[Federal Register Volume 74, Number 130 (Thursday, July 9, 2009)]
[Notices]
[Pages 33008-33009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-16173]
[[Page 33008]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-60200; File No. SR-NYSEArca-2009-57]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change by NYSE Arca, Inc.
Amending Rule 6.9--Exercise Limits
June 30, 2009.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on June 24, 2009, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. 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\ 15 U.S.C. 78a.
\3\ 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 Rule 6.9--Exercise Limits. The text
of the proposed rule change is attached as Exhibit 5 to the 19b-4 form.
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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing to revise Rule 6.9--Execise [sic]
Limits, to clarify that exercise limits applicable to a particular
class of options shall be determined in accordance with the position
limits established pursuant to Rule 6.8.
Rule 6.9(a) states that except with the prior approval of the
Exchange, no OTP Holder or OTP Firm shall exercise a long position in
any option contract if as a result thereof such OTP Holder or OTP Firm
has or will have exercised within any five (5) consecutive business
days aggregate long positions in that particular class of options in
excess of such number of option contracts as shall be fixed from time
to time by the Exchange as the exercise limit for that particular class
of options.
Commentary .01 to Rule 6.9 goes on to list certain tiers for
exercise limits, starting at 25,000 contracts and going up to 250,000
contracts. These exercise limits are equivalent to applicable position
limits for a particular options class as prescribed by Rule 6.8.06(a)-
(e). Commentary .01 goes on to say that whether an exercise limit is
25,000 or 50,000 or 75,000 or 200,000 or 250,000 shall be determined in
the manner described in Rule 6.8.06. Rule 6.8.06, specifically
subsections (f)-(g), also contains position limits, for certain
specific products, that differ from the tiers cited in Rule 6.9.01. In
addition, Rule 6.8.07-.09 contains provisions that exempt certain
positions from standard position limits.
Because Rule 6.8.06 prescribes additional position limits that are
not cited in Rule 6.9.01, plus the fact that Rule 6.8 contains
Commentary other than .06, which includes additional criteria for
determining position limits other than what is already cited in Rule
6.9.01, the Exchange now proposes to adopt new rule text to Rule 6.9.01
that explicitly states the exercise limits pursuant to Rule 6.9(a)
shall be equivalent to the corresponding position limit, for the same
particular class of options, as determined by Rule 6.8. and Commentary
thereto.
The purpose of this rule change is to offer clarity to the existing
rules governing exercise limits. It does not in any way attempt to
alter the method in which the Exchange calculates position or exercise
limits. NYSE Arca notes that over the years, it has at times, revised
Rule 6.8 to increase position limits, as well as the sizes and scopes
of available hedge exemptions to the applicable position limits.\4\
While it has always been the intent to determine exercise limits based
on the applicable position limits, Rule 6.9.01 has not necessarily been
revised to reflect the various changes made to Rule 6.8. The rule
simply serves to make it perfectly clear that the exercise limits for a
particular class of options shall be equivalent to the corresponding
position limit for the same particular class of options as determined
by Rule 6.8 and any Commentary thereto.
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\4\ See Securities Exchange Act Release No. 57358 (February 20,
2008), 73 FR 11173 (February 29, 2008) (notice of filing and
immediate effectiveness of NYSEArca-2008-17); See Securities
Exchange Act Release No. 55347 (February 26, 2007), 72 FR 9823
(March 5, 2007) (notice of filing and immediate effectiveness of
NYSEArca-2007-19); See Securities Exchange Act Release No. 54385
(August 30, 2006), 71 FR 53150 (September 8, 2006), (notice of
filing and immediate effectiveness of NYSEArca-2006-49); See
Securities Exchange Act Release No. 51286 (March 1, 2005), 70 FR
11297 (approval notice for PCX-2003-55); See Securities Release Act
No. 45737 (April 11, 2005), [sic] 67 FR 18975 (approval order for
PCX-2000-45).
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In addition, rule changes contained in this proposal are consistent
with similar rules of NYSE Amex LLC (``NYSE Amex''), \5\ and NASDAQ OMX
PHLX (``PHLX''), \6\ governing the exercise of options contracts.
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\5\ See NYSE Amex Rule 905(a)--Exercise Limits.
\6\ See PHLX Rule 1002.--Exercise Limits.
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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 prevent
fraudulent and manipulative acts and practices, promote just and
equitable principles of trade, 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. This rule
change simply serves to offer clarity to an already existing rule. In
addition, adopting similar rules to those that are in place at other
options exchanges will help to alleviate any confusion on the part of
market participants, when exercising option contracts.
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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
No written comments were solicited or received with respect to the
proposed rule change.
[[Page 33009]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing 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 after the date of this filing, or such shorter time as the
Commission may designate, 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). Rule 19b-4(f)(6)(iii) requires that
a self-regulatory organization submit to 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 of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied the five-day pre-filing notice requirement.
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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
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-NYSEArca-2009-57 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-NYSEArca-2009-57. 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 NYSE Arca. 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-2009-57 and should
be submitted on or before July 30, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-16173 Filed 7-8-09; 8:45 am]
BILLING CODE 8010-01-P