[Federal Register Volume 73, Number 193 (Friday, October 3, 2008)]
[Notices]
[Pages 57723-57725]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-23362]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58658; File No. SR-Phlx-2008-64]
Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a
Trading Halt Rule in Connection With the Dissemination of Net Asset
Value and Disclosed Portfolio for Certain Derivative Securities
Products
September 26, 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 September 18, 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 and II below, which Items
have been prepared by the Exchange. 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 Exchange proposes to amend Phlx Rule 136 to state that the
Exchange will halt trading in New Derivative Securities Products \3\
listed on the Exchange for which a net asset value (and in the case of
managed fund shares or actively managed exchange-traded funds, a
``disclosed portfolio'') is disseminated if the Exchange becomes aware
that the net asset value and, if applicable, the disclosed portfolio is
not being disseminated to all market participants at the same time. The
text of the proposed rule change is available on the Exchange's Website
at http://www.phlx.com/regulatory/reg_rulefilings.aspx , at the
Exchange's principal office, and at the Commission's Public Reference
Room.
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\3\ See Phlx Rule 136(e)(1).
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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 address trading halts
for New Derivative Securities Products listed on the Exchange for which
a net asset value and/or a disclosed portfolio is disseminated. Net
asset values and disclosed portfolios, when applicable, are calculated
daily and disseminated to all market participants at the same time. In
this proposed rule change, the Exchange is amending its rules to state
that the Exchange will halt trading in New Derivative Securities
Products listed on the Exchange for which a net asset value and/or a
disclosed portfolio
[[Page 57724]]
is disseminated if the Exchange becomes aware that the net asset value
or, if applicable, the disclosed portfolio is not being disseminated to
all market participants at the same time. Also, the Exchange will
maintain the trading halt until such time as the Exchange becomes aware
that the net asset value and, if applicable, the disclosed portfolio is
available to all market participants. In addition, the Exchange
represents that in the event that the net asset value or the disclosed
portfolio, as applicable, for a New Derivative Securities Product
ceases to be disseminated altogether, the Exchange will halt trading in
such New Derivative Securities Product.
The Exchange notes that it recently filed a proposed rule change in
which it adopted a rule, Phlx Rule 136(d)(4), stating that the Exchange
would halt trading in New Derivative Securities Products trading on the
Exchange pursuant to unlisted trading privileges, if the listing market
notifies the Exchange that the net asset value and, if applicable, the
disclosed portfolio is not being disseminated to all market
participants at the same time.\4\ Also the Exchange is now proposing to
clarify the rule text in Phlx Rule 136(d)(4) by changing the word
``and'' to ``or'' in the second half of the first sentence of that
paragraph to make clear that the Exchange would halt trading upon
notification by the listing market of the New Derivative Securities
Product that either the net asset value or the disclosed portfolio is
not being disseminated to all market participants at the same time.
Consistent with the earlier proposed rule change, the Exchange now
proposes to adopt a rule, Phlx Rule 136(c)(1)(B), stating that the
Exchange will halt trading in New Derivative Securities Products listed
on the Exchange for which a net asset value and/or a disclosed
portfolio is disseminated if the Exchange becomes aware that the net
asset value or, if applicable, the disclosed portfolio is not being
disseminated to all market participants at the same time. As a
consequence of the additional language proposed in Phlx Rule 136(c),
the Exchange is renumbering the existing material to provide more
clarity to the section.
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\4\ See Securities Exchange Act Release No. 57806 (May 9, 2008),
73 FR 28541 (May 16, 2008) (SR-Phlx-2008-34).
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2.Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\5\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\6\ 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.
The Exchange believes the proposed rule change is reasonably designed
to prevent trading in certain New Derivative Securities Products when
the availability of certain information is impaired. Specifically, the
proposed rule change is intended to protect investors and the public
interest when key information relating to the net asset value or the
disclosed portfolio becomes unavailable or available only to some
market participants, but not all participants, at the time of
dissemination.
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\5\ 15 U.S.C. 78f(b).
\6\ 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.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
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, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \7\ and
Rule 19b-4(f)(6) thereunder.\8\ A proposed rule change filed under 19b-
4(f)(6) normally does not become operative until 30 days after the date
of filing.\9\ However, Rule 19b-4(f)(6)(iii) \10\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. Phlx requests
that the Commission waive the 30-day operative delay and make the
proposed rule change operative upon filing because this proposal raises
no novel issues and is virtually identical to the rule proposals of the
American Stock Exchange LLC (``Amex''), the NASDAQ Stock Market LLC
(``NASDAQ''), the New York Stock Exchange LLC (``NYSE'') and NYSE Arca,
Inc. (``NYSE Arca''), which were recently approved by the
Commission.\11\ The Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest. The Commission therefore grants the Exchange's request
and designates the proposal to be operative upon filing.\12\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6).
\9\ Id. In addition, Rule 19b-4(f)(6)(iii) requires a self-
regulatory organization to give the Commission written notice of its
intent to file 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
satisfied this requirement.
\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ See Securities Exchange Act Release No. 58111 (July 7,
2008), 73 FR 40643 (July 15, 2008) (SR-Amex-2008-40, SR-NASDAQ-2008-
046, SR-NYSE-2008-39, SR-NYSEArca-2008-50).
\12\ For purposes only of waiving the 30-day 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 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-Phlx-2008-64 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-2008-64. 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
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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-Phlx-2008-64 and should be submitted on or before
October 24, 2008.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-23362 Filed 10-2-08; 8:45 am]
BILLING CODE 8011-01-P