[Federal Register: May 13, 2005 (Volume 70, Number 92)]
[Notices]
[Page 25641-25643]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13my05-104]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51664; File No. SR-Phlx-2005-24]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Philadelphia Stock
Exchange, Inc. Relating to Disclaimer of Warranties by SIG Indices,
LLLP and by Standard and Poor's
May 6, 2005.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby given
that on April 20, 2005, the Philadelphia Stock Exchange, Inc. (``Phlx''
or ``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 Phlx. 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 Phlx proposes to amend Phlx Rule 1104A (Susquehanna Indices,
LLLP Indexes), regarding disclaimer of express or implied warranties,
to add the new SIG Coal Producers Index TM licensed by
Susquehanna Indices, LLLP (``SI'') to Phlx. The Exchange also proposes
to adopt Phlx Rule 1105A (Standard and Poor's[supreg] Index), regarding
disclaimer of express or implied warranties, with respect to the
Standard & Poor's 500 Index (``S&P 500[supreg] Index'') that
S&P[supreg] licensed to the Exchange.
The text of the proposed rule change is available on Phlx's Web
site (http://www.phlx.com), the Phlx's Office of the Secretary, 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 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. Self-Regulatory 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 amend Exchange Rule
1104A, which applies to indexes maintained by SI, to include a new
index that was recently licensed by SI to the Exchange.\3\ The purpose
of the proposed rule change is also to adopt new Phlx Rule 1105A, which
is similar to existing rule 1104A but applies to the Index developed
and maintained by S&P[supreg], that was recently licensed to the
Exchange and indicates that S&P[supreg] does not make specified express
or implied warranties.\4\
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\3\ The Exchange currently lists options on the SIG Investment
Managers Index TM, the SIG Cable, Media & Entertainment
Index TM, the SIG Casino Gaming Index TM, the
SIG Semiconductor Equipment Index TM, the SIG
Semiconductor Device Index TM, the SIG Steel Producers
Index TM, the SIG Specialty Retail Index TM,
the SIG Footwear & Athletic Index TM, the SIG Education
Index TM, and the SIG Restaurant Index TM, and
on newly-licensed index, the SIG Coal Producers Index TM,
pursuant to a license agreement with SI and Exchange Rule 1009A(b).
The indexes are trademarks of SIG Indices, LLLP.
\4\ The Exchange currently lists options on Standard and Poor's
Depository Receipts (``SPDRs''), pursuant to a license agreement
with Standard & Poor's, a division of McGraw-Hill Companies, Inc.
``Standard & Poor's[supreg]'', ``S&P[supreg]'', ``S&P 500[supreg]'',
``Standard & Poor's 500'', and ``500'' are trademarks of McGraw-Hill
Companies, Inc.
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Phlx Rule 1104A currently provides that SI makes no warranty,
express or implied, as to results to be obtained by any person or
entity from the use of the SIG Investment Managers Index TM,
the SIG Cable, Media & Entertainment Index TM, the SIG
Casino Gaming Index TM, the SIG Semiconductor Equipment
Index TM, the SIG Semiconductor Device Index TM,
the SIG Steel Producers Index TM, the SIG Specialty Retail
Index TM, the SIG Footwear & Athletic Index TM,
the SIG Education Index TM, and the SIG Restaurant Index
TM, and that SI makes no express or implied warranties of
merchantability or fitness for a particular purpose for use with
respect to any of the named indexes or any data included therein.\5\
The Exchange is now proposing to amend Rule 1104A to expand the
coverage of the rule to include the newly-licensed and listed index--
the SIG Coal Producers Index TM as required by the license
agreement issued to the Exchange.\6\
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\5\ The Exchange noted in its filing to adopt Rule 1104A that
the proposed disclaimer was appropriate given that it was similar to
disclaimer provisions of American Stock Exchange Rule 902C relating
to indexes underlying options listed on that exchange. See
Securities Exchange Act Release No. 48135 (July 7, 2003), 68 FR
42154 (July 16, 2003) (approving SR-Phlx-2003-21). The Exchange
recently amended Rule 1104A to include the SIG Specialty Retail
Index TM, the SIG Steel Producers Index TM,
the SIG Footwear & Athletic Index TM, the SIG Education
Index TM, and the SIG Restaurant Index TM, as
required by the license agreement between SI and the Exchange. See
Securities Exchange Act Release No. 51239 (February 22, 2005), 70 FR
10015 (March 1, 2005) (SR-Phlx-2005-13).
\6\ The SIG Coal Producers Index TM was listed
pursuant to Sec. 19b-4(e) on March 23, 2005.
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The Exchange is proposing to establish new Phlx Rule 1105A
essentially based on current Phlx Rule 1104A, as required by a
licensing agreement between S&P[supreg] and the
[[Page 25642]]
Exchange licensing it to trade options on SPDRs and products based on
the Index maintained by S&P[supreg] and licensed to the Exchange.\7\
The purpose of proposed Rule 1105A is to indicate that S&P[supreg]
makes no express or implied warranties regarding merchantability or
fitness for a particular purpose or use with respect to the S&P
500[supreg] Index or any data included therein, in connection with the
trading of options contracts thereon.
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\7\ The Exchange has been listing options on SPDRs since on or
about January 10, 2005, pursuant to a provisional license with
S&P[supreg]. The Exchange has subsequently entered into a permanent
license agreement with S&P[supreg] that supersedes the provisional
license and is proposing new Rule 1105A pursuant to the permanent
license agreement.
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The Exchange believes that proposed Phlx Rule 1105A is similar in
concept to current Rule 1104A, would provide S&P[supreg] with a
disclaimer of any implied or express warranties of merchantability or
fitness for a particular purpose in respect of an option on an index
that S&P[supreg] licensed to the Exchange, and would put S&P[supreg] on
similar footing with the licensor of other options on indexes to the
Exchange.
2. Statutory Basis
The Exchange believes that its 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 foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, 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.
The Exchange believes that the proposed rule should encourage SIG
Indices, LLLP and S&P[supreg] to continue to maintain indexes so that
options on the respective indexes may be traded on the Exchange,
thereby providing investors with enhanced investment opportunities.
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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 inappropriate burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change is being designated by the Exchange as
``non-controversial'' pursuant to section 19(b)(3)(A) of the Act \10\
and subparagraph (f)(6) of Rule 19b-4 \11\ thereunder, because the
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) does not become operative
for thirty 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.\12\ Consequently, the proposed
rule change has become effective pursuant to section 19(b)(3)(A) of the
Act \13\ and Rule 19b-4(f)(6) thereunder.\14\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4.
\12\ As required under Rule 19b-4(f)(6)(iii), the Exchange has
provided the Commission with written notice of its intent to file
the proposed rule change at least five business days prior to the
filing date of this proposal.
\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6).
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Pursuant to Rule 19b-4(f)(6)(iii), a proposed ``non-controversial''
rule change does not become operative for 30 days after the date of
filing, or such shorter time as the Commission may designate, if
consistent with the protection of investors and the public interest,
and the Phlx gave 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.\15\ The Phlx has requested that the
Commission waive the 30-day operative delay. The Commission has
determined that it is consistent with the protection of investors and
the public interest to waive the 30-day operative delay.\16\ The
Commission believes that accelerating the operative date will help to
ensure that all options traded on the indexes are treated uniformly.
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\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ For the purposes only of accelerating the operative date of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 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.
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-2005-24 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW.,
Washington, DC 20549-0609.
All submissions should refer to File Number SR-Phlx-2005-24. 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 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
[[Page 25643]]
Number SR-Phlx-2005-24 and should be submitted on or before June 6,
2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-2382 Filed 5-12-05; 8:45 am]
BILLING CODE 8010-01-P