15794 Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices 

15 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78s(b)(3)(A)(iii). 

3 17 CFR 240.19b–4(f)(4). 

4There are exceptions to this general prohibition. 

Subject to certain aggregation requirements for 

cash-settled options, CBOE permits flexibly 

structured options to expire on the same day as 

non-flexibly structured quarterly options and nonflexibly structured weekly options. Non-flexibly 

structured weekly options are called ‘‘short term 

options’’ in OCC’s By-Laws and Rules. CBOE Rules 

24A.7(d) and 24B.7(d). 

5Securities Exchange Act Release No. 59417 (Feb. 

18, 2009), 74 FR 8591 (Feb. 25, 2009) [SR–CBOE– 

2008–115]. 

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 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–NYSE– 

2009–35 and should be submitted on or 

before April 28, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–7711 Filed 4–6–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59675; File No. SR–OCC– 

2009–05] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change Relating to 

Flexibly Structured Options 

April 1, 2009. 

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

Securities Exchange Act of 1934,1 notice 

is hereby given that on March 19, 2009, 

The Options Clearing Corporation 

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

Exchange Commission the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

prepared primarily by OCC. OCC filed 

the proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 2 and 

Rule 19b–4(f)(4) thereunder 3 so that the 

proposal was 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 the Substance 

of the Proposed Rule Change 

The proposed rule change will amend 

OCC’s By-Laws in order to clear and 

settle flexibly structured options traded 

on the Chicago Board Options Exchange 

(‘‘CBOE’’). 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

OCC 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. OCC 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 

Flexibly structured options are 

options that give investors the ability to 

customize basic option features 

including size, expiration date, exercise 

style, and certain exercise prices. 

Currently, options exchanges generally 

do not permit flexibly structured 

options to be customized to expire on 

the same expiration date as any series of 

non-flexibly structured options that are 

listed for trading.4 However, pursuant to 

a recent CBOE rule change, CBOE 

eliminated this restriction so that the 

parties to a flexibly structured option 

transaction can choose an expiration 

date that coincides with that of a series 

of non-flexibly structured options.5 As a 

result of eliminating the expiration date 

restriction, it is now possible for new 

flexibly structured options to become 

fungible with a series of non-flexibly 

structured options that are subsequently 

listed for trading. Thus, CBOE now 

permits flexibly structured options to be 

traded before identical non-flexibly 

structured options are listed for trading. 

Once an option series is listed on CBOE 

for trading as a non-flexibly structured 

option series, (i) all existing flexibly 

structured options having identical 

terms as the non-flexibly structured 

option series will be fully fungible with 

options in such series and (ii) any 

further trading in such series would be 

as non-flexibly structured options. As 

an exception to the foregoing, flexibly 

structured options will not become 

fungible with subsequently-introduced 

non-flexibly structured quarterly 

options or short term options. 

In order to clear and settle flexibly 

structured options traded on CBOE in a 

manner that is consistent with CBOE’s 

rules, OCC will change the definition of 

‘‘flexibly structured option’’ in Article I 

of its By-Laws to clarify that an option 

will be classified as a flexibly structured 

option only if its variable terms do not 

correspond to the variable terms of any 

series of non-flexibly structured options 

listed for trading other than a series of 

quarterly options or short term options. 

Furthermore, existing flexibly 

structured options will be fungible with 

options in a subsequently listed nonflexibly structured option series other 

than quarterly options or short term 

options that have identical variable 

terms and will not be classified as 

flexibly structured options. The 

definition of ‘‘flexibly structured 

option’’ in Article XVII, Section 1 of 

OCC’s By-Laws will be deleted because 

such definition is redundant. OCC will 

also amend the definition of ‘‘variable 

terms’’ in Article I of the By-Laws to 

clarify that the expiration date is a 

variable term for all types of options. 

Finally, other parts of the definition will 

also be revised to group together 

variable terms of option contracts and 

variable terms of futures contracts. 

Prior to this rule change, OCC’s rules 

provided that an expiring flexibly 

structured index option with an exercise 

settlement amount of $1.00 or more was 

automatically exercised on its 

expiration date. In comparison, an 

expiring non-flexibly structured index 

option with an exercise settlement 

amount of $1.00 or more except 

quarterly options or short term options 

was subject to the ‘‘exercise by 

exception’’ procedures under which the 

option will be exercised on its 

expiration date if the option holder does 

not give contrary exercise instructions. 

However, as described above, flexibly 

Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices 15795 

6 15 U.S.C. 78q–1. 

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

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Amendment No. 1 replaced and superseded the 

original filing in its entirety. 

structured options that become fungible 

with non-flexibly structured options 

will cease to be classified as flexibly 

structured options. Therefore, such 

flexibly structured options will cease to 

be subject to automatic exercise at 

expiration and will instead be subject to 

exercise by exception like the nonflexibly structured options with which 

they have become fungible. 

OCC believes that the proposed 

changes to OCC’s By-Laws and Rules are 

consistent with the purposes and 

requirements of Section 17A of the Act 6

because they are designed to promote 

the prompt and accurate clearance and 

settlement of transactions in, including 

exercises of, flexibly structured options 

and to foster cooperation and 

coordination with persons engaged in 

the clearance and settlement of such 

transactions, to remove impediments to 

and perfect the mechanism of a national 

system for the prompt and accurate 

clearance and settlement of such 

transactions, and, in general, to protect 

investors and the public interest. It 

accomplishes these purposes by 

maintaining consistency between OCC’s 

By-Laws and Rules and CBOE’s rules as 

applied to the clearance and settlement 

of flexibly structured options. The 

proposed rule change is not inconsistent 

with the existing By-Laws and Rules of 

OCC, including any rules proposed to be 

amended. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

OCC does not believe that the 

proposed rule change would impose any 

burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

OCC has not solicited or received 

written comments with respect to the 

proposed rule change. OCC will notify 

the Commission of any written 

comments it receives. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 7 and Rule 19b–4(f) 

thereunder because the proposed rule 

effects a change in an existing OCC 

service that (i) does not adversely affect 

the safeguarding of securities or funds 

in OCC’s custody or control or for which 

OCC is responsible and (ii) does not 

significantly affect OCC’s respective 

rights or obligations or persons using 

the service. At any time within 60 days 

of the filing of the proposed rule change, 

the Commission may summarily 

abrogated 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 rulecomment@sec.gov. Please include File 

No. SR–OCC–2009–05 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 No. 

SR–OCC–2009–05. 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. to 3 p.m. 

Copies of such filing also will be 

available for inspection and copying at 

OCC’s principal office and on OCC’s 

Web site at http://www.theocc.com/ 

publications/rules/proposed_changes/ 

proposed_changes.jsp. 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–OCC–2009– 

05 and should be submitted on or before 

April 28, 2009. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–7774 Filed 4–6–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59679; File No. SR–ISE– 

2007–97] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing of Proposed Rule 

Change and Amendment No. 1 Thereto 

Relating to Market Data Fees 

April 1, 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 October 

5, 2007, International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) 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. 

On March 9, 2009, 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 modified by 

Amendment No. 1, from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is proposing to amend 

its Schedule of Fees to establish fees for 

a real-time depth of market data 

offering. 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.