Document ID: SEC-2009-0930-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Arca, Inc. Amending Rule 6.9-Exercise Limits
Posted Date: 2009-07-09T04:00Z

[Federal Register: July 9, 2009 (Volume 74, Number 130)]
[Notices]               
[Page 33008-33009]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09jy09-136]                         

[[Page 33008]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60200; File No. SR-NYSEArca-2009-57]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change by NYSE Arca, Inc. 
Amending Rule 6.9--Exercise Limits

June 30, 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 June 24, 2009, NYSE Arca, Inc. (``NYSE Arca'' 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.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 6.9--Exercise Limits. 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 purpose of this filing to revise Rule 6.9--Execise [sic] 
Limits, to clarify that exercise limits applicable to a particular 
class of options shall be determined in accordance with the position 
limits established pursuant to Rule 6.8.
    Rule 6.9(a) states that except with the prior approval of the 
Exchange, no OTP Holder or OTP Firm shall exercise a long position in 
any option contract if as a result thereof such OTP Holder or OTP Firm 
has or will have exercised within any five (5) consecutive business 
days aggregate long positions in that particular class of options in 
excess of such number of option contracts as shall be fixed from time 
to time by the Exchange as the exercise limit for that particular class 
of options.
    Commentary .01 to Rule 6.9 goes on to list certain tiers for 
exercise limits, starting at 25,000 contracts and going up to 250,000 
contracts. These exercise limits are equivalent to applicable position 
limits for a particular options class as prescribed by Rule 6.8.06(a)-
(e). Commentary .01 goes on to say that whether an exercise limit is 
25,000 or 50,000 or 75,000 or 200,000 or 250,000 shall be determined in 
the manner described in Rule 6.8.06. Rule 6.8.06, specifically 
subsections (f)-(g), also contains position limits, for certain 
specific products, that differ from the tiers cited in Rule 6.9.01. In 
addition, Rule 6.8.07-.09 contains provisions that exempt certain 
positions from standard position limits.
    Because Rule 6.8.06 prescribes additional position limits that are 
not cited in Rule 6.9.01, plus the fact that Rule 6.8 contains 
Commentary other than .06, which includes additional criteria for 
determining position limits other than what is already cited in Rule 
6.9.01, the Exchange now proposes to adopt new rule text to Rule 6.9.01 
that explicitly states the exercise limits pursuant to Rule 6.9(a) 
shall be equivalent to the corresponding position limit, for the same 
particular class of options, as determined by Rule 6.8. and Commentary 
thereto.
    The purpose of this rule change is to offer clarity to the existing 
rules governing exercise limits. It does not in any way attempt to 
alter the method in which the Exchange calculates position or exercise 
limits. NYSE Arca notes that over the years, it has at times, revised 
Rule 6.8 to increase position limits, as well as the sizes and scopes 
of available hedge exemptions to the applicable position limits.\4\ 
While it has always been the intent to determine exercise limits based 
on the applicable position limits, Rule 6.9.01 has not necessarily been 
revised to reflect the various changes made to Rule 6.8. The rule 
simply serves to make it perfectly clear that the exercise limits for a 
particular class of options shall be equivalent to the corresponding 
position limit for the same particular class of options as determined 
by Rule 6.8 and any Commentary thereto.
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    \4\ See Securities Exchange Act Release No. 57358 (February 20, 
2008), 73 FR 11173 (February 29, 2008) (notice of filing and 
immediate effectiveness of NYSEArca-2008-17); See Securities 
Exchange Act Release No. 55347 (February 26, 2007), 72 FR 9823 
(March 5, 2007) (notice of filing and immediate effectiveness of 
NYSEArca-2007-19); See Securities Exchange Act Release No. 54385 
(August 30, 2006), 71 FR 53150 (September 8, 2006), (notice of 
filing and immediate effectiveness of NYSEArca-2006-49); See 
Securities Exchange Act Release No. 51286 (March 1, 2005), 70 FR 
11297 (approval notice for PCX-2003-55); See Securities Release Act 
No. 45737 (April 11, 2005), [sic] 67 FR 18975 (approval order for 
PCX-2000-45).
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    In addition, rule changes contained in this proposal are consistent 
with similar rules of NYSE Amex LLC (``NYSE Amex''), \5\ and NASDAQ OMX 
PHLX (``PHLX''), \6\ governing the exercise of options contracts.
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    \5\ See NYSE Amex Rule 905(a)--Exercise Limits.
    \6\ See PHLX Rule 1002.--Exercise Limits.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act,\7\ in general, and furthers the objectives of section 
6(b)(5) of the Act,\8\ 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. This rule 
change simply serves to offer clarity to an already existing rule. In 
addition, adopting similar rules to those that are in place at other 
options exchanges will help to alleviate any confusion on the part of 
market participants, when exercising option contracts.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 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 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.

[[Page 33009]]

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

    Because the foregoing rule change does not: (1) Significantly 
affect the protection of investors or the public interest; (2) impose 
any significant burden on competition; and (3) become operative for 30 
days after the date of this filing, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). Rule 19b-4(f)(6)(iii) requires that 
a self-regulatory organization submit to the Commission 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 the five-day pre-filing notice requirement.
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    At any time within 60 days of the filing of such 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 rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2009-57 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-NYSEArca-2009-57. 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 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-2009-57 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\
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    \11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-16173 Filed 7-8-09; 8:45 am]

BILLING CODE 8010-01-P