Federal Register / Vol. 73, No. 191 / Wednesday, October 1, 2008 / Notices 57181 

13The Exchange applies a sliding scale, between 

$0.01 and $0.18 per contract side, based on the 

number of contracts an ISE market maker trades in 

a month. 

14The amount of the execution fee for non-ISE 

Market Maker transactions executed in the 

Exchange’s Facilitation and Solicitation 

Mechanisms is $0.19 per contract. 

15 15 U.S.C. 78f. 

16 15 U.S.C. 78f(b)(4). 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 19b–4(f)(2). 

19 17CFR 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)(1). 

4 17 CFR 240.19b–4. 

5See Securities Exchange Act Release No. 54538 

(September 28, 2006), 71 FR 59184 (October 6, 

2006) (SR–Phlx–2006–43) (Order approving XLE). 

transactions in equity options.13 Finally, 

the amount of the execution fee for all 

non-ISE Market Maker transactions shall 

be $0.45 per contract.14 Further, since 

options on DBC, DBB, VTI, UUP, TIP, 

EPP, URE, and EFU are multiply-listed, 

the Exchange’s Payment for Order Flow 

fee shall apply to all these products. The 

Exchange believes the proposed rule 

change will further the Exchange’s goal 

of introducing new products to the 

marketplace that are competitively 

priced. 

(b) Basis—The Exchange believes that 

the proposed rule change is consistent 

with the objectives of Section 6 of the 

Act,15 in general, and furthers the 

objectives of Section 6(b)(4),16 in 

particular, in that it is designed to 

provide for the equitable allocation of 

reasonable dues, fees and other charges 

among its members and other persons 

using its facilities. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

impose 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 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

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) of 

the Act 17 and Rule 19b–4(f)(2) 18

thereunder. At any time within 60 days 

of the filing of such 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–2008–68 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–ISE–2008–68. 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 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 will also be available 

for inspection and copying at the 

principal office of the self-regulatory 

organization. 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–ISE– 

2008–68 and should be submitted on or 

before October 22, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–22967 Filed 9–30–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58613; File No. SR–Phlx– 

2008–65] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to the 

Administration and Enforcement of 

Certain Rules Pertaining to XLE 

September 22, 2008. 

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

Securities Exchange Act of 1934,1 and 

Rule 19b–4 2 thereunder, notice is 

hereby given that on September 5, 2008, 

NASDAQ OMX PHLX, Inc. (‘‘Phlx’’ or 

‘‘Exchange’’) 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 Phlx. 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 3 and Rule 19b–4 

thereunder,4 proposes to change the 

administration and enforcement of 

certain rules in light of the fact that the 

Exchange will cease operation of the 

technology used to operate XLE,5 the 

Exchange’s equity trading system, on or 

before October 24, 2008 (the 

‘‘Shutdown’’). At this time, the 

Exchange is not proposing to amend the 

text of any rules, but simply to change 

the administration and enforcement of 

certain rules, as described below. The 

Shutdown will not affect any other 

trading systems or markets at Phlx. 


jlentini on PROD1PC65 with NOTICES
57182 Federal Register / Vol. 73, No. 191 / Wednesday, October 1, 2008 / Notices 

6 See Securities Exchange Act Release No. 58179 

(July 17, 2008), 73 FR 42874 (July 23, 2008). 

7See Phlx Rule 1(nn). 

8At that time, XLE Participants were given 

information about applying for membership in the 

NASDAQ Stock Market as a means to continue their 

equity trading operations, if they so desired. XLE 

Participants are free to apply for membership at any 

trading venue. Nothing in this proposed rule change 

is intended to restrict their access at any other 

venue. 

9See Phlx Rules 181 and 185. 

10See Phlx Rule 185(g). The function of PRO as 

the Exchange’s optional outbound routing facility is 

more fully described in Section IV.D. of the SR– 

Phlx–2006–43 approval order. See supra note 5. 

11 15 U.S.C. 78c(a)(2). 

12 See Phlx Rule 1(l). 

13See Phlx Rule 1(m). 

14See Phlx Rule 170(a), 171(b) and 172(a). 

15At this time, only one Market Maker, that has 

one MMAT, is registered in three securities on 

XLE. 

16See Phlx Rules 171 and 173. 

17 15 U.S.C. 78f(b). 

18 15 U.S.C. 78f(b)(5). 

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 purpose of the proposed rule 

change is to change the administration 

and enforcement of certain rules in light 

of the Shutdown. A more in-depth rule 

review may occur in the future; this 

proposal is intended to cover the 

specific rules that make trading 

available on XLE, which will no longer 

be the case after the Shutdown. 

Background 

The Exchange began XLE in 2006. 

The Exchange has continued to operate 

XLE through the July 2008 

acquisition 6 of the Exchange by the 

NASDAQ OMX Group, Inc. 

(‘‘NASDAQ’’) and up to the present 

time. Following a review of the 

operations of the Exchange, including 

XLE and the fact that it currently 

accounts for less than one-tenth of one 

percent of national share volume in 

equity securities, it was determined to 

cease operation of the technology used 

to operate XLE. 

The Shutdown 

The Exchange informed XLE 

Participants 7 on August 4, 2008, that 

the Exchange intends to discontinue 

XLE on or before October 24, 2008.8 As 

XLE Participants discontinue their 

operations on XLE and disconnect 

from the system, they will not be 

permitted to re-connect. Depending on 

the rate of disconnections, the Exchange 

may determine to implement the 

Shutdown before October 24, 2008. In 

that event, the Exchange would notify 

any remaining XLE Participants at least 

14 calendar days prior to the Shutdown. 

Current XLE Rules 

Today, XLE is available for the 

acceptance of orders from XLE 

Participants and the execution of those 

orders.9 On the day of the Shutdown 

and thereafter, XLE would no longer be 

available to accept orders and would not 

be available to execute any transactions. 

Any executions that took place before 

the Shutdown would clear and settle 

normally, even if such settlement was 

scheduled to take place after the 

Shutdown. 

Further, the Exchange’s optional 

outbound router, facilitated through 

PRO Securities LLC (‘‘PRO’’),10 will 

cease to accept and route orders on the 

day of the Shutdown because PRO will 

no longer receive any instructions to 

route orders to other trading centers 

from XLE.PRO was deemed to be a 

facility 11 of the Exchange because of its 

function as the provider of these 

outbound router services. Following the 

Shutdown, PRO would no longer act in 

its capacity as an outbound router for 

the Exchange; therefore, the Exchange 

would no longer administer PRO as its 

facility. 

Finally, the Exchange currently 

allows member organization that are 

XLE Participants and the members 

associated with them to register as 

Market Makers 12 and Market Maker 

Authorized Trader (‘‘MMATs’’),13

respectively.14 After the Shutdown, the 

Exchange will cancel the registrations of 

any Market Makers and MMATs that 

remain on XLE 15 and such persons 

will cease to have the obligations 

associated with Market Makers and 

MMATs 16 because after the Shutdown, 

there will be no venue for the Market 

Makers and MMATs to perform their 

functions. In addition, after the 

Shutdown, no further registrations for 

Market Makers or MMATs will be 

accepted because there will be no venue 

for Market Makers and MMATs to 

perform their functions. 

To the extent that these rules state 

that orders ‘‘will’’ be accepted and 

registrations will be permitted, for 

example, that will not occur after the 

Shutdown. The trading rules applicable 

to XLE will continue to be in effect 

respecting trades that occurred before 

the Shutdown and remain in the 

Exchange’s rulebook for ease of 

reference. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 17 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 18

in particular, in that it is designed to 

promote just and equitable principles of 

trade, 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, by 

providing notice of the Exchange’s 

policy regarding the administration and 

enforcement of certain Phlx Rules in 

light of the Shutdown. 

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) 

of the Act and paragraph (f)(1) of Rule 

19b–4 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. 

The Exchange designates the 

proposed rule change as constituting a 

stated policy, practice, or interpretation 

with respect, to the meaning, 

administration, or enforcement of an 

existing rule. Specifically, as described 

above, the Exchange has stated its 

policy regarding how it will administer 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 73, No. 191 / Wednesday, October 1, 2008 / Notices 57183 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See also NYSE Rules 60(e)(i). It is important to 

note that not all securities on the NYSE are eligible 

for automatic executions. In accordance with 

Exchange Rule 1000(a)(vi) those securities that are 

priced at or more than $1000 per share are defined 

as ‘‘high-priced’’ and do not receive automatic 

executions and, therefore, are not assigned an LRP 

value ranges. 

4See NYSE Rule 60(e)(ii)(C). Currently, in an 

effort to increase the availability of NYSE quotes 

eligible for automatic execution, the NYSE will 

revert to auto-quoting in situations where the LRP 

has been hit but the market is not locked or crossed 

in five seconds. See Liquidity Replenishment Points 

(LRPs) Timer Pilot (August 20, 2008), NYSE Trader 

Updates available at: http:// 

traderupdates.nyse.com/2008/08/liquidity_

replenishment_points_2.html . 

5The Display Book system is an order 

management and execution facility. The Display 

Book system receives and displays orders to the 

specialists, contains the Book, and provides a 

mechanism to execute and report transactions and 

publish the results to the Consolidated Tape. The 

Display Book system is connected to a number of 

other Exchange systems for the purposes of 

comparison, surveillance, and reporting 

information to customers and other market data and 

national market systems. 

6See NYSE Rule 60(e)(ii)(C). 

and enforce the enumerated portions of 

Phlx Rules 170–174, 181 and 185 

regarding XLE, Market Makers, 

MMATs and PRO in light of the 

Shutdown. 

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–2008–65 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–2008–65. 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–2008–65 and should 

be submitted on or before October 22, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–22960 Filed 9–30–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58629; File No. SR–NYSE– 

2008–85] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change Amending 

NYSE Rule 1000 (‘‘Automatic 

Execution of Limit Orders Against 

Orders Reflected in NYSE Published 

Quotation’’) 

September 24, 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 17, 2008, New York Stock 

Exchange LLC ‘‘NYSE’’ or the 

‘‘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. 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 amend 

Exchange Rule 1000(a)(iv)(C) to modify 

the current LRP value ranges. The text 

of the proposed rule change is available 

at NYSE, http://www.nyse.com, 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 

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 Exchange proposes to amend 

Exchange Rule 1000(a)(iv)(C) (Liquidity 

Replenishment Point) to widen the 

value ranges for the calculation of 

liquidity replenishment points 

(‘‘LRPs’’). 

Background 

Pursuant to NYSE Rule 1000(a)(iv), 

LRPs are pre-determined price points 

that function to moderate volatility, 

improve price continuity, and foster 

market quality in a particular security 

by temporarily converting the electronic 

market to an auction market and 

permitting new orders, the Crowd, or 

the specialist, to add liquidity.3

Pursuant to NYSE Rule 60, Autoquote 

is suspended when an LRP is reached 

and resumes in no more than five to ten 

seconds after the LRP is reached.4

Autoquote resumes unless there is 

interest on the NYSE Display Book

system 5 that would lock or cross the 

market. In such case, Autoquote will 

resume with a manual transaction.6

LRPs are calculated by adding and 

subtracting a value to the security’s last 

sale price. The LRP values are based on 

an examination of trading data and vary 

based on the security’s NYSE average 

daily volume (‘‘ADV’’), price, and 

volatility. The values used to calculate 

the LRP’s range do not change intraday 


jlentini on PROD1PC65 with NOTICES