Federal Register / Vol. 75, No. 89 / Monday, May 10, 2010 / Notices 25899 

7An RSQT is an ROT that is a member or member 

organization with no physical trading floor 

presence who has received permission from the 

Exchange to generate and submit option quotations 

electronically through AUTOM in eligible options 

to which such RSQT has been assigned. An RSQT 

may only submit such quotations electronically 

from off the floor of the Exchange. See Exchange 

Rule 1014(b)(ii)(B). 

8This applies to all customer orders, directed and 

non-directed. 

9For purposes of the fees and rebates related to 

adding and removing liquidity, a Directed 

Participant is a Specialist, SQT, or RSQT that 

executes a customer order that is directed to them 

by an Order Flow Provider and is executed 

electronically on PHLX XL II. 

10See Exchange Rule 1080(l), ‘‘* * * The term 

‘Directed Specialist, RSQT, or SQT’ means a 

specialist, RSQT, or SQT that receives a Directed 

Order.’’ A Directed Participant has a higher quoting 

requirement as compared with a specialist, SQT or 

RSQT who is not acting as a Directed Participant. 

See Exchange Rule 1014. 

11The Exchange defines a ‘‘professional’’ as any 

person or entity that (i) is not a broker or dealer in 

securities, and (ii) places more than 390 orders in 

listed options per day on average during a calendar 

month for its own beneficial account(s) (hereinafter 

‘‘Professional’’). 

12 15 U.S.C. 78f(b). 

13 15 U.S.C. 78f(b)(4). 

14 15 U.S.C. 78s(b)(3)(A)(ii). 

15 17 CFR 240.19b–4(f)(2). 

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Traders (‘‘RSQTs’’); 7 (ii) customers; 8 (iii) 

specialists, SQTs and RSQTs that 

receive Directed Orders (‘‘Directed 

Participants’’ 9 or ‘‘Directed Specialists, 

RSQTs, or SQTs’’ 10); (iv) Firms; (v) 

broker-dealers; and (vi) Professionals.11

The current per-contract transaction 

charge depends on the category of 

market participant submitting an order 

or quote to the Exchange that removes 

liquidity. 

The Exchange also currently assesses 

a per-contract rebate of transaction 

charges for orders or quotations that add 

liquidity in the select Symbols. The 

amount of the rebate depends on the 

category of participant whose order or 

quote was executed as part of the Phlx 

Best Bid and Offer. 

The Exchange proposes to add the 

five additional options to the list of 

select Symbols and apply the applicable 

fees and rebates to these options. 

While changes to the Fee Schedule 

pursuant to this proposal are effective 

upon filing, the Exchange has 

designated these changes to be operative 

for transactions settling on or after May 

3, 2010. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Fee Schedule is 

consistent with Section 6(b) of the Act 12

in general, and furthers the objectives of 

Section 6(b)(4) of the Act 13 in 

particular, in that it is an equitable 

allocation of reasonable fees and other 

charges among Exchange members. The 

Exchange believes that the addition of 

the options to the rebates for adding and 

fees for removing liquidity is reasonable 

and equitable in that it will apply to all 

categories of participants in the same 

manner. 

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 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 14 and 

paragraph (f)(2) of Rule 19b–4 15

thereunder. 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–Phlx–2010–64 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, Station Place, 100 F Street, 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–Phlx–2010–64. 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 Web site viewing and 

printing 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 

publicly available. All submissions 

should refer to File Number SR–Phlx– 

2010–64 and should be submitted on or 

before June 1, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–10961 Filed 5–7–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62023; File No. SR–CBOE– 

2010–039] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Trade Options on S&P 

500 Annual Dividend Index With an 

Applied Scaling Factor of 1 

May 3, 2010. 

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 April 28, 

2010, the Chicago Board Options 

Exchange, Incorporated (‘‘Exchange’’ or 

‘‘CBOE’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change as described 


jlentini on DSKJ8SOYB1PROD with NOTICES
25900 Federal Register / Vol. 75, No. 89 / Monday, May 10, 2010 / Notices 

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

4 17 CFR 240.19b–4(f)(6). 

5See Securities Exchange Act Release No. 61136 

(December 10, 2009), 74 FR 66711 (December 16, 

2009) (SR–CBOE–2009–022). The S&P 500 

Dividend Index represents the accumulated exdividend amounts of all S&P 500 Index component 

securities over a specified accrual period. Each day 

Standard & Poor’s calculates the aggregate daily 

dividend totals for the S&P 500 Index component 

securities, which are summed over any given 

calendar quarter and are the basis of the S&P 500 

Dividend index. On any given day, the index 

dividend is calculated as the total dividend value 

for all constituents of the S&P 500 Index divided 

by the S&P 500 Index divisor. The total dividend 

value is calculated as the sum of dividends per 

share multiplied by the shares outstanding for all 

constituents of the S&P 500 Index that are trading 

‘‘ex-dividend’’ on that day. 

6The Exchange will assign separate trading 

symbols to options overlying an index with a 

designated annual accrual period to distinguish 

them from options overlying an index with a 

designated quarterly accrual period. 

7Standard & Poor’s has created and now 

calculates the S&P 500 Annual Dividend Index. 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 

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

11 17 CFR 240.19b–4(f)(6). Pursuant to Rule 19b– 

4(f)(6)(iii) under the Act, the Exchange is required 

to give the Commission 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. The Exchange 

has satisfied this requirement. 

in Items I and II below, which Items 

have been prepared by the Exchange. 

The Exchange filed the proposal as a 

‘‘non-controversial’’ proposed rule 

change pursuant to Section 

19(b)(3)(A)(iii) of the Act 3 and Rule 

19b–4(f)(6) thereunder.4 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 

CBOE proposes to trade options on 

the S&P 500 Annual Dividend Index 

with an applied scaling factor of 1. The 

Exchange is not proposing any rule text 

changes. The rule proposal is available 

on the Exchange’s Web site (http:// 

www.cboe.org/legal), at the Exchange’s 

Office of the Secretary 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 Securities and Exchange 

Commission previously approved 

CBOE’s proposed rule change, as 

modified Amendment No. 1, to list and 

trade cash-settled options that overlie 

the S&P 500 Dividend Index.5 In the 

filing, the Exchange stated that the S&P 

500 Dividend Index is reported in 

absolute numbers (e.g., 3, 5, 7) and that 

the Exchange would apply a scaling 

factor of 10 to the underlying index. The 

Exchange proposed the use of the 

scaling factor in the original filing 

because it was premised on the S&P 500 

Dividend Index representing the 

accumulated ex-dividend amounts of all 

S&P 500 Index components over a 

specified quarterly accrual period. The 

use of a scaling factor was intended to 

increase the size of the underlying index 

value because it was expected to be a 

relatively low value. 

In Amendment No. 1, the Exchange 

proposed to permit varying terms for the 

accrual period (e.g., quarterly, semiannually, annually). To date, the 

Exchange has only designated a 

quarterly accrual period for S&P 500 

Dividend Index options. Beginning May 

25, 2010, the Exchange plans to list 

options on the S&P 500 Annual 

Dividend Index, an index with a 

designated annual accrual period.6 The 

Exchange plans to list options with a 

single expiration for each year (e.g., Dec. 

2010, Dec. 2011).7 In the recent past, the 

final index value (at expiration) has 

ranged from the low 20s up to the upper 

20s. The final value on December 18, 

2009 was 22.81. Because the duration of 

an annual accrual period results in the 

underlying index value being higher 

than for lesser duration accrual periods, 

the Exchange proposes to apply a 

scaling factor of 1 to the underlying 

annual index. During each business day, 

CBOE will disseminate the underlying 

S&P 500 Annual Dividend Index value 

with the applied scaling factor of 1 

through the Options Price Reporting 

Authority (‘‘OPRA’’) and/or one or more 

major market data vendors. 

The use of a scaling factor of 10 was 

described in the purpose section of the 

filing and in the contract specifications 

that were submitted as Exhibit 3; 

therefore, the Exchange is not proposing 

any new or revised rule text to affect 

this change. Exhibit 3 presents revised 

contract specifications for S&P 500 

Annual Dividend Index options. 

2. Statutory Basis 

The Exchange believes this rule 

proposal is consistent with the Act and 

the rules and regulations under the Act 

applicable to a national securities 

exchange and, in particular, the 

requirements of Section 6(b) of the Act.8

Specifically, the Exchange believes that 

the proposed rule change is consistent 

with the Section 6(b)(5) Act 9

requirements that the rules of an 

exchange be designed to promote just 

and equitable principles of trade, to 

prevent fraudulent and manipulative 

acts and, in general, to protect investors 

and the public interest. In particular, the 

proposed rule change seeks to permit 

the Exchange to apply a scaling factor of 

1 to options on the S&P 500 Annual 

Dividend Index, an index with a 

designated annual accrual period, since 

the duration of an annual accrual period 

results in the underlying index value 

being higher than for lesser duration 

accrual periods. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE 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 solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the proposed rule change: (i) 

Does not significantly affect the 

protection of investors or the public 

interest; (ii) does not impose any 

significant burden on competition; and 

(iii) does not become operative for 30 

days after the date of the filing, or such 

shorter time as the Commission may 

designate if consistent with the 

protection of investors and the public 

interest, the proposed rule change has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 10 and Rule 19b– 

4(f)(6) thereunder.11

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 


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Federal Register / Vol. 75, No. 89 / Monday, May 10, 2010 / Notices 25901 

12 17 CFR 240.19b–4(f)(6). 

13 17 CFR 240.19b–4(f)(6)(iii). 

14For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f). 15 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. 

4See Securities Exchange Act Release No. 60534 

(August 19, 2009), 74 FR 44410 (August 28, 2009) 

(order approving SR–FINRA–2009–036) (‘‘Release 

No. 34–60534’’). 

5See Securities Exchange Act Release No. 61744 

(March 19, 2010), 75 FR 14648. 

6See Release No. 34–60534, supra note 4. 

Act 12 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 13

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. The Exchange has 

requested that the Commission waive 

the 30-day operative delay to allow the 

Exchange to begin listing options 

overlying the S&P 500 Annual Dividend 

Index beginning on Tuesday, May 25, 

2010. 

The Commission believes that 

acceleration of the operative date is 

consistent with the protection of 

investors and the public interest 

because the Commission has previously 

considered and approved the listing of 

options on the S&P 500 Annual 

Dividend Index and the current 

proposal raises no new regulatory 

issues. Acceleration of the operative 

date will allow the Exchange to list 

options on the S&P 500 Annual 

Dividend Index on May 25, 2010, 

thereby providing investors with an 

additional investment tool and greater 

flexibility in meeting their investment 

objectives without delay. For these 

reasons, the Commission designates that 

the proposed rule change become 

operative on May 25, 2010.14

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

the 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–CBOE–2010–039 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–CBOE–2010–039. 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 Web site viewing and 

printing 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 

CBOE. 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–CBOE–2010–039 and should be 

submitted on or before June 1, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–10956 Filed 5–7–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62014; File No. SR– 

NYSEAMEX–2010–26] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Order Approving a 

Proposed Rule Change Deleting Rule 

446—NYSE Amex Equities and 

Adopting New Rule 4370—NYSE Amex 

Equities To Correspond With Rule 

Changes Filed by the Financial 

Industry Regulatory Authority, Inc. 

April 30, 2010. 

I. Introduction 

On March 11, 2010, NYSE Amex LLC 

(‘‘NYSE Amex’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) pursuant 

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

Exchange Act of 1934 (the ‘‘Act’’) 2 and 

Rule 19b–4 thereunder,3 a proposed rule 

change to delete Rule 446—NYSE Amex 

Equities and adopt new Rule 4370— 

NYSE Amex Equities to correspond 

with rule changes filed by the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) and approved by the 

Commission.4 The proposed rule change 

was published for comment in the 

Federal Register on March 26, 2009.5

The Commission received no comments 

regarding the proposal. This order 

approves the proposed rule change. 

II. Description of the Proposal 

The Exchange proposes to delete Rule 

446—NYSE Amex Equities and adopt 

new Rule 4370—NYSE Amex Equities 

to correspond with rule changes filed by 

the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) and approved 

by the Commission.6

III. Background 

On July 30, 2007, FINRA’s 

predecessor, the National Association of 

Securities Dealers, Inc. (‘‘NASD’’), and 

NYSE Regulation, Inc. (‘‘NYSER’’) 

consolidated their member firm 

regulation operations into a combined 

organization, FINRA. Pursuant to Rule 

17d–2 under the Act, the New York 

Stock Exchange LLC (‘‘NYSE’’), NYSER 

and FINRA entered into an agreement 

(‘‘Agreement’’) to reduce regulatory 

duplication for their members by 


jlentini on DSKJ8SOYB1PROD with NOTICES