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

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Start Preamble May 4, 2010.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),[1] and Rule 19b-4 [2] thereunder, notice is hereby given that on April 27, 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 May 3, 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 May 3, 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 quarterly 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 May 3, 2010, based on ADVs for the six months ending March 31, 2010.

Nat'l rankingSymbolSecurity nameNat'l rankingSymbolSecurity name
153XLVHealth Care Select Sector SPDR Fund247JCPJC Penney Co Inc.
155CIENCiena Corp248ACLAlcon Inc.
157AMLNAmylin Pharmaceuticals Inc249STPSuntech Power Holdings Co Ltd.
158CTICCell Therapeutics Inc250TLBTalbots Inc.
159MDTMedtronic Inc251SYMCSymantec Corp.
162TIVOTiVo Inc253AMEDAmedisys Inc.
163MNKDMannKind Corp255TMToyota Motor Corp.
171MDVNMedivation Inc257HKPetrohawk Energy Corp.
176BRKBBerkshire Hathaway Inc258ENEREnergy Conversion Devices Inc.
178APOLApollo Group Inc259STTState Street Corp.
181BSXBoston Scientific Corp260BHPBHP Billiton Ltd.
185XLYConsumer Discretionary Sel. Sec. SPDR Fund261NFLXNetFlix Inc.
188CLFCliffs Natural Resources Inc262LDKLDK Solar Co Ltd.
190ZIONZions Bancorporation263SPGSimon Property Group Inc.
194IOCInterOil Corp264TIFTiffany & Co.
197ITMNInterMune Inc265BUCYBucyrus International Inc.
204GMEGameStop Corp266WAGWalgreen Co.
209XLKTechnology Select Sector SPDR Fund268IPInternational Paper Co.
210AKSAK Steel Holding Corp271XMESPDR S&P Metals & Mining ETF.
212GRMNGarmin Ltd272KGCKinross Gold Corp.
213MRVLMarvell Technology Group Ltd273EPEl Paso Corp.
215XLPConsumer Staples Select Sector SPDR Fund274SEEDOrigin Agritech Ltd.
Start Printed Page 25891
216UNPUnion Pacific Corp275WINWindstream Corp.
223WMBWilliams Cos Inc/The280ADBEAdobe Systems Inc.
225MEEMassey Energy Co281PCXPatriot Coal Corp.
227CELGCelgene Corp282SPWRASunPower Corp.
229GMCRGreen Mountain Coffee Roasters Inc284LCCUS Airways Group Inc.
231WDCWestern Digital Corp285PRUPrudential Financial Inc.
234DALDelta Air Lines Inc286LENLennar Corp.
235FXECurrencyShares Euro Trust287EWTiShares MSCI Taiwan Index Fund.
237COSTCostco Wholesale Corp288KBHKB Home.
239MJNMead Johnson Nutrition Co289CREECree Inc.
240ALLAllstate Corp/The290SIRISirius XM Radio Inc.
241SIISmith International Inc291MMRMcMoRan Exploration Co.
242RTNRaytheon Co292CENXCentury Aluminum Co.
243DVNDevon Energy Corp293GFIGold Fields Ltd.

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 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 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-Phlx-2010-65. 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 Web site viewing and printing 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 Number SR-Phlx-2010-65 and should be submitted on or before June 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), 74 FR 56675 (November 2, 2009) (SR-Phlx-2009-91) (notice of filing and immediate effectiveness expanding and extending Penny Pilot); and 60966 (November 9, 2009), 74 FR 59331 (November 17, 2009) (SR-Phlx-2009-94) (notice of filing and immediate effectiveness adding seventy-five classes to Penny Pilot); and 61454 (February 1, 2010), 75 FR 6233 (February 8, 2010) (SR-Phlx-2010-12) (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. 2010-10964 Filed 5-7-10; 8:45 am]