12412 Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices 

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

8 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. 

Nasdaq has met this requirement. 

9See 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). 

10For 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). 11 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The $1 Strike Price Program was initially 

approved on June 11, 2003, and was then extended 

several times until June 5, 2008. See Securities 

Exchange Act Release Nos. 48013 (June 11, 2003), 

68 FR 35933 (June 17, 2003) (SR–Phlx–2002–55); 

49801 (June 3, 2004), 69 FR 32652 (June 10, 2004) 

(SR–Phlx–2004–38); 51768 (May 31, 2005), 70 FR 

33250 (June 7, 2005) (SR–Phlx–2005–35); 53938 

(June 5, 2006), 71 FR 34178 (June 13, 2006) (SR– 

Phlx–2006–36); and 55666 (April 25, 2007), 72 FR 

23879 (May 1, 2007) (SR–Phlx–2007–29). The 

program was subsequently expanded and made 

permanent in 2008. See Securities Exchange Act 

Release No. 57111 (January 8, 2008), 73 FR 2297 

(January 14, 2008) (SR–Phlx–2008–01). 

become effective pursuant to Section 

19(b)(3)(A) of the Act 7 and Rule 19b– 

4(f)(6) thereunder.8

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,9 and respond to increased 

customer demand for $1 strikes without 

delay.10 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–NASDAQ–2009–025 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–NASDAQ–2009–025. 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 No. 

SR–NASDAQ–2009–025 and should be 

submitted on or before April 14, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–6328 Filed 3–23–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59590; File No. SR–Phlx– 

2009–21] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX PHLX, Inc. Related to the $1 

Strike Price Program 

March 17, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on March 

16, 2009, NASDAQ OMX PHLX, Inc. 

(‘‘Phlx’’ 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 prepared 

by the Exchange. 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 modify 

Phlx Rule 1012 (Series of Options Open 

for Trading) to expand the Exchange’s 

$1 Strike Price Program (the 

‘‘Program’’).4 The text of the proposed 

rule change is available on the 

Exchange’s Web site at http:// 

www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings. 

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 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices 12413 

5See supra note 3. 

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

7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). In addition, Rule 19b4(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. Phlx 

has met this requirement. 

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 proposed rule 

change is to modify Phlx Rule 1012 to 

expand the Program to allow the 

Exchange to select 55 individual stocks 

on which options may be listed at $1 

strike price intervals and to expand the 

price range on which the Exchange may 

list such options. 

Currently, the Program allows Phlx 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, the Exchange 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. The 

Exchange may also list $1 strikes on any 

other option class designated by another 

securities exchange that employs a 

similar Program under their respective 

rules. The Exchange may not list longterm option series (‘‘LEAPS’’) at $1 

strike price intervals for any class 

selected for the Program. The Exchange 

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 Phlx 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 the 

Exchange 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 Phlx is 

restricted from listing any series that 

would result in strike prices being $0.50 

apart. 

As stated in the Commission order 

that initially approved Phlx’s Program 

and in subsequent extensions and 

expansions of the Program,5 Phlx 

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, 

member firms representing customers 

have repeatedly requested that Phlx 

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, the 

Exchange would, on a monthly basis, 

review series that were originally listed 

under the Program with strike prices 

that are more than $5 from the current 

values of the options classes in the 

Program. The Exchange 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, Phlx could grant 

member 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 the 

Exchange identifies series for delisting, 

the Exchange 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. Phlx 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, Phlx has analyzed its capacity 

and represents that it 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 

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, Phlx 

requests an expansion of the current 

Program. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 6 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 7

in particular, in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general to protect 

investors and the public interest. The 

Exchange believes that expanding the 

current $1 Strike Program will result in 

a continuing benefit to investors by 

giving them more flexibility to closely 

tailor their investment decisions in 

greater number of securities. 

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 

No written comments were either 

solicited or received. 

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 8 and Rule 

19b-4(f)(6) thereunder.9

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 

mstockstill on PROD1PC66 with NOTICES

12414 Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices 

10See 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). 

11For 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). 12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 ISE filed Amendment Nos. 1 and 2 to its 

proposal on February 9, 2009 and February 10, 

2009, respectively. 

4CBOE filed Amendment No. 1 to its proposal on 

February 4, 2009. 

5See Securities Exchange Act Release Nos. 59377 

(February 10, 2009), 74 FR 7719 (SR–ISE–2009–04); 

59378 (February 10, 2009), 74 FR 7711 (SR–CBOE– 

2009–001); 59395 (February 11, 2009), 74 FR 7710 

(SR–NYSEArca–2009–10); and 59394 (February 11, 

2009), 74 FR 7722 (SR–NYSEALTR–2009–11). 

6See Letter to Secretary, Commission, from 

Thomas R. Keyes III, CPA, J.D., dated February 21, 

2009, regarding SR–CBOE–2009–001. 

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,10 and respond to increased 

customer demand for $1 strikes without 

delay.11 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. 

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–Phlx–2009–21 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–Phlx–2009–21. 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 No. 

SR–Phlx–2009–21 and should be 

submitted on or before April 14, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–6330 Filed 3–23–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59587; File Nos. SR–ISE– 

2009–04, SR–CBOE–2009–001, SR– 

NYSEArca–2009–10, and SR–NYSEALTR– 

2009–11] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Chicago Board Options 

Exchange, Incorporated; NYSE Arca, 

Inc.; and NYSE Alternext US LLC; 

Order Granting Accelerated Approval 

of Proposed Rule Changes, as 

Amended, To Expand the $1 Strike 

Program 

March 17, 2009. 

I. Introduction 

Four options exchanges filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) proposed rule changes 

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

Securities Exchange Act of 1934 

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

expand the $1 Strike Program. 

Specifically, the International Securities 

Exchange, LLC (‘‘ISE’’) submitted its 

proposal on January 21, 2009; 3 the 

Chicago Board Options Exchange, 

Incorporated (‘‘CBOE’’) submitted its 

proposal on January 23, 2009; 4 NYSE 

Arca, Inc. (‘‘NYSE Arca’’) submitted its 

proposal on February 10, 2009; and 

NYSE Alternext US LLC (‘‘NYSE 

Alternext’’) submitted its proposal on 

February 10, 2009. The proposals 

submitted by ISE, CBOE, NYSE Arca, 

and NYSE Alternext (each an 

‘‘Exchange’’ and collectively, the 

‘‘Exchanges’’) are substantively 

identical. The proposals were published 

for comment in the Federal Register on 

February 19, 2009.5 The Commission 

received one comment in response to 

CBOE’s proposal.6 This order approves 

the proposed rule changes, as amended 

in the cases of ISE and CBOE, on an 

accelerated basis. 

II. Description of the Proposals 

The $1 Strike Program currently 

allows each Exchange to select a total of 

10 individual stocks on which option 

series may be listed at $1 strike price 

intervals. To be eligible for inclusion in 

the Program, an underlying stock must 

close below $50 in its primary market 

on the previous trading day. For each 

stock selected for the Program, each 

Exchange 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. Each Exchange also may 

list $1 strikes on any other option class 

designated by another securities 

exchange that employs a similar 

program under their respective rules. 

The Exchanges may not list long-term 

option series at $1 strike price intervals 

for any class selected for the program. 

Each Exchange is restricted from listing 

any series that would result in strike 

prices being $0.50 apart. 

Each Exchange has proposed to 

amend its rules to expand the $1 Strike 

mstockstill on PROD1PC66 with NOTICES