[Federal Register Volume 73, Number 17 (Friday, January 25, 2008)]
[Notices]
[Pages 4656-4658]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-1303]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57167; File No. SR-NYSEArca-2008-10]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to the 
Closing Time for Options on Exchange-Traded Funds

January 17, 2008.
    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 January 16, 2008, NYSE Arca, Inc. (``NYSE Arca'' or the 
``Exchange''), through its wholly owned subsidiary, NYSE Arca

[[Page 4657]]

Equities, Inc. (``NYSE Arca Equities''), 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 NYSE Arca. The Exchange filed the proposal as ``non-
controversial'' pursuant to Section 19(b)(3)(A)(iii) 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)(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

    NYSE Arca proposes to amend NYSE Arca Rule 7.1 in order to provide 
the Exchange with flexibility, similar to that of other options 
exchanges, regarding the time at which options on exchange-traded funds 
(``ETFs'') cease trading on the Exchange. The text of the proposed rule 
change is available at the Exchange's principal office, the 
Commission's Public Reference Room, and http://www.nysearca.com.

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 those 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 parts 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 to amend NYSE Arca Rule 7.1 (``Rule''), 
Trading Sessions, to provide the Exchange with flexibility, similar to 
that of other options exchanges, regarding the time at which options on 
ETFs cease trading on the Exchange. The rule currently specifies the 
trading hours for options on ETFs as commencing at 6:30 a.m. Pacific 
Time (``PT'') and ending at the same time as the primary listing 
exchange closes its core trading session in the underlying ETF.
    Recently, the Exchange submitted a proposed rule change that was 
effective upon filing that governed the trading hours of options on 
ETFs.\5\ As a result of that proposed rule change, the Exchange 
synchronized the closing time for options on ETFs with the time at 
which the underlying ETF closes on its primary listing exchange. In the 
case of NYSE Arca Equities, starting January 2, 2008, the closing time 
for its primary listed ETFs changed to 1 p.m. PT.
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    \5\ See Securities Exchange Act Release No. 57087 (January 2, 
2008), 73 FR 1656 (January 9, 2008) (SR-NYSEArca-2008-01).
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    Since that date, the Exchange has closed trading in options on NYSE 
Arca Equities primary listed ETFs at 1 p.m. PT. For the most part, 
other options exchanges followed suit. However, certain options 
exchanges, most notably the Chicago Board Options Exchange (``CBOE''), 
the American Stock Exchange, and the International Stock Exchange have 
continued to trade options on iShares Russell 2000 Index Fund 
(``IWM''), an ETF that is listed on NYSE Arca Equities, until 1:15 p.m. 
PT. The Exchange, meanwhile, closes trading in options on IWM at 1 p.m. 
PT in keeping with NYSE Arca Rule 7.1.
    Although compliant with its rules, the Exchange is operating at a 
competitive disadvantage because other options exchanges allow their 
members to trade options on IWM until 1:15 p.m. PT. To address this 
apparent disadvantage, the Exchange proposes to amend Rule 7.1 similar 
to CBOE Rule 6.1 so that options on ETFs may be traded on the Exchange 
until 1:15 p.m. each business day.\6\
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    \6\ Commentary .01 to CBOE Rule 6.1 states, in part, that 
``hours during which transactions in options on individual stocks 
may be made on the Exchange shall correspond to the normal hours for 
business set forth in the rules of the primary exchange listing the 
stocks underlying CBOE options.'' Commentary .03 to CBOE Rule 6.1 
states: ``Options on Units, as defined under Interpretation and 
Policy .06 to Rule 5.3, and options on the Nasdaq-100 Index Tracking 
Stock may be traded on the Exchange until 3:15 p.m. [Central Time] 
each business day.''
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\7\ in general, and furthers the objectives of Section 6(b)(5),\8\ 
in particular, in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanisms of a free and open 
market and a national market system.
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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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

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

    Because the foregoing proposed 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 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, 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). The Exchance has requested that the 
Commission waive the requirement that the Exchange provide 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 on which the 
Exchange filed the proposed rule change pursuant to rule 19b-
4(f)(6)(iii). The Commission hereby grants this request.
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    NYSE Arca has requested that the Commission waive the 30-day 
operative delay and designate the proposed rule change to become 
operative upon filing. The proposed rule is similar to rules of other 
exchanges and does not appear to raise any novel or significant 
regulatory issues. Therefore, the Commission designates the proposed 
rule change as operative upon filing.\11\
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    \11\ For the purposes only of waiving the operative date of this 
proposal, 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 such 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 the furtherance of the purposes of the Act.

[[Page 4658]]

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 [email protected]. Please include 
File Number SR-NYSEArca-2008-10 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2008-10. 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 between the hours 
of 10 a.m. and 3 p.m. Copies of such 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-NYSEArca-2008-10 and should 
be submitted on or before February 15, 2008.

    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. E8-1303 Filed 1-24-08; 8:45 am]
BILLING CODE 8011-01-P