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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62028; File No. SR-Phlx-2010-65]

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

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.

1

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

2

17 CFR 240.19b-4.

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

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).

4

See

Rule 1034 regarding the Penny Pilot.

The text of the proposed rule change is available on the Exchange's Web site at

http://nasdaqomxphlx.cchwallstreet.com/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.

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).

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 ranking

Symbol

Security name

Nat'l ranking

Symbol

Security name

153

XLV

Health Care Select Sector SPDR Fund

247

JCP

JC Penney Co Inc.

155

CIEN

Ciena Corp

248

ACL

Alcon Inc.

157

AMLN

Amylin Pharmaceuticals Inc

249

STP

Suntech Power Holdings Co Ltd.

158

CTIC

Cell Therapeutics Inc

250

TLB

Talbots Inc.

159

MDT

Medtronic Inc

251

SYMC

Symantec Corp.

162

TIVO

TiVo Inc

253

AMED

Amedisys Inc.

163

MNKD

MannKind Corp

255

TM

Toyota Motor Corp.

171

MDVN

Medivation Inc

257

HK

Petrohawk Energy Corp.

176

BRKB

Berkshire Hathaway Inc

258

ENER

Energy Conversion Devices Inc.

178

APOL

Apollo Group Inc

259

STT

State Street Corp.

181

BSX

Boston Scientific Corp

260

BHP

BHP Billiton Ltd.

185

XLY

Consumer Discretionary Sel. Sec. SPDR Fund

261

NFLX

NetFlix Inc.

188

CLF

Cliffs Natural Resources Inc

262

LDK

LDK Solar Co Ltd.

190

ZION

Zions Bancorporation

263

SPG

Simon Property Group Inc.

194

IOC

InterOil Corp

264

TIF

Tiffany & Co.

197

ITMN

InterMune Inc

265

BUCY

Bucyrus International Inc.

204

GME

GameStop Corp

266

WAG

Walgreen Co.

209

XLK

Technology Select Sector SPDR Fund

268

IP

International Paper Co.

210

AKS

AK Steel Holding Corp

271

XME

SPDR S&P Metals & Mining ETF.

212

GRMN

Garmin Ltd

272

KGC

Kinross Gold Corp.

213

MRVL

Marvell Technology Group Ltd

273

EP

El Paso Corp.

215

XLP

Consumer Staples Select Sector SPDR Fund

274

SEED

Origin Agritech Ltd.

216

UNP

Union Pacific Corp

275

WIN

Windstream Corp.

220

DTV

DIRECTV

279

DHI

DR Horton Inc.

223

WMB

Williams Cos Inc/The

280

ADBE

Adobe Systems Inc.

225

MEE

Massey Energy Co

281

PCX

Patriot Coal Corp.

227

CELG

Celgene Corp

282

SPWRA

SunPower Corp.

229

GMCR

Green Mountain Coffee Roasters Inc

284

LCC

US Airways Group Inc.

231

WDC

Western Digital Corp

285

PRU

Prudential Financial Inc.

234

DAL

Delta Air Lines Inc

286

LEN

Lennar Corp.

235

FXE

CurrencyShares Euro Trust

287

EWT

iShares MSCI Taiwan Index Fund.

237

COST

Costco Wholesale Corp

288

KBH

KB Home.

239

MJN

Mead Johnson Nutrition Co

289

CREE

Cree Inc.

240

ALL

Allstate Corp/The

290

SIRI

Sirius XM Radio Inc.

241

SII

Smith International Inc

291

MMR

McMoRan Exploration Co.

242

RTN

Raytheon Co

292

CENX

Century Aluminum Co.

243

DVN

Devon Energy Corp

293

GFI

Gold Fields Ltd.

244

MT

ArcelorMittal

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.

6

15 U.S.C. 78f(b).

7

15 U.S.C. 78f(b)(5).

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.

8

15 U.S.C. 78s(b)(3)(A)(i).

9

17 CFR 240.19b-4(f)(1).

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

• Use the Commission's Internet comment form (

http://www.sec.gov/rules/sro.shtml);

or

• Send an e-mail to

rule-comments@sec.gov

. Please include File Number SR-Phlx-2010-65 on the subject line.

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 (

http://www.sec.gov/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.

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

10

10

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

Florence E. Harmon,

Deputy Secretary.

[FR Doc. 2010-10964 Filed 5-7-10; 8:45 am]

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