[Federal Register Volume 73, Number 117 (Tuesday, June 17, 2008)]
[Notices]
[Pages 34353-34355]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-13499]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57945; File No. SR-NASDAQ-2008-051]
Self-Regulatory Organizations; NASDAQ Stock Market, LLC; Notice
of Filing and Immediate Effectiveness of Proposed Rule Change Relating
to the Listing and Trading on the Exchange of Options on the SPDR Gold
Trust
June 10, 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 June 3, 2008, the NASDAQ Stock Market, LLC (``NASDAQ'' 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.
NASDAQ filed the proposal pursuant to Section 19(b)(3)(A) of the Act
\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal
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
NASDAQ proposes to amend certain NASDAQ Rules to enable the listing
and trading on the Exchange of options on the SPDR Gold Trust. The text
of the proposed rule change is available at the Exchange, the
Commission's Public Reference Room, and http://www.nasdaq.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, 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
[[Page 34354]]
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 Exchange states that the purpose of the proposed rule change is
to permit the listing and trading of options on the SPDR Gold Trust.
Currently, Chapter IV, Section 3(i) of the NASDAQ Options Rules
permits only certain Fund Shares (also referred to herein as exchange
traded funds (``ETFs'')) to underlie options traded on the Exchange.
Specifically, to be eligible as an underlying security for options
traded on the Exchange, an ETF must represent interests in registered
investment companies (or series thereof) organized as open-end
management investment companies, unit investment trusts or similar
entities that are principally traded on a national securities exchange
or through the facilities of a national securities association and
reported as ``national market'' securities, and that hold portfolios of
securities comprising or otherwise based on or representing investments
in broad-based indexes or portfolios of securities (or that hold
securities in one or more other registered investment companies that
themselves hold such portfolios of securities). The proposed rule
change would expand the types of ETFs that may be approved for options
trading on the Exchange to include the SPDR Gold Trust.
The Exchange states that apart from allowing the SPDR Gold Trust to
be an underlying for options traded on the Exchange as described above,
the listing standards for ETFs would remain unchanged from those that
apply under current Exchange rules. ETFs on which options may be listed
and traded would still have to be listed and traded on a national
securities exchange and satisfy the other listing standards set forth
in Chapter IV, Section 3(i) of the NASDAQ Options Rules.
Specifically, in addition to satisfying the aforementioned listing
requirements, Fund Shares would have to: (1) Meet the criteria and
standards set forth in paragraphs (a) and (b) of Chapter IV, Section 3;
or (2) be available for creation or redemption each business day from
or through the Fund in cash or in kind at a price related to net asset
value, and the Fund is obligated to issue Fund Shares in a specified
aggregate number even if some or all of the securities required to be
deposited have not been received by the Fund, subject to the condition
that the person obligated to deposit the securities has undertaken to
deliver the securities as soon as possible and such undertaking is
secured by the delivery and maintenance of collateral consisting of
cash or cash equivalents satisfactory to the Fund, all as described in
the Fund's prospectus.
The Exchange proposes that the current continued listing standards
for options on ETFs would apply to options on the SPDR Gold Trust.
Specifically, under Chapter IV, Section 4(h) of the NASDAQ Options
Rules, options on Fund Shares may be subject to the suspension of
opening transactions as follows: (1) Following the initial twelve-month
period beginning upon the commencement of trading of the Fund Shares,
there are fewer than 50 record and/or beneficial holders of the Fund
Shares for 30 or more consecutive trading days; (2) the value of the
index or portfolio of securities on which Fund Shares are based is no
longer calculated or available; or (3) such other event occurs or
condition exists that in the opinion of the Exchange makes further
dealing on the Exchange inadvisable.
Additionally, the SPDR Gold Trust would not be deemed to meet the
requirements for continued approval, and the Exchange would not open
for trading any additional series of option contracts of the class
covering the SPDR Gold Trust, if the SPDR Gold Trust ceases to be an
``NMS stock'' as provided for in paragraph (b)(v) of Chapter IV,
Section 4 of the NASDAQ Options Rules or if the SPDR Gold Trust is
halted from trading on its primary market. The Exchange believes that
the addition of the SPDR Gold Trust to Chapter IV, Section 3(i) of the
NASDAQ Options Rules would not have any effect on the rules pertaining
to position and exercise limits \5\ or margin.\6\
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\5\ See NASDAQ Options Rules, Chapter III, Sections 7, Position
Limits, and 9, Exercise Limits.
\6\ See NASDAQ Options Rule Chapter XIII, Section 3, Margin
Requirements.
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The Exchange represents that its surveillance procedures applicable
to trading in options on the SPDR Gold Trust would be similar to those
applicable to all other options on other ETFs currently traded on the
Exchange. Also, the Exchange may obtain information from the New York
Mercantile Exchange, Inc. (a member of the Intermarket Surveillance
Group) related to any financial instrument traded there that is based,
in whole or in part, upon an interest in, or performance of, gold.
2. Statutory Basis
The Exchange believes that amending its rules to accommodate the
listing and trading of options on the SPDR Gold Trust will benefit
investors by providing them with valuable risk management tools.
Accordingly, NASDAQ believes that 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) of the Act,\8\ in particular, in that
it is designed to remove impediments to and perfect the mechanism of a
free and open market in a manner consistent with the protection of
investors and the public interest.
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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 states that 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 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) by its terms does not become operative for 30 days after the
date of this filing, or such shorter time as the Commission may
designate if consistent with the protection of investors and the public
interest, the proposed rule change 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). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to provide 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 business days prior to the date of filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Exchange has fulfilled this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) permits the Commission to
[[Page 34355]]
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange requests
that the Commission waive the 30-day operative delay so that the
Exchange can list and trade the Shares immediately. The Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest to permit the listing
and trading of options on the SPDR Gold Trust without further
delay.\11\ The Commission notes the proposal is substantively identical
to proposals that were recently approved by the Commission, and does
not raise any new regulatory issues.\12\ For these reasons, the
Commission designates the proposed rule change as operative upon
filing.
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\11\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
\12\ See Securities Exchange Act Release No. 57894 (May 30,
2008) (SR-Amex-2008-15; SR-CBOE-2005-11; SR-ISE-2008-12; SR-
NYSEArca-2008-52; and SR-Phlx-2008-17) (approving the listing and
trading of options on the SPDR Gold Trust).
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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 [email protected]. Please include
File Number SR-NASDAQ-2008-051 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-NASDAQ-2008-051. 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 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-NASDAQ-2008-051 and should
be submitted on or before July 8, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-13499 Filed 6-16-08; 8:45 am]
BILLING CODE 8010-01-P