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Federal Register / Vol. 72, No.

164 / Friday, August 24, 2007 / Notices 48717

SECURITIES AND EXCHANGE places specified in Item IV below. The Aside from this expansion, all other
COMMISSION Exchange has prepared summaries, set aspects of the Pilot Program will remain
forth in Sections A, B, and C below, of the same. Specifically, for option
[Release No. 34–56280; File No. SR–
the most significant aspects of such contracts traded pursuant to the Pilot
statements. Program, the following minimum
Self-Regulatory Organizations; NYSE A. Self-Regulatory Organization’s increments apply: (1) One cent ($0.01)
Arca, Inc.; Notice of Filing of Proposed Statement of the Purpose of, and for all options contracts in QQQQ
Rule Change Relating to NYSE Arca Statutory Basis for, the Proposed Rule (Nasdaq-100 Index Tracking Stock), (2)
Rule 6.72 and the Penny Pilot for Change one cent ($0.01) for all options contracts
Options Trading that are trading at less than $3, and (3)
1. Purpose
August 17, 2007. five cents ($0.05) for all option contracts
The Exchange hereby proposes to that are trading at or above $3. NYSE
Pursuant to Section 19(b)(1) of the extend the time period of the Pilot
Securities Exchange Act of 1934 Arca represents that the Exchange has
Program 4 through March 27, 2009. The the necessary system capacity to
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
Exchange believes the benefits to public support any additional series listed as
notice is hereby given that on August
customers and other market participants part of the Pilot Program.
16, 2007, the NYSE Arca, Inc. (‘‘NYSE
who will be able to express their true
Arca’’ or ‘‘Exchange’’) filed with the The Exchange agrees to submit
prices to buy and sell options have been
Securities and Exchange Commission written reports to the Commission that
demonstrated to outweigh the increase
(‘‘Commission’’) the proposed rule include data and written analysis of
in quote traffic.
change as described in Items I, II, and The Exchange also proposes to information collected during the course
III below, which items have been expand the Pilot Program in two phases. of the Pilot Program. The Exchange
substantially prepared by NYSE Arca. According to the proposal, the first intends to submit four reports within 30
The Commission is publishing this phase will start on September 28, 2007 days of the end of each of the following
notice to solicit comments on the and continue through March 27, 2008
proposed rule change from interested report periods: (i) May 1, 2007 through
and will add 22 options classes. These September 27, 2007, (ii) September 28,
persons. 22 options classes are among the most 2007 through January 31, 2008, (iii)
I. Self-Regulatory Organization’s actively traded, multiply listed options February 1, 2008 through July 31, 2008,
Statement of the Terms of Substance of classes based on national average daily and (iv) August 1, 2008 through January
the Proposed Rule Change volume and, together with the existing 31, 2009. These reports will include, but
13 pilot classes, represent
NYSE Arca proposes to amend its will not be limited to, data and analysis
approximately 35% of the total industry
options trading rules in order to extend concerning the economic and capacity
the Penny Pilot in options classes in The 22 additional classes are: SPDR impact of the Pilot Program.
certain issues (‘‘Pilot Program’’) S&P 500 (SPY), Apple Inc. (AAPL),
previously approved by the Commission 2. Statutory Basis
Altria Group (MO), Dendreon Corp.
through March 27, 2009.3 The Exchange (DNDN), Amgen Inc. (AMGN), Yahoo! The Exchange believes that the
also proposes to expand the Pilot Inc. (YHOO), Qualcomm Inc. (QCOM), proposed rule change is consistent with
Program in two phases: (1) The first General Motors (GM), Energy Select Section 6(b) of the Act,6 in general, and
phase will start on September 28, 2007 Sector SPDR (XLE), Diamonds Trust furthers the objectives of Section 6(b)(5)
and continue through March 27, 2008 (DIA), Oil Services HLDRS (OIH), NYSE of the Act,7 in particular, in that the
and will add 22 options classes, and (2) Euronext (NYX), Cisco Systems (CSCO),
the second phase will start on March 28, proposed rule change is designed to
Financial Select Sector SPDR (XLF), prevent fraudulent and manipulative
2008 and continue through March 27, AT&T, Inc. (T), Citigroup, Inc. (C),
2009 and will add approximately 28 acts and practices, to promote just and
Amazon.com Inc. (AMZN), Motorola equitable principles of trade, to foster
additional option classes. The text of the Inc. (MOT), Research in Motion Ltd.
proposed rule change is available at cooperation and coordination with
(RIMM), Freeport-McMoRan Copper & persons engaged in facilitating
http://www.nysearca.com, at the Gold, Inc. (FCX), ConocoPhillips (COP),
Exchange, and at the Commission’s transactions in securities, and to remove
and Bristol-Myers Squibb Co. (BMY). impediments to and perfect the
Public Reference Room. Pursuant to the proposal, the second
mechanism of a free and open market
II. Self-Regulatory Organization’s phase will start on March 28, 2008 and
continue through March 27, 2009 and and a national market system.
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule will add approximately 28 additional B. Self-Regulatory Organization’s
Change options classes. These 28 options Statement on Burden on Competition
classes will be among the most actively
In its filing with the Commission, the
traded, multiply listed options classes The Exchange does not believe that
Exchange included statements
based on national average daily volume, the proposed rule change will result in
concerning the purpose of, and basis for,
up to the top 50 by volume. This will any burden on competition that is not
the proposed rule change and discussed
bring the total number of options classes necessary or appropriate in furtherance
any comments it received on the
traded pursuant to the Pilot Program to of the purposes of the Act.
proposed rule change. The text of these
63 (12 from the original Pilot Program,
statements may be examined at the
22 from phase one of the proposed
1 15 U.S.C. 78s(b)(1).
expansion, and 28 from phase two of the to be added to the Pilot Program. Pursuant to NYSE
yshivers on PROD1PC66 with NOTICES

2 17 proposed expansion).5 Arca Rule 6.72, the pilot issues will also be
CFR 240.19b–4.
3 See Securities Exchange Act Release Nos. 55156
announced to the Exchange’s membership via
4 See supra, note 3. Regulatory Bulletin and published by the Exchange
(January 23, 2007), 72 FR 4759 (February 1, 2007)
on its Web site.
(SR–NYSEArca–2006–73) and 56150 (July 26, 5 The Exchange intends to submit a filing
6 15 U.S.C. 78f(b).
2007), 72 FR 42460 (August 2, 2007) (SR– pursuant to Section 19(b)(3)(A) of the Act prior to
NYSEArca–2007–56). the beginning of phase two, announcing the classes 7 15 U.S.C. 78f(b)(5).

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48718 Federal Register / Vol. 72, No. 164 / Friday, August 24, 2007 / Notices

C. Self-Regulatory Organization’s • If a determination is made that an For the Commission, by the Division of
Statement on Comments on the option should be removed from the Market Regulation, pursuant to delegated
Proposed Rule Change Received From Penny Pilot, how much notice should be authority.8
Members, Participants, or Others given to market participants that the Florence E. Harmon,
Written comments on the proposed quoting increment will change? Deputy Secretary.
rule change were neither solicited nor [FR Doc. E7–16759 Filed 8–23–07; 8:45 am]
Comments may be submitted by any of
received. the following methods:

III. Date of Effectiveness of the

Proposed Rule Change and Timing for Electronic Comments
Commission Action • Use the Commission’s Internet COMMISSION
Within 35 days of the date of comment form (http://www.sec.gov/ [Release No. 34–56272; File No. SR–Phlx–
publication of this notice in the Federal rules/sro.shtml); or 2007–57]
Register or within such longer period (i) • Send an e-mail to rule-
as the Commission may designate up to comments@sec.gov. Please include File Self-Regulatory Organizations;
90 days of such date if it finds such Philadelphia Stock Exchange, Inc.;
Number SR–NYSEArca–2007–88 on the
longer period to be appropriate and Notice of Filing and Immediate
subject line.
publishes its reasons for so finding or Effectiveness of Proposed Rule
(ii) as to which the Exchange consents, Paper Comments Change Relating to Trading Sessions
the Commission will: on XLE
(A) By order approve such proposed • Send paper comments in triplicate
rule change, or to Nancy M. Morris, Secretary, August 16, 2007.
(B) Institute proceedings to determine Securities and Exchange Commission, Pursuant to Section 19(b)(1) of the
whether the proposed rule change 100 F Street, NE., Washington, DC Securities Exchange Act of 1934
should be disapproved. 20549–1090. (‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on August 3,
IV. Solicitation of Comments All submissions should refer to File 2007, the Philadelphia Stock Exchange,
Interested persons are invited to Number SR–NYSEArca–2007–88. This Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with
submit written data, views and file number should be included on the the Securities and Exchange
arguments concerning the foregoing, subject line if e-mail is used. To help the Commission (‘‘Commission’’) the
including whether the proposed rule Commission process and review your proposed rule change as described in
change is consistent with the Act. The comments more efficiently, please use Items I and II below, which Items have
Commission also requests and only one method. The Commission will been substantially prepared by the
encourages interested persons to submit post all comments on the Commission’s Exchange. The Exchange filed the
comments on the following specific Internet Web site (http://www.sec.gov/ proposed rule change pursuant to
questions: rules/sro.shtml). Copies of the Section 19(b)(3)(A) of the Act 3 and Rule
• Whether there are circumstances submission, all subsequent 19b–4(f)(6) thereunder,4 which renders
under which options classes included in amendments, all written statements the proposed rule change effective upon
the Penny Pilot should be removed from with respect to the proposed rule filing with the Commission. The
the Pilot? change that are filed with the Commission is publishing this notice to
• If so, what factors should be solicit comments on the proposed rule
considered in making the determination Commission, and all written
communications relating to the change from interested persons.
to remove an option class from the
Penny Pilot? proposed rule change between the I. Self-Regulatory Organization’s
Æ Should an objective standard be Commission and any person, other than Statement of the Terms of Substance of
used? For instance, should an option those that may be withheld from the the Proposed Rule Change
class come out of the Penny Pilot if its public in accordance with the The Exchange proposes to amend
trading volume drops below a threshold provisions of 5 U.S.C. 552, will be Phlx Rule 101, Supplementary Material
amount? If so, what should that available for inspection and copying in .02 to provide for securities that trade in
threshold be? Or, should an option class the Commission’s Public Reference one or two, but not all three, trading
come out of the Penny Pilot if it is no Room, 100 F Street, NE., Washington, sessions on XLE.5 In addition, the
longer among the most actively-traded DC 20549, on official business days Exchange would amend the rule to
options? If so, what should be between the hours of 10 a.m. and 3 p.m. require the Exchange to maintain on its
considered the most-actively traded Copies of such filing also will be Internet Web site information regarding
options? What statistics or analysis available for inspection and copying at securities that do not trade in all three
should be used to support a the principal office of the Exchange. All
determination to remove an options comments received will be posted 8 17 CFR 200.30–3(a)(12).

class? without change; the Commission does

1 15 U.S.C. 78s(b)(1).

Æ Should a more subjective analysis not edit personal identifying

2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
be allowed? If so, what factors should be information from submissions. You 4 17 CFR 240.19b–4(f)(6).
taken into account?
• What concerns might arise by should submit only information that 5 Phlx Rule 101 Supplementary Material .02(1)–

removing an option from the Penny you wish to make available publicly. All (3) describes XLE’s three trading sessions. The Pre
submissions should refer to File Market Session begins at 8 a.m. Eastern Time
Pilot? How could such concerns be
yshivers on PROD1PC66 with NOTICES

(‘‘ET’’) and concludes at the commencement of the

ameliorated? Number SR–NYSEArca–2007–88 and Core Session. The Core Session begins at 9:30 a.m.
• How frequently should the analysis should be submitted on or before (ET) and concludes at 4 p.m. (ET), provided that for
September 14, 2007. specified exchange-traded funds, the Core Session
be undertaken (e.g., annually, bi- concludes at 4:15 p.m. (ET). The Post Market
annually, quarterly), or should the Session begins following the conclusion of the Core
evaluation be an automated process? Session and concludes at 6 p.m. (ET).

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