65680 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Notices 

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

2 17 CFR 240.19b–4. 3 15 U.S.C. 78f(b). 

G–117a is used by railroad employers to 

designate employees who are to act as 

point of contact with the RRB on a 

variety of RRA and RUIA-related 

matters. The RRB proposes no changes 

to Form G–117A. Completion time is 

estimated at 15 minutes. Completion is 

voluntary. One response is requested 

from each respondent. 

Previous Requests for Comments: The 

RRB has already published the initial 

60-day notice (75 FR 38565 on July 2, 

2010) required by 44 U.S.C. 3506(c)(2). 

That request elicited no comments. 

Information Collection Request (ICR) 

Title: Designation of Contact Officials. 

OMB Control Number: 3220–0200. 

Form(s) submitted: G–117A. 

Type of request: Extension of a 

currently approved collection. 

Affected public: Business or other for 

profit. 

Abstract: The Railroad Retirement 

Board (RRB) requests that railroad 

employers designate employees to act as 

liaison with the RRB on a variety of 

Railroad Retirement Act and Railroad 

Unemployment Insurance Act matters. 

The burden estimate for the ICR is as 

follows: 

Estimated annual number of 

respondents: 100. 

Total annual responses: 100. 

Total annual reporting hours: 25. 

FOR FURTHER INFORMATION CONTACT: 

Copies of the form and supporting 

documents can be obtained from 

Charles Mierzwa, the agency clearance 

officer at (312–751–3363) or 

Charles.Mierzwa@rrb.gov. 

Comments regarding the information 

collection should be addressed to 

Patricia A. Henaghan, Railroad 

Retirement Board, 844 North Rush 

Street, Chicago, Illinois, 60611–2092 or 

Patricia.Henaghan@rrb.gov and to the 

OMB Desk Officer for the RRB, at the 

Office of Management and Budget, 

Room 10230, New Executive Office 

Building, Washington, DC 20503. 

Charles Mierzwa, 

Clearance Officer. 

[FR Doc. 2010–26997 Filed 10–25–10; 8:45 am] 

BILLING CODE 7905–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Closed Meeting 

on Thursday, October 28, 2010 at 9:30 

a.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) 

and 17 CFR 200.402(a)(3), (5), (7), 9(ii) 

and (10), permit consideration of the 

scheduled matters at the Closed 

Meeting. 

Commissioner Walter, as duty officer, 

voted to consider the items listed for the 

Closed Meeting in a closed session, and 

determined that no earlier notice thereof 

was possible. 

The subject matter of the Closed 

Meeting scheduled for Thursday, 

October 28, 2010 will be: 

Institution and settlement of injunctive 

actions; 

Institution and settlement of administrative 

proceedings; and 

Other matters relating to enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted or postponed, please 

contact: 

The Office of the Secretary at (202) 

551–5400. 

Dated: October 22, 2010. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–27218 Filed 10–22–10; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63139; File No. SR–ISE– 

2010–99] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Order 

Granting Accelerated Approval of 

Proposed Rule Change To Adopt ISE 

Rule 421 Relating to Proxy Voting 

October 20, 2010. 

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 

6, 2010, the International Securities 

Exchange, LLC (‘‘ISE’’ 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 substantially prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons, and is 

approving the proposed rule change on 

an accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to adopt Rule 

421 (Proxy Voting), in accordance with 

the provisions of Section 957 of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (the ‘‘DoddFrank Act’’). 

The text of the proposed rule change 

is available on the Exchange’s Internet 

Web site at http://www.ise.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 

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 self-regulatory organization 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 is proposing to adopt 

ISE Rule 421 (Proxy Voting), in 

accordance with the provisions of 

Section 957 of the Dodd-Frank Act, to 

prohibit Members from voting 

uninstructed shares if the matter voted 

on relates to (i) the election of a member 

of the board of directors of an issuer 

(other than an uncontested election of a 

director of an investment company 

registered under the Investment 

Company Act of 1940 (the ‘‘Investment 

Company Act’’)), (ii) executive 

compensation, or (iii) any other 

significant matter, as determined by the 

Commission, by rule. 

Section 957 of the Dodd-Frank Act 

amends Section 6(b) 3 of the Act to 


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Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Notices 65681 

4 15 U.S.C. 781. 5 15 U.S.C. 78f(b)(5). 

require the rules of each national 

securities exchange to prohibit any 

member organization that is not the 

beneficial owner of a security registered 

under Section 12 4 of the Act from 

granting a proxy to vote the security in 

connection with certain stockholder 

votes, unless the beneficial owner of the 

security has instructed the member 

organization to vote the proxy in 

accordance with the voting instructions 

of the beneficial owner. The stockholder 

votes covered by Section 957 include 

any vote with respect to (i) the election 

of a member of the board of directors of 

an issuer (other than an uncontested 

election of a director of an investment 

company registered under the 

Investment Company Act), (ii) executive 

compensation, or (iii) any other 

significant matter, as determined by the 

Commission, by rule. 

Accordingly, in order to carry out the 

requirements of Section 957 of the 

Dodd-Frank Act, the Exchange proposes 

to adopt proposed ISE Rule 421 to 

prohibit any Member from giving a 

proxy to vote stock that is registered in 

its name, unless: (i) Such Member is the 

beneficial owner of such stock; (ii) 

pursuant to the written instructions of 

the beneficial owner; or (iii) pursuant to 

the rules of any national securities 

exchange or association of which it is a 

member provided that the records of the 

Member clearly indicate the procedure 

it is following. The Exchange is 

proposing to adopt these rules because 

other national securities exchanges and 

associations do allow proxy voting 

under certain limited circumstances 

while the current Exchange Rules are 

silent on such matters. Therefore, a 

Member that is also a member of 

another national securities exchange or 

association may vote the shares held for 

a customer when allowed under its 

membership at another national 

securities exchange or association, 

provided that the records of the Member 

clearly indicate the procedure it is 

following. 

More specifically, a Member that is 

not the beneficial owner of a security 

registered under Section 12 of the Act 

is prohibited from granting a proxy to 

vote the security in connection with a 

shareholder vote with respect to the 

election of a member of the board of 

directors of an issuer (except for a vote 

with respect to uncontested election of 

a member of the board of directors of 

any investment company registered 

under the Investment Company Act), 

executive compensation, or any other 

significant matter, as determined by the 

Commission, by rule, unless the 

beneficial owner of the security has 

instructed the Member to vote the proxy 

in accordance with the voting 

instructions of the beneficial owner. 

Because Section 957 of the DoddFrank Act does not provide for a 

transition phase, the Exchange is 

proposing to adopt the proposed rule 

change pursuant to Section 19(b) of the 

Act to comply with Section 957 of the 

Dodd-Frank Act and is requesting that 

the Commission approve the proposal 

on an accelerated basis. Additionally, 

proposed ISE Rule 421(a) is based on 

NYSE Arca, Inc. (‘‘NYSE Arca’’) rule 9.4 

and Financial Industry Regulatory 

Authority (‘‘FINRA’’) rule 2251 and 

proposed ISE Rule 421(b) is based on 

Nasdaq rule 2251(d). 

2. Statutory Basis 

The basis under the Act for these 

proposed rule changes is the 

requirement under Section 6(b)(5) 5 to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to remove 

impediments to, and perfect the 

mechanism of a free and open market 

and, in general, to protect investors and 

the public interest. The Exchange is 

adopting this proposed rule change to 

comply with the requirements of 

Section 957 of the Dodd-Frank Act, and 

therefore believes the proposed rule 

change to be consistent with the Act, 

particularly with respect to the 

protection of investors and the public 

interest. 

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. 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–2010–99 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–ISE–2010–99. 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 Web site viewing and 

printing 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 ISE. 

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–2010–99 and should be 

submitted on or before November 16, 

2010. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of the 

Proposed Rule Change 

In its filing, ISE requested that the 

Commission approve the proposal on an 

accelerated basis so that the Exchange 

could immediately comply with the 

requirements imposed by the DoddFrank Act, and because the proposed 

rule text is based upon NYSE Arca Rule 

9.4, FINRA Rule 2251, and Nasdaq Rule 

2251(d). After careful consideration, the 

Commission finds that the proposed 


emcdonald on DSK2BSOYB1PROD with NOTICES
65682 Federal Register / Vol. 75, No. 206 / Tuesday, October 26, 2010 / Notices 

6 In approving this rule change, the Commission 

notes that it has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

7 15 U.S.C. 78f(b)(5). 

8See Securities Exchange Act Release No. 48735 

(October 31, 2003), 68 FR 63173 (November 7, 2003) 

(SR–PCX–2003–50); 61052 (November 23, 2009), 74 

FR 62857 (December 1, 2009) (SR–FINRA–2009– 

066) (finding that the proposed rule change was 

consistent with the Act because the Rule ‘‘will 

continue to provide FINRA members with guidance 

on the forwarding of proxy and other issuer-related 

materials.’’). 

9 15 U.S.C. 78f(b)(10). 

10See S. Rep. No. 111–176, at 136 (2010). 

11The Commission has not, to date, adopted rules 

concerning other significant matters where 

uninstructed broker votes should be prohibited, 

although it may do so in the future. Should the 

Commission adopt such rules, we would expect ISE 

to adopt coordinating rules promptly to comply 

with the statute. 

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

13As the Commission stated in approving NYSE 

rules prohibiting broker voting in the election of 

directors, having those with an economic interest in 

the company vote the shares, rather than the broker 

who has no such economic interest, furthers the 

goal of enfranchising shareholders. See Securities 

Exchange Act Release No. 60215 (July 1, 2009), 74 

FR 33293 (July 10, 2009) (SR–NYSE–2006–92). 

14 15 U.S.C. 78s(b)(2). 

15See note 8 supra. 

rule change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.6

The Commission believes that 

proposed Rule 421(a) is consistent with 

Section 6(b)(5) 7 of the Act, which 

provides, among other things, that the 

rules of the Exchange must be designed 

to 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, and 

are not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

Under proposed Rule 421(a), a 

Member shall be prohibited from voting 

uninstructed shares unless: (1) That 

member is the beneficial owner of the 

stock; (2) pursuant to the written 

instructions of the beneficial owner; or 

(3) pursuant to the rules of any national 

securities exchange or association of 

which it is also a member, provided that 

the member’s records clearly indicate 

the procedure it is following. This 

provision is based upon NYSE Arca 

Rule 9.4 and FINRA Rule 2251, which 

were previously approved by the 

Commission.8 The Commission notes 

that the proposed change to Rule 421(a) 

will provide clarity to ISE members 

going forward on whether broker 

discretionary voting is permitted by ISE 

members under limited circumstances 

when the ISE member is also a member 

of another national securities exchange 

that permits broker discretionary voting. 

In approving this portion of the ISE 

proposal, the Commission notes that it 

does not go outside the scope of the 

rules of other national securities 

exchanges or national securities 

association, and for ISE members who 

are not also members of another 

national securities exchange prohibits 

broker discretionary voting on any 

matter, consistent with investor 

protection and the public interest. 

The Commission believes that 

proposed Rule 421(b) is consistent with 

Section 6(b)(10) 9 of the Act, which 

requires that national securities 

exchanges adopt rules prohibiting 

members that are not beneficial holders 

of a security from voting uninstructed 

proxies with respect to the election of a 

member of the board of directors of an 

issuer (except for uncontested elections 

of directors for companies registered 

under the Investment Company Act), 

executive compensation, or any other 

significant matter, as determined by the 

Commission by rule. 

The Commission believes that 

proposed Rule 421(b) is consistent with 

Section 6(b)(10) of the Act because it 

adopts revisions that comply with that 

section. As noted in the accompanying 

Senate Report, Section 957, which 

enacted Section 6(b)(10), reflects the 

principle that ‘‘final vote tallies should 

reflect the wishes of the beneficial 

owners of the stock and not be affected 

by the wishes of the broker that holds 

the shares.’’ 10 The proposed rule change 

will make ISE compliant with the new 

requirements of Section 6(b)(10) by 

specifically prohibiting, in ISE’s rule 

language, broker-dealers, who are not 

beneficial owners of a security, from 

voting uninstructed shares in 

connection with a shareholder vote on 

the election of a member of the board of 

directors of an issuer (except for a vote 

with respect to the uncontested election 

of a member of the board of directors of 

any investment company registered 

under the Investment Company Act of 

1940), executive compensation, or any 

other significant matter, as determined 

by the Commission by rule, unless the 

member receives voting instructions 

from the beneficial owner of the 

shares.11

The Commission also believes that 

proposed Rule 421(b) is consistent with 

Section 6(b)(5) 12 of the Act, which 

provides, among other things, that the 

rules of the Exchange must be designed 

to 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, and 

are not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Commission believes that the rule 

assures that shareholder votes on the 

election of the board of directors of an 

issuer (except for a vote with respect to 

the uncontested election of a member of 

the board of directors of any investment 

company registered under the 

Investment Company Act of 1940) and 

on executive compensation matters are 

made by those with an economic 

interest in the company, rather than by 

a broker that has no such economic 

interest, which should enhance 

corporate governance and accountability 

to shareholders.13

Based on the above, the Commission 

finds that the ISE proposal will further 

the purposes of Sections 6(b)(5) and 

6(b)(10) of the Act because it should 

enhance corporate accountability to 

shareholders while also serving to fulfill 

the Congressional intent in adopting 

Section 6(b)(10) of the Act. 

The Commission also finds good 

cause, pursuant to Section 19(b)(2) of 

the Act,14 for approving the proposed 

rule change prior to the 30th day after 

the date of publication of notice in the 

Federal Register. The Commission 

believes that good cause exists to grant 

accelerated approval to proposed Rule 

421(a), because this proposed rule will 

conform the ISE rule to NYSE Arca Rule 

9.4 and FINRA Rule 2251, which were 

published for public comment in the 

Federal Register and approved by the 

Commission, and for which no 

comments were received.15 Because 

proposed Rule 421(a) is substantially 

similar to the NYSE Arca and FINRA 

rules, it raises no new regulatory issues. 

The Commission also believes that 

good cause exists to grant accelerated 

approval to proposed Rule 421(b), 

which conforms the ISE rules to the 

requirements of Section 6(b)(10) of the 

Act. Section 6(b)(10) of the Act, enacted 

under Section 957 of the Dodd-Frank 

Act, does not provide for a transition 

phase, and requires rules of national 

securities exchanges to prohibit broker 

voting on the election of a member of 

the board of directors of an issuer 

(except for a vote with respect to the 

uncontested election of a member of the 

board of directors of any investment 

company registered under the 

Investment Company Act of 1940), 

executive compensation, or any other 

significant matter, as determined by the 

Commission by rule. The Commission 

believes that good cause exists to grant 


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16 15 U.S.C. 78s(b)(2). 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Exchange Act Release No. 62799 (August 30, 

2010) 75 FR 54662 (September 8, 2010) (SR–Phlx– 

2010–118). 

4See Securities Exchange Act Release No. 61920, 

(April 15, 2010), 75 FR 21902 (April 22, 2010) (SR– 

NYSEArca–2010–29) (notice of filing and 

immediate effectiveness permitting the concurrent 

listing of $3.50 and $4 strikes for classes that 

participate in both the $0.50 Strike and $1 Strike 

Programs). 

5See Exchange Rule 6.4, Commentary .04(a), 

referring to the $1 Strike Program. 

6SIRI was trading at $ 0.9678 on July 13, 2010. 

accelerated approval to proposed Rule 

421(b), because it will conform the ISE 

rules to the requirements of Section 

6(b)(10) of the Act. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,16 that the 

proposed rule change (SR–ISE–2010–99) 

be, and it hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–26993 Filed 10–25–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63137; File No. SR– 

NYSEArca–2010–92] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Arca, Inc. To Expand the $0.50 Strike 

Price Program 

October 20, 2010. 

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 

18, 2010, NYSE Arca, Inc. (‘‘NYSE Arca’’ 

or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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 

Commentary .04 to NYSE Arca Options 

Rule 6.4 to expand the $.50 Strike Price 

Program as described below. The text of 

the proposed rule change is available at 

the Exchange, on the Commission’s Web 

site at http://www.sec.gov, at the 

Commission’s Public Reference Room, 

and http://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 Exchange proposes to adopt Rule 

provisions similar to those proposed for 

use by NASDAQ OMX PHLX (‘‘Phlx’’) 3

that will amend Commentary .04 to 

NYSE Arca Options Rule 6.4, Series of 

Options Open for Trading, specifically 

the Exchange’s $.50 Strike Price 

Program (the ‘‘$.50 Strike Program’’ or 

‘‘Program’’) 4 to: (i) Expand the $.50 

Strike Program for strike prices below 

$1.00; (ii) extend the $.50 strike program 

to strike prices that are $5.50 or less; 

(iii) extend the prices of the underlying 

security to at or below $5.00; and (iv) 

extend the number of options classes 

overlying 20 individual stocks. The 

purpose of this proposed rule change is 

to expand the $.50 Strike Program in 

order to provide investors with 

opportunities and strategies to minimize 

losses associated with owning a stock 

declining in price. 

The Exchange is proposing to 

establish strike price intervals of $.50, 

beginning at $.50 for certain options 

classes where the strike price is $5.50 or 

less and whose underlying security 

closed at or below $5.00 in its primary 

market on the previous trading day and 

that have national average daily volume 

that equals or exceeds 1,000 contracts 

per day as determined by The Options 

Clearing Corporation (‘‘OCC’’) during the 

preceding three calendar months. The 

Exchange also proposes to limit the 

listing of $.50 strike prices to options 

classes overlying no more than 20 

individual stocks as specifically 

designated by the Exchange. 

Currently, Exchange Rule 6.4 at 

Commentary .04 permits strike price 

intervals of $.50 or greater beginning at 

$1.00 where the strike price is $3.50 or 

less, but only for option classes whose 

underlying security closed at or below 

$3.00 in its primary market on the 

previous trading day and that have 

national average daily volume that 

equals or exceeds 1,000 contracts per 

day as determined by the OCC during 

the preceding three calendar months. 

Further, the listing of $.50 strike prices 

is limited to options classes overlying 

no more than 5 individual stocks as 

specifically designated by the Exchange. 

The Exchange is currently restricted 

from listing series with $1 intervals 

within $0.50 of an existing strike price 

in the same series, except that strike 

prices of $2, $3, and $4 shall be 

permitted within $0.50 of an existing 

strike price for classes also selected to 

participate in the $0.50 Strike Program.5

The number of $.50 strike options 

traded on the Exchange has continued 

to increase since the inception of the 

Program. There are now approximately 

18 of the $.50 strike price option classes 

listed and traded across all options 

exchanges including the Exchange, five 

of which are classes chosen by the 

Exchange for the $0.50 Strike Program. 

The proposal would expand $.50 strike 

offerings to market participants, such as 

traders and retail investors, and thereby 

enhance their ability to tailor investing 

and hedging strategies and 

opportunities in a volatile market place. 

By way of example, if an investor 

wants to invest in 5,000 shares of Sirius 

Satellite (‘‘SIRI’’) at $0.9678,6 the only 

choice the investor would have today 

would be to buy out-of-the-money calls, 

at the $1.00 strike, or to invest in the 

underlying stock with a total outlay of 

$.96 per share or $4,800. However, if a 

$.50 strike series were available, an 

investor may be able to invest in 5,000 

shares by purchasing an exercisable inthe-money $.50 strike call option. It is 

reasonable to assume that with SIRI 

trading at $.96, the $.50 strike call 

option would trade at an estimated price 

of $.46 to $.48 under normal 

circumstances. This would allow the 

investor to manage 5,000 shares with 

the same upside potential return for a 

cost of only $2,350 (assuming $.47 as a 

call price). 

Similarly, if an investor wanted to 

spend $4,800 for 5,000 shares of SIRI, a 

$.50 put option that would trade for 


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