46668 Federal Register / Vol. 73, No. 155 / Monday, August 11, 2008 / Notices 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6). 

11 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires the self-regulatory 

organization to give the Commission 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. ISE 

has satisfied this requirement. 

12For purposes only of waiving the operative 

delay for this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

13See Securities Exchange Act Release No. 58119 

(July 8, 2008), 73 FR 40646 (July 15, 2008) (SR–

CBOE–2008–53). 14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4Changes are marked to the rule text that appears 

in the electronic manual of The NASDAQ Stock 

Market, LLC found at http:// 

nasdaq.cchwallstreet.com/. 

comments from members or other 

interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The proposed rule change has become 

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

of the Act 9 and Rule 19b–4(f)(6) 

thereunder 10 because the foregoing 

proposed rule change: (1) Does not 

significantly affect the protection of 

investors or the public interest; (2) does 

not impose any significant burden on 

competition; and (3) by its terms, does 

not become operative for 30 days after 

the date of filing, or such shorter time 

as the Commission may designate if 

consistent with the protection of 

investors and the public interest.11

The Exchange has asked the 

Commission to waive the 30-day 

operative delay and designate the 

proposed rule change as operative upon 

filing. The Commission hereby grants 

the Exchange’s request and believes that 

doing so is consistent with the 

protection of investors and the public 

interest.12 The Exchange’s proposed 

rule change is based on a similar 

proposal that was previously approved 

by the Commission 13 and does not raise 

any novel or significant issues. 

Therefore, the Commission designates 

the proposed rule change operative 

upon filing. 

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–ISE–2008–62 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–ISE–2008–62. 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 publicly available. All 

submissions should refer to File 

Number SR–ISE–2008–62 and should be 

submitted on or before September 2, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18367 Filed 8–8–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58282; File No. SR–

NASDAQ–2008–067] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Regarding 

Letters of Guarantee for Options 

Participants 

August 1, 2008. 

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 July 29, 

2008, The NASDAQ Stock Market LLC 

(‘‘Nasdaq’’) 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 Nasdaq. Nasdaq 

has designated the proposed rule change 

as constituting a non-controversial rule 

change under Rule 19b–4(f)(6) under the 

Act,3 which renders the proposal 

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 

Nasdaq is filing a proposed rule 

change for the NASDAQ Options Market 

(‘‘NOM’’) to modify Chapter VII, Section 

8 of its options rules to require Letters 

of Guarantee for each options 

participant, rather than each market 

maker. 

The text of the proposed rule change 

is below. Proposed new language is in 

italics; proposed deletions are in 

brackets.4

* * * * * 

Chapter VII Market Participants 

* * * * * 

Sec. 8 Letters of Guarantee 

(a) Required of Each Options 

Participant [Market Maker]. No Options 

Participant [Market Maker] shall make 

any transactions on NOM unless a Letter 

of Guarantee has been issued for such 

Participant by a Clearing Participant and 

filed with Nasdaq Regulation, and 

unless such Letter of Guarantee has not 


rmajette on PRODPC74 with NOTICES
Federal Register / Vol. 73, No. 155 / Monday, August 11, 2008 / Notices 46669 

5 15 U.S.C. 78s(b)(3)(A). 

6 17 CFR 240.19b–4(f)(6). 

been revoked pursuant to paragraph (c) 

of this Section. 

(b)–(c) No change. 

* * * * * 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

Nasdaq 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. Nasdaq 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 

Nasdaq has determined that requiring 

a Letter of Guarantee for each options 

participant would decrease the 

individual risk exposure of each options 

participant as well as the systemic risk 

of exposure to Nasdaq’s options 

marketplace. Requiring a Letter of 

Guarantee of market makers provides a 

measure of protection but it does not 

provide protection with respect to 

options participants that enter orders 

and liquidity into the market in the 

same fashion as market makers but to a 

lesser degree. It will also provide 

incremental protection to clearing 

brokers by providing advanced notice 

and requiring acknowledgment that a 

new firm will be using their clearing 

services. 

Nasdaq’s determination is based in 

part on conversations with current 

options participants as well as potential 

options participants. It is also based on 

Rule 3.28 of the Chicago Board Options 

Exchange which requires letters of 

guarantee for all trading activity on that 

exchange regardless of whether the firm 

is a registered specialist or not. In 

addition, all options participants are 

required by Chapter VI, Section 15 of 

Nasdaq’s options rules to document its 

relationship with a clearing firm by 

submitting one of several documents, 

including a Letter of Guarantee. 

Nasdaq will work with its 

membership to ensure full and timely 

compliance with this proposed rule 

change. While many members are 

familiar with Letters of Guarantee 

through, for example, compliance with 

Chapter VI, Section 15 or their 

membership at other exchanges, Nasdaq 

will provide all members 45 days from 

the date of filing of the proposed rule 

change to comply with the new 

requirement. In addition, Nasdaq will 

issue an Options Trader Alert to 

members explaining the new 

requirement and providing notice of the 

compliance date. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the 

Securities Exchange Act of 1934, in 

general and with Section 6(b)(5) of the 

Act, in particular, in that it is designed 

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; and are not designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers, 

or to regulate by virtue of any authority 

conferred by this title matters not 

related to the purposes of this title or 

the administration of the exchange. The 

proposed changes are consistent with 

the statute in that they are designed to 

facilitate transactions in options on the 

Nasdaq Options Market by minimizing 

counter-party risk and encouraging 

participants to provide liquidity in 

Quarterly Options Series. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Nasdaq 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. To the 

contrary, the proposal is designed to 

enhance competition and is based upon 

the rules of another national securities 

exchange that trades standardized 

options. 

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 

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 from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 5 and Rule 19b–

4(f)(6) thereunder.6 Nasdaq will make 

the proposed rule change operative 45 

days from the date of filing this 

proposal. 

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–NASDAQ–2008–067 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2008–067. 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 


rmajette on PRODPC74 with NOTICES
46670 Federal Register / Vol. 73, No. 155 / Monday, August 11, 2008 / Notices 

7 17 CFR 200.30–3(a)(12). 

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

215 U.S.C. 78a. 

317 CFR 240.19b–4. 

4Shares held by directors, officers, or their 

immediate families and other concentrated holding 

of 10 percent or more are excluded in calculating 

the number of publicly-held shares. 

Nasdaq’s principal office. 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–

NASDAQ–2008–067, and should be 

submitted on or before September 2, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18383 Filed 8–8–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58299; File No. SR–NYSE–

2008–68] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change To 

Enable the Exchange To Determine 

That a Company Meets the Exchange’s 

Market Value Requirements by Relying 

on a Third-Party Valuation of the 

Company 

August 4, 2008. 

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

Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’),2 and Rule 19b–4 

thereunder,3 notice is hereby given that 

on July 31, 2008, New York Stock 

Exchange LLC (the ‘‘NYSE’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission the proposed 

rule changes as described in Items I, II 

and III below, which items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

changes from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

sections 102.01B and 102.01C of the 

Exchange’s Listed Company Manual 

(the ‘‘Manual’’) to provide that the 

Exchange will, on a case by case basis, 

exercise discretion to list a company 

whose stock is not previously registered 

under the Exchange Act, where such a 

company is listing without a related 

underwritten offering upon 

effectiveness of a registration statement 

registering only the resale of shares sold 

by the company in earlier private 

placements. The proposed amendment 

would permit the Exchange to 

determine that such a company has met 

its market value requirements by relying 

on a third-party valuation of the 

company. 

The text of the proposed rule change 

is available at http://www.nyse.com, the 

NYSE, and 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 these statements may be examined at 

the places specified in Item IV below. 

The NYSE 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 Exchange proposes to amend 

sections 102.01B and 102.01C of the 

Manual to provide that the Exchange 

will, on a case by case basis, exercise 

discretion to list a company whose stock 

is not previously registered under the 

Exchange Act, where such a company is 

listing without a related underwritten 

offering upon effectiveness of a 

registration statement registering only 

the resale of shares sold by the company 

in earlier private placements. The 

proposed amendment would allow the 

Exchange to determine that such a 

company has met its market value 

requirements by relying on a third-party 

valuation of the company. 

Section 102.01B of the Manual 

requires that companies listing on the 

Exchange in connection with their 

initial public offering (‘‘IPO’’) or as a 

result of a spin-off or under the 

Affiliated Company standard must have 

$60 million in market value of publiclyheld shares at the time of listing and all 

other companies must have a market 

value of publicly-held shares of $100 

million.4 In addition, the Valuation/ 

Revenue with Cash Flow, Pure 

Valuation/Revenue, and Affiliated 

Company standards of Section 102.01C 

require global market capitalization of 

$500 million, $750 million, and $500 

million, respectively. Sections 102.01B 

and 102.01C provide that, in connection 

with a company’s IPO, the Exchange 

will rely on a written commitment from 

the underwriter to represent the 

anticipated value of the company’s 

offering in order to determine a 

company’s compliance with this listing 

standard. In the case of a spin-off, the 

company may rely on a letter from the 

parent company’s investment banker or 

other financial adviser. 

The Exchange has in recent years 

been approached by a number of private 

companies that would like to list upon 

the effectiveness of a selling shareholder 

registration statement. These private 

companies typically have sold a 

significant amount of their common 

stock to qualified institutional buyers in 

one or more private placements and, as 

a condition to those sales, will have 

agreed to file a registration statement to 

facilitate the resale of the privatelyplaced shares. These companies may 

meet all of the financial criteria for 

listing on the Exchange, except that they 

have not had any prior public market for 

their common stock and they are not 

contemplating an underwritten offering 

in connection with their selling 

shareholder registration statement. As 

such, the Exchange cannot rely on 

trading on any predecessor public 

market to evaluate the company’s 

market value, as would be possible with 

a company transferring from another 

market. Nor is there a public offering 

whose price would provide the basis for 

a letter of the type provided by 

underwriters for companies listing in 

conjunction with an IPO. 

The Exchange believes that a 

company of this sort which otherwise 

meets the Exchange’s listing criteria 

should not be barred from listing. As 

such, the Exchange proposes to list such 

companies if there is available an 

independent third-party valuation of the 

company (a ‘‘Valuation’’) and 

information regarding trading in a 

private placement trading market that, 

taken together, provide evidence that 

the company meets the relevant market 

value tests. 

Therefore, the Exchange proposes to 

amend sections 102.01B and 102.10C to 

provide that, in the case of a company 

whose stock is not previously registered 

under the Exchange Act that is listing 

upon effectiveness of a registration 

statement without a related 

underwritten offering, the Exchange will 

have the discretion to determine that 

such company has met the applicable 


rmajette on PRODPC74 with NOTICES