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Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Add Seventy-Five Options Classes to the Penny Pilot Program

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Start Preamble February 1, 2010.

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 January 25, 2010 NASDAQ OMX PHLX, Inc. (“Phlx” or “Exchange”) 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 the Exchange. 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

The Exchange is filing with the Commission a proposal to designate seventy-five options classes to be added to the Penny Pilot Program (“Penny Pilot” or “Pilot”) on February 1, 2010.[3] The Exchange is not proposing to amend any rule text, but simply administering or enforcing an existing rule.[4]

The text of the proposed rule change is available on the Exchange's Web site at​NASDAQOMXPHLX/​Filings, at the principal office of the Exchange, 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 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 this filing is to identify the next seventy-five options classes to be added to the Penny Pilot effective February 1, 2010.

In the Exchange's immediately effective filing to extend and expand the Penny Pilot through December 31, 2010,[5] the Exchange proposed expanding the Pilot four times on a Start Printed Page 6234quarterly 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 February 1, 2010, based on ADVs for the six months ending December 31, 2009.

Nat'l rankingSymbolCompany nameNat'l rankingSymbolCompany name
131ABTAbbott Laboratories.192LEAPLeap Wireless International Inc.
169AEMAgnico-Eagle Mines Ltd.205LLYEli Lilly & Co.
151AETAetna Inc.162LOLorillard Inc.
156AFLAflac Inc.152LOWLowe's Cos Inc.
181AKAMAkamai Technologies Inc.176MMacy's Inc.
178AMATApplied Materials Inc.155MCOMoody's Corp.
117AMRAMR Corp.217METMetLife Inc.
166ANFAbercrombie & Fitch Co.187MMM3M Co.
172APCAnadarko Petroleum Corp.140MUMicron Technology Inc.
209ATVIActivision Blizzard Inc.177NUENucor Corp.
145BBDBanco Bradesco SA.157OXYOccidental Petroleum Corp.
190BCRXBioCryst Pharmaceuticals Inc.158PARDPoniard Pharmaceuticals Inc.
218BKBank of New York Mellon Corp/The.150PEPPepsiCo Inc/NC.
194BRCMBroadcom Corp.141PMPhilip Morris International Inc.
184BTUPeabody Energy Corp.185PNCPNC Financial Services Group Inc.
144BXBlackstone Group LP.216QIDProShares UltraShort QQQ.
200CALContinental Airlines Inc.149SHLDSears Holdings Corp.
211CFCF Industries Holdings Inc.175SLMSLM Corp.
142CMCSAComcast Corp.212SLWSilver Wheaton Corp.
203CSXCSX Corp.215SQNMSequenom Inc.
143CVSCVS Caremark Corp.153STECSTEC Inc.
174CXCemex SAB de CV.219STXSeagate Technology.
183DDEI du Pont de Nemours & Co.202SUSuncor Energy Inc.
146ERTSElectronic Arts Inc.207TCKTeck Resources Ltd.
121EWJiShares MSCI Japan Index Fund.196TEVATeva Pharmaceutical Industries Ltd.
186FDXFedEx Corp.135TLTiShares Barclays 20+ Year Treasury Bond Fund.
118FNMFederal National Mortgage Association.214TZADirexion Daily Small Cap Bear 3X Shares.
182FREFederal Home Loan Mortgage Corp.168UAUAUAL Corp.
179GILDGilead Sciences Inc.154UREProShares Ultra Real Estate.
198GLWCorning Inc.180UTXUnited Technologies Corp.
170HBCHSBC Holdings PLC.204WFRMEMC Electronic Materials Inc.
197HESHess Corp.115WFTWeatherford International Ltd.
161HLHecla Mining Co.165WLPWellPoint Inc.
193HOGHarley-Davidson Inc.191XLBMaterials Select Sector SPDR Fund.
206HONHoneywell International Inc.173XRXXerox Corp.
210JOYGJoy Global Inc.148XTOXTO Energy Inc.
213JWNNordstrom Inc.130YRCWYRC Worldwide Inc.
137KFTKraft Foods Inc.

2. Statutory Basis

The Exchange believes that its proposal is consistent with Section 6(b) of the Act [6] in general, and furthers the objectives of Section 6(b)(5) of the Act [7] 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

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 either solicited or 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 [8] and Rule 19b-4(f)(1) thereunder,[9] the Exchange 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 Start Printed Page 6235interest, 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-Phlx-2010-12. 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-Phlx-2010-12 and should be submitted on or before March 1, 2010.

Start Signature

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.[10]

Florence E. Harmon,

Deputy Secretary.

End Signature End Preamble


3.  The Penny Pilot was established in January 2007 and in October 2009 was expanded and extended through December 31, 2010. See Securities Exchange Act Release Nos. 55153 (January 23, 2007), 72 FR 4553 (January 31, 2007) (SR-Phlx-2006-74) (notice of filing and approval order establishing Penny Pilot); 60873 (October 23, 2009) (SR-Phlx-2009-91) (notice of filing and immediate effectiveness expanding and extending Penny Pilot); and 60966 (November 9, 2009) (SR-Phlx-2009-094) (notice of filing and immediate effectiveness adding seventy-five classes to Penny Pilot).

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4.  See Rule 1034 regarding the Penny Pilot.

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5.  See Securities Exchange Act Release No. 60873 (October 23, 2009), 74 FR 56675 (November 2, 2009) (SR-Phlx-2009-91) (notice of filing and immediate effectiveness).

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8.  15 U.S.C. 78s(b)(3)(A)(i).

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[FR Doc. 2010-2583 Filed 2-5-10; 8:45 am]