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SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission
DOCUMENT ID: [Release No. 34-57038; File No. SR-Phlx-2007-93]
NOTICE: NOTICES
ACTION: Self-regulatory organizations; proposed rule changes:
SUBJECT CATEGORY: Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to $5 Strike Price Intervals of Options on Exchange-Traded Fund Shares above $200
DOCUMENT SUMMARY: December 21, 2007.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b4 thereunder,\2\ notice is hereby given that
on December 19, 2007, the Philadelphia Stock Exchange, 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 substantially prepared by the Phlx. The
Exchange filed the proposal as a ``noncontroversial'' proposed rule
change pursuant to section 19(b)(3)(A) of the Act \3\ and Rule 19b
4(f)(6) thereunder,\4\ which rendered the proposal effective upon
filing with the Commission. The Commission is publishing this notice to solicit
[[Page 74397]]
comments on the proposed rule change from interested persons. \1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b4(f)(6).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
Phlx proposes to amend Commentary .05 to Exchange Rule 1012
(``Series of Options Open for Trading'') to clarify that strike price
intervals of options on ExchangeTraded Fund Shares (``ETFs'') will be $5 or greater where the strike price is over $200.\5\
\5\ Strike price intervals for series of options on ETFs were
initially established at $1 or greater where the strike price is
$200 or less. See Securities Exchange Act Release No. 44055 (March
8, 2001), 66 FR 15310 (March 16, 2001) (SRPhlx200132) (filing
silent regarding strike price intervals where the strike price is over $200).
The text of the proposed rule change is available at the Phlx, the Commission's Public Reference Room, and http://www.phlx.com. II. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Phlx 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 Phlx has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. SelfRegulatory 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 clarify that strike
price intervals of options on ETFs will be $5 or greater where the
strike price is over $200. Commentary .05 to Phlx Rule 1012 currently
states that strike price intervals of options on ETFs will be $1 or
greater when the strike price of the underlying asset is $200 or less.
As such, most ETF options, which have become popular investment tools,
are priced at $1 strike price intervals.\6\ However, some ETF options
are listed at $10 strike price intervals at strike prices greater than
$200.\7\ According to the Exchange, within the last few months, the
Phlx has received requests from Phlx traders to price ETF options at $5
strike price intervals above $200. Because the Exchange does not
currently have a provision that allows ETF options to list and trade at
$5 or greater strike price intervals where the strike price is more
than $200, however, the Exchange has only been able to list these ETF
options at $10 or greater strike price intervals.\8\ This has put Phlx
at a competitive disadvantage, particularly with respect to options
exchanges that allow $5 strike price intervals for ETF options.\9\
\6\ The proposal establishing strike price intervals for series
of options on ETFs at $1 or greater where the strike price is $200
or less did not discuss strike price intervals where the strike
price is over $200. See Securities Exchange Act Release No. 44055
(March 8, 2001), 66 FR 15310 (March 16, 2001)(SRPhlx200132).
\7\ For example, ETF options trading under the symbols ILF, FXI,
MDY, and EEM are all listed at strike prices greater than $200.
\8\ Commentary .05(a) to Phlx Rule 1012 states, among other
things, that strike prices of options may be $2.50 or greater where
the strike price is $25 or less, $5 or greater where the strike
price is more than $25 but less than $200, and $10 or greater where the strike price is $200 or more.
\9\ See, e.g., Amex Rule 903 stating that options on ETFs may
trade at $5 strike price intervals where the strike price is over
$200. See Securities Exchange Act Release Nos. 40157 (July 1, 1998),
63 FR 37426 (July 10, 1998) (SRAMEX199644) and 48024 (June 12,
2003), 68 FR 36617 (June 18, 2003) (SRAMEX200336). Supplementary
Material .01 to Chapter IV, Sec. 6 of BOX rules similarly allows
listing and trading of ETF options at $5 strike price intervals where the strike price is over $200.
The Exchange believes that the rule proposal to clarify the availability of $5 strike price intervals for ETF options above $200 should enable Phlx to competitively list and trade ETF options at appropriate strike price intervals to the benefit of public customers, traders on the Exchange, and the Exchange itself.
2. Statutory Basis
The Exchange believes that its proposal is consistent with section
6(b) of the Act \10\ in general, and furthers the objectives of section
6(b)(5) of the Act \11\ in particular, in that it is designed to
promote just and equitable principles of trade, perfect the mechanism
of a free and open market and a national market system, and in general
to protect investors and the public interest. Specifically, the
Exchange believes that the proposal would achieve this by allowing
listing and trading of options on ETFs at $5 strike price intervals
within certain parameters, commensurate with the rules of other options exchanges.
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
B. SelfRegulatory 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. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received by the Exchange.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
The proposed rule change has become effective pursuant to section
19(b)(3)(A) of the Act \12\ and Rule 19b4(f)(6) thereunder,\13\
because the foregoing proposed rule 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 if consistent with the protection of investors
and the public interest. As required under Rule 19b4(f)(6)(iii) under
the Act,\14\ Phlx provided 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, prior to the date of the filing of the proposed rule change.
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b4(f)(6).
\14\ 17 CFR 240.19b4(f)(6)(iii).
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.\15\
\15\ See 15 U.S.C. 78s(b)(3)(C).
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
Paper Comments
[[Page 74398]]
100 F Street, NE., Washington, DC 205491090.
All submissions should refer to File Number SRPhlx200793. This file number should be included on the subject line if email 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 Phlx. 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 SRPhlx200793 and should be submitted on or before January 22, 2008.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\16\
Nancy M. Morris,
Secretary.
\16\ 17 CFR 200.303(a)(12).
[FR Doc. E725366 Filed 122807; 8:45 am]
BILLING CODE 801101P
SUMMARY: Philadelphia Stock Exchange, Inc.,
DOCUMENT BODY 2: December 21, 2007.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b4 thereunder,\2\ notice is hereby given that
on December 19, 2007, the Philadelphia Stock Exchange, 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 substantially prepared by the Phlx. The
Exchange filed the proposal as a ``noncontroversial'' proposed rule
change pursuant to section 19(b)(3)(A) of the Act \3\ and Rule 19b
4(f)(6) thereunder,\4\ which rendered the proposal effective upon
filing with the Commission. The Commission is publishing this notice to solicit
[[Page 74397]]
comments on the proposed rule change from interested persons. \1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b4(f)(6).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
Phlx proposes to amend Commentary .05 to Exchange Rule 1012
(``Series of Options Open for Trading'') to clarify that strike price
intervals of options on ExchangeTraded Fund Shares (``ETFs'') will be $5 or greater where the strike price is over $200.\5\
\5\ Strike price intervals for series of options on ETFs were
initially established at $1 or greater where the strike price is
$200 or less. See Securities Exchange Act Release No. 44055 (March
8, 2001), 66 FR 15310 (March 16, 2001) (SRPhlx200132) (filing
silent regarding strike price intervals where the strike price is over $200).
The text of the proposed rule change is available at the Phlx, the Commission's Public Reference Room, and http://www.phlx.com. II. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Phlx 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 Phlx has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. SelfRegulatory 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 clarify that strike
price intervals of options on ETFs will be $5 or greater where the
strike price is over $200. Commentary .05 to Phlx Rule 1012 currently
states that strike price intervals of options on ETFs will be $1 or
greater when the strike price of the underlying asset is $200 or less.
As such, most ETF options, which have become popular investment tools,
are priced at $1 strike price intervals.\6\ However, some ETF options
are listed at $10 strike price intervals at strike prices greater than
$200.\7\ According to the Exchange, within the last few months, the
Phlx has received requests from Phlx traders to price ETF options at $5
strike price intervals above $200. Because the Exchange does not
currently have a provision that allows ETF options to list and trade at
$5 or greater strike price intervals where the strike price is more
than $200, however, the Exchange has only been able to list these ETF
options at $10 or greater strike price intervals.\8\ This has put Phlx
at a competitive disadvantage, particularly with respect to options
exchanges that allow $5 strike price intervals for ETF options.\9\
\6\ The proposal establishing strike price intervals for series
of options on ETFs at $1 or greater where the strike price is $200
or less did not discuss strike price intervals where the strike
price is over $200. See Securities Exchange Act Release No. 44055
(March 8, 2001), 66 FR 15310 (March 16, 2001)(SRPhlx200132).
\7\ For example, ETF options trading under the symbols ILF, FXI,
MDY, and EEM are all listed at strike prices greater than $200.
\8\ Commentary .05(a) to Phlx Rule 1012 states, among other
things, that strike prices of options may be $2.50 or greater where
the strike price is $25 or less, $5 or greater where the strike
price is more than $25 but less than $200, and $10 or greater where the strike price is $200 or more.
\9\ See, e.g., Amex Rule 903 stating that options on ETFs may
trade at $5 strike price intervals where the strike price is over
$200. See Securities Exchange Act Release Nos. 40157 (July 1, 1998),
63 FR 37426 (July 10, 1998) (SRAMEX199644) and 48024 (June 12,
2003), 68 FR 36617 (June 18, 2003) (SRAMEX200336). Supplementary
Material .01 to Chapter IV, Sec. 6 of BOX rules similarly allows
listing and trading of ETF options at $5 strike price intervals where the strike price is over $200.
The Exchange believes that the rule proposal to clarify the availability of $5 strike price intervals for ETF options above $200 should enable Phlx to competitively list and trade ETF options at appropriate strike price intervals to the benefit of public customers, traders on the Exchange, and the Exchange itself.
2. Statutory Basis
The Exchange believes that its proposal is consistent with section
6(b) of the Act \10\ in general, and furthers the objectives of section
6(b)(5) of the Act \11\ in particular, in that it is designed to
promote just and equitable principles of trade, perfect the mechanism
of a free and open market and a national market system, and in general
to protect investors and the public interest. Specifically, the
Exchange believes that the proposal would achieve this by allowing
listing and trading of options on ETFs at $5 strike price intervals
within certain parameters, commensurate with the rules of other options exchanges.
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
B. SelfRegulatory 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. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received by the Exchange.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
The proposed rule change has become effective pursuant to section
19(b)(3)(A) of the Act \12\ and Rule 19b4(f)(6) thereunder,\13\
because the foregoing proposed rule 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 if consistent with the protection of investors
and the public interest. As required under Rule 19b4(f)(6)(iii) under
the Act,\14\ Phlx provided 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, prior to the date of the filing of the proposed rule change.
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b4(f)(6).
\14\ 17 CFR 240.19b4(f)(6)(iii).
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.\15\
\15\ See 15 U.S.C. 78s(b)(3)(C).
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
Paper Comments
[[Page 74398]]
100 F Street, NE., Washington, DC 205491090.
All submissions should refer to File Number SRPhlx200793. This file number should be included on the subject line if email 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 Phlx. 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 SRPhlx200793 and should be submitted on or before January 22, 2008.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\16\
Nancy M. Morris,
Secretary.
\16\ 17 CFR 200.303(a)(12).
[FR Doc. E725366 Filed 122807; 8:45 am]
BILLING CODE 801101P
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14 CFR Part 39 40 CFR Part 52 14 CFR Part 71 33 CFR Part 165 50 CFR Part 679 26 CFR Part 1 40 CFR Part 180 47 CFR Part 73 50 CFR Part 17 33 CFR Part 117 44 CFR Part 67 50 CFR Part 648 14 CFR Part 97 33 CFR Part 100 40 CFR Part 63 50 CFR Part 622 26 CFR Part 301 39 CFR Part 111 40 CFR Part 300 50 CFR Part 660 44 CFR Part 65 40 CFR Parts 52 and 81 40 CFR Part 271 47 CFR Part 64 50 CFR Part 665 47 CFR Part 76 50 CFR Part 229 14 CFR Part 23 14 CFR Part 25 21 CFR Part 522