[Federal Register: January 5, 2009 (Volume 74, Number 2)]
[Notices]
[Page 328-330]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05ja09-104]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59166; File No. SR-Phlx-2008-82]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX, Inc. Relating
to Rule 1028 (Confirmations)
December 29, 2008.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 10, 2008, NASDAQ OMX PHLX, Inc. (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III, below, which Items have substantially been prepared by the
Exchange. The Exchange filed the proposal as a ``non-controversial''
proposed rule change pursuant to section 19(b)(3)(A)(iii) of the Act
\3\ and Rule 19b-4(f)(6) thereunder.\4\ 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)(iii).
\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 proposes to amend Phlx Rule 1028, Confirmations, to
eliminate the requirement that members indicate in written
confirmations to options customers the specific exchange on which
transactions were done.\5\ The text of the proposed rule change is
available at the Exchange, on the Exchange's Web site at http://
www.nasdaqtrader.com/micro.aspx?id= PHLXRulefilings, and at the
Commission.
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\5\ The proposed filing is being done pursuant to an industry-
wide initiative under the auspices of the Options Self-Regulatory
Council (``OSRC''), which is a committee comprised of
representatives from each of the options exchanges functioning
pursuant to the OSRC Plan (the ``Plan''). See Securities Exchange
Act Release No. 20158 (Sept. 8, 1983), 48 FR 41256 (Sept. 14, 1983).
The Plan is not a National Market System (``NMS'') plan under
Section 11A of the Act, but rather is a plan to allocate regulatory
responsibilities under Rule 17d-2 under the Act. 17 CFR 240.17d-2.
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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 purpose of the proposed rule change is to amend Phlx Rule 1028
to eliminate the requirement that the market on which an options
transaction is executed be disclosed on a written confirmation
furnished to a customer of a member organization. Pursuant to Phlx Rule
1028, the member organization will continue to be required to furnish a
written confirmation that contains a description of each transaction in
the option contracts which shall show: the type of option; the
underlying security (e.g.,
[[Page 329]]
stock or Exchange Traded Fund); the expiration month; the exercise
price; the number of option contracts; the premium and commissions; the
transaction and settlement dates; whether the transaction was a
purchase or a sale (writing) transaction; whether the transaction was
an opening or a closing transaction; and whether the transaction was
effected on a principal or agency basis.
The Exchange believes that with the expansion of multi-listing of
options and the introduction of new options exchanges, it has become
operationally inefficient to require the disclosure of the market
center on which an order was executed on the confirmation. As an
example, a customer may have a single option order containing numerous
option contracts executed on multiple exchanges. As such, it would be
inefficient for the member organization to be required to identify the
exchange symbol for each contract executed on that customer's order.
This proposal will clarify that written confirmations furnished by the
member organization(s) to a customer will not need to specify the
exchange or exchanges on which such option contracts were executed.
This proposal is similar to rule change proposals that have been
filed by the Chicago Board Options Exchange (``CBOE''), the Financial
Industry Regulatory Authority, Inc. (``FINRA''), and the American Stock
Exchange LLC (``Amex'').\6\ The Exchange believes that similar
proposals will be filed with the Commission by the New York Stock
Exchange (``NYSE'') and other exchanges, and if adopted, would continue
to provide a uniform approach with respect to confirmations to
customers regarding standardized options.
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\6\ See Securities Exchange Act Release Nos. 58814 (Oct. 20,
2008), 73 FR 63527 (Oct. 24, 2008) (SR-Amex-2008-53); 58932 (Nov.
12, 2008), 73 FR 69696 (Nov. 19, 2008) (SR-FINRA-2008-32); and 58980
(Nov. 19, 2008), 73 FR 72091 (Nov. 26, 2008) (SR-CBOE-2008-61).
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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
clarifying the Exchange's options confirmation procedure rules to
better reflect the realities of the modern options market.
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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 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 either solicited or received with respect
to the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange believes that the foregoing proposed rule change may
take effect upon filing with the Commission pursuant to section
19(b)(3)(A) \9\ of the Act and Rule 19b-4(f)(6)(iii) thereunder \10\
because the foregoing proposed rule change 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.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6)(iii).
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A proposed rule change filed under 19b-4(f)(6) normally may not
become operative prior to 30 days after the date of filing.\11\
However, Rule 19b-4(f)(6)(iii) \12\ 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.
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\11\ Id.
\12\ Id.
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The proposed rule change is substantially similar to an Amex rule
that provides that written confirmations relating to options
transactions are not required to specify the options exchange or
exchanges on which such options were executed.\13\ The Exchange
believes that this proposed rule change does not raise any new, unique
or substantive issues from those raised in the approved Amex filing.
The Exchange also believes that acceleration of the operative date is
consistent with the protection of investors and the public
interest.\14\ Lastly, the Exchange 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, at least five
days prior to the date of the filing of the proposed rule change as
required by Rule 19b-4(f)(6).
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\13\ See supra note 6, and related text.
\14\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the impact of the proposed rule 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 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-2008-82 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-2008-82. 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
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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-2008-82 and
should be submitted on or before January 26, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-31259 Filed 1-2-09; 8:45 am]
BILLING CODE 8011-01-P