Federal Register / Vol. 74, No. 136 / Friday, July 17, 2009 / Notices 34813 

11 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

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–2009–49 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–2009–49. 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–ISE–2009–49 and should be 

submitted on or before August 7, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–17006 Filed 7–16–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60283; File No. SR– 

NYSEAmex–2009–41] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Amex LLC Amending Its Option 

Trading Rules in Order To Adopt the 

Quarterly Option Series Pilot Program 

on a Permanent Basis 

July 10, 2009. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on July 9, 

2009, NYSE Amex LLC (‘‘NYSE Amex’’ 

or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory 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 Exchange proposes to amend its 

option trading rules in order to adopt 

the Quarterly Option Series Pilot 

Program on a permanent basis. The text 

of the proposed rule change is attached 

as Exhibit 5 to the 19b–4 form. A copy 

of this filing is available on the 

Exchange’s Web site at http:// 

www.nyse.com, at the Exchange’s 

principal office 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 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 

the Quarterly Option Series Pilot 

Program (‘‘QOS Program’’) on a 

permanent basis. On July 12, 2006, the 

Exchange filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

SR–Amex–2006–67, which was effective 

on filing and established the QOS 

Program. The QOS Program allows 

NYSE Amex to list and trade Quarterly 

Option Series, which expire at the close 

of business on the last business day or 

a calendar quarter. Under the QOS 

Program, NYSE Amex may select up to 

five (5) currently listed exchange traded 

fund (‘‘ETF’’) or index option classes on 

which Quarterly Option Series may be 

opened. In addition, NYSE Amex may 

also list Quarterly Option Series on any 

options classes that are selected by other 

securities exchanges that employ a 

similar pilot program under their 

respective rules. 

The Exchange may list series that 

expire at the end of the next consecutive 

four (4) calendar quarters, as well as the 

fourth quarter of the next calendar year. 

For example, if the Exchange is trading 

Quarterly Options Series in the month 

of May 2009, it may list series that 

expire at the end of the second, third, 

and fourth quarters of 2009, as well as 

the first and fourth quarters of 2010. 

Following the second quarter 2009 

expiration, the Exchange could add 

series that expire at the end of the 

second quarter of 2010. 

Quarterly Option Series are P.M. 

settled. 

Quarterly Option Series in ETF Options 

If an ETF option is selected for 

participation in the QOS Program, the 

strike price of each Quarterly Option 

Series is fixed at a price per share, with 

at least two strike prices above and two 

strike prices below the approximate 

value of the underlying security at about 

the time the Quarterly Options Series is 

opened for trading on the Exchange. 

NYSE Amex shall list strike prices for 

a Quarterly Option series that are within 

$5 of the closing price of the underlying 

on the preceding day. 

The Exchange may open for trading 

additional Quarterly Options Series of 

the same class when the Exchange 

deems it necessary to maintain an 

orderly market, to meet customer 

demand or when the market price of the 

underlying security moves substantially 

from the initial exercise price or prices. 

To the extent that any additional strike 

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34814 Federal Register / Vol. 74, No. 136 / Friday, July 17, 2009 / Notices 

prices are listed by the Exchange, such 

additional strike prices shall be within 

thirty percent (30%) above or below the 

closing price of the underlying ETF on 

the preceding day. The Exchange may 

also open additional strike prices of 

Quarterly Option Series in ETF options 

that are more than 30% above or below 

the current price of the underlying ETF 

provided that demonstrated customer 

interest exists for such series, as 

expressed by institutional, corporate or 

individual customers or their brokers. 

Market-Makers trading for their own 

account shall not be considered when 

determining customer interest under 

this provision. The opening of the new 

Quarterly Options Series shall not affect 

the series of options of the same class 

previously opened. In addition to the 

initial listed series, the Exchange may 

list up to sixty (60) additional series per 

expiration month for each Quarterly 

Options Series in ETF options. 

The interval between strike prices on 

Quarterly Options Series shall be the 

same as the interval for strike prices for 

series in that same options class that 

expire in accordance with the normal 

monthly expiration cycle. 

The Exchange has adopted a delisting 

policy with respect to QOS in ETF 

options. On a monthly basis, the 

Exchange reviews series that are outside 

a range of five (5) strikes above and five 

(5) strikes below the current price of the 

underlying ETF, and delists series with 

no open interest in both the put and the 

call series having a: (i) Strike higher 

than the highest strike price with open 

interest in the put and/or call series for 

a given expiration month; and (ii) strike 

lower than the lowest strike price with 

open interest in the put and/or call 

series for a given expiration month. 

Notwithstanding the delisting policy, 

customer requests to add strikes and/or 

maintain strikes in QOS in ETF options 

in series eligible for delisting shall be 

granted. 

Further, in connection with the 

delisting policy, if the Exchange 

identifies series for delisting, the 

Exchange shall notify other options 

exchanges with similar delisting 

policies regarding eligible series for 

listing, and shall work with such other 

exchanges to develop a uniform list of 

series to be delisted, so as to ensure 

uniform series delisting of multiply 

listed Quarterly Options Series in ETF 

options. 

Quarterly Option Series in Index 

Options 

If an index option is selected for 

participation in the QOS Program, the 

strike price of each Quarterly Option 

Series will be fixed at a price per share, 

with at least two, but no more than five, 

strike prices above and at least two, but 

no more than five, strike prices below 

the value of the underlying index at 

about the time that a Quarterly Options 

Series is opened for trading on the 

Exchange. The Exchange shall list strike 

prices for Quarterly Options Series that 

are reasonably related to the current 

index value of the underlying index to 

which such series relates at about the 

time such series of options is first 

opened for trading on the Exchange. The 

term ‘‘reasonably related to the current 

index value of the underlying index’’ 

means that the exercise price is within 

thirty percent (30%) of the current 

index value. 

The Exchange may open for trading 

additional Quarterly Options Series of 

the same class when the Exchange 

deems it necessary to maintain an 

orderly market, to meet customer 

demand or when the market price of the 

underlying security moves substantially 

from the initial exercise price or prices. 

The Exchange may also open for trading 

additional Quarterly Options Series that 

are more than thirty percent (30%) of 

the current index value, provided that 

demonstrated customer interest exists 

for such series, as expressed by 

institutional, corporate, or individual 

customers or their brokers. MarketMakers trading for their own account 

shall not be considered when 

determining customer interest under 

this provision. 

The Exchange may open additional 

strike prices of a Quarterly Option 

Series that are above the value of the 

underlying index provided that the total 

number of strike prices above the value 

of the underlying index is no greater 

than five. The Exchange may open 

additional strike prices of a Quarterly 

Option Series that are below the value 

of the underlying index provided that 

the total number of strike prices below 

the value of the underlying index is no 

greater than five. The opening of any 

new Quarterly Option Series shall not 

affect the series of options of the same 

class previously opened. 

By definition, Quarterly Option Series 

on an option class can never expire in 

the same week in which monthly option 

series on the same class expires. The 

same, however, is not the case with 

regard to Short Term Option Series. 

Quarterly Option Series and Short Term 

Option Series on the same options class 

may expire concurrently. However, to 

avoid any confusion in the marketplace, 

the Exchange will not list a Short Term 

Option Series on an options class whose 

expiration coincides with that of a 

Quarterly Option Series on the same 

options class. In other words, the 

Exchange will not list a Short Term 

Options Series on an ETF or an index 

if a Quarterly Option Series on that ETF 

or index were to expire on a Friday, the 

only day of the week during which both 

Quarterly Option Series and a P.M.- 

settled Short Term Option Series can 

potentially expire concurrently. 

There being one exception to this 

rule. The Exchange may list a P.M.- 

settled Quarterly Option Series on an 

options class concurrent with an A.M.- 

settled Short Term Options Series on 

that same options class, both of which 

may expire on a Friday. In other words, 

the Exchange may list a P.M.-settled 

Quarterly Option Series on an ETF on 

an index concurrent with an A.M.- 

settled Short Term Option Series on that 

ETF or index and both of which expire 

on a Friday. The Exchange believes that 

the concurrent listing of an A.M.-settled 

Short Term Option Series and a P.M.- 

settled Quarterly Option Series on the 

same underlying ETF or index will 

provide investors with yet another 

hedging mechanism. Finally, the 

interval between strike prices on 

Quarterly Option Series shall be the 

same as the interval for strike prices for 

series in the same options class that 

expires in accordance with the normal 

monthly expiration cycles. 

The Exchange presently lists and 

trades Quarterly Option Series on the 

following five ETF option classes as part 

of the QOS Program: DIAMONDS Trust 

(DIA), Standard and Poor’s Depositary 

Receipts/SPDRs (SPY), iShares Russell 

2000 Index Fund (IWM), PowerShares 

QQQ Trust (QQQQ), and Energy Select 

SPDR (XLE). NYSE Amex believes the 

QOS Program has been successful and 

well received by its members and the 

investing public for the nearly three 

years that it has been in operation as a 

pilot program. 

NYSE Amex is now proposing to 

make the QOS Program permanent. In 

support of approving the QOS Program 

on a permanent basis, the Exchange has 

submitted to the Commission a Pilot 

Program Report (‘‘Report’’) detailing the 

Exchange’s experience with the QOS 

Program. Specifically, the Report 

contains data and written analysis 

regarding the five ETF option classes 

included in the QOS Program. The 

Report was submitted under separate 

cover and seeks confidential treatment 

under the Freedom of Information Act. 

The Exchange believes there is 

sufficient investor interest and demand 

in the QOS Program to warrant its 

permanent approval. The Exchange 

believes that the QOS Program has 

provided investors with additional 

means of managing their risk exposures 

and carrying out their investment 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 74, No. 136 / Friday, July 17, 2009 / Notices 34815 

4See Securities Exchange Act Release No. 60164 

(June 23, 2009), 74 FR 31333 (June 30, 2009) (order 

approving SR–CBOE–2009–29). 

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

6 15 U.S.C. 78f(b)(5). 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

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. NYSE Amex has satisfied this 

requirement. 

9See Securities Exchange Act Release No. 60164 

(June 23, 2009), 74 FR 31333 (June 30, 2009) (SR– 

CBOE–2009–029) (approving the quarterly options 

series program on a permanent basis). 

10For 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). 11 17 CFR 200.30–3(a)(12). 

objectives. Furthermore, the Exchange 

has not experienced any capacityrelated problems with respect to 

Quarterly Option Series. The Exchange 

also represents that is has the necessary 

system capacity to continue to support 

the option series listed under the QOS 

Program. 

This proposal is substantially similar 

to the recently approved proposal by the 

Chicago Board Options Exchange 

(‘‘CBOE’’), to make permanent their 

Quarterly Options Series Program.4

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 5 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’), in general, and furthers the 

objectives of Section 6(b)(5) 6 in 

particular in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, and to remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system. The 

Exchange believes that the QOS 

Program promotes just and equitable 

principles of trade and further believes 

the QOS Program has been successful 

and well received by the investing 

public for the nearly three years that it 

has been in operation as a pilot 

program. 

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 does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days after the date of 

the filing, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, it has 

become effective pursuant to 19(b)(3)(A) 

of the Act 7 and Rule 19b–4(f)(6) 

thereunder.8

The Exchange requests that the 

Commission waive the 30-day operative 

delay so that the Exchange can 

permanently establish a Quarterly 

Options Series Program that is 

consistent with those of other options 

exchanges.9 In addition, the 

Commission notes that the Exchange’s 

QOS Program currently is scheduled to 

expire on July 10, 2009. The 

Commission therefore has determined 

that waiving the 30-day operative delay 

of the Exchange’s proposal is consistent 

with the protection of investors and the 

public interest because such waiver will 

enable the Exchange to permanently 

establish the QOS program without 

disruption.10 Therefore, the 

Commission 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–NYSEAmex–2009–41 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–NYSEAmex–2009–41. 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–NYSEAmex–2009–41 and 

should be submitted on or before 

August 7, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–17008 Filed 7–16–09; 8:45 am] 

BILLING CODE 8010–01–P 

mstockstill on DSKH9S0YB1PROD with NOTICES