Document ID: SEC-2008-1353-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX, Inc.
Posted Date: 2008-10-03T04:00Z

[Federal Register: October 3, 2008 (Volume 73, Number 193)]
[Notices]               
[Page 57723-57725]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03oc08-121]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58658; File No. SR-Phlx-2008-64]

 
Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a 
Trading Halt Rule in Connection With the Dissemination of Net Asset 
Value and Disclosed Portfolio for Certain Derivative Securities 
Products

September 26, 2008.
    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 September 18, 2008, NASDAQ OMX PHLX, Inc. (``Phlx'' 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 prepared by the Exchange. 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.
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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 Phlx Rule 136 to state that the 
Exchange will halt trading in New Derivative Securities Products \3\ 
listed on the Exchange for which a net asset value (and in the case of 
managed fund shares or actively managed exchange-traded funds, a 
``disclosed portfolio'') is disseminated if the Exchange becomes aware 
that the net asset value and, if applicable, the disclosed portfolio is 
not being disseminated to all market participants at the same time. The 
text of the proposed rule change is available on the Exchange's Website 
at http://www.phlx.com/regulatory/reg_rulefilings.aspx , at the 
Exchange's principal office, and at the Commission's Public Reference 
Room.
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    \3\ See Phlx Rule 136(e)(1).
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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 purpose of the proposed rule change is to address trading halts 
for New Derivative Securities Products listed on the Exchange for which 
a net asset value and/or a disclosed portfolio is disseminated. Net 
asset values and disclosed portfolios, when applicable, are calculated 
daily and disseminated to all market participants at the same time. In 
this proposed rule change, the Exchange is amending its rules to state 
that the Exchange will halt trading in New Derivative Securities 
Products listed on the Exchange for which a net asset value and/or a 
disclosed portfolio

[[Page 57724]]

is disseminated if the Exchange becomes aware that the net asset value 
or, if applicable, the disclosed portfolio is not being disseminated to 
all market participants at the same time. Also, the Exchange will 
maintain the trading halt until such time as the Exchange becomes aware 
that the net asset value and, if applicable, the disclosed portfolio is 
available to all market participants. In addition, the Exchange 
represents that in the event that the net asset value or the disclosed 
portfolio, as applicable, for a New Derivative Securities Product 
ceases to be disseminated altogether, the Exchange will halt trading in 
such New Derivative Securities Product.
    The Exchange notes that it recently filed a proposed rule change in 
which it adopted a rule, Phlx Rule 136(d)(4), stating that the Exchange 
would halt trading in New Derivative Securities Products trading on the 
Exchange pursuant to unlisted trading privileges, if the listing market 
notifies the Exchange that the net asset value and, if applicable, the 
disclosed portfolio is not being disseminated to all market 
participants at the same time.\4\ Also the Exchange is now proposing to 
clarify the rule text in Phlx Rule 136(d)(4) by changing the word 
``and'' to ``or'' in the second half of the first sentence of that 
paragraph to make clear that the Exchange would halt trading upon 
notification by the listing market of the New Derivative Securities 
Product that either the net asset value or the disclosed portfolio is 
not being disseminated to all market participants at the same time. 
Consistent with the earlier proposed rule change, the Exchange now 
proposes to adopt a rule, Phlx Rule 136(c)(1)(B), stating that the 
Exchange will halt trading in New Derivative Securities Products listed 
on the Exchange for which a net asset value and/or a disclosed 
portfolio is disseminated if the Exchange becomes aware that the net 
asset value or, if applicable, the disclosed portfolio is not being 
disseminated to all market participants at the same time. As a 
consequence of the additional language proposed in Phlx Rule 136(c), 
the Exchange is renumbering the existing material to provide more 
clarity to the section.
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    \4\ See Securities Exchange Act Release No. 57806 (May 9, 2008), 
73 FR 28541 (May 16, 2008) (SR-Phlx-2008-34).
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2.Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\5\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\6\ particular, in that it is designed to promote 
just and equitable principles of trade, 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. 
The Exchange believes the proposed rule change is reasonably designed 
to prevent trading in certain New Derivative Securities Products when 
the availability of certain information is impaired. Specifically, the 
proposed rule change is intended to protect investors and the public 
interest when key information relating to the net asset value or the 
disclosed portfolio becomes unavailable or available only to some 
market participants, but not all participants, at the time of 
dissemination.
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    \5\ 15 U.S.C. 78f(b).
    \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 will 
impose any burden on competition 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 either solicited or received.

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 from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to Section 19(b)(3)(A) of the Act \7\ and 
Rule 19b-4(f)(6) thereunder.\8\ A proposed rule change filed under 19b-
4(f)(6) normally does not become operative until 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. Phlx requests 
that the Commission waive the 30-day operative delay and make the 
proposed rule change operative upon filing because this proposal raises 
no novel issues and is virtually identical to the rule proposals of the 
American Stock Exchange LLC (``Amex''), the NASDAQ Stock Market LLC 
(``NASDAQ''), the New York Stock Exchange LLC (``NYSE'') and NYSE Arca, 
Inc. (``NYSE Arca''), which were recently approved by the 
Commission.\11\ The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. The Commission therefore grants the Exchange's request 
and designates the proposal to be operative upon filing.\12\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ Id. In addition, Rule 19b-4(f)(6)(iii) 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. The Exchange has 
satisfied this requirement.
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
    \11\ See Securities Exchange Act Release No. 58111 (July 7, 
2008), 73 FR 40643 (July 15, 2008) (SR-Amex-2008-40, SR-NASDAQ-2008-
046, SR-NYSE-2008-39, SR-NYSEArca-2008-50).
    \12\ For 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).
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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 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-Phlx-2008-64 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-Phlx-2008-64. 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

[[Page 57725]]

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-Phlx-2008-64 and should be submitted on or before 
October 24, 2008.
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-23362 Filed 10-2-08; 8:45 am]

BILLING CODE 8011-01-P