Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices 60375 

28See SIFMA letter. 

29 Id. 

30 In approving this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition and capital formation. See 

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

31 15 U.S.C. 78o–3(b)(6). 

32See supra note 3. 33 15 U.S.C. 78s(b)(2). 

34 15 U.S.C. 78s(b)(2). 

35 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). 

or a similar in-person meeting.28 SIFMA 

suggested that instead of providing the 

full ODD, firms should provide 

information on how to access the 

ODD.29 FINRA responded by stating that 

the requirement to deliver the ODD to 

prospective customers during a seminar 

or in-person meeting should be 

maintained as it also poses virtually no 

burden and makes the disclosures to a 

prospective customer as accessible as 

other forms of options communications. 

IV. Discussion and Findings 

After careful review of the proposed 

rule change, the comment letter and 

FINRA’s response to the comment letter, 

the Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act, and the rules 

and regulations thereunder that are 

applicable to a national securities 

association.30 In particular, the 

Commission believes that the proposed 

rule change is consistent with the 

provisions of Section 15A(b)(6) of the 

Act,31 which requires, among other 

things, that FINRA rules 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. The Commission 

believes that the proposed rule change 

would provide the investing public with 

options communications rules that are 

designed to provide appropriate 

safeguards and greater clarity by 

promoting harmonization between 

FINRA’s and other SROs’ options 

communications rules. 

The Commission also finds good 

cause to approve the proposed rule 

change, as modified by Amendment No. 

1, prior to the thirtieth day after the date 

of publication of notice of filing of the 

amendment in the Federal Register. The 

proposed rule change was published in 

the Federal Register on May 2, 2008.32

FINRA submitted Amendment No. 1 in 

response to comments received on the 

proposed rule change and to reflect 

recently approved changes to the rule 

text. Amendment No. 1 does not 

materially modify the scope of the 

proposed rule change as published in 

the Federal Register. The Commission 

believes that approving Amendment No. 

1 will simplify firms’ compliance, and 

is consistent with the public interest 

and the investor protection goals of the 

Act. Finally, the Commission finds that 

it is in the public interest to approve the 

proposed rule change as soon as 

possible to expedite its implementation. 

Accordingly, the Commission believes 

good cause exists, consistent with 

Section 19(b)(2) of the Act 33 to approve 

the proposed rule change, as modified 

by Amendment No. 1, on an accelerated 

basis. 

VI. 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–2008–013 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–FINRA–2008–013. 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 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–2008–013 and 

should be submitted on or before 

October 31, 2008. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,34 that the 

proposed rule change (SR–FINRA– 

2008–013), as modified by Amendment 

No. 1, be, and hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.35

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–24121 Filed 10–9–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58733; File No. SR–Phlx– 

2008–67] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by the 

NASDAQ OMX PHLX, Inc. Relating to 

Clarification Regarding CapitalizationWeighting of Indexes 

October 3, 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 29, 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 Act3 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 Act5 and Rule 19b–4 

mstockstill on PROD1PC66 with NOTICES

60376 Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices 

6 17 CFR 240.19b–4. 

7Language that was included in the ‘‘Purpose’’ 

section of the filing to add modified capitalizationweighting as a permissible weighting methodology 

for indexes underlying options listed pursuant to 

the Generic Listing Rule could be interpreted to 

permit only primary exchange last sale prices to be 

used. See Securities Exchange Act Release No. 

46211 (July 16, 2002), 67 FR 47874 (July 22, 2002) 

(SR–Phlx–2002–42). This, of course, is not always 

the best approach in calculating indexes, since in 

some cases the consolidated tape may be a better 

source for current prices. 

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). 

12 17 CFR 240.19b–4(f)(6)(iii). 

thereunder,6 proposes to clarify the 

methodology used in calculating 

capitalization-weighted and modified 

capitalization-weighted indexes 

underlying options listed pursuant to 

Exchange Rule 1009A(b). 

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 

The Exchange currently lists a 

number of narrow-based stock index 

options pursuant to the listing standards 

established in section (b) of Phlx Rule 

1009A, Designation of the Index (the 

‘‘Generic Listing Rule’’). The Generic 

Listing Rule includes capitalizationweighting (including modified 

capitalization-weighting) as a 

permissible component weighting 

methodology for indexes underlying 

options listed pursuant to the Generic 

Listing Rule. The Exchange would like 

to clarify that component last sale prices 

used to calculate index values under 

capitalization-weighting methodology 

can be either primary exchange regularway last sale prices or the regular-way 

last sale prices reported on the 

consolidated tape. A primary exchange 

last sale price is generally the last sale 

price on a trade executed through the 

facilities of the exchange where the 

component maintains its listing. A 

consolidated tape last sale price is the 

last sale price reported under the 

appropriate national market system 

reporting plan, regardless of where the 

trade was executed.7

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with Section 6(b) 

of the Act8 in general, and furthers the 

objectives of Section 6(b)(5) of the Act9

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 by 

clarifying that investors may have 

access to options listed pursuant to the 

Generic Listing Rule that underlie 

indexes other than those based 

exclusively on primary exchange last 

sale prices. 

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 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, 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 In addition, Rule 

19b–4(f)(6)(iii) 12 requires a selfregulatory 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. The 

Exchange has satisfied the five-businessday pre-filing requirement. 

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–2008–67 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–2008–67. 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 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices 60377 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3This rule change proposes no changes to the fees 

and rebates applicable to securities executed in the 

Automatic Execution (‘‘Auto Ex’’) mode of order 

interaction under NSX Rule 16.2(b)(1). 

4Securities which trade under one dollar in 

Order Delivery Mode and which add liquidity 

currently receive a rebate of 0.10% of the trade 

value, where ‘‘trade value’’ means a dollar amount 

equal to the price per share multiplied by the 

number of shares executed. 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–Phlx–2008–67 and should 

be submitted on or before October 31, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–24119 Filed 10–9–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58731; File No. SR–NSX– 

2008–17] 

Self-Regulatory Organizations; 

National Stock Exchange, Inc.; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change To Amend 

Exchange Rule 16 and NSX Fee 

Schedule Concerning Liquidity— 

Adding Rebates and Market Data 

Credits for Order Delivery 

Transactions 

October 3, 2008. 

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 

September 22, 2008, National Stock 

Exchange, Inc. (‘‘NSX’’ or the 

‘‘Exchange’’) 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 the Exchange. The 

Commission is publishing this notice to 

solicit comment on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

National Stock Exchange, Inc. (‘‘NSX’’ 

or ‘‘Exchange’’) is proposing to amend 

Exchange Rule 16 and the NSX Fee and 

Rebate Schedule (the ‘‘Fee Schedule’’) 

in order to (i) reduce the rebate for 

adding liquidity in Order Delivery mode 

of order interaction for those securities 

trading at one dollar or more and (ii) 

eliminate the trade and quote market 

data revenue credit in Order Delivery 

mode for all Tape A securities. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nsx.com, at 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

Purpose 

With this rule change, the Exchange is 

proposing to reduce the liquidity adding 

rebates and market data revenue credits 

in Order Delivery mode of order 

interaction (‘‘Order Delivery Mode’’).3

In particular, this rule change proposes 

to reduce the rebate for adding liquidity 

in securities trading at or above one 

dollar in Order Delivery Mode to a flat 

rebate of $0.0023 per share executed for 

Tape A, and to $0.0025 per share 

executed for Tapes B and C. In addition, 

the Exchange is proposing to eliminate 

the trade and quote market data revenue 

credit for all Tape A securities executed 

in Order Delivery Mode. 

Reduction of Rebate for Adding 

Liquidity in Order Delivery Mode 

With respect to securities traded at 

one dollar or more in Order Delivery 

Mode, the instant filing proposes 

simplifying the Fee Schedule by 

reducing the per share executed rebate 

to a flat rate of $0.0023 for Tape A 

securities and to $0.0025 for Tapes B 

and C securities. Currently, the per 

share rebate for adding liquidity across 

all tapes in Order Delivery Mode for 

securities executed at one dollar or more 

is $0.0027 if ‘‘Executed ADV’’ is equal 

to or greater than 60 million, and 

$0.0026 if ‘‘Executed ADV’’ is less than 

60 million. As set forth in explanatory 

endnote number 6 to the Fee Schedule 

(which endnote is proposed to be 

deleted as no longer necessary), 

‘‘Executed ADV’’ means, with respect to 

an ETP Holder, ‘‘the number of shares 

such ETP Holder has executed on 

average per trading day (excluding 

partial trading days and securities under 

one dollar) across all tapes on NSX for 

the calendar month in which the 

executions occurred.’’ The instant filing 

proposes to simplify the Fee Schedule 

by eliminating the tiered rebate 

structure in Order Delivery Mode based 

on ‘‘Executed ADV’’ and replacing it 

with a flat fee based solely on whether 

the security is Tape A, B or C. The 

instant filing will affect the calculation 

of the ‘‘Executed ADV’’ for the month of 

September, 2008. Accordingly, the 

‘‘Executed ADV’’ will be calculated 

based on the average per trading day 

(excluding partial trading days and 

securities under one dollar) across all 

tapes on NSX for the period beginning 

September 1, 2008 and ending 

September 22, 2008, the period when 

the old Fee Schedule (prior to the 

instant modification) was in effect. 

Notice will be provided to ETP Holders 

respecting the calculation of the 

Executed ADV. 

The instant rule filing proposes no 

changes to the liquidity adding rebates 

applicable to securities trading at less 

than one dollar in Order Delivery 

Mode.4

Elimination of Market Data Revenue 

Credit for Tape A Securities in Order 

Delivery Mode 

With respect to Tape A securities in 

Order Delivery Mode, the instant filing 

proposes to eliminate the market data 

revenue credit in both trades and 

quotes. Currently in Order Delivery 

Mode, ETP Holders receive a credit of 

50% of both trade and quote market 

data revenues across all tapes. This 

credit is proposed to be eliminated for 

all Tape A securities in Order Delivery 

Mode, regardless of price. 

No Changes to Auto Ex 

For purposes of clarity, the proposed 

rule change proposes no modifications 

to the fees and rebates relating to any 

trades in Auto Ex. 

Rationale 

The Exchange has determined that 

these changes are necessary to increase 

the revenue of the Exchange and to 

adequately fund its regulatory and 

general business functions. The 

proposed modification is reasonable and 

equitably allocated to those ETP Holders 

that opt to provide liquidity in Order 

Delivery Mode, and is not 

discriminatory because ETP Holders are 

free to elect whether to send orders in 

mstockstill on PROD1PC66 with NOTICES