12408 Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices 

1Every existing entity that currently intends to 

rely on the requested order is named as an 

applicant. Any existing or future entity that relies 

on the order in the future will do so only in 

accordance with the terms and condition in the 

application. 

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

2 17 CFR 240.19b–4. 

under the Act as an open-end 

management investment company. Each 

of IIL, DSL and IIM and is registered as 

an investment adviser under the 

Investment Advisers Act of 1940, as 

amended, and currently serves as an 

investment adviser or sub-adviser to 

existing series of the Trust. IFD, a 

Delaware corporation, is registered as a 

broker-dealer under the Securities 

Exchange Act of 1934, as amended 

(‘‘Exchange Act’’). IFD currently serves 

as the distributor of the existing series 

of the Trust. The Trusts and each 

existing or future registered open-end 

management investment company or 

series thereof that is in the same group 

of investment companies, as defined in 

section 12(d)(1)(G)(ii) of the Act, as the 

Trusts and that is advised by IIL, DSL 

or IIM or any entity controlling, 

controlled by or under common control 

with IIL, DSL or IIM (the ‘‘Advisers’’), 

together with series of the Trusts are 

referred to as the ‘‘Funds.’’ Applicants 

request the exemption to the extent 

necessary to permit any Fund that may 

invest in other funds in reliance on 

Section 12(d)(1)(G) of the Act, and 

which is also eligible to invest in 

securities (as defined in section 2(a)(36) 

of the Act) in reliance on rule 12d1–2 

under the Act, to also invest, to the 

extent consistent with its investment 

objective, policies, strategies and 

limitations, in financial instruments that 

may not be securities within the 

meaning of section 2(a)(36) of the Act 

(‘‘Other Investments’’).1

2. Consistent with its fiduciary 

obligations under the Act, each Fund’s 

board of trustees or directors will review 

the advisory fees charged by the Fund’s 

investment adviser to ensure that they 

are based on services provided that are 

in addition to, rather than duplicative 

of, services provided pursuant to the 

advisory agreement of any investment 

company in which the Fund may invest. 

Applicants’ Legal Analysis 

1. Section 12(d)(1)(A) of the Act 

provides that no registered investment 

company (‘‘acquiring company’’) may 

acquire securities of another investment 

company (‘‘acquired company’’) if such 

securities represent more than 3% of the 

acquired company’s outstanding voting 

stock or more than 5% of the acquiring 

company’s total assets, or if such 

securities, together with the securities of 

other investment companies, represent 

more than 10% of the acquiring 

company’s total assets. Section 

12(d)(1)(B) of the Act provides that no 

registered open-end investment 

company may sell its securities to 

another investment company if the sale 

will cause the acquiring company to 

own more than 3% of the acquired 

company’s voting stock, or cause more 

than 10% of the acquired company’s 

voting stock to be owned by investment 

companies. 

2. Section 12(d)(1)(G) of the Act 

provides that section 12(d)(1) will not 

apply to securities of an acquired 

company purchased by an acquiring 

company if: (i) the acquiring company 

and acquired company are part of the 

same group of investment companies; 

(ii) the acquiring company holds only 

securities of acquired companies that 

are part of the same group of investment 

companies, government securities, and 

short-term paper; (iii) the aggregate sales 

loads and distribution-related fees of the 

acquiring company and the acquired 

company are not excessive under rules 

adopted pursuant to section 22(b) or 

section 22(c) of the Act by a securities 

association registered under section 15A 

of the Exchange Act or by the 

Commission; and (iv) the acquired 

company has a policy that prohibits it 

from acquiring securities of registered 

open-end management investment 

companies or registered unit investment 

trusts in reliance on section 12(d)(1)(F) 

or (G) of the Act. 

3. Rule 12d1–2 under the Act permits 

a registered open-end investment 

company or a registered unit investment 

trust that relies on section 12(d)(1)(G) of 

the Act to acquire, in addition to 

securities issued by another registered 

investment company in the same group 

of investment companies, government 

securities, and short-term paper: (1) 

Securities issued by an investment 

company that is not in the same group 

of investment companies, when the 

acquisition is in reliance on section 

12(d)(1)(A) or 12(d)(1)(F) of the Act; (2) 

securities (other than securities issued 

by an investment company); and (3) 

securities issued by a money market 

fund, when the investment is in reliance 

on rule 12d1–1 under the Act. For the 

purposes of rule 12d1–2, ‘‘securities’’ 

means any security as defined in section 

2(a)(36) of the Act. 

4. Section 6(c) of the Act provides that 

the Commission may exempt any 

person, security, or transaction from any 

provision of the Act, or from any rule 

under the Act, if such exemption is 

necessary or appropriate in the public 

interest and consistent with the 

protection of investors and the purposes 

fairly intended by the policies and 

provisions of the Act. 

5. Applicants state that the proposed 

arrangement would comply with the 

provisions of rule 12d1–2 under the Act, 

but for the fact that the Funds may 

invest a portion of their assets in Other 

Investments. Applicants request an 

order under section 6(c) of the Act for 

an exemption from rule 12d1–2(a) to 

allow the Funds to invest in Other 

Investments. Applicants assert that 

permitting the Funds to invest in Other 

Investments as described in the 

application would not raise any of the 

concerns that the requirements of 

section 12(d)(1) were designed to 

address. 

Applicants’ Condition 

Applicants agree that the order 

granting the requested relief will be 

subject to the following condition: 

Applicants will comply with all 

provisions of rule 12d1–2 under the Act, 

except for paragraph (a)(2) to the extent 

that it restricts any Fund from investing 

in Other Investments as described in the 

application. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–6391 Filed 3–23–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59589; File No. SR–BX– 

2009–016] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change Relating to the 

$1 Strike Price Program on the Boston 

Options Exchange Facility 

March 17, 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 16, 

2009, NASDAQ OMX BX, Inc. (the 

‘‘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 prepared 

by the self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

from interested persons. 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices 12409 

3The $1 Strike Price Program was established as 

a pilot in February 2004. See Securities Exchange 

Act Release Nos. 49292 (February 20, 2004), 69 FR 

8993 (February 26, 2004) (SR–BSE–2004–01) 

(establishing the Pilot Program). The pilot was 

subsequently extended through June 5, 2008. See 

Securities Exchange Act Release Nos. 49806 (June 

4, 2004), 69 FR 32640 (June 10, 2004) (SR–BSE– 

2004–22); 51778 (June 2, 2005), 70 FR 33562 (June 

8, 2005) (SR–BSE–2005–18); 53855 (May 24, 2006), 

71 FR 30973 (May 31, 2006) (SR–BSE–2006–19); 

and 55684 (April 30, 2007), 72 FR 26188 (May 8, 

2007) (SR–BSE–2007–17). The pilot was 

subsequently expanded and made permanent in 

2008. See Securities Exchange Act Release No. 

57302 (February 11, 2008), 73 FR 8913 (February 

15, 2008) (SR–BSE–2008–08). 

4 15 U.S.C. 78f(b). 

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

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Chapter IV, Section 6 (Series of Options 

Contracts Open for Trading) of the Rules 

of the Boston Options Exchange Group, 

LLC (‘‘BOX’’) to expand the $1 Strike 

Price Program. The text of the proposed 

rule change is available from the 

principal office of the Exchange, at the 

Commission’s Public Reference Room 

and also on the Exchange’s Internet Web 

site at http://nasdaqomxbx.cchwall

street.com/NASDAQOMXBX/Filings/. 

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 

self-regulatory organization 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 expand the $1 Strike Price 

Program (the ‘‘Program’’).3 The $1 Strike 

Price Program currently allows BOX to 

select a total of 10 individual stocks on 

which option series may be listed at $1 

strike price intervals. In order to be 

eligible for selection into the Program, 

the underlying stock must close below 

$50 in its primary market on the 

previous trading day. If selected for the 

Program, BOX may list strike prices at 

$1 intervals from $3 to $50, but no $1 

strike price may be listed that is greater 

than $5 from the underlying stock’s 

closing price in its primary market on 

the previous day. BOX may also list $1 

strikes on any other option class 

designated by another securities 

exchange that employs a similar 

Program under their respective rules. 

BOX may not list long-term option 

series (‘‘LEAPS’’) at $1 strike price 

intervals for any class selected for the 

Program. BOX also is restricted from 

listing any series that would result in 

strike prices being $0.50 apart. 

The Exchange now proposes to 

expand the Program to allow BOX to 

select a total of 55 individual stocks on 

which option series may be listed at $1 

strike price intervals, and to expand 

slightly the price range on which BOX 

may list $1 strikes, i.e., from $1 to $50. 

The existing restrictions on listing $1 

strikes would continue, i.e., no $1 strike 

price may be listed that is greater than 

$5 from the underlying stock’s closing 

price in its primary market on the 

previous day, and BOX is restricted 

from listing any series that would result 

in strike prices being $0.50 apart. 

As stated in the filings establishing 

BOX’s Program and in subsequent 

extensions and expansions of the 

Program, BOX believes that $1 strike 

price intervals provide investors with 

greater flexibility in the trading of 

equity options that overlie lower price 

stocks by allowing investors to establish 

equity options positions that are better 

tailored to meet their investment 

objectives. Indeed, Participants 

representing customers have repeatedly 

requested that BOX seek to expand the 

Program in terms of the number of 

classes on which option series may be 

listed at $1 strike price intervals. The 

Exchange notes that current market 

conditions, in which the number of 

securities trading below $50 has 

increased dramatically, further warrant 

the expansion of the Program. 

The Exchange is also proposing to set 

forth a delisting policy. Specifically, 

BOX would, on a monthly basis, review 

series that were originally listed under 

the $1 Strike Price Program with strike 

prices that are more than $5 from the 

current values of the options classes in 

the Program. BOX would delist series 

with no open interest in both the put 

and the call series having a: (i) Strike 

higher than the highest strike price with 

open interest in the put and/or call 

series for a given expiration month; and 

(ii) strike lower than the lowest strike 

price with open interest in the put and/ 

or call series for a given expiration 

month. 

Notwithstanding the proposed 

delisting policy, BOX could grant 

Participant requests to add strikes and/ 

or maintain strikes in certain options 

classes in series eligible for delisting. 

Further, in connection with the 

proposed delisting policy, if BOX 

identifies series for delisting, BOX shall 

notify other options exchanges with 

similar delisting policies regarding 

eligible series for listing, and shall work 

with such other exchanges to develop a 

uniform list of series to be delisted, so 

as to ensure uniform series delisting of 

multiply listed options classes. The 

Exchange expects that the proposed 

delisting policy will be adopted by other 

options exchanges that amend their 

rules to employ a similar expansion of 

the Program. 

With regard to the impact on system 

capacity, BOX has analyzed its capacity 

and the Exchange represents that BOX 

and the Options Price Reporting 

Authority (‘‘OPRA’’) have the necessary 

systems capacity to handle the 

additional traffic associated with the 

listing and trading of an expanded 

number of series as proposed by this 

filing. 

The Exchange believes that the $1 

Strike Price Program has provided 

investors with greater trading 

opportunities and flexibility and the 

ability to more closely tailor their 

investment strategies and decisions to 

the movement of the underlying 

security. Furthermore, the Exchange has 

not detected any material proliferation 

of illiquid options series resulting from 

the narrower strike price intervals. For 

these reasons, the Exchange requests an 

expansion of the current Program. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the Act,4

in general, and Section 6(b)(5) of the 

Act,5 in particular, in that it is designed 

to foster cooperation and coordination 

with persons engaged in regulating, 

clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, 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. In particular, the 

Exchange believes that expanding the 

current $1 Strike Price Program will 

result in a continuing benefit to 

investors by giving them more flexibility 

to closely tailor their investment 

decisions in a greater number of 

securities. 

mstockstill on PROD1PC66 with NOTICES

12410 Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices 

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

provide the Commission with 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. BX 

has met this requirement. 

8See Securities Exchange Act Release No. 59587 

(March 17, 2009) (SR–ISE–2009–04, SR–CBOE– 

2009–001, SR–NYSEArca–2009–10, and SR– 

NYSEALTR–2009–11) (Order Granting Accelerated 

Approval of Proposed Rule Changes, as Amended, 

to Expand the $1 Strike Program). 

9For 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). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The $1 Strike Price Program was initially 

approved as a pilot on March 12, 2008. See 

Securities Exchange Act Release No. 57478 (March 

12, 2008), 73 FR 14521 (March 18, 2008) (SR– 

NASDAQ–2007–004 and SR–NASDAQ–2007– 

080).The program was subsequently expanded and 

made permanent. See Securities Exchange Act 

Release No. 58093 (July 3, 2008), 73 FR 39756 (July 

10, 2008) (SR–NASDAQ–2008–057). 

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 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 neither solicited 

nor received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days after the date of 

the filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 6 and Rule 19b– 

4(f)(6) thereunder.7

The Exchange has asked the 

Commission to waive the operative 

delay to permit the proposed rule 

change to become operative prior to the 

30th day after filing. The Commission 

has determined that waiving the 30-day 

operative delay of the Exchange’s 

proposal is consistent with the 

protection of investors and the public 

interest because such waiver will enable 

the Exchange to implement its proposed 

expansion of the Program 

contemporaneously with other 

exchanges,8 and respond to increased 

customer demand for $1 strikes without 

delay.9 Therefore, the Commission 

designates the proposal operative upon 

filing. The Commission expects that the 

Exchange will continue to monitor the 

trading volume associated with the 

additional options series listed as a 

result of this proposal and the effect of 

these additional series on market 

fragmentation and on the capacity of the 

Exchange’s, OPRA’s, and vendors’ 

automated systems. 

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 

No. SR–BX–2009–016 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–BX–2009–016. 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 onlyinformation that you 

wish to make available publicly. All 

submissions should refer to File No. 

SR–BX–2009–016 and should be 

submitted on or before April 14, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–6329 Filed 3–23–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59588; File No. SR– 

NASDAQ–2009–025] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of a Proposed Rule Change by The 

NASDAQ Stock Market LLC Related To 

the $1 Strike Price Program 

March 17, 2009. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on March 17, 

2009, The NASDAQ Stock Market LLC 

(‘‘Nasdaq’’) filed with the Securities and 

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by Nasdaq. 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 

Nasdaq proposes for NOM to modify 

Chapter IV, Section 6 (Securities Traded 

on NOM) of its options rules to expand 

the Exchange’s $1 Strike Price Program 

(the ‘‘Program’’).3

The text of the proposed rule change 

is available from Nasdaq’s website at 

http://nasdaq.cchwallstreet.com, at 

Nasdaq’s principal office, and at the 

Commission’s Public Reference Room. 

mstockstill on PROD1PC66 with NOTICES