[Federal Register Volume 74, Number 32 (Thursday, February 19, 2009)]
[Notices]
[Pages 7722-7724]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-3465]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59394; File No. SR-NYSEALTR-2009-11]


Self-Regulatory Organizations; NYSE Alternext U.S. LLC; Notice of 
Filing of a Proposed Rule Change Amending Rule 903

February 11, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\

[[Page 7723]]

notice is hereby given that on February 10, 2009, NYSE Alternext US LLC 
(``NYSE Alternext,'' ``NYSE Amex'' or the ``Exchange'') filed with the 
Securities and Exchange Commission (the ``Commission'') the proposed 
rule change as described in Items I, II, and III 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NYSE Alternext US LLC is proposing to amend Rule 903, Series of 
Options Open for Trading, to expand the $1 Strike Program. Changes to 
the rule text are shown in Exhibit 5 of the filing. A copy of this 
filing is available on the Exchange's Web site at http://www.nyse.com, 
at the Exchange's principal office 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 self-regulatory organization 
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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The $1 Strike Program currently allows NYSE Amex to select a total 
of 10 individual stocks on which options series may be listed at $1 
strike price intervals. In order to be eligible for selection into the 
Program, the underlying stock must close below $50 in its primary 
market on the previous trading day. If selected for the Program, the 
Exchange may list strike prices at $1 intervals from $3 to $50, but no 
$1 Strike Price may be listed that is greater than $5 from the 
underlying stock's closing price on its primary market on the previous 
day. The Exchange may also list $1 strikes on any other option class 
designated by another securities exchange that employs a similar 
Program under their respective rules. The Exchange may not list long-
term option series (``LEAPS'') at $1 strike price intervals for any 
class selected for the Program. The Exchange is also restricted from 
listing any series that would result in strike prices being $.50 apart.
    The Exchange now proposes to expand the Program to allow NYSE Amex 
to select a total of 55 individual stocks on which option series may be 
listed in $1 strike price intervals, and to expand slightly the price 
range on which the Exchange may list $1 strikes, i.e., from $1 to $50. 
The existing restrictions on listing $1 strikes would continue, i.e., 
no $1 strike price may be listed that is greater than $5 from the 
underlying stock's closing price in its primary market on the previous 
day, and NYSE Amex is restricted from listing any series that would 
result in strike prices being $.50 apart.
    NYSE Amex believes that $1 strike price intervals provide investors 
with greater flexibility in the trading of equity options that overlie 
lower price stocks by allowing investors to establish equity options 
positions that are better tailored to meet their investment objectives. 
The Exchange notes that current market conditions, in which the number 
of securities trading below $50 has increased dramatically, further 
warrant the expansion of the Program.
    The Exchange is also proposing to set forth a delisting policy. 
Specifically, the Exchange would, on a monthly basis, review series 
that were originally listed under the $1 Strike Program with strike 
prices that are more than $5 from the current values of the options 
classes in the Program. The Exchange would delist series with no open 
interest in both the put and the call series having a: (i) Strike 
higher than the highest strike price with open interest in the put and/
or call series for a given expiration month; and (ii) strike lower than 
the lowest strike price with open interest in the put and/or call 
series for a given expiration month.
    Notwithstanding the proposed delisting policy, NYSE Amex could 
grant ATP Holder requests to add strikes and/or maintain strikes in 
certain options classes in series eligible for delisting.
    Further, in connection with the proposed delisting policy, if the 
Exchange identifies series for delisting, the Exchange shall notify 
other options exchanges with similar delisting policies regarding 
eligible series for listing, and shall work with such other exchanges 
to develop a uniform list of series to be delisted, so as to ensure 
uniform series delisting of multiply listed options classes. NYSE Amex 
expects that the proposed delisting policy will be adopted by other 
options exchanges that amend their rules to employ a similar expansion 
of the Program.
    With regard to the impact on system capacity, NYSE Amex has 
analyzed its capacity and represents that it and the Options Price 
Reporting Authority have the necessary systems capacity to handle the 
additional traffic associated with the listing and trading of an 
expanded number of options series as proposed by this filing.
    The Exchange believes that the $1 Strike Program has provided 
investors with greater trading opportunities and flexibility and the 
ability to more closely tailor their investment strategies and 
decisions to the movement of the underlying security. Furthermore, the 
Exchange has not detected any material proliferation of illiquid 
options series resulting from the narrower strike price intervals. For 
these reasons, NYSE Amex requests an expansion of the current Program.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
and furthers the objectives of Section 6(b)(5) of the Act, in that it 
is designed to promote just and equitable principles of trade, remove 
impediments to and perfect the mechanisms of a free and open market and 
a national market system and, in general, to protect investors and the 
public interest, in that it provides for a greater number of available 
strike prices in lower priced underlying issues, and thus allows 
investors to better tailor their investments to meet their needs.

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 solicited or received with respect to the 
proposed rule change.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such

[[Page 7724]]

longer period to be appropriate and publishes its reasons for so 
finding or (ii) as to which the self-regulatory organization consents, 
the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-NYSEALTR-2009-11 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEALTR-2009-11. 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, on business days 
between the hours of 10 a.m. and 3 p.m., located at 100 F Street, NE., 
Washington, DC 20549. 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-NYSEALTR-2009-11 and should 
be submitted on or before March 12, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\3\
Florence E. Harmon,
Deputy Secretary.
---------------------------------------------------------------------------

    \3\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

[FR Doc. E9-3465 Filed 2-18-09; 8:45 am]
BILLING CODE 8011-01-P