The Securities and Exchange Commission has approved a proposed FINRA rule change that will expand the class of entities permitted to use the delta hedging exemption from equity options position limits. Under the rule, eligibility for the delta hedging exemption would be expanded beyond “OTC derivatives dealers” to include FINRA members and non-member affiliates, provided its position in standardized and/or conventional equity options is delta neutral under a “Permitted Pricing Model.” The expanded class of members and non-member affiliates who rely on the exemption will be required to provide written certification to FINRA affirming the use of a “Permitted Pricing Model.” Certain other specifications are required to be in writing, such as aggregate positions of 200 or more contracts on the same side of the market.

 http://www.sec.gov/rules/sro/nasd/2007/34-56916.pdf