55188 Federal Register / Vol. 73, No. 186 / Wednesday, September 24, 2008 / Notices 

7CFR 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). 

4 17 CFR 240.19b–4(f)(6). 

5 15 U.S.C. 78s(b)(1). 

6 17 CFR 240.19b–4 

7See Securities Exchange Act Release Nos. 58204 

(July 22, 2008), 73 FR 43807 (July 28, 2008) (SR– 

CBOE–2008–64) and 58203 (July 22, 2008), 73 FR 

43812 (July 28, 2008) (SR–NYSEArca–2008–57). In 

addition, the Exchange is making minor changes to 

Commentary .06 to Phlx Rule 1009 to conform the 

Exchange’s rules to those of CBOE and NYSE Arca. 

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–Amex–2008–70 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–Amex–2008–70. 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 offices 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–Amex–2008–70 and should 

be submitted on or before October 15, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

J. Lynn Taylor, 

Assistant Secretary. 

[FR Doc. E8–22462 Filed 9–23–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58571; File No. SR–Phlx– 

2008–60] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by the 

NASDAQ OMX PHLX, Inc. To Enable 

the Listing and Trading of Options on 

Index-Linked Securities 

September 17, 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 

September 12, 2008, the 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. Phlx 

filed the proposal pursuant to Section 

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

4(f)(6) thereunder,4 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 Substance of 

the Proposed Rule Change 

The Exchange, pursuant to Section 

19(b)(1) of the Act 5 and Rule 19b–4 

thereunder,6 proposes to amend Phlx 

Rules 1009, Criteria for Underlying 

Securities, and 1010, Withdrawal of 

Approval of Underlying Securities or 

Options, to enable the listing and 

trading on the Exchange of options on 

Index-Linked Securities, as defined 

below. The text of the proposed rule 

change is available on the Exchange’s 

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

regulatory/reg_rulefilings.aspx, the 

principal office of the Exchange, 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 

This proposed rule change is based on 

recent Chicago Board Options Exchange, 

Incorporated (‘‘CBOE’’) and NYSE Arca, 

Inc. (‘‘NYSE Arca’’) filings.7

The purpose of the proposed rule 

change is to revise Phlx Rules 1009 and 

1010 to enable the listing and trading of 

options on equity index-linked 

securities (‘‘Equity Index-Linked 

Securities’’), commodity-linked 

securities (‘‘Commodity-Linked 

Securities’’), currency-linked securities 

(‘‘Currency-Linked Securities’’), fixed 

income index-linked securities (‘‘Fixed 

Income Index-Linked Securities’’), 

futures-linked securities (‘‘FuturesLinked Securities’’) and multifactor 

index-linked securities (‘‘Multifactor 

Index-Linked Securities’’) (the six types 

of index-linked securities are 

collectively known as ‘‘Index-Linked 

Securities’’) that are principally traded 

on a national securities exchange and 

are ‘‘NMS Stock’’ (as defined in Rule 

600 of Regulation NMS under the Act). 

Index-Linked 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 of the foregoing 

(‘‘Underlying Index’’ or ‘‘Underlying 

Indexes’’). Index-Linked Securities are 

the non-convertible debt of an issuer 

that have a term of at least one (1) year 

but not greater than thirty (30) years. 

Despite the fact that Index-Linked 

Securities are linked to an underlying 

index, each trades as a single, exchangelisted security. Accordingly, rules 

pertaining to the listing and trading of 

standard equity options will apply to 

Index-Linked Securities. The Exchange 

does not propose any changes to rules 

pertaining to Index Options. 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 73, No. 186 / Wednesday, September 24, 2008 / Notices 55189 

8See proposed Commentary .06 to Phlx Rule 

1009. The term ‘‘Currency Trust Shares’’ is defined 

as a security that (a) holds a specified non-U.S. 

currency deposited with the trust or similar entity; 

(b) when aggregated in some specified minimum 

number may be surrendered to the trust by the 

beneficial owner to receive the specified non-U.S. 

currency or currencies; and (c) pays the beneficial 

owner interest and other distributions on deposited 

non-U.S. currency or currencies, if any, declared 

and paid by the trust. 

9See Phlx Rules 1001, 1001A, 1002, and 1002A. 

10See Phlx Rules 721 through 725. 

11 15 U.S.C. 78f(b). 

12 15 U.S.C. 78f(b)(5). 

Listing Criteria 

The Exchange will consider listing 

and trading options on Index-Linked 

Securities provided the Index-Liked 

Securities meet the criteria for 

underlying securities set forth in Phlx 

Rule 1009 (a) to (c) and Commentary .01 

to Rule 1009. 

The Exchange proposes that IndexLinked Securities deemed appropriate 

for options trading represent ownership 

of a security that provides for the 

payment at maturity, as described 

below: 

—Equity Index-Linked Securities are 

securities that provide for the 

payment at maturity of a cash amount 

based on the performance of an 

underlying index or indexes of equity 

securities (‘‘Equity Reference Asset’’); 

—Commodity-Linked Securities are 

securities that provide for the 

payment at maturity of a cash amount 

based on the performance of one or 

more physical commodities or 

commodity futures, options or other 

commodity derivatives or 

Commodity-Based Trust Shares or a 

basket or index of any of the foregoing 

(‘‘Commodity Reference Asset’’); 

—Currency-Linked Securities are 

securities that provide for the 

payment at maturity of a cash amount 

based on the performance of one or 

more currencies, or options or 

currency futures or other currency 

derivatives or Currency Trust Shares 8

or a basket or index of any of the 

foregoing (‘‘Currency Reference 

Asset’’); 

—Fixed Income Index-Linked Securities 

are securities that provide for the 

payment at maturity of a cash amount 

based on the performance of one or 

more notes, bonds, debentures or 

evidence of indebtedness that 

include, but are not limited to, U.S. 

Department of Treasury securities 

(‘‘Treasury Securities’’), government 

sponsored entity securities (‘‘GSE 

Securities’’), municipal securities, 

trust preferred securities, 

supranational debt and debt of a 

foreign country or a subdivision 

thereof or a basket or index of any of 

the foregoing (‘‘Fixed Income 

Reference Asset’’); 

—Futures-Linked Securities are 

securities that provide for the 

payment at maturity of a cash amount 

based on the performance of an index 

of (a) futures on Treasury Securities, 

GSE Securities, supranational debt 

and debt of a foreign country or a 

subdivision thereof, or options or 

other derivatives on any of the 

foregoing; or (b) interest rate futures 

or options or derivatives on the 

foregoing in this subparagraph (b) 

(‘‘Futures Reference Asset’’); and 

—Multifactor Index-Linked Securities 

are securities that provide for the 

payment at maturity of a cash amount 

based on the performance of any 

combination of two or more Equity 

Reference Assets, Commodity 

Reference Assets, Currency Reference 

Assets, Fixed Income Reference 

Assets or Futures Reference Assets 

(‘‘Multifactor Reference Asset’’). 

For the purposes of Commentary .09 

to Phlx Rule 1009, Equity Reference 

Assets, Commodity Reference Assets, 

Currency Reference Assets, Fixed 

Income Reference Assets, Futures 

Reference Assets and Multifactor 

Reference Assets, will be collectively 

referred to as ‘‘Reference Assets.’’ 

Index-Linked Securities must meet 

the criteria and guidelines for 

underlying securities set forth in 

Commentary .01 to Phlx Rule 1009, or 

the Index-Linked Securities must be 

redeemable at the option of the holder 

at least on a weekly basis through the 

issuer at a price related to the applicable 

underlying Reference Asset. In addition, 

the issuing company is obligated to 

issue or repurchase the securities in 

aggregation units for cash or cash 

equivalents satisfactory to the issuer of 

Index-Linked Securities which underlie 

the option as described in the IndexLinked Securities prospectus. 

Continued Listing Requirements 

Options on Index-Linked Securities 

will be subject to all Exchange rules 

governing the trading of equity options. 

The current continuing or maintenance 

listing standards for options traded on 

the Exchange will continue to apply. 

The Exchange proposes to establish 

Commentary .12 to Rule 1010 which 

will include criteria related to the 

continued listing of options on IndexLinked Securities. 

Under the applicable continued 

listing criteria in proposed Commentary 

.12 to Rule 1010, options on Index 

Linked Securities initially approved for 

trading pursuant to proposed 

Commentary .09 to Rule 1009 may be 

subject to the suspension of opening 

transactions as follows: (1) Noncompliance with the terms of 

Commentary .09 to Rule 1009; (2) noncompliance with the terms of 

Commentary .01 to Rule 1010, except in 

the case of options covering Index 

Linked Securities approved pursuant to 

Commentary .09(c)(ii) to Rule 1009 that 

are redeemable at the option of the 

holder at least on a weekly basis, then 

option contracts of the class covering 

such Securities may only continue to be 

open for trading as long as the Securities 

are listed on a national securities 

exchange and are an ‘‘NMS stock’’ as 

defined in Rule 600 of Regulation NMS; 

(3) in the case of any Index-Linked 

Security trading pursuant to 

Commentary .09 to Rule 1009, the value 

of the Reference Asset is no longer 

calculated or available; or (4) such other 

event shall occur or condition exist that 

in the opinion of the Exchange makes 

further dealing in such options on the 

Exchange inadvisable. 

The Exchange represents that the 

listing and trading of options on IndexLinked Securities under Commentary 

.09 to Rule 1009 will not have any effect 

on the rules pertaining to position and 

exercise limits 9 or margin.10

The Exchange will implement 

surveillance procedures for options on 

Index-Linked Securities, including 

adequate comprehensive surveillance 

sharing agreements with markets trading 

in non-U.S. components, as applicable. 

The Exchange represents that these 

procedures will be adequate to properly 

monitor Exchange trading of options on 

these the securities and to deter and 

detect violations of Exchange rules. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with Section 6(b) 

of the Act 11 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 12

in particular, in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanisms 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 the proposed 

rules applicable to trading pursuant to 

generic listing and trading criteria, 

together with the Exchange’s 

surveillance procedures applicable to 

trading in the securities covered by the 

proposed rules, serve to foster investor 

protection. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 


jlentini on PROD1PC65 with NOTICES
55190 Federal Register / Vol. 73, No. 186 / Wednesday, September 24, 2008 / Notices 

13 15 U.S.C. 78s(b)(3)(A). 

14 17 CFR 240.19b–4(f)(6). 

15For purposes only of waiving the 30-day 

operative delay and five business-day pre-filing 

requirement, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

16See Securities Exchange Act Release Nos. 

58203 (July 22, 2008), 73 FR 43812 (July 28, 2008) 

(SR–NYSEArca–2008–57) and 58204 (July 22, 

2008), 73 FR 43807 (July 28, 2008) (SR–CBOE– 

2008–64). 

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). 

4 17 CFR 240.19b–4(f)(6). 

5 15 U.S.C. 78s(b)(1). 

6 17 CFR 240.19b–4. 

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 

No written comments were solicited 

nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

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 

this 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 13 and 

Rule 19b–4(f)(6) thereunder.14

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of filing. 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. However, Rule 19b– 

4(f)(6)(iii) permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange requests that the Commission 

waive the 30-day operative delay as well 

as the five business-day pre-filing 

requirement so that the Exchange is able 

to compete with other options 

exchanges that are currently permitted 

to list and trade options on IndexLinked Securities. The Commission 

believes that waiving the 30-day 

operative delay and five business-day 

pre-filing requirement is consistent with 

the protection of investors and the 

public interest.15 The Commission notes 

the proposal is substantively identical to 

proposals that were recently approved 

by the Commission, and does not raise 

any new regulatory issues.16 For these 

reasons, the Commission designates the 

proposed rule change as 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–Phlx–2008–60 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–Phlx–2008–60. 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 the 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–2008–60 and should 

be submitted on or before October 15, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

J. Lynn Taylor, 

Assistant Secretary. 

[FR Doc. E8–22249 Filed 9–23–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58582; File No. SR–Phlx– 

2008–66] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Quotation Size Decrementation 

September 18, 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 

September 16, 2008, the 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 Phlx. Phlx filed the 

proposed rule change pursuant to 

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

19b–4(f)(6) thereunder,4 which renders 

it 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 Substance of 

the Proposed Rule Change 

The Exchange, pursuant to Section 

19(b)(1) of the Act 5 and Rule 19b–4 

thereunder,6 proposes to amend 

Exchange Rule 1082, Firm Quotations, 

to reflect a change to its fully electronic 


jlentini on PROD1PC65 with NOTICES