Document ID: SEC-2008-1415-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX, Inc.
Posted Date: 2008-10-10T04:00Z

[Federal Register: October 10, 2008 (Volume 73, Number 198)]
[Notices]               
[Page 60375-60377]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10oc08-144]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58733; File No. SR-Phlx-2008-67]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the NASDAQ OMX PHLX, Inc. 
Relating to Clarification Regarding Capitalization-Weighting of Indexes

 October 3, 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 29, 2008, the 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. Phlx 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

    The Exchange, pursuant to Section 19(b)(1) of the Act\5\ and Rule 
19b-4

[[Page 60376]]

thereunder,\6\ proposes to clarify the methodology used in calculating 
capitalization-weighted and modified capitalization-weighted indexes 
underlying options listed pursuant to Exchange Rule 1009A(b).
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    \5\ 15 U.S.C. 78s(b)(1).
    \6\ 17 CFR 240.19b-4.
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    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.phlx.com/regulatory/reg_rulefilings.aspx, the 
principal office of the Exchange, 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 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 Exchange currently lists a number of narrow-based stock index 
options pursuant to the listing standards established in section (b) of 
Phlx Rule 1009A, Designation of the Index (the ``Generic Listing 
Rule''). The Generic Listing Rule includes capitalization-weighting 
(including modified capitalization-weighting) as a permissible 
component weighting methodology for indexes underlying options listed 
pursuant to the Generic Listing Rule. The Exchange would like to 
clarify that component last sale prices used to calculate index values 
under capitalization-weighting methodology can be either primary 
exchange regular-way last sale prices or the regular-way last sale 
prices reported on the consolidated tape. A primary exchange last sale 
price is generally the last sale price on a trade executed through the 
facilities of the exchange where the component maintains its listing. A 
consolidated tape last sale price is the last sale price reported under 
the appropriate national market system reporting plan, regardless of 
where the trade was executed.\7\
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    \7\ Language that was included in the ``Purpose'' section of the 
filing to add modified capitalization-weighting as a permissible 
weighting methodology for indexes underlying options listed pursuant 
to the Generic Listing Rule could be interpreted to permit only 
primary exchange last sale prices to be used. See Securities 
Exchange Act Release No. 46211 (July 16, 2002), 67 FR 47874 (July 
22, 2002) (SR-Phlx-2002-42). This, of course, is not always the best 
approach in calculating indexes, since in some cases the 
consolidated tape may be a better source for current prices.
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2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act\8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act\9\ in particular, in that it is designed to promote 
just and equitable principles of trade, to remove impediments to and 
perfect the mechanisms of a free and open market and a national market 
system, and, in general, to protect investors and the public interest 
by clarifying that investors may have access to options listed pursuant 
to the Generic Listing Rule that underlie indexes other than those 
based exclusively on primary exchange last sale prices.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 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 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, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) 
thereunder.\11\ In addition, Rule 19b-4(f)(6)(iii) \12\ 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. 
The Exchange has satisfied the five-business-day pre-filing 
requirement.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
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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-2008-67 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-2008-67. 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

[[Page 60377]]

you wish to make available publicly. All submissions should refer to 
File Number SR-Phlx-2008-67 and should be submitted on or before 
October 31, 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. E8-24119 Filed 10-9-08; 8:45 am]

BILLING CODE 8011-01-P