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Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change, as Modified by Amendment No.1, to Add Seventy-Five Options Classes to the Penny Pilot Program

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Start Preamble November 9, 2009.

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 October 28, 2009, The NASDAQ Stock Market LLC (“Nasdaq”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items I, II and III below, which Items have been prepared by Nasdaq. Nasdaq filed Amendment No. 1 to the proposal on November 5, 2009.[3] The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

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

Nasdaq is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposal for the NASDAQ Options Market (“NOM” or “Exchange”) to designate seventy-five options classes to be added to the Penny Pilot in options classes in certain issues (“Penny Pilot” or “Pilot”) on November 2, 2009.[4] The Exchange is not proposing to amend any rule text, but simply administering or enforcing an existing rule.[5]

The text of the proposed rule change is available from Nasdaq's Web site at, at Nasdaq'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, Nasdaq 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. Nasdaq 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 this filing is to identify the next seventy-five options classes to be added to the Penny Pilot effective November 2, 2009.

In the Exchange's immediately effective filing to extend and expand the Penny Pilot through December 31, 2010,[6] the Exchange proposed expanding the Pilot four times on a Start Printed Page 59293quarterly basis. Each such quarterly expansion would be of the next seventy-five most actively traded multiply listed options classes based on the national average daily volume (“ADV”) for the six months prior to selection, closing under $200 per share on the Expiration Friday prior to expansion; however, the month immediately preceding the addition of options to the Penny Pilot will not be used for the purpose of the six month analysis. Index option products would be included in the quarterly expansions if the underlying index levels were under 200.

The Exchange is identifying, in the chart below, seventy-five options classes that it will add to the Penny Pilot on November 2, 2009, based on ADVs from April 1, 2009, through September 30, 2009.

Nat'l rankingSymbolCompany name
118ABXBarrick Gold Corp
48AXPAmerican Express Co
134AUYYamana Gold Inc
93BABoeing Co/The
115BBTBB&T Corp
111BBYBest Buy Co Inc
67CHKChesapeake Energy Corp
58CITCIT Group Inc
78COFCapital One Financial Corp
68CVXChevron Corp
130DEDeere & Co
104DOWDow Chemical Co/The
49DRYSDryShips Inc
88EFAiShares MSCI EAFE Index Fund
64ETFCE*Trade Financial Corp
32EWZiShares MSCI Brazil Index Fund
25FASDirexion Daily Financial Bull 3X Shares
33FAZDirexion Daily Financial Bear 3X Shares
112FITBFifth Third Bancorp
70FSLRFirst Solar Inc
26FXIiShares FTSE/Xinhua China 25 Index Fund
82GDXMarket Vectors—Gold Miners ETF
127GGGoldcorp Inc
18GLDSPDR Gold Trust
129HGSIHuman Genome Sciences Inc
62HIGHartford Financial Services Group Inc
72HPQHewlett-Packard Co
59IBMInternational Business Machines Corp
45IYRiShares Dow Jones US Real Estate Index Fund
105JNJJohnson & Johnson
131JNPRJuniper Networks Inc
98KOCoca-Cola Co/The
39LVSLas Vegas Sands Corp
87MCDMcDonald's Corp
71MGMMGM Mirage
113MONMonsanto Co
63MOSMosaic Co/The
120MRKMerck & Co Inc/NJ
35MSMorgan Stanley
73NLYAnnaly Capital Management Inc
99NOKNokia OYJ
121NVDANvidia Corp
80ORCLOracle Corp
61PALMPalm Inc
37PBRPetroleo Brasileiro SA
85PGProcter & Gamble Co/The
41POTPotash Corp of Saskatchewan Inc
74RFRegions Financial Corp
124RIGTransocean Ltd
132RMBSRambus Inc
103SSprint Nextel Corp
83SDSProShares UltraShort S&P500
122SKFProShares UltraShort Financials
107SLBSchlumberger Ltd
91SLViShares Silver Trust
84SRSProShares UltraShort Real Estate
119SSOProShares Ultra S&P500
101STISunTrust Banks Inc
125SVNTSavient Pharmaceuticals Inc
92TBTProShares UltraShort 20+ Year Treasury
14UNGUnited States Natural Gas Fund LP
117UNHUnitedHealth Group Inc
110UPSUnited Parcel Service Inc
Start Printed Page 59294
81USBUS Bancorp
44USOUnited States Oil Fund LP
60UYGProShares Ultra Financials
96VVisa Inc
10WFCWells Fargo & Co
133WYNNWynn Resorts Ltd
52XUnited States Steel Corp
114XHBSPDR S&P Homebuilders ETF
86XLIIndustrial Select Sector SPDR Fund
79XLUUtilities Select Sector SPDR Fund

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, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanisms of a free and open market and a national market system, by identifying the options classes to be added to the Penny Pilot in a manner consistent with prior approvals and filings.

B. Self-Regulatory Organization's Statement on Burden on Competition

Nasdaq 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

Written comments were neither solicited nor received.

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

Pursuant to Section 19(b)(3)(A)(i) of the Act [9] and Rule 19b-4(f)(1) thereunder,[10] NASDAQ has designated this proposal as one constituting a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule.

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

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-NASDAQ-2009-097. 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 (​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 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 No. SR-NASDAQ-2009-097 and should be submitted on or before December 8, 2009.

Start Signature

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.[11]

Florence E. Harmon,

Deputy Secretary.

End Signature End Preamble


3.  In Amendment No. 1, Nasdaq proposed to correct a technical error in Section III. The change has no effect on the substance of the proposed rule change.

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4.  The Penny Pilot was established in March 2008 and in October 2009 was expanded and extended through December 31, 2010. See Securities Exchange Act Release Nos. 57579 (March 28, 2008), 73 FR 18587 (April 4, 2008) (SR-NASDAQ-2008-026) (notice of filing and immediate effectiveness establishing Penny Pilot); and 60874 (October 23, 2009) (SR-NASDAQ-2009-091) (notice of filing and immediate effectiveness expanding and extending Penny Pilot).

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5.  See Chapter VI, Section 5 regarding the Penny Pilot.

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6.  See Securities Exchange Act Release No. 60874 (October 23, 2009) (SR-NASDAQ-2009-091) (notice of filing and immediate effectiveness).

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9.  15 U.S.C. 78s(b)(3)(A)(i).

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[FR Doc. E9-27499 Filed 11-16-09; 8:45 am]