Federal Register / Vol. 74, No. 49 / Monday, March 16, 2009 / Notices 11149 

8 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). 

5See ISE Rule 502(a) and (b), which collectively 

require minimum requirements for the underlying 

security that include, but are not limited to: (1) The 

security be registered and be an ‘‘NMS stock’’ as 

defined in Rule 600 of Regulation NMS under the 

Exchange Act; (2) the security be characterized by 

a substantial number of outstanding shares that are 

widely held and actively traded; (3) 7,000,000 

underlying shares, (4) 2,000 shareholders; and (4) 

trading volume of 2,400,000 shares in the preceding 

12 months. 

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–ISE–2009–10 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–ISE–2009–10. 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, 100 F Street, NE., Washington, 

DC 20549, 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–ISE–2009–10 and should be 

submitted on or before April 6, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–5593 Filed 3–13–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59553; File No. SR–ISE– 

2009–11] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Enable the Listing and 

Trading of Options on Managed Fund 

Shares 

March 10, 2009. 

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 3, 

2009, the International Securities 

Exchange, LLC (‘‘ISE’’ 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 prepared by the Exchange. 

The Exchange filed the proposal 

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

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

which renders the proposal 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 proposes to amend 

Rule 502(h) to enable the listing and 

trading of options on Managed Fund 

Shares. The text of the proposed rule 

change is available on the Exchange’s 

Web site http://www.ise.com, at the 

principal office of the Exchange, 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 

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 

self-regulatory organization 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 revise ISE Rule 502 to 

enable the listing and trading of options 

on managed fund shares (‘‘Managed 

Fund Shares’’) that are listed and traded 

on a national securities exchange and 

are considered to be an ‘‘NMS Stock’’ 

(as defined in Rule 600 of Regulation 

NMS under the Securities and Exchange 

Act of 1934 (the ‘‘Act’’)). 

Managed Fund Shares represent an 

interest in a registered investment 

company (‘‘Investment Company’’) 

organized as an open-end management 

investment company or similar entity. 

Unlike traditional exchange traded 

funds Managed Fund Shares are actively 

managed. Managed Fund Shares, 

although, based upon a publicly 

disclosed portfolio of securities, each 

trade as a single exchange-listed equity 

security. 

Accordingly, the rules pertaining to 

the listing and trading of standardized 

equity options will apply to Managed 

Fund Shares. 

Listing Criteria 

The Exchange will consider listing 

and trading options on Managed Fund 

Shares provided the Managed Fund 

Shares meet (1) the criteria for 

underlying securities set forth in ISE 

Rule 502(a) and (b) 5, or the Managed 

Fund Shares are available for creation 

and redemption each business day as set 

forth in ISE Rule 502(h)(A)(ii). 

The Exchange proposes that Managed 

Fund Shares deemed appropriate for 

options trading represent an interest in 

an open-end management investment 

company or similar entity, as described 

below: 

• Managed Fund Shares are securities 

that represents an interest in a registered 

investment company (‘‘Investment 

Company’’) organized as an open-end 

management investment company or 

similar entity, that invests in a portfolio 

of securities selected by the Investment 

Company’s investment adviser 

consistent with the Investment 

Company’s investment objectives and 

11150 Federal Register / Vol. 74, No. 49 / Monday, March 16, 2009 / Notices 

6Pursuant to ISE Rule 412(a)(1) and 412(d), 

Managed Fund Shares are subject to the same 

position limits applicable to options on stocks and 

Exchange-Traded Fund Shares. ISE Rule 414 

stipulates that exercise limits for options on stocks 

and other securities, including Managed Fund 

Shares shall be the same as the position limits 

applicable under ISE Rule 412. 

7See ISE Rules 1200—1204, the Exchange’s rules 

governing margin. 

8See ISE Rule 502(h)(B), the Exchange’s rule 

governing the applicable CSSA requirements for 

options on exchange-traded funds. The Exchange 

notes that any non-U.S. component securities 

(including fixed-income) in an index or portfolio of 

securities on which the Fund Shares are based that 

are not subject to comprehensive surveillance 

agreements may in the aggregate represent an 

amount equal to 50% of the weight of the index or 

portfolio. 

9A complete list of the current members of the 

ISG is available at http://www.isgportal.org. 

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

11 17 CFR 240.19b–4(f)(6). 

12See Securities Exchange Act Release Nos. 

59004 (November 24, 2008), 73 FR 72882 

(December 1, 2008) (SR–NYSEArca–2008–108); 

59006 (November 24, 2008), 73 FR 72879 (SR– 

NYSEALTR–2008–08). 

policies, which is issued in a specified 

aggregate minimum number in return 

for a deposit of a specified portfolio of 

securities and/or a cash amount with a 

value equal to the next determined net 

asset value (‘‘NAV’’), and when 

aggregated in the same specified 

minimum number, may be redeemed at 

a holder’s request, which holder will be 

paid a specified portfolio of securities 

and/or cash with a value equal to the 

next determined NAV. 

Continued Listing Requirements 

Options on Managed Fund Shares 

will be subject to all Exchange rules 

governing the trading of equity options 

and furthermore, the rules pertaining to 

position and exercise limits 6 or margin 7

shall apply. The current continuing or 

maintenance listing standards for 

options traded on ISE will continue to 

apply. 

The Exchange will utilize its existing 

surveillance procedures applicable to 

options on exchange traded funds 

(which will include Managed Fund 

Shares) to monitor trading. In addition, 

the Exchange will implement any new 

surveillance procedures it deems 

necessary to effectively monitor the 

trading of options on Managed Fund 

Shares, including adequate 

comprehensive surveillance sharing 

agreements (‘‘CSSA’’) with markets 

trading in non-U.S. components,8 as 

applicable. Also, the Exchange may 

obtain trading information via the 

Intermarket Surveillance Group 

(‘‘ISG’’) 9 from other exchanges who are 

members or affiliates of the ISG. ISE 

represents that these procedures will be 

adequate to properly monitor Exchange 

trading of options on these the securities 

and to deter and detect violations of 

Exchange rules. 

2. Statutory Basis 

The basis under the Act for this 

proposed rule change is the requirement 

under Section 6(b)(5) that an exchange 

have rules that are designed to promote 

just and equitable principles of trade, 

and 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. The 

Exchange believes that proposed rules 

applicable to trading pursuant to generic 

listing and trading criteria, together with 

the Exchange’s surveillance procedures 

applicable to trading in the securities 

covered by the proposed rules, serve to 

foster investor protection. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

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 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has designated the 

proposed rule change as one that: (i) 

Does not significantly affect the 

protection of investors or the public 

interest; (ii) does not impose any 

significant burden on competition; and 

(iii) by its terms, does not become 

operative for 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. 

Additionally, the Exchange provided 

the Commission with written notice of 

its intention to file the proposed rule 

change at least five business days before 

its filing. Therefore, the foregoing rule 

change has become effective pursuant to 

Section 19(b)(3)(A) of the Act 10 and 

Rule 19b–4(f)(6) thereunder.11 The 

proposed rule change will permit the 

Exchange to trade options on Managed 

Fund Shares thus providing investors 

additional opportunities to hedge their 

positions. Further, this proposed rule 

change is identical to one recently 

approved by the Commission.12 For the 

foregoing reasons, this rule filing 

qualifies for immediate effectiveness as 

a ‘‘non-controversial’’ rule change under 

paragraph (f)(6) of Rule 19b–4 of the 

Act. 

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–ISE–2009–11 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–ISE–2009–11. 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, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

Federal Register / Vol. 74, No. 49 / Monday, March 16, 2009 / Notices 11151 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Amendment No. 1 clarified that if there is any 

change to the status of the Monthly MAP Volume 

Bonus and/or the MAP Marketing Subsidy, or if the 

Exchange negotiates any MAP Agreement 

extension, the Exchange will file a proposed rule 

change with the Commission. 

4See Securities Exchange Act Release No. 56274 

(August 16, 2007), 72 FR 48720 (August 24, 2007) 

(SR–Phlx–2007–54). 

5The term ‘‘Eligible MAP’’ is defined in current 

footnote 5(b) of the Market Access Provider Subsidy 

section of the Exchange’s fee schedule. 

6A MAP Agreement is typically in effect for a 

period of one year, and the Exchange may, by giving 

written notice to the Eligible MAP, elect to extend 

it for additional one year terms, in which case the 

per contract Subsidy payable during any extension 

period for that Eligible MAP is $0.01 per contract 

greater than the Subsidy Rate then in effect at the 

date of renewal. See supra note 4. 

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–ISE–2009–11 and should be 

submitted on or before April 6, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–5594 Filed 3–13–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59537; File No. SR–Phlx– 

2009–19] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change as Modified 

by Amendment No. 1 Thereto by 

NASDAQ OMX PHLX, Inc. To Amend 

the Exchange’s Fee Schedule Relating 

to the Market Access Provider Subsidy 

March 9, 2009. 

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 

25, 2009, NASDAQ OMX PHLX, Inc. 

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

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III, below, which Items have been 

prepared by the Exchange. On March 3, 

2009, the Exchange filed Amendment 

No. 1 to the proposal.3 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 its 

schedule of fees to remove certain 

subsidies that are available to qualifying 

Phlx member organizations that offer to 

customers automated order routing 

systems and electronic market access to 

U.S. options markets (‘‘Market Access 

Providers’’ or ‘‘MAPs’’). Specifically, the 

Exchange proposes to amend the Market 

Access Provider Subsidy section of its 

fee schedule by deleting the following 

subsidies: (i) A $0.01 per contract 

incentive above the previously 

established per-contract subsidy rate 

upon the renewal of a MAP Agreement; 

(ii) a $50,000 per month bonus payment 

(the ‘‘Monthly MAP Volume Bonus’’) for 

each month in which the number of 

contracts routed to the Exchange 

exceeds a defined number of contracts; 

and (iii) a $25,000 per month marketing 

subsidy (the ‘‘MAP Marketing 

Subsidy’’), as defined below. 

The proposed rule change is filed for 

immediate effectiveness and will be 

effective for trades settling on or after 

March 1, 2009. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, at the 

principal office of the Exchange, 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 

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 purpose of the proposed rule 

change is to manage Exchange expenses 

by removing certain subsidies from the 

Exchange’s fee schedule. 

Market Access Provider 

In August, 2007, the Exchange 

amended its fee schedule to provide a 

per contract Subsidy (the ‘‘Subsidy’’) for 

certain Exchange members known as 

MAPs.4 A MAP is an Exchange member 

organization that offers to customers 

automated order routing systems and 

electronic market access to U.S. options 

markets. The Exchange pays a percontract MAP Subsidy to any Exchange 

member organization that qualifies as a 

MAP (an ‘‘Eligible MAP’’) 5 who elects 

to participate by submitting any 

application(s) and/or form(s) required 

by the Exchange, and complying with 

other conditions. 

A MAP must enter into and maintain 

an Agreement (a ‘‘MAP Agreement’’) 

with the Exchange to function as an 

Eligible MAP and be in compliance with 

all terms thereof. 

MAP Subsidy 

The Exchange currently pays a 

Subsidy to Eligible MAPs on a monthly 

basis, of $0.10 (the ‘‘Subsidy Rate’’) for 

each Eligible Contract (as defined 

below) executed in the immediately 

preceding calendar month above the 

particular Eligible MAP’s Baseline 

Order Flow (as defined below). 

‘‘Eligible Contracts’’ means contracts 

that result from the execution on the 

Exchange of: (1) Equity option orders 

(other than crosses) sent electronically 

to an Eligible MAP (and routed to the 

Exchange electronically by the Eligible 

MAP) by its customers; and (2) MAP 

Routing Orders (other than crosses) sent 

electronically by the Eligible MAP. 

‘‘Baseline Order Flow’’ for an Eligible 

MAP means the higher of: (1) 500,000 

contracts; or (2) the average contracts 

per month, calculated for the 3-month 

period immediately preceding the 

Eligible MAP entering into an agreement 

with the Exchange, that resulted from 

the execution on the Exchange of equity 

option orders (other than crosses) routed 

to Phlx electronically by such Eligible 

MAP. 

In addition, the Exchange pays an 

additional $0.01 per contract above the 

previously established per-contract 

Subsidy Rate upon the renewal of a 

MAP Agreement.6

The Exchange proposes to delete the 

additional $0.01 per contract payment 

provision respecting extended MAP 

Agreements from the Market Access 

Provider Subsidy section of its fee 

schedule. The Exchange believes that it 

would benefit both parties to negotiate 

the terms of any MAP Agreement 

extension on a case-by-case basis, rather 

than having fixed terms already in