Document ID: SEC-2010-1637-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2010-10-26T04:00Z

[Federal Register: October 26, 2010 (Volume 75, Number 206)]
[Notices]               
[Page 65692-65693]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26oc10-135]                         

[[Page 65692]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63134; File No. SR-Phlx-2010-149]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX LLC Relating 
to the $0.50 Strike Price Program

October 20, 2010.
    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 October 19, 2010, NASDAQ OMX PHLX LLC (``Phlx'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``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 Exchange Rule 1012, Series of 
Options Open for Trading, to correct a minor error related to a 
previous rule change regarding the $0.50 Strike Program.\3\
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    \3\ See Securities Exchange Act Release No. 63132 (October 19, 
2010) (SR-Phlx-2010-118).
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    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings, 
at the principal office of the Exchange, on the Commission's Web site 
at http://www.sec.gov, 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 proposes amending Rule 1012, Series of Options Open 
for Trading, to add additional language to Rule 1012 related to the 
Exchange's ability to list a strike price of $6.00 within $.50 of an 
existing strike price for classes selected to participate in the $0.50 
Strike Program.\4\ The Exchange filed a rule change to expand the $0.50 
Strike Program.\5\ Specifically, the Exchange amended its $0.50 Strike 
Program to establish strike price intervals of $.50, beginning at $.50 
for certain options classes where the strike price is $5.50 or less and 
whose underlying security closed at or below $5.00 in its primary 
market on the previous trading day and which have national average 
daily volume that equals or exceeds 1000 contracts per day as 
determined by The Options Clearing Corporation (``OCC'') during the 
preceding three calendar months. The Exchange also amended Exchange 
Rule 1012 to increase the number of classes permitted in the $.50 
Strike Program from 5 to 20 individual stocks.\6\
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    \4\ See Securities Exchange Act Release No. 63132 (October 19, 
2010) (SR-Phlx-2010-118).
    \5\ See Securities Exchange Act Release Nos. 60694 (September 
18, 2009), 74 FR 49048 (September 25, 2009) (SR-Phlx-2009-65) (order 
approving); and 61630 (March 2, 2010), 75 FR 11211 (March 10, 2010) 
(SR-Phlx-2010-26) (notice of filing and immediate effectiveness 
allowing concurrent listing of $3.50 and $4 strikes for classes that 
participate in both the $0.50 Strike Program and the $1 Strike 
Program).
    \6\ See Securities Exchange Act Release No. 63132 (October 19, 
2010) (SR-Phlx-2010-118).
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    At that time, the Exchange made an additional amendment to 
Commentary .05(a)(i)(B) of Exchange Rule 1012 to add language to the $1 
Strike Program that addresses listing series with $1 intervals within 
$.50 of an existing strike price in the same series. Specifically, the 
Exchange added $5 to the listed strike prices of $2, $3 and $4 to 
account for the overlap with the $0.50 Strike Program amendments.
    The Exchange proposes to add $6 to that list to account for 
existing amendments to the $0.50 Strike Program to allow for a strike 
price of $5.50. The Exchange intended to expand this language 
originally to account for all possible strike prices as a result of its 
recent filing. This minor amendment was not made at that time as a 
result of an oversight. The Exchange proposes this language to correct 
that oversight.
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 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, 
by correcting a minor error in a previous rule change to account for 
recent amendments to the $0.50 Strike Program. This amendment will 
clarify Exchange Rule 1012 by adding $6 to the list of strike prices 
permitted within $.50 of an existing strike price for classes selected 
to participate in the $0.50 Strike Program. This amendment will clarify 
Exchange Rule 1012 to correct the minor error.
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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.

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

    Because the foregoing proposed rule change does not significantly 
affect the protection of investors or the public interest, does not 
impose any significant burden on competition, and, by its terms, does 
not 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 \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 the Exchange to give the Commission written notice of the 
Exchange's 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 
Commission has waived the five-day pre-filing requirement in this 
case.
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    The Exchange has requested that the Commission waive the 30-day 
operative delay. The Commission believes that

[[Page 65693]]

waiver of the operative delay is consistent with the protection of 
investors and the public interest because doing so will permit 
immediate correction of the Exchange's error in their prior filing 
revising the terms of the $0.50 Strike Price Program. Therefore, the 
Commission designates the proposal operative upon filing.\11\
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    \11\ 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 summarily may temporarily suspend 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-2010-149 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-Phlx-2010-149. 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 Web site viewing and 
printing 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-2010-149 and should be 
submitted on or before November 16, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-27003 Filed 10-25-10; 8:45 am]
BILLING CODE 8011-01-P