Document ID: SEC-2008-0826-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2008-06-17T04:00Z

[Federal Register: June 17, 2008 (Volume 73, Number 117)]
[Notices]               
[Page 34353-34355]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17jn08-109]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57945; File No. SR-NASDAQ-2008-051]

 
Self-Regulatory Organizations; NASDAQ Stock Market, LLC; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to the Listing and Trading on the Exchange of Options on the SPDR Gold 
Trust

June 10, 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 June 3, 2008, the NASDAQ Stock Market, LLC (``NASDAQ'' 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. 
NASDAQ filed the proposal pursuant to Section 19(b)(3)(A) of the Act 
\3\ 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).
    \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

    NASDAQ proposes to amend certain NASDAQ Rules to enable the listing 
and trading on the Exchange of options on the SPDR Gold Trust. The text 
of the proposed rule change is available at the Exchange, the 
Commission's Public Reference Room, and http://www.nasdaq.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. The

[[Page 34354]]

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 Exchange states that the purpose of the proposed rule change is 
to permit the listing and trading of options on the SPDR Gold Trust.
    Currently, Chapter IV, Section 3(i) of the NASDAQ Options Rules 
permits only certain Fund Shares (also referred to herein as exchange 
traded funds (``ETFs'')) to underlie options traded on the Exchange. 
Specifically, to be eligible as an underlying security for options 
traded on the Exchange, an ETF must represent interests in registered 
investment companies (or series thereof) organized as open-end 
management investment companies, unit investment trusts or similar 
entities that are principally traded on a national securities exchange 
or through the facilities of a national securities association and 
reported as ``national market'' securities, and that hold portfolios of 
securities comprising or otherwise based on or representing investments 
in broad-based indexes or portfolios of securities (or that hold 
securities in one or more other registered investment companies that 
themselves hold such portfolios of securities). The proposed rule 
change would expand the types of ETFs that may be approved for options 
trading on the Exchange to include the SPDR Gold Trust.
    The Exchange states that apart from allowing the SPDR Gold Trust to 
be an underlying for options traded on the Exchange as described above, 
the listing standards for ETFs would remain unchanged from those that 
apply under current Exchange rules. ETFs on which options may be listed 
and traded would still have to be listed and traded on a national 
securities exchange and satisfy the other listing standards set forth 
in Chapter IV, Section 3(i) of the NASDAQ Options Rules.
    Specifically, in addition to satisfying the aforementioned listing 
requirements, Fund Shares would have to: (1) Meet the criteria and 
standards set forth in paragraphs (a) and (b) of Chapter IV, Section 3; 
or (2) be available for creation or redemption each business day from 
or through the Fund in cash or in kind at a price related to net asset 
value, and the Fund is obligated to issue Fund Shares in a specified 
aggregate number even if some or all of the securities required to be 
deposited have not been received by the Fund, subject to the condition 
that the person obligated to deposit the securities has undertaken to 
deliver the securities as soon as possible and such undertaking is 
secured by the delivery and maintenance of collateral consisting of 
cash or cash equivalents satisfactory to the Fund, all as described in 
the Fund's prospectus.
    The Exchange proposes that the current continued listing standards 
for options on ETFs would apply to options on the SPDR Gold Trust. 
Specifically, under Chapter IV, Section 4(h) of the NASDAQ Options 
Rules, options on Fund Shares may be subject to the suspension of 
opening transactions as follows: (1) Following the initial twelve-month 
period beginning upon the commencement of trading of the Fund Shares, 
there are fewer than 50 record and/or beneficial holders of the Fund 
Shares for 30 or more consecutive trading days; (2) the value of the 
index or portfolio of securities on which Fund Shares are based is no 
longer calculated or available; or (3) such other event occurs or 
condition exists that in the opinion of the Exchange makes further 
dealing on the Exchange inadvisable.
    Additionally, the SPDR Gold Trust would not be deemed to meet the 
requirements for continued approval, and the Exchange would not open 
for trading any additional series of option contracts of the class 
covering the SPDR Gold Trust, if the SPDR Gold Trust ceases to be an 
``NMS stock'' as provided for in paragraph (b)(v) of Chapter IV, 
Section 4 of the NASDAQ Options Rules or if the SPDR Gold Trust is 
halted from trading on its primary market. The Exchange believes that 
the addition of the SPDR Gold Trust to Chapter IV, Section 3(i) of the 
NASDAQ Options Rules would not have any effect on the rules pertaining 
to position and exercise limits \5\ or margin.\6\
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    \5\ See NASDAQ Options Rules, Chapter III, Sections 7, Position 
Limits, and 9, Exercise Limits.
    \6\ See NASDAQ Options Rule Chapter XIII, Section 3, Margin 
Requirements.
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    The Exchange represents that its surveillance procedures applicable 
to trading in options on the SPDR Gold Trust would be similar to those 
applicable to all other options on other ETFs currently traded on the 
Exchange. Also, the Exchange may obtain information from the New York 
Mercantile Exchange, Inc. (a member of the Intermarket Surveillance 
Group) related to any financial instrument traded there that is based, 
in whole or in part, upon an interest in, or performance of, gold.
2. Statutory Basis
    The Exchange believes that amending its rules to accommodate the 
listing and trading of options on the SPDR Gold Trust will benefit 
investors by providing them with valuable risk management tools. 
Accordingly, NASDAQ believes that the proposed rule change 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 remove impediments to and perfect the mechanism of a 
free and open market in a manner consistent with the protection of 
investors and the public interest.
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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

    The Exchange states that 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 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) 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). 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 fulfilled this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
Rule 19b-4(f)(6)(iii) permits the Commission to

[[Page 34355]]

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 
Exchange can list and trade the Shares immediately. The Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest to permit the listing 
and trading of options on the SPDR Gold Trust without further 
delay.\11\ The Commission notes the proposal is substantively identical 
to proposals that were recently approved by the Commission, and does 
not raise any new regulatory issues.\12\ For these reasons, the 
Commission designates the proposed rule change as operative upon 
filing.
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    \11\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \12\ See Securities Exchange Act Release No. 57894 (May 30, 
2008) (SR-Amex-2008-15; SR-CBOE-2005-11; SR-ISE-2008-12; SR-
NYSEArca-2008-52; and SR-Phlx-2008-17) (approving the listing and 
trading of options on the SPDR Gold Trust).
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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-NASDAQ-2008-051 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-NASDAQ-2008-051. 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-NASDAQ-2008-051 and should 
be submitted on or before July 8, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-13499 Filed 6-16-08; 8:45 am]

BILLING CODE 8010-01-P