[Federal Register: March 5, 2007 (Volume 72, Number 42)]
[Notices]
[Page 9823-9825]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05mr07-98]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55347; File No. SR-NYSEArca-2007-19]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Extend the
Exchange's Standard Position and Exercise Limit Pilot Program
February 26, 2007.
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 February 23, 2007, the NYSE Arca, Inc. (``NYSE Arca'' 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.
The Exchange has filed the proposal as a ``non-controversial'' rule
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6) thereunder,\4\ which renders it 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
NYSE Arca proposes to amend its rules to extend the time period in
NYSE Arca Rule 6.8(a), which covers the position limit and exercise
limits pilot program for equity option contracts and options on the
Nasdaq-100 Tracking Stock (``QQQQ'') (``Pilot Program''). The text of
the proposed rule change is available at NYSE Arca, the Commission's
Public Reference Room, and http://www.nysearca.com.
[[Page 9824]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NYSE Arca 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. NYSE Arca 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 this proposal is to extend the period for the
Exchange's Pilot Program relating to standard position and exercise
limits for equity option contracts and for options on QQQQs until
September 1, 2007.\5\ Specifically, the Pilot Program increased the
applicable position and exercise limits for equity options and options
on the QQQQ in accordance with the following levels:
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\5\ The Pilot Program, which was effective upon filing on
February 25, 2005 and subsequently extended, is due to expire on
March 1, 2007. See Securities Exchange Act Release No. 51286 (March
1, 2005), 70 FR 11297 (March 8, 2005) (SR-PCX-2003-55) (``Pilot
Program Notice''). See also Securities Exchange Act Release Nos.
54385 (August 30, 2006), 71 FR 53150 (September 8, 2006) (SR-
NYSEArca-49); 53350 (February 22, 2006), 71 FR 10582 (March 1, 2006)
(SR-PCX-2006-08); and 52263 (August 15, 2005), 70 FR 49003 (August
22, 2005) (SR-PCX-2005-95).
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Current equity option contract Pilot Program Equity Option
limit \6\ Contract Limit
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13,500 25,000
22,500 50,000
31,500 75,000
60,000 200,000
75,000 250,000
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Current QQQQ option contract limit Pilot program QQQQ option contract
limit
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300,000 900,000
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The Exchange believes that extending the Pilot Program until
September 1, 2007 is warranted due to the positive feedback from OTP
Holders and for the reasons cited in the original rule filing that
proposed the Pilot Program.\7\ The Exchange has not encountered any
problems or difficulties relating to the Pilot Program since its
inception. For these reasons, the Exchange requests that the Commission
extend the Pilot Program until September 1, 2007.
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\6\ Except when the Pilot Program is in effect.
\7\ See Pilot Program Notice, supra note 5.
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder and, in particular,
the requirements of Section 6(b) of the Act.\8\ Specifically, the
Exchange believes the proposed rule change is consistent with Section
6(b)(5) of the Act \9\ that requires that the rules of an exchange be
designed to promote just and equitable principles of trade, to prevent
fraudulent and manipulative acts, to remove impediments to and perfect
the mechanism for a free and open market and a national market system,
and, in general, to protect investors and the public interest.
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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
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 rule change does not: (1) Significantly
affect the protection of investors or the public interest; (2) impose
any significant burden on competition; and (3) become operative for 30
days from the date of this filing, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.\12\
However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay. The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and in the public interest because it will
allow the Pilot Program to continue uninterrupted.\14\
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\12\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to
the Commission 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. NYSEArca has satisfied the five-day pre-filing
requirement.
\13\ Id.
\14\ For purposes only of waiving the 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 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:
[[Page 9825]]
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 No. SR-NYSEArca-2007-19 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File No. SR-NYSEArca-2007-19. 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. Copies of such
filing will also be available for inspection and copying at the
principal office of NYSE Arca. 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 No. SR-NYSEArca-2007-19 and should be submitted on or before March
26, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-3745 Filed 3-2-07; 8:45 am]
BILLING CODE 8010-01-P