
[Federal Register: September 2, 2008 (Volume 73, Number 170)]
[Notices]               
[Page 51328-51331]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02se08-81]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58410; File No. SR-Phlx-2008-53]

 
Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc. 
(n/k/a NASDAQ OMX PHLX, Inc.); Order Granting Approval of Proposed Rule 
Change Relating to an Exchange Member's Conduct of Doing Business With 
the Public

August 22, 2008.

I. Introduction

    On July 11, 2008, the Philadelphia Stock Exchange, Inc. (``Phlx'' 
or ``Exchange'') (n/k/a NASDAQ OMX PHLX, Inc.) \1\ filed with the 
Securities and Exchange Commission (``Commission'' or ``SEC''), 
pursuant to Section 19(b)(1) of the Securities and Exchange Act of 1934 
(``Act''),\2\ and Rule 19b-4 thereunder,\3\ a proposed rule change 
relating to the Exchange's rules governing doing business with the 
public. On July 16, 2008, the Commission issued a release noticing the 
proposed rule change, which was published for comment in the Federal 
Register on July 22, 2008.\4\ The Comment period expired on August 12, 
2008. The Commission did not receive any comment letters in response to 
the proposed rule change. This order approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ The Exchange recently changed its name to NASDAQ OMX PHLX, 
Inc. See Securities Exchange Act Release No. 58380 (August 18, 2008) 
(SR-Phlx-2008-61).
    \2\ 15 U.S.C. 78s(b)(1).
    \3\ 17 CFR 240.19b-4.
    \4\ See Securities Exchange Act Release No. 58168 (July 16, 
2008), 73 FR 42641 (July 22, 2008) (``proposal'').
---------------------------------------------------------------------------

II. Description of Phlx Proposal

    Phlx proposed to amend Phlx Rules 1024 (Conduct of Accounts for 
Options Trading), 1025 (Supervision of Accounts), 1027 (Discretionary 
Accounts), and 1049 (Communications to Customers) that govern an 
Exchange member organizations' conduct of doing business with the 
public. Specifically, the proposed rule change would require that 
member organizations integrate the responsibility for supervision of a 
member organizations' public customer options business into their 
overall supervisory and compliance programs. In addition, the proposal 
would require a member organization to strengthen its supervisory 
procedures and internal controls as they relate to its public customer 
options business.

A. Integration of Options Supervision

    The purpose of the proposed rule change is to create a supervisory 
structure for options that is similar to that required by New York 
Stock Exchange (``NYSE'') Rule 342 and National Association of 
Securities Dealers (``NASD'') Rule 3010.\5\ The proposed rule change 
would eliminate the requirement that member organizations qualified to 
do a public customer business in options must designate a single person 
to act as Senior Registered Options Principal (``SROP'') for the member 
organization and that each such member organization designate a 
specific individual as a Compliance Registered Options Principal 
(``CROP''). Instead member organizations would be required to integrate 
the SROP and CROP functions into their overall supervisory and 
compliance programs. The proposed rule change is substantively similar 
to recent amendments to the rules of the Chicago Board Options 
Exchange, Inc. (``CBOE'') which were approved by the Commission.\6\
---------------------------------------------------------------------------

    \5\ On July 26, 2007, the Commission approved a proposed rule 
change filed by NASD to amend NASD's Certificate of Incorporation to 
reflect its name change to Financial Industry Regulatory Authority, 
Inc., or FINRA, in connection with the consolidation of the member 
firm regulatory functions of NASD and NYSE Regulation, Inc. See 
Securities Exchange Act Release No. 56146 (July 26, 2007), 72 FR 
42190 (August 1, 2007). The FINRA rule book currently consists of 
both NASD rules and certain NYSE Rules that FINRA has incorporated.
    \6\ See Securities Exchange Act Release No. 56971 (December 14, 
2007), 72 FR 72804 (December 21, 2007) (SR-CBOE-2007-106).
---------------------------------------------------------------------------

    The SROP concept was first introduced by Phlx and other options 
exchanges during the early years of the development of the listed 
options market. Initially, member organizations were required to 
designate one or more persons qualified as Registered Options 
Principals (``ROPs'') having supervisory responsibilities in respect of 
the member organization's options business. As the number of ROPs at 
larger member organizations began to increase, Phlx imposed an 
additional requirement that member organizations designate one of their 
ROPs as the SROP. This was intended to eliminate confusion as to where 
the compliance and supervisory responsibilities lay by centralizing in 
a single supervisory officer overall responsibility for the supervision 
of a

[[Page 51329]]

member organization's options activities.\7\ Subsequently, following 
the recommendation of the Commission's Options Study, Phlx and other 
options exchanges required member organizations to designate a CROP to 
be responsible for the member organization's overall compliance program 
in respect of its options activities.\8\ The CROP may be the same 
person who is designated as SROP.
---------------------------------------------------------------------------

    \7\ See Securities and Exchange Commission, 96th Cong., 1st 
Sess., Report of the Special Study of the Options Markets (Comm. 
Print 1978) 316 fn. 11 (``Options Study'').
    \8\ Id. at p. 335.
---------------------------------------------------------------------------

    Since the SROP and CROP requirements were first imposed, the 
supervisory function in respect of the options activities of most 
securities firms has been integrated into the matrix of supervisory and 
compliance functions in respect of the firms' other securities 
activities. This not only reflects the maturity of the options market, 
but also recognizes the ways in which the uses of options themselves 
have become more integrated with other securities in the implementation 
of particular strategies. Thus, the current requirement for a 
separately designated senior supervisor in respect of all aspects of a 
member organization's options activities, rather than clarifying the 
allocation of supervisory responsibilities within the member 
organization, may have just the opposite effect by failing to take into 
account the way in which these responsibilities are actually assigned. 
By permitting supervision of a member organization's options activities 
to be handled in the same manner as the supervision of its other 
securities and futures activities, the proposed rule change will ensure 
that supervisory responsibility over each segment of the member 
organization's business is assigned to the best qualified person in the 
member organization, thereby enhancing the overall quality of 
supervision. The same holds true for the compliance function.
    For example, member organizations generally designate one person to 
have supervisory responsibility over the application of margin 
requirements and other matters pertaining to the extension of credit. 
The proposed rule change would enable a member organization to include 
within the scope of such a person's duties the supervision over the 
proper margining of options accounts, thereby assuring that the most 
qualified person is charged with this responsibility and at the same 
time eliminating any uncertainty that might now exist as to whether 
this responsibility lies with the senior credit supervisor or with the 
SROP.
    Similarly, the proposed rule change would allow a member 
organization to specifically designate one or more individuals as being 
responsible for approving a ROP's acceptance of discretionary accounts 
\9\ and exceptions to a member organization's suitability standards for 
trading uncovered short options.\10\ The proposed rule changes would 
allow member organizations the flexibility to assign such 
responsibilities, which formerly rested with the SROP and/or CROP, to 
more than one ROP qualified individual where the member organization 
believes it advantageous to do so to enhance its supervisory or 
compliance structure. Typically, a member organization may wish to 
divide these functions on the basis of geographic region or functional 
considerations. Phlx Rule 1024 would be amended to clarify the 
qualification requirements of individuals designated as ROPs.\11\ Rule 
1024 would also be amended to specify the registration requirements of 
individuals who accept orders from non-broker-dealer customers.\12\
---------------------------------------------------------------------------

    \9\ See proposed Phlx Rule 1027 (a)(i).
    \10\ See proposed Phlx Rule 1024(c).
    \11\ See proposed Commentaries .06 and .07 to Phlx Rule 1024.
    \12\ See proposed Commentary .08 to Phlx Rule 1024.
---------------------------------------------------------------------------

    The proposed rule change would call for options discretionary 
accounts, the acceptance of which must be approved by a ROP qualified 
individual (other than the ROP who accepted the account), to be 
supervised in the same manner as the supervision of other securities 
accounts that are handled on a discretionary basis.\13\ The proposed 
rule change would eliminate the requirement that discretionary options 
orders be approved on the day of entry by a ROP (with one exception as 
described below).\14\ This requirement predates the Options Study and 
is not consistent with the use of supervisory tools in computerized 
format or exception reports generated after the close of a trading day. 
No similar requirement exists for supervision of other securities 
accounts that are handled on a discretionary basis.\15\ Discretionary 
orders must be reviewed in accordance with a member organization's 
written supervisory procedures. The proposed rule change would ensure 
that supervisory responsibilities are assigned to specific ROP 
qualified individuals, thereby enhancing the quality of supervision.
---------------------------------------------------------------------------

    \13\ See proposed Phlx Rule 1025.
    \14\ See proposed Phlx Rule 1027(a).
    \15\ See e.g., NYSE Rule 408.
---------------------------------------------------------------------------

    Phlx Rule 1027 would be revised by adding, as Commentary .01, a 
requirement that any member organization that does not utilize 
computerized surveillance tools for the frequent and appropriate review 
of discretionary account activity must establish and implement 
procedures to require ROP qualified individuals who have been 
designated to review discretionary accounts to approve and initial each 
discretionary order on the day entered. The Exchange believes that any 
member organization that does not utilize computerized surveillance 
tools to monitor discretionary account activity should continue to be 
required to perform the daily manual review of discretionary orders.
    Under the proposed rule change, options discretionary accounts will 
continue to receive frequent appropriate supervisory review by 
designated ROP qualified individuals. Additionally, member 
organizations will continue to be required to designate ROP qualified 
individuals to review and approve the acceptance of options 
discretionary accounts in order to determine whether the ROP accepting 
the account had a reasonable basis for believing that the customer was 
able to understand and bear the risks of the proposed strategies or 
transactions.\16\ This requirement provides an additional level of 
supervisory audit over options discretionary accounts that does not 
exist for other securities discretionary accounts.
---------------------------------------------------------------------------

    \16\ See proposed Phlx Rule 1027(a).
---------------------------------------------------------------------------

    In addition, the proposed rule change would require that each 
member organization submit to the Exchange a written report by April 1 
of each year, that details the member organization's supervision and 
compliance effort, including its options compliance program, during the 
preceding year and reports on the adequacy of the member organization's 
ongoing compliance processes and procedures.\17\
---------------------------------------------------------------------------

    \17\ See proposed Phlx Rule 1025(g), which is modeled after NYSE 
Rule 342.30.
---------------------------------------------------------------------------

    Proposed Phlx Rule 1025(h) would require that each member 
organization submit, by April 1st of each year, a copy of the Phlx Rule 
1025(g) annual report to one or more of its control persons or, if the 
member organization has no control person, to the audit committee of 
its board of directors or its equivalent committee or group.\18\
---------------------------------------------------------------------------

    \18\ See proposed Phlx Rule 1025(h) which is modeled after NYSE 
Rule 354.
---------------------------------------------------------------------------

    Proposed Phlx Rule 1025(g) would provide that a member organization 
that

[[Page 51330]]

specifically includes its options compliance program in a report that 
complies with substantially similar NYSE and NASD rule requirements 
will be deemed to have satisfied the requirements of Phlx Rules 1025(g) 
and 1025(h).
    Although the proposed rule change would eliminate entirely the 
positions and titles of the SROP and CROP, member organizations would 
still be required to designate a single general partner or executive 
officer to assume overall authority and responsibility for internal 
supervision, control of the member organization and compliance with 
securities laws and regulations.\19\ Member organizations would also be 
required to designate specific qualified individuals as having 
supervisory or compliance responsibilities over each aspect of the 
member organization's options activities and to set forth the names and 
titles of these individuals in their written supervisory 
procedures.\20\ This is consistent with the integration of options 
supervision into the overall supervisory and compliance structure of a 
member organization. In connection with the approval of these proposed 
rule changes, the Exchange intends to review member organizations' 
written supervisory and compliance procedures in the course of the 
Exchange's routine examination of member organizations to ensure that 
supervisory and compliance responsibilities are adequately defined.
---------------------------------------------------------------------------

    \19\ See proposed Phlx Rule 1025(a).
    \20\ See proposed Commentary .02 to Phlx Rule 1025.
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule changes recognize that 
options are no longer in their infancy, have become more integrated 
with other securities in the implementation of particular strategies, 
and thus should not continue to be regulated as though they are new and 
experimental products. The Exchange believes that the proposed rule 
change is appropriate and would not materially alter the supervisory 
operations of member organizations. The Exchange believes the 
supervisory and compliance structure in place for non-options products 
at most member organizations is not materially different from the 
structure in place for options.

B. Supervisory Procedures and Internal Controls

    The Exchange also proposed to amend certain rules to strengthen 
member and member organizations' supervisory procedures and internal 
controls as they relate to the members' public customer options 
business. The proposed rule changes described below are modeled after 
NYSE and NASD rules approved by the Commission in 2004.\21\ The 
Exchange believes the following proposal to strengthen member 
supervisory procedures and internal controls is appropriate and 
consistent with the preceding proposal to integrate options and non-
options sales practice supervision and compliance functions.
---------------------------------------------------------------------------

    \21\ See Securities Exchange Act Release Nos. 49882 (June 17, 
2004), 69 FR 35108 (June 23, 2004) (SR-NYSE-2002-36) and 49883 (June 
17, 2004), 69 FR 35092 (June 23, 2004) (SR-NASD-2002-162).
---------------------------------------------------------------------------

    Phlx Rule 1025(a)(iii) would be revised to require the development 
and implementation of written policies and procedures reasonably 
designed to supervise sales managers and other supervisory personnel 
who service customer options accounts (i.e., who act in the capacity of 
a registered representative).\22\ This requirement would apply to 
branch office managers, sales managers, regional/district sales 
managers, or any person performing a similar supervisory function. Such 
policies and procedures are expected to encompass all options sales-
related activities. Proposed Phlx Rule 1025(a)(iii)(A) would require 
that supervisory reviews of producing sales managers be conducted by a 
qualified ROP who is either senior to, or otherwise ``independent of'', 
the producing manager under review.\23\ This provision is intended to 
ensure that all options sales activity of a producing manager is 
monitored for compliance with applicable regulatory requirements by 
persons who do not have a personal interest in such activity.
---------------------------------------------------------------------------

    \22\ See proposed Phlx Rule 1025(a)(iii) which is modeled after 
NYSE Rule 342.19.
    \23\ An ``otherwise independent'' person is defined in proposed 
Phlx Rule 1025(a)(iii)(A) as one who: May not report either directly 
or indirectly to the producing manager under review; must be 
situated in an office other than the office of the producing 
manager; must not otherwise have supervisory responsibility over the 
activity being reviewed; and must alternate such review 
responsibility with another qualified person every two years or 
less. Further, if a person designated to review a producing manager 
receives an override or other income derived from that producing 
manager's customer activity that represents more than 10% of the 
designated person's gross income derived from the member 
organization over the course of a rolling twelve-month period, the 
member organization must establish alternative senior or otherwise 
independent supervision of that producing manager to be conducted by 
a qualified Registered Options Principal other than the designated 
person receiving the income.
---------------------------------------------------------------------------

    Proposed Phlx Rule 1025(a)(iii)(B) would provide a limited 
exception for members so limited in size and resources that there is no 
qualified person senior to, or otherwise independent of, the producing 
manager to conduct the review. In this case, the reviews may be 
conducted by a qualified ROP to the extent practicable. Under proposed 
Phlx Rule 1025(a)(iii)(C), a member relying on the limited size and 
resources exception must document the factors used to determine that 
compliance with each of the ``senior'' or ``otherwise independent'' 
standards of Phlx Rule 1025(a)(iii)(A) is not possible, and that the 
required supervisory systems and procedures in place with respect to 
any producing manager comply with the provisions of Phlx Rule 
1025(a)(iii)(A) to the extent practicable.\24\
---------------------------------------------------------------------------

    \24\ Paragraph 1025 (a)(iii)(D) of Phlx Rule 1025 would provide 
that a member organization that complies with requirements of the 
NYSE or the NASD that are substantially similar to the requirements 
in Phlx Rules 1025 (a)(iii)(A), (a)(iii)(B) and (a)(iii)(C) will be 
deemed to have met such requirements.
---------------------------------------------------------------------------

    Proposed Phlx Rule 1025(c)(i) would require member organizations to 
develop and maintain adequate controls over each of their business 
activities.\25\ The proposed rule would further require that such 
controls include the establishment of procedures to independently 
verify and test the supervisory systems and procedures for those 
business activities. Member organizations would be required to include 
in the annual report prepared pursuant to Phlx Rule 1025(g) a review of 
their efforts in this regard, including a summary of the tests 
conducted and significant exceptions identified. The Exchange believes 
proposed Phlx Rule 1025(c)(i) would enhance the quality of member 
organizations' supervision.\26\
---------------------------------------------------------------------------

    \25\ Current Phlx Rule 1025(c) regarding designation of foreign 
currency options principals was renumbered as 1025(i).
    \26\ See proposed Phlx Rule 1025(c)(i) which is modeled after 
NYSE Rule 342.23. Paragraph (c)(ii) of Phlx Rule 1025 would provide 
that a member organization that complies with requirements of the 
NYSE or the NASD that are substantially similar to the requirements 
in Phlx Rule 1025(c)(i) will be deemed to have met such 
requirements.
---------------------------------------------------------------------------

    Proposed Phlx Rule 1025(d) would establish requirements for branch 
office inspections similar to the requirements of NYSE Rule 342.24. 
Specifically, Phlx Rule 1025(d) would require a member organization to 
inspect, at least annually, each supervisory branch office and inspect 
each non-supervisory branch office at least once every three years.\27\ 
The proposed rule would further require that persons who conduct a 
member organization's annual

[[Page 51331]]

branch office inspection must be independent of the direct supervision 
or control of the branch office (i.e., not the branch office manager, 
or any person who directly or indirectly reports to such manager, or 
any person to whom such manager directly reports). The Exchange 
believes that requiring branch office inspections to be conducted by 
someone who has no significant financial interest in the success of a 
branch office should lead to more objective and vigorous inspections.
---------------------------------------------------------------------------

    \27\ Proposed Phlx Rules 1025(d)(i)(A) and (B) would provide 
members with two exceptions from the annual branch office inspection 
requirement: A member may demonstrate to the satisfaction of the 
Exchange that other arrangements may satisfy the Rule's requirements 
for a particular branch office, or based upon a member 
organization's written policies and procedures providing for a 
systematic risk-based surveillance system, the member organization 
submits a proposal to the Exchange and receives, in writing, an 
exemption from this requirement pursuant to Phlx Rule 1025(e).
---------------------------------------------------------------------------

    Under proposed Phlx Rule 1025(e), any member organization seeking 
an exemption, pursuant to Phlx Rule 1025(d)(ii), from the annual branch 
office inspection requirement would be required to submit to the 
Exchange written policies and procedures for systematic risk-based 
surveillance of its branch offices, as defined in Phlx Rule 1025(e). 
Proposed Phlx Rule 1025(f) would require that annual branch office 
inspection programs include, at a minimum, testing and verification of 
specified internal controls.\28\ Paragraph (d)(3) of Phlx Rule 1025 
would provide that a member organization that complies with 
requirements of the NYSE or the NASD that are substantially similar to 
the requirements in Phlx Rules 1025(d), (e) and (f) will be deemed to 
have met such requirements.
---------------------------------------------------------------------------

    \28\ See proposed Phlx Rules 1025(e) and (f) which are modeled 
after NYSE Rules 342.25 and 342.26.
---------------------------------------------------------------------------

    In conjunction with the proposed changes to Phlx Rules 1025(d), (e) 
and (f), the Exchange proposes to add new Commentary .09 to Phlx Rule 
1024 to define ``branch office'' in a way that is substantially similar 
to the definition of branch office in NYSE Rule 342.10.
    Proposed Phlx Rule 1024(g)(iv) would require a member organization 
to designate a Chief Compliance Officer (CCO). Proposed Phlx Rule 
1025(g)(v) would require each member organization's Chief Executive 
Officer (CEO), or equivalent, to certify annually per subsection (A) 
that the member organization has in place processes to: (1) Establish 
and maintain policies and procedures reasonably designed to achieve 
compliance with applicable Exchange rules and federal securities laws 
and regulations; (2) modify such policies and procedures as business, 
regulatory, and legislative changes and events dictate; and (3) test 
the effectiveness of such policies and procedures on a periodic basis, 
the timing of which is reasonably designed to ensure continuing 
compliance with Exchange rules and federal securities laws and 
regulations.
    Proposed Phlx Rule 1025(g)(v) would further require that the CEO 
attest the CEO has conducted one or more meetings with the CCO in the 
preceding 12 months to discuss the compliance processes in proposed 
Phlx Rule 1025(g)(v), that the CEO has consulted with the CCO and other 
officers to the extent necessary to attest to the statements in the 
certification, and the compliance processes are evidenced in a report, 
reviewed by the CEO, CCO, and such other officers as the member 
organization deems necessary to make the certification, that is 
provided to the member organization's board of directors and audit 
committee (if such committee exists).\29\
---------------------------------------------------------------------------

    \29\ See proposed Phlx Rule 1025(g)(v) which is modeled after 
NASD Rule 3013 and NYSE Rule 342.30(e).
---------------------------------------------------------------------------

    Under proposed Phlx Rule 1025(b)(ii), a member, upon a customer's 
written instructions, may hold mail for a customer who will not be at 
his or her usual address for no longer than two months if the customer 
is on vacation or traveling, or three months if the customer is going 
abroad. This provision would help ensure that members that hold mail 
for customers who are away from their usual addresses, do so only 
pursuant to the customer's written instructions and for a specified, 
relatively short period of time.\30\
---------------------------------------------------------------------------

    \30\ See proposed Phlx Rule 1025(b)(ii) which is modeled after 
NASD Rule 3110(i).
---------------------------------------------------------------------------

    Proposed Phlx Rule 1025(b)(iii) would require that, before a 
customer's options order is executed, the account name or designation 
must be placed upon the memorandum for each transaction. In addition, 
only a qualified ROP may approve any changes in account names or 
designations. The ROP also must document the essential facts relied 
upon in approving the changes and maintain the record in a central 
location. A member would be required to preserve any account 
designation change documentation for a period of not less than three 
years, with the documentation preserved for the first two years in an 
easily accessible place, as the term ``easily accessible place'' is 
used in Exchange Act Rule 17a-4.\31\ The Exchange believes the proposed 
rule would help to protect account name and designation information 
from possible fraudulent activity.\32\
---------------------------------------------------------------------------

    \31\ See 17 CFR 240.17a-4.
    \32\ See proposed Phlx Rule 1025(b)(iii) which is modeled after 
NASD Rule 3110(j).
---------------------------------------------------------------------------

    Phlx Rule 1027(e) allows member organizations to exercise time and 
price discretion on orders for the purchase or sale of a definite 
number of options contracts in a specified security. The Exchange 
proposes to amend its Rule 1027(e) to limit the duration of this 
discretionary authority to the day it is granted, absent written 
authorization to the contrary. In addition, the proposed rule would 
require any exercise of time and price discretion to be reflected on 
the customer order ticket. The proposed one-day limitation would not 
apply to time and price discretion exercised for orders effected with 
or for an institutional account (as defined in the rule) pursuant to 
valid Good-Till-Cancelled instructions issued on a ``not held'' basis. 
The Exchange believes that investors will receive greater protection by 
clarifying the time such discretionary orders remain pending.\33\
---------------------------------------------------------------------------

    \33\ See proposed Phlx Rule 1027(e) which is modeled after NASD 
Rule 2510(d)(1).
---------------------------------------------------------------------------

III. Discussion

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder.\34\ In particular, the Commission finds that 
the proposed rule change would integrate the supervision and compliance 
functions relating to member organizations' public customer options 
activities into the overall supervisory structure of a member 
organization, thereby eliminating any uncertainty over where 
supervisory responsibility lies. In addition, the proposed rule change 
would foster the strengthening of members' and member organizations' 
internal controls and supervisory systems. As such, the Commission 
finds that the proposal is consistent with and furthers the objectives 
of Section 6(b)(5) of the Act,\35\ in that it is designed to promote 
just and equitable principles of trade, to prevent fraudulent and 
manipulative acts and practices, and in general, to protect investors 
and the public interest.
---------------------------------------------------------------------------

    \34\ In approving this rule change, the Commission notes that it 
has considered the proposed rule's impact on efficiency, competition 
and capital formation. See 15 U.S.C. 78c(f).
    \35\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\36\ that the proposed rule change (SR-Phlx-2008-53), be and hereby 
is, approved.
---------------------------------------------------------------------------

    \36\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\37\
---------------------------------------------------------------------------

    \37\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-20228 Filed 8-29-08; 8:45 am]

BILLING CODE 8010-01-P
