27606 Federal Register / Vol. 75, No. 94 / Monday, May 17, 2010 / Notices 

12The Exchange believes that, as borne out in the 

current economic crisis, market participants benefit 

from being able to trade options in an exchange 

environment in several ways, including, but not 

limited to, the following: (1) Regulatory oversight of 

the options exchanges/markets; (2) increased 

market transparency; and (3) heightened contraparty creditworthiness due to the role of The 

Options Clearing Corporation (‘‘OCC’’) as issuer and 

guarantor of options including FCO Products. 

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

14 15 U.S.C. 78f(b)(5). 

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

16 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the self-regulatory organization 

to submit to 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. 

17 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)(iii). 

4 17 CFR 240.19b–4(f)(3). 

that operate outside of U.S. regulatory 

jurisdiction.12

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 13 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 14

in particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, and to remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system, by 

allowing the Exchange to list a single 

one cent strike for each expiration 

month of foreign currency options 

opened for trading and thereby provide 

investors with the ability to engage in 

previously unavailable spot foreign 

currency trading strategies. 

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: (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, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 15 and Rule 19b– 

4(f)(6) thereunder.16

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–2010–68 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–2010–68. 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 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–Phlx–2010–68 and should 

be submitted on or before June 7, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–11653 Filed 5–14–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62064; File No. SR–FINRA– 

2010–020] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to the Trade 

Reporting Facility Limited Liability 

Company Agreements 

May 10, 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 27, 

2010, the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) (f/k/a 

National Association of Securities 

Dealers, Inc. (‘‘NASD’’)) 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 FINRA. FINRA has 

designated the proposed rule change as 

being concerned solely with the 

administration of the self-regulatory 

organization under Section 

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

19b–4(f)(3) thereunder,4 which renders 

the proposal effective upon receipt of 

this filing by the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 94 / Monday, May 17, 2010 / Notices 27607 

5 15 U.S.C. 78o–3(b)(6). 

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

7 17 CFR 240.19b–4(f)(3). 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA is proposing to make technical 

changes to the Trade Reporting Facility 

limited liability company agreements, as 

they appear in the FINRA Manual, to 

reflect that the agreements were 

amended and restated following the 

formation of FINRA through the 

consolidation of NASD and the member 

regulatory functions of NYSE 

Regulation. The proposed rule change 

does not require amendments to any 

FINRA rules. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, on the 

Commission’s Web site at http:// 

www.sec.gov, at the principal office of 

FINRA 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, 

FINRA 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. FINRA 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 FINRA Trade Reporting Facilities 

(‘‘TRFs’’) are mechanisms for reporting 

trades in NMS stocks effected otherwise 

than on an exchange. Currently, there 

are two TRFs in operation: The FINRA/ 

Nasdaq TRF and the FINRA/NYSE TRF. 

At the time the TRFs were established, 

FINRA (then NASD) entered into 

limited liability company agreements 

with the respective Business Members, 

Nasdaq Stock Market (now known as 

Nasdaq OMX Group) and New York 

Stock Exchange (the ‘‘TRF LLC 

Agreements’’). 

Following the establishment of the 

TRFs, FINRA was formed through the 

consolidation of NASD and the member 

regulatory functions of NYSE 

Regulation, effective July 30, 2007. 

FINRA and the TRF Business Members 

subsequently executed amended and 

restated TRF LLC Agreements to reflect 

the formation of FINRA and updated the 

schedules to reflect new TRF officers 

and directors. 

FINRA is proposing to make technical 

changes to the TRF LLC Agreements, as 

they appear in the FINRA Manual, to 

reflect the amended and restated 

agreements and updated schedules. The 

terms and conditions of the amended 

and restated TRF LLC Agreements are 

substantively identical to those of the 

original TRF LLC Agreements. In this 

filing, FINRA is not proposing to amend 

any FINRA rules. 

FINRA has filed the proposed rule 

change for immediate effectiveness. The 

effective date and the implementation 

date will be the date of filing. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,5 which 

requires, among other things, that 

FINRA rules must be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, and, in 

general, to protect investors and the 

public interest. FINRA believes that the 

proposed rule change will enhance the 

information available to members and 

the public regarding FINRA’s TRF LLC 

Agreements. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA does not believe that the 

proposed rule change will result in 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 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The proposed rule change has become 

effective upon filing pursuant to Section 

19(b)(3)(A) of the Act 6 and paragraph 

(f)(3) of Rule 19b–4 thereunder.7 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–FINRA–2010–020 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–FINRA–2010–020. 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 

FINRA. 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–FINRA–2010–020 and 

should be submitted on or before June 

7, 2010. 


srobinson on DSKHWCL6B1PROD with NOTICES
27608 Federal Register / Vol. 75, No. 94 / Monday, May 17, 2010 / Notices 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 Index-Linked Securities, also known as 

exchange-traded notes, are long-term notes that are 

the non-convertible debt of an issuer with a term 

of at least one year but not greater than thirty years. 

These exchange-traded securities are designed for 

investors who desire to participate in a specific 

market segment by providing exposure to one or 

more identifiable underlying securities, 

commodities, currencies, derivative instruments or 

market indexes. The Exchange’s listing standards 

for options on Index-Linked Securities were 

established in July 2008. See Securities Exchange 

Act Release No. 58203 (July 22, 2008), 73 FR 43812 

(July 28, 2008) (SR–NYSEArca–2008–57). Other 

Exchanges have established similar listing 

standards. See Securities Exchange Act Release 

Nos. 58571 (September 17, 2008), 73 FR 55188 

(September 24, 2008) (SR–Phlx–2008–60) (notice of 

filing and immediate effectiveness); 59923 (May 14, 

2009), 74 FR 23902 (May 21, 2009) (SR–NASDAQ– 

2009–046) (notice of filing and immediate 

effectiveness); 58204 (July 22, 2008), 73 FR 43807 

(July 28, 2008) (SR–CBOE–2008–64) (approval 

order); and 58985 (November 20, 2008), 73 FR 

72538 (November 28, 2008) (SR–ISE–2008–86) 

(notice of filing and immediate effectiveness). 

4See supra Note 3. 5OCC previously received Commission approval 

to clear options based on Index-Linked Securities. 

See Securities Exchange Act Release No. 60872 

(October 23, 2009), 74 FR 55878 (October 29, 2009) 

(SR–OCC–2009–14) (approval order). 

6See, for example, Securities Exchange Act 

Release No. 61466 (February 2, 2010), 75 FR 6243 

(February 8, 2010) (SR–CBOE–2010–005) (notice of 

filing). 

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

8 15 U.S.C. 78f(b)(5). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–11652 Filed 5–14–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62066; File No. SR– 

NYSEArca–2010–37] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Establish Strike Price 

Intervals and Trading Hours for 

Options on Index Linked Securities 

May 10, 2010. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that, on April 28, 

2010, NYSE Arca, Inc. (‘‘NYSE Arca’’ or 

the ‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘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 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to Rule 6.4 

Commentary .05 to establish strike price 

intervals for options on Index Linked 

Securities,3 and to amend Rule 7.1 

Commentary .02, to establish trading 

hours for these products. The text of the 

proposed rule change is available on 

NYSE Arca’s Web site at http:// 

www.nyse.com, on the Commission’s 

Web site at http://www.sec.gov, 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 

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 those 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 parts 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 filing is to amend 

Rule 6.4 Commentary .05 and Rule 7.1 

Commentary .02 to establish strike price 

intervals and trading hours for options 

on Index-Linked Securities (‘‘ILS’’), also 

known as Exchange-Traded Notes 

(‘‘ETN’’), prior to the Exchange actually 

listing and trading these products. 

The Commission has approved the 

Exchange’s proposal, as well as the 

proposals of other options exchanges, to 

enable the listing and trading of options 

on ILS (ETN).4 Options trading has not 

commenced to date and is contingent 

upon the Commission’s approval of The 

Options Clearing Corporation’s (‘‘OCC’’) 

proposed supplement to the Options 

Disclosure Document (‘‘ODD’’) that will 

provide disclosure regarding options on 

Index-Linked Securities.5

$1 Strikes for ILS (ETN) Options 

Prior to the commencement of trading 

options on Index-Linked Securities, the 

Exchange is proposing to establish that 

strike price intervals of $1 will be 

permitted where the strike price is less 

than $200. Where the strike price is 

greater than $200, $5 strikes will be 

permitted. These proposed changes are 

reflected by the addition to Commentary 

.05 to Rule 6.4. 

The Exchange is seeking to establish 

$1 strikes for ILS (ETN) options where 

the strike price is less than $200 because 

the Exchange believes the marketplace 

and investors will be expecting these 

types of options to trade in a similar 

manner to options on exchange-traded 

funds (‘‘ETFs’’). Strike prices for ETF 

options are permitted in $1 or greater 

intervals where the strike price is $200 

or less and $5 or greater where the strike 

price is greater than $200. Accordingly, 

the Exchange believes that the rationale 

for permitting $1 strikes for ETF options 

equally applies to permitting $1 strikes 

for ILS (ETN) options, and that investors 

will be better served if $1 strike price 

intervals are available for ILS (ETN) 

options where the strike price is less 

than $200. The Exchange believes that 

$1 strike price intervals for options on 

Index-Linked Securities will provide 

investors with greater flexibility by 

allowing them to establish positions that 

are better tailored to meet their 

investment objectives. 

Trading Hours for ILS (ETN) Options 

The Exchange proposes to amend 

Commentary .02 to Rule 7.1 to provide 

that options on exchange-traded notes 

including Index-Linked Securities may 

be traded on the Exchange until 1:15 

p.m. (Pacific Time) each business day. 

This will establish similar trading hours 

for ILS (ETN) options as the currentlyestablished trading hours for ETF 

options. 

The Exchange expects that other 

option exchanges that have adopted 

rules providing for the listing and 

trading of options on Index-Linked 

Securities has or will submit similar 

proposals.6

The Exchange has analyzed its 

capacity and believes the Exchange and 

the Options Price Reporting Authority 

(‘‘OPRA’’) have the necessary systems 

capacity to handle the additional traffic 

associated with the listing and trading 

of $1 strikes where the strike price is 

less than $200 for ILS (ETN) options. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Section 

6(b) 7 of the Securities Exchange Act of 

1934 (the ‘‘Act’’), in general, and furthers 

the objectives of Section 6(b)(5) 8 in 

particular in that it is designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts, to remove 


srobinson on DSKHWCL6B1PROD with NOTICES