60386 Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices 

7 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). 

Exchange believes that the proposed 

rule change will provide more specific 

continued listing criteria for securities 

listed under NYSE Arca Equities Rules 

5.2(j)(1) and 5.2(j)(2), and provides an 

adequate minimum threshold for the 

dollar principal amount of derivativelypriced securities such as those listed 

under Rules 5.2(j)(1) and 5.2(j)(2) to 

permit sufficient market liquidity. 

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 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve the proposed 

rule change; or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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–NYSEArca–2008–104 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–NYSEArca–2008–104. 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–NYSEArca–2008–104 and 

should be submitted on or before 

October 31, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–24117 Filed 10–9–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58717; File No. SR– 

NYSEArca–2008–106] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Amending Rule 6.87— 

Obvious Errors and Catastrophic 

Errors 

October 2, 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 October 

2, 2008, NYSE Arca, Inc. (‘‘NYSE Arca’’ 

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 self-regulatory organization. 

NYSE Arca filed the proposed rule 

change as a ‘‘non-controversial’’ 

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 proposes to amend 

Rule 6.87—Obvious Errors and 

Catastrophic Errors. The text of the 

proposed rule change is available at the 

principal office of the Exchange, the 

Commission’s Public Reference Room, 

and at www.nyse.com. 

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 

Exchange rules governing obvious and 

catastrophic errors, by adding 

provisions which will allow for the 

nullification of trades that are a result of 

either an erroneous quote, or print, in 

the underlying security. Specifically, 

NYSE Arca is proposing new Rule 

6.87(a)(4) Erroneous Print in the 

Underlying, and new Rule 6.87(a)(5) 

Erroneous Quote in the Underlying. 

Market participants on NYSE Arca 

base the value of their quotes and orders 

off of the price of underlying security. 

These two proposed provisions cover 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices 60387 

5NYSE Arca Rule 6.1(b)(27) defines Primary 

Market as the principal market in which the 

underlying stock or Exchange-Traded Fund Share is 

traded. 

6See CBOE Rules 6.25(a)(4)–(5). 

7See Amex Rules 936–ANTE(a)(4)–(5). 

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). 

12For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

13The Commission is also waiving the five 

business-day pre-filing requirement. 

14See Amex Rule 936–ANTE(a)(4)–(5) and CBOE 

Rule 6.25(a)(4)–(5). 

instances where the information the 

market participants are using to price 

options is erroneous, through no fault of 

their own. An erroneous quote or print 

in an underlying security, which is 

disseminated by the primary market 5

for that security, means that market 

participants are receiving erroneous 

information which they then 

incorporate into trading decisions. In 

these instances, market participants 

have little if any chance of pricing 

options accurately. In order to provide 

relief from transactions that occur as a 

result of these erroneous prints and/or 

quotes, the Exchange proposes the 

following provisions. 

Rule 6.87(a)(4) Erroneous Print in 

Underlying 

An electronic trade resulting from an 

erroneous print disseminated by the 

underlying market which is later 

cancelled or corrected by that 

underlying market may be nullified. In 

order to be nullified, however, the trade 

must be the result of an erroneous print 

that is higher or lower than the average 

trade in the underlying security during 

a two-minute period before and after the 

erroneous print by an amount at least 

five times greater than the average quote 

width for such underlying security 

during the same period. 

For purposes of this Rule, the average 

trade in the underlying security shall be 

determined by adding the prices of each 

trade during the four minute time 

period referenced above (excluding the 

trade in question) and dividing by the 

number of trades during such time 

period (excluding the trade in question). 

For purposes of this Rule, the average 

quote width shall be determined by 

adding the quote widths of each 

separate quote during the four minute 

time period referenced above (excluding 

the quote in question) and dividing by 

the number of quotes during such time 

period (excluding the quote in 

question). 

Rule 6.87(a)(5) Erroneous Quote in 

Underlying 

Electronic trades resulting from an 

erroneous quote in the underlying 

security may be adjusted or nullified as 

set forth in section (a)(3) of Rule 6.87. 

An erroneous quote occurs when the 

underlying security has a width of at 

least $1.00 and has a width at least five 

times greater than the average quote 

width for such underlying security on 

the primary market (as defined in Rule 

6.1(b)(27)) during the time period 

encompassing two minutes before and 

after the dissemination of such quote. 

For purposes of this Rule, the average 

quote width shall be determined by 

adding the quote widths of each 

separate quote during the four minute 

time period referenced above (excluding 

the quote in question) and dividing by 

the number of quotes during such time 

period (excluding the quote in question) 

and dividing by the number of quotes 

during such time period (excluding the 

quote in question). 

These proposed rule changes will 

provide market participants on NYSE 

Arca the same opportunities for price 

adjustment or trade nullification that are 

available on other options exchanges. 

The Exchange notes that these 

provisions are similar in all respects to 

rules already approved for use at The 

Chicago Board Options Exchange 

(‘‘CBOE’’) 6 and The American Stock 

Exchange (‘‘Amex’’).7

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with section 6(b) 

of the Act,8 in general, and furthers the 

objectives of section 6(b)(5) of the Act,9

in particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, promote just and 

equitable principles of trade, 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. NYSE Arca believes that 

this proposal is appropriate given that it 

provides for the adjustment or 

nullification of trades, which are 

executed at clearly erroneous prices due 

to no fault of the participants on the 

trade. 

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 

or received with respect to the proposed 

rule change. 

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 10 and 

Rule 19b–4(f)(6) thereunder.11

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 to allow the Exchange to 

immediately offer market participants 

on NYSE Arca the same potential for 

relief that is available at other option 

exchanges, when an erroneous print, or 

quote, in an underlying security occurs 

on the primary market. The Exchange 

argued that such flexibility is 

increasingly important in light of recent 

market volatility. The Commission 

believes that waiving the 30-day 

operative delay 12 is consistent with the 

protection of investors and the public 

interest.13 Given that the Exchange’s 

proposed rule change is substantially 

similar to the rules of other exchanges 

previously approved by the 

Commission,14 the proposal does not 

appear to present any novel regulatory 

issues. Therefore, the Commission 

mstockstill on PROD1PC66 with NOTICES

60388 Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3For purposes of proposed Rule 5.2(b), 

Commentary .01, the term ‘‘Derivative Products’’ 

includes securities described in Rule 5.2(j)(2) 

(Equity-Linked Notes); Rule 5.2(j)(3) (Investment 

Company Units); Rule 5.2(j)(4) (Index-Linked 

Exchangeable Notes); and Rule 5.2(j)(6) (IndexLinked Securities); and the following securities 

enumerated in provisions of section 2 to Rule 8: 

Portfolio Depositary Receipts; and Trust Issued 

Receipts to be listed pursuant to Rule 8.200, 

Commentary .01. Exchange rules relating to listing 

and trading, including trading pursuant to unlisted 

trading privileges, of ‘‘Derivative Products’’ as 

described above permit listing and trading pursuant 

to Rule 19b–4(e) under the Exchange Act. Rule 19b– 

4(e) under the Exchange Act provides that the 

listing and trading of a new derivative securities 

product by a self-regulatory organization (‘‘SRO’’) 

shall not be deemed a proposed rule change, 

designates the proposal 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–NYSEArca–2008–106 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–NYSEArca–2008–106. 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–NYSEArca–2008–106 and 

should be submitted on or before 

October 31, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–24179 Filed 10–9–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58734; File No. SR– 

NYSEArca–2008–105] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Relating to Listing 

Certain Derivative Products Pursuant 

to Continued Listing Criteria 

October 6, 2008. 

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

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on October 1, 2008, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or ‘‘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 NYSE Arca. 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 

NYSE Arca, through its wholly owned 

subsidiary NYSE Arca Equities, Inc. 

(‘‘NYSE Arca Equities’’), proposes to 

adopt Commentary .01 to Rule 5.2(b) to 

allow NYSE Arca to list Derivative 

Products (as defined in the proposed 

Commentary .01 to Rule 5.2(b)) that (1) 

were originally listed on another 

registered national securities exchange 

on an initial listing basis and continue 

to be listed on such other registered 

national securities exchange, and (2) 

satisfy the Exchange’s continued listing 

criteria. The text of the proposed rule 

change is set forth below (new language 

is in italics): 

Rule 5.2(b) 

* * * * * 

Commentary: 

.01 The Exchange is permitted to list 

any Derivative Product, as described 

below, that (1) was originally listed on 

another registered national securities 

exchange (‘‘Other SRO’’) and continues 

to be listed on such Other SRO; and (2) 

satisfies the Exchange’s continued 

listing criteria that are applicable to the 

product class that would include such 

Derivative Product. For the purposes of 

this rule, the term ‘‘Derivative Product’’ 

shall include securities described in 

NYSE Arca Equities Rules 5.2(j)(2) 

(Equity Linked Notes); 5.2(j)(3) 

(Investment Company Units); 5.2(j)(4) 

(Index-Linked Exchangeable Notes); 

5.2(j)(6) (Equity Index-Linked Securities, 

Commodity-Linked Securities, 

Currency-Linked Securities, Fixed 

Income Index-Linked Securities, 

Futures-Linked Securities and 

Multifactor Index-Linked Securities); 

8.100 (Portfolio Depositary Receipts); 

and Commentary .01 to Rule 8.200 

(Trust Issued Receipts). 

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 Exchange is proposing to adopt 

Commentary .01 to NYSE Arca Equities 

Rule 5.2(b) to allow NYSE Arca to list 

Derivative Products (as defined in the 

proposed Commentary .01 to Rule 

5.2(b)) 3 that (1) were originally listed on 

mstockstill on PROD1PC66 with NOTICES