32994 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Notices 

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4(f)(6). 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. The 

Exchange has satisfied this requirement. 

8 17 CFR 240.19b–4(f)(6). 

9 17 CFR 240.19b–4(f)(6)(iii). 

10For the 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. 78(c)(f). 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Commission notes that as of July 1, 2009, 

the proposed rule change is also available on the 

Exchange’s Web site at https://www.ise.com. 

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) 6 of the Act and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.7

A proposed rule change filed under 

Rule 19b–4(f)(6) 8 normally does not 

become operative for 30 days after the 

date of filing. However, Rule 19b– 

4(f)(6)(iii) 9 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 so that 

the proposal may become operative 

immediately upon filing. The Exchange 

states that extending the Penny Pilot 

Program until October 31, 2009, will 

allow further analysis of the Penny Pilot 

Program, and that waiving the 30 days 

will allow the Penny Pilot Program to 

continue uninterrupted. 

The Commission believes waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest because such waiver will 

allow the Penny Pilot Program to 

continue without interruption through 

October 31, 2009.10 Accordingly, the 

Commission designates the proposed 

rule change operative upon filing with 

the Commission. 

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–CBOE–2009–043 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–CBOE–2009–043. 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 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 No. 

SR–CBOE–2009–043 and should be 

submitted on or before July 30, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–16185 Filed 7–8–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60222; File No. SR–ISE– 

2009–37] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to an Extension of the 

Penny Pilot Program 

July 1, 2009. 

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 June 30, 

2009, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) filed with the Securities and 

Exchange Commission the proposed 

rule change as described in Items I and 

II below, which Items have been 

substantially prepared by the selfregulatory organization. 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 ISE is proposing to extend, until 

October 31, 2009, a pilot program to 

quote and to trade certain options in 

pennies. The text of the proposed rule 

amendment is available at the Exchange 

and at the Commission’s Public 

Reference Room.3

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 


rmajette on DSK29S0YB1 with NOTICES
Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Notices 32995 

4See Securities Exchange Act Release No. 55161 

(January 24, 2007), 72 FR 4754 (February 1, 2007) 

(the ‘‘Initial Filing’’). The Penny Pilot Program was 

subsequently extended for an additional two month 

period, until September 27, 2007. See Securities 

Exchange Act Release No. 56151 (July 26, 2007), 72 

FR 42452 (August 2, 2007). 

5See Securities Exchange Act Release Nos. 56564 

(September 27, 2007), 72 FR 56412 (October 3, 

2007) and 57508 (March 17, 2008), 73 FR 15243 

(March 21, 2008). 

6See Securities Exchange Act Release No. 60146 

(June 19, 2009) (SR–ISE–2009–32). 

7See Securities Exchange Act Release Nos. 60018 

(June 1, 2009), 74 FR 27211 (June 18, 2009) (Notice 

of Filing of Proposed Rule Change by the Chicago 

Board Options Exchange To Expand the Penny Pilot 

Program); 59944 (May 20, 2009), 74 FR 25294 (May 

27, 2009) (Notice of Filing of Proposed Rule Change 

by NYSE Arca To Expand the Penny Pilot Program). 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). 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. The 

Exchange has satisfied this requirement. 

10 17 CFR 240.19b–4(f)(6). 

11 17 CFR 240.19b–4(f)(6)(iii). 

12For the 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. 78(c)(f). 

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 

On January 24, 2007, the SEC 

approved ISE’s rule filing, SR–ISE– 

2006–62, which initiated a pilot 

program to quote and to trade certain 

options in penny increments (the 

‘‘Penny Pilot Program’’).4 Under the 

Penny Pilot Program, the minimum 

price variation for all participating 

options classes, except for the Nasdaq100 Index Tracking Stock (‘‘QQQQ’’), is 

$0.01 for all quotations in options series 

that are quoted at less than $3 per 

contract and $0.05 for all quotations in 

options series that are quoted at $3 per 

contract or greater. The QQQQs are 

quoted in $0.01 increments for all 

options series. Through subsequent 

expansions, the Penny Pilot now 

consists of 63 underlying securities.5

The Penny Pilot Program is scheduled 

to expire on July 3, 2009. 

The Exchange recently submitted a 

proposal to extend and expand the 

Penny Pilot Program, which the 

Commission recently published for 

comment.6 The Commission also 

recently published for comment two 

alternative proposals.7 In order to give 

the Commission and market participants 

time to evaluate the varying proposals, 

ISE proposes to extend the Penny Pilot 

Program in its current pilot until 

October 31, 2009. 

As proposed in the Initial Filing, ISE 

represents that options trading in penny 

increments will not be eligible for split 

pricing, as permitted under ISE Rule 

716. In the Initial Filing, the Exchange 

also made references to quote mitigation 

strategies that are currently in place and 

proposed to apply them to the Penny 

Pilot Program. The Exchange proposes 

to continue applying those quote 

mitigation strategies during the 

extension of the Penny Pilot Program, as 

contemplated by this rule filing. 

Specifically, as proposed in Rule 804, 

ISE will continue to utilize a holdback 

timer that delays quotation updates for 

up to, but not longer than, one second. 

The Exchange’s monitoring and 

delisting policies, as proposed in the 

Initial Filing, shall also continue to 

apply. 

Finally, ISE intends to submit an 

additional report to the Commission 

analyzing the Penny Pilot Program for 

the following time period: May 1, 2009– 

July 31, 2009. 

The Exchange anticipates its report 

will analyze the impact of penny pricing 

on market quality and options system 

capacity. The Exchange will submit the 

report no later than August 31, 2009. 

2. Statutory Basis 

The basis under the Securities 

Exchange Act of 1934 (the ‘‘Exchange 

Act’’) for this proposed rule change is 

found in Section 6(b)(5), in that the 

proposed rule change is designed to 

promote just and equitable principles of 

trade, 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. In 

particular, the proposed rule change 

will allow the Exchange to continue the 

Penny Pilot Program uninterrupted. 

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 written 

comments from members or other 

interested parties. 

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) 8 of the Act and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.9

A proposed rule change filed under 

Rule 19b–4(f)(6) 10 normally does not 

become operative for 30 days after the 

date of filing. However, Rule 19b– 

4(f)(6)(iii) 11 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 so that 

the proposal may become operative 

immediately upon filing. The Exchange 

states that waiver of the 30-day 

operative delay will allow the Penny 

Pilot Program to continue 

uninterrupted. 

The Commission believes waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest because such waiver will 

allow the Penny Pilot Program to 

continue without interruption through 

October 31, 2009.12 Accordingly, the 

Commission designates the proposed 

rule change operative upon filing with 

the Commission. 

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 


rmajette on DSK29S0YB1 with NOTICES
32996 Federal Register / Vol. 74, No. 130 / Thursday, July 9, 2009 / Notices 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Commission notes that this proposed rule 

change was submitted pursuant to Section 

19(b)(3)(A)(ii) of the Act and was, therefore, 

effective upon filing. The Commission does not 

approve proposed rule changes submitted pursuant 

to this section of the Act. 

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

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

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–ISE–2009–37 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–2009–37. 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 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 No. 

SR–ISE–2009–37 and should be 

submitted on or before July 30, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–16184 Filed 7–8–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60221; File No. SR–BX– 

2009–033] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Amend the 

BOX Fee Schedule To Remove Three 

Classes From the Liquidity Make or 

Take Pricing Structure 

July 1, 2009. 

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 June 26, 

2009, NASDAQ OMX BX, Inc. (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

NASDAQ OMX BX, Inc. (the 

‘‘Exchange’’) proposes to amend the Fee 

Schedule of the Boston Options 

Exchange Group, LLC (‘‘BOX’’). The text 

of the proposed rule change is available 

from the principal office of the 

Exchange, at the Commission’s Public 

Reference Room and also on the 

Exchange’s Internet Web site at http:// 

nasdaqomxbx.cchwallstreet.com/ 

NASDAQOMXBX/Filings/. 

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 Liquidity Make or Take Pricing 

Structure on BOX, as described in 

Section 7 of the BOX Fee Schedule, 

currently applies to all classes 

participating in the Penny Pilot, as 

referenced in Chapter V, Section 33 of 

the BOX Rules. The Exchange proposes 

to remove the following three (3) classes 

from the Liquidity Make or Take Pricing 

Structure: (1) Standard & Poor’s 

Depositary Receipts® (SPY); (2) 

Powershares® QQQ Trust Series 1 

(QQQQ); and (3) iShares Russell 2000®

Index Fund (IWM). 

The Exchange also proposes to 

remove references and pricing from the 

Fee Schedule pertaining to ‘Tier 2’ 

Penny Pilot Classes, as these three (3) 

classes currently make up the entirety of 

Tier 2. However, the Exchange is 

leaving references to ‘Tier 1’ Penny Pilot 

classes in the BOX Fee Schedule should 

it choose to designate classes as other 

than Tier 1 in the future. 

The Exchange believes that this 

proposed fee change will align its 

pricing so as to better compete with 

other exchanges in these classes. If 

approved,3 the Liquidity Make or Take 

Pricing Structure will no longer apply to 

the three (3) classes listed above and 

instead standard execution fees will be 

applied. 

The Exchange is proposing that these 

changes become effective on July 1, 

2009. In conjunction with this proposal, 

the Exchange proposes to issue a 

Regulatory Circular explicitly listing the 

classes being removed from the 

Liquidity Make or Take Pricing 

Structure and the resulting changes to 

the fees for transactions in these classes. 

2. Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the Act,4

in general, and Section 6(b)(4) of the 

Act,5 in particular, in that it provides for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

members and issuers and other persons 

using its facilities. In particular, the 

proposed rule change will apply fees 


rmajette on DSK29S0YB1 with NOTICES