Document ID: SEC-2007-0866-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NYSE Arca, Inc.
Posted Date: 2007-06-27T04:00Z

[Federal Register: June 27, 2007 (Volume 72, Number 123)]
[Notices]               
[Page 35288-35290]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27jn07-106]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55932; File No. SR-NYSEArca-2007-54]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Establish 
Position and Exercise Limits for Options on the KBW Bank Index

June 20, 2007.
    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 13, 2007, 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 substantially prepared by the Exchange. The Exchange has 
designated the proposed rule change as ``non-controversial'' under 
Section 19(b)(3)(A)(iii) \3\ of the Act 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NYSE Arca proposes to amend NYSE Arca Rule 5.16 in order to 
increase the position and exercise limits for options

[[Page 35289]]

on the KBW Bank Index. The text of the proposed rule change is 
available at NYSE Arca, at the Commission's Public Reference Room, and 
on the Exchange's Web site (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 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. NYSE Arca 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 recently listed for trading options on the KBW Bank 
Index (``BKX'') pursuant to the generic listing standards of NYSE Arca 
Rule 5.13. Under NYSE Arca Rule 5.16(a), a narrow-based index option 
such as BKX cannot have position and exercise limits that exceed 31,500 
contracts. The Exchange notes that the Philadelphia Stock Exchange, 
Inc. (``Phlx'') and the International Securities Exchange, LLC 
(``ISE'') currently list options on BKX and expanded their position and 
exercise limits for options on BKX to 44,000 contracts.\5\ Accordingly, 
the Exchange proposes to amend NYSE Arca Rule 5.16 to increase the 
position and exercise limits for options on BKX to 44,000 contracts 
also. The Exchange believes it is important for a product traded at 
multiple exchanges to have uniform position and exercise limits in 
order to eliminate any confusion among investors and other market 
participants.
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    \5\ See Securities Exchange Act Release Nos. 49312 (February 24, 
2004), 69 FR 9672 (March 1, 2004) (SR-Phlx-2004-13) and 55279 
(February 12, 2007), 72 FR 7784 (February 20, 2007) (SR-ISE-2007-
02).
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2. Statutory Basis
    The Exchange believes the basis under the Act for this proposed 
rule change is found in Section 6(b)(5),\6\ in that the adoption of 
uniform position and exercise limits for BKX will serve 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 regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, to 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.
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    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
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

    Written comments on the proposed rule change were neither solicited 
nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the 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 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 \7\ and subparagraph (f)(6) of Rule 
19b-4 thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing.\9\ However, 
Rule 19b-4(f)(6)(iii) \10\ permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest.
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    \9\ 17 CFR 240.19b-4(f)(6)(iii).
    \10\ Id.
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    The Commission believes that waiving the five-day prefiling 
requirement and the 30-day operative delay is consistent with the 
protection of investors and the public interest because it would allow 
the Exchange to immediately implement this proposal and make NYSE 
Arca's position and exercise limits for options on BKX consistent with 
the Phlx's and ISE's position and exercise limits for such options.\11\ 
Further, the Commission further notes that the increased position and 
exercise limits for Phlx were previously noticed for comment and no 
comments were received. The Commission designates the proposal to 
become effective and operative upon filing.\12\
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    \11\ See supra note 5.
    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the impact of the proposed rule on 
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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    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 the 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 rule-comments@sec.gov. Please include 

File Number SR-NYSEArca-2007-54 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2007-54. 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,

[[Page 35290]]

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 NYSE Arca. 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-2007-54 and should be submitted 
on or before July 18, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-12389 Filed 6-26-07; 8:45 am]

BILLING CODE 8010-01-P