES
Federal Register / Vol. 72, No. 93 / Tuesday, May 15, 2007 / Notices 27347 

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 NYSE Arca 

addressed them; (6) any complaints that NYSE Arca 

received during the operation of the Pilot Program 

and how NYSE Arca addressed them; and (7) any 

additional information that would help to assess the 

operation of the Pilot Program. See Securities 

Exchange Act Release Nos. 48945 (June 17, 2003), 

68 FR 37594 (June 24, 2003) (SR–PCX–2003–28) 

and 50152 (August 5, 2004), 69 FR 49931 (August 

12, 2004) (SR–PCX–2004–61). 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 In Amendment No. 1, the Exchange clarified 

that the proposed rule change was seeking to permit 

manual executions of P/A Orders that had been 

price-improved on another exchange and submitted 

to Phlx for execution against the original customer 

limit order that gave rise to the Linkage P/A Order 

and made minor corrections to the rule text. 

4A P/A Order is an order under the Plan for the 

Purpose of Creating and Operating an Intermarket 

Option Linkage (‘‘Linkage Plan’’), for the principal 

account of a specialist (or equivalent entity on 

another Participant Exchange that is authorized to 

represent Public Customer orders), reflecting the 

terms of a related unexecuted Public Customer 

order for which the specialist is acting as agent. See 

Phlx Rule 1083(k)(i). 

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–NYSEAcra–2007–42 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–NYSEArca-2007–42. 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-2007–42 and should be 

submitted on or before June 5, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–9261 Filed 5–14–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55729; File No. SR–Phlx–

2007–26] 

Self-Regulatory Organizations; 

Philadelphia Stock Exchange, Inc.; 

Notice of Filing of Proposed Rule 

Change as Modified by Amendment 

No. 1 Thereto, Relating to Price 

Improved Linkage P/A Orders 

May 9, 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 March 21, 

2007, the Philadelphia Stock Exchange, 

Inc. (‘‘Phlx’’ 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 the 

Phlx. On May 2, 2007, the Exchange 

filed Amendment No. 1 to the proposed 

rule change.3 The Commission is 

publishing this notice to solicit 

comments on the proposed rule change, 

as amended, from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Phlx proposes to amend Phlx 

Rule 1034, Minimum Increments, and to 

adopt proposed Phlx Rule 

1080(c)(iv)(F), to permit the Exchange to 

execute Linkage Principal Acting as 

Agent (‘‘P/A’’) Orders 4 that are sent to, 

and price-improved on, another 

exchange, and subsequently presented 

for execution on the Phlx against 

customer limit orders on the limit order 

book that give rise to the initial P/A 

Order, at a price other than the 

minimum trading increment applicable 

to the particular series traded. 

The proposed amendment to Phlx 

Rule 1080(c)(iv)(F) states that such 

orders would be ineligible for automatic 

execution, and would instead be 

handled manually by the specialist. 

The text of the proposed rule change 

is available at Phlx, the Commission’s 

Public Reference Room, and 

www.phlx.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, the 

Phlx 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. The Phlx 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 the proposed rule 

change is to permit Exchange specialists 

to execute price-improved P/A Orders 

against public customer limit orders at 

prices other than the minimum trading 

increment applicable to that particular 

series so that the customer limit order 

underlying the P/A Order receives the 

improved price. 

Currently, Phlx Rule 1034, Minimum 

Increments, generally provides that 

options quoting at $3.00 or higher have 

a minimum increment of $.10, and 

options quoting under $3.00 have a 

minimum increment of $.05. Options 

subject to the current ‘‘penny pilot’’ may 


cprice-sewell on PROD1PC62 with NOTICES