Self-Regulatory Organizations; American Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Rule 903 To Provide That the Exchange Will Typically Open Four Expiration Months for Each Class of Options Open for Trading, 9841-9843 [E6-2688]
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Federal Register / Vol. 71, No. 38 / Monday, February 27, 2006 / Notices
every time a registrant or other person
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must be submitted to OMB within 30
days of this notice.
Dated: February 16, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. E6–2687 Filed 2–24–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53332; File No. SR–Amex–
2006–16]
Self-Regulatory Organizations;
American Stock Exchange LLC; Notice
of Filing and Immediate Effectiveness
of a Proposed Rule Change To Amend
Its Rule 903 To Provide That the
Exchange Will Typically Open Four
Expiration Months for Each Class of
Options Open for Trading
hsrobinson on PROD1PC70 with NOTICES
February 17, 2006.
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 February
15, 2006, the American Stock Exchange
LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Amex. The Amex
filed this proposal as a ‘‘non1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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14:15 Feb 24, 2006
Jkt 208001
controversial’’ proposed rule change
pursuant to section 19(b)(3)(A) of the
Act,3 and Rule 19b–4(f)(6) thereunder,4
which renders the proposal effective
upon filing with the Commission.5 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 proposes to amend
Amex Rule 903 to provide that the
Exchange will typically open four
expiration months for each class of
options open for trading. The text of the
proposed rule change is available on the
Amex’s Web site at https://
www.amex.com, the Office of the
Secretary of the Amex 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
Amex 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 Amex 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 Exchange is proposing to amend
Amex Rule 903 in order to avoid
confusion and conform to industry
standard. The Amex states that this
proposal will not change the manner in
which options expiration months are
offered and listed, but instead, will
clearly set forth how the Exchange will
add these additional series.
Current Amex Rule 903 sets forth the
manner in which options series are
offered and listed on the Exchange. In
connection with expiration month
series, the rule provides that at the
commencement of trading on the
Exchange of a particular class of options
relating to an underlying stock or
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
5 As required by Rule 19b–4(f)(6)(iii), 17 CFR
240.19b–4(f)(6)(iii), the Amex submitted written
notice of its intent to file the proposed rule change,
along with a brief description and text of the
proposed rule change, at least five business days
prior to the date of filing.
9841
Exchange-Traded Fund Share, series of
options having three different expiration
months in three-month intervals will
normally be opened. Although Amex
Rule 903 does not specifically provide
that four expiration months will be open
for trading for each options class, the
Exchange in 1989 received approval
together with the other options
exchanges to provide four expiration
months.6 Accordingly, the Exchange
submits that this amendment to Amex
Rule 903 largely implements the prior
Commission approval permitting four
outstanding expiration months.
The other options exchanges provide
that they will open four expiration
months for each class of options open
for trading with the first two months
being the two nearest months, regardless
of the quarterly cycle on which the class
trades; and the third and fourth being
the next two months of the quarterly
cycle previously designated by the
exchange for that specific class.7 The
Exchange believes that it is necessary to
amend its rules to codify and conform
the listing of options expiration months
to the industry standard. Specifically,
the Exchange is proposing to add new
paragraph (b) to Amex Rule 903 to
provide that the Exchange will usually
open four expiration months for each
class of options open for trading on the
Exchange. The first two expiration
months will be the two nearest term
months, regardless of the quarterly cycle
on which the options class trades while
the third and fourth expiration months
will be the next two months of the
quarterly cycle previously designated by
the Exchange for the specific class. For
example, if the Exchange listed, in late
April, a new stock option on a JanuaryApril-July-October quarterly cycle, the
Exchange would list the two nearest
term months (May and June) and the
next two expiration months of the cycle
(July and October). When the May series
expires, the Exchange would then add
the January series. When the June series
expires, the Exchange would add the
August series as the next nearest month,
and would not add April.
Current Exchange Rule 903 permits
additional expiration month series of
the same options class to be added at or
about the time a prior expiration month
series expires. The rules of the other
options exchanges provide that, due to
unusual market conditions, new series
of options on an individual stock
(including an Exchange-Traded Fund
4 17
PO 00000
Frm 00070
Fmt 4703
Sfmt 4703
6 See Securities Exchange Act Release Nos. 26934
(June 14, 1989), 54 FR 26283 (June 22, 1989) and
22099 (May 31, 1985), 50 FR 23862 (June 6, 1985).
7 See, e.g., Chicago Board Options Exchange,
Incorporated (‘‘CBOE’’) Rule 5.5 and International
Securities Exchange, Inc. (‘‘ISE’’) Rule 504.
E:\FR\FM\27FEN1.SGM
27FEN1
9842
Federal Register / Vol. 71, No. 38 / Monday, February 27, 2006 / Notices
Share) may be added up until five
business days prior to expiration.8 The
Amex states that the rules of the other
options exchanges also permit new
series of options on individual stocks
and Exchange-Traded Fund Shares to be
added until the beginning of the month
in which the options contracts expire. In
order to conform to market convention,
the Exchange is proposing to add new
paragraph (d) to Amex Rule 903 as well
as Commentary .04. New paragraph (d)
provides for the opening of additional
series of options of the same class,
which new series would not affect the
prior series of the same class previously
opened, in the event the Exchange
deems such to be necessary to maintain
an orderly market, to meet customer
demand or when the market price of the
underlying stock or Exchange-Traded
Fund Share moves substantially from
the initial exercise price or prices.
Commentary .04 provides that such new
series of options on individual stocks
and Exchange-Traded Fund Shares may
be added until five business days prior
to expiration. It also provides that a new
series of FLEX Equity Options may be
added on any business day prior to the
expiration date.
The Exchange believes that its Rule
903 should be amended as proposed in
order to conform the Exchange’s options
offering and listing standards to
previously approved rule filings as well
as to conform to industry standard.
hsrobinson on PROD1PC70 with NOTICES
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with section
6(b) of the Act 9 in general and furthers
the objectives of section 6(b)(5) of the
Act 10 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 regulating, clearing,
settling, processing information with
respect to, and facilitating transactions
in securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest; and is
not designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers, or to
regulate by virtue of any authority
conferred by the Act matters not related
8 The Exchange received Commission approval in
1985 relating to the manner of adding additional
options series. See Securities Exchange Act Release
No. 21929 (April 10, 1985), 50 FR 15258 (April 17,
1985). This proposal seeks to implement this prior
Commission approval.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
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14:15 Feb 24, 2006
Jkt 208001
to the purpose of the Act or the
administration of the Exchange.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Amex does not believe that the
proposed rule change will impose any
burden on competition that is not
necessary or appropriate in the
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
The Amex has neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change: (1) Does not significantly affect
the protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) by its terms does not become
operative for 30 days after the date of
this filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, the proposed rule
change has become effective pursuant to
section 19(b)(3)(A) of the Act and Rule
19b–4(f)(6) thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing. However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest.
The Amex has asked the Commission
to waive the 30-day operative delay. The
Commission believes that the proposed
rule change does not raise any new
regulatory issues; the proposed rule is
identical to CBOE Rule 5.5 and ISE Rule
504. Waiver of the 30-day operative
period would enable the Exchange to
implement the proposal as quickly as
possible, and thereby provide for greater
uniformity with respect to the manner
in which options series are offered and
listed. Therefore, the Commission finds
that waiving the 30-day operative delay
is consistent with the protection of
investors and the public interest.11 For
this reason, the Commission designates
that the proposal has become effective
and operative immediately upon filing
with the Commission.
11 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
PO 00000
Frm 00071
Fmt 4703
Sfmt 4703
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.12
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–Amex–2006–16 on the subject
line.
Paper comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
No. SR–Amex–2006–16. 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 (https://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 inspection and copying in
the Commission’s Public Reference
Room. Copies of such filing will also be
available for inspection and copying at
the principal office of the Amex. 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
12 See Rule 19b–4(f)(6)(iii), 17 CFR 240.19b–
4(f)(6)(iii).
E:\FR\FM\27FEN1.SGM
27FEN1
Federal Register / Vol. 71, No. 38 / Monday, February 27, 2006 / Notices
submissions should refer to File No.
SR–Amex–2006–16 and should be
submitted on or before March 20, 2006.
For the Commission, by the Division
of Market Regulation, pursuant to
delegated authority.13
Nancy M. Morris,
Secretary.
[FR Doc. E6–2688 Filed 2–24–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53331; File No. SR–CBOE–
2006–17]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend a Pilot
Program Relating to Market-Maker BidAsk Width Requirements for NonHybrid System Classes
February 17, 2006.
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 February
15, 2006, the Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The CBOE has filed
this proposal pursuant to section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b-4(f)(6) thereunder,4 which renders
the proposal effective upon filing with
the Commission.5 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
hsrobinson on PROD1PC70 with NOTICES
The CBOE proposes to extend until
February 17, 2007, a pilot program
establishing a limited exemption from
the bid/ask differential requirements of
CBOE Rule 8.7(b)(iv). The text of the
proposed rule change appears below.
Proposed new language is italicized;
proposed deletions are [bracketed].
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b-4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b-4(f)(6).
5 The CBOE has asked the Commission to waive
the 30-day operative delay provided in Rule 19b4(f)(6)(iii). 17 CFR 240.19b-4(f)(6)(iii).
1 15
VerDate Aug<31>2005
14:15 Feb 24, 2006
Jkt 208001
Chicago Board Options Exchange,
Incorporated Rules
*
*
*
*
*
Rule 8.7. Obligations of Market-Makers
(a)–(e) No Change.
* * * Interpretations and Policies:
.01–.12 No Change.
.13 Market-Makers will be exempt
from the requirements of subparagraph
(b)(iv) of this Rule for a period of 30
seconds in cases where the Exchange
automatically adjusts one side of the
disseminated quote to one minimum
increment below (above) the NBBO bid
(offer): (1) because the size associated
with that quote has been exhausted by
automatic executions; or (2) to comply
with the terms of the Plan for the
Purpose of Creating and Operating an
Intermarket Option Linkage. This
exemption will be in effect until
[February 17, 2006] February 17, 2007
on a pilot basis.
*
*
*
*
*
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 Exchange is proposing to extend
until February 17, 2007, a pilot program
that provides a limited exemption from
the Market-Maker bid/ask differential
requirements contained in CBOE Rule
8.7(b)(iv).6 As part of accommodating
compliance with the Plan for the
Purpose of Creating and Operating an
Intermarket Options Linkage (the
6 The Commission approved the pilot program on
September 10, 2003. See Securities Exchange Act
Release No. 48471 (September 10, 2003), 68 FR
54251 (September 16, 2003) (order approving File
No. SR–CBOE–2003–08). The pilot program was
subsequently extended for an additional 18 months,
until February 17, 2006. See Securities Exchange
Act Release No. 50292 (August 31, 2004), 69 FR
54167 (September 7, 2004) (notice of filing and
immediate effectiveness of File No. SR–CBOE–
2004–39).
PO 00000
Frm 00072
Fmt 4703
Sfmt 4703
9843
‘‘Linkage Plan’’),7 the Exchange
introduced an ‘‘autofade’’ functionality
for classes NOT trading on the CBOE’s
Hybrid platform (‘‘Hybrid’’) (there are
currently fewer than 10 classes that are
not on Hybrid).8 Because dynamic
quoting is a feature of the Hybrid
system, it does not require the autofade
enhancement. Autofade causes one side
of the CBOE’s disseminated quote to
move to an inferior price when the
quote is required to fade pursuant to the
terms of the Linkage Plan and/or when
the size associated with the quote has
been depleted by automatic Retail
Automatic Execution System (‘‘RAES’’)
executions (of both Linkage orders and
non-Linkage orders). Without this
enhancement, the system would not
change the quote as required.
Linkage orders are generally
Immediate or Cancel limit orders priced
at the national best bid or offer
(‘‘NBBO’’) that must be acted upon
within 15 seconds. The Linkage Plan
provides several instances in which a
Participant receiving a Linkage order
must fade its quote. For example, if a
Participant receives a Principal Acting
as Agent (‘‘PA’’) order for a size greater
than the Firm Customer Quote Size and
does not execute the entirety of the PA
Order within 15 seconds, the Participant
is required to fade its quote. The CBOE’s
autofade functionality automates the
fading process to ensure that members
(and the Exchange) are in full
compliance with this aspect of the
Linkage Plan. Autofade moves the
CBOE’s quote to a price that is one tick
inferior to the NBBO.9 This ensures that
the Exchange will not immediately
receive additional Linkage orders to
allow the quote to refresh (either
manually or through an autoquote
update).
As mentioned above, autofade also
applies any time an automatic execution
of any order via RAES has depleted the
size of the CBOE’s quote. Once a quote
is exhausted, autofade moves the quote
to a price that is one tick inferior to the
NBBO, as described above. For equity
option classes that are not trading on the
Hybrid System, the CBOE quote is
generally derived from an autoquote
system that is maintained by the
7 The Commission approved the Linkage Plan on
July 28, 2000. See Securities Exchange Act Release
No. 43086 (July 28, 2000), 65 FR 48023 (August 4,
2000).
8 Hybrid is the CBOE’s trading platform that
allows individual Market Makers to submit
electronic quotes in their appointed classes. See
CBOE Rule 1.1(aaa).
9 The only exception is when CBOE’s NBBO
quote (or next best quote) is represented by a
customer order in the book. In such cases, the
Exchange does not fade a booked order (it would
have to be traded).
E:\FR\FM\27FEN1.SGM
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]]>Agencies
[Federal Register Volume 71, Number 38 (Monday, February 27, 2006)]
[Notices]
[Pages 9841-9843]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-2688]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53332; File No. SR-Amex-2006-16]
Self-Regulatory Organizations; American Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Amend Its Rule 903 To Provide That the Exchange Will Typically Open
Four Expiration Months for Each Class of Options Open for Trading
February 17, 2006.
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 February 15, 2006, the American Stock Exchange LLC (``Amex'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Amex. The Amex filed
this proposal as a ``non-controversial'' proposed rule change pursuant
to section 19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(6)
thereunder,\4\ which renders the proposal effective upon filing with
the Commission.\5\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
\5\ As required by Rule 19b-4(f)(6)(iii), 17 CFR 240.19b-
4(f)(6)(iii), the Amex submitted written notice of its intent to
file the proposed rule change, along with a brief description and
text of the proposed rule change, at least five business days prior
to the date of filing.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Amex Rule 903 to provide that the
Exchange will typically open four expiration months for each class of
options open for trading. The text of the proposed rule change is
available on the Amex's Web site at https://www.amex.com, the Office of
the Secretary of the Amex 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 Amex 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 Amex 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 Exchange is proposing to amend Amex Rule 903 in order to avoid
confusion and conform to industry standard. The Amex states that this
proposal will not change the manner in which options expiration months
are offered and listed, but instead, will clearly set forth how the
Exchange will add these additional series.
Current Amex Rule 903 sets forth the manner in which options series
are offered and listed on the Exchange. In connection with expiration
month series, the rule provides that at the commencement of trading on
the Exchange of a particular class of options relating to an underlying
stock or Exchange-Traded Fund Share, series of options having three
different expiration months in three-month intervals will normally be
opened. Although Amex Rule 903 does not specifically provide that four
expiration months will be open for trading for each options class, the
Exchange in 1989 received approval together with the other options
exchanges to provide four expiration months.\6\ Accordingly, the
Exchange submits that this amendment to Amex Rule 903 largely
implements the prior Commission approval permitting four outstanding
expiration months.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release Nos. 26934 (June 14,
1989), 54 FR 26283 (June 22, 1989) and 22099 (May 31, 1985), 50 FR
23862 (June 6, 1985).
---------------------------------------------------------------------------
The other options exchanges provide that they will open four
expiration months for each class of options open for trading with the
first two months being the two nearest months, regardless of the
quarterly cycle on which the class trades; and the third and fourth
being the next two months of the quarterly cycle previously designated
by the exchange for that specific class.\7\ The Exchange believes that
it is necessary to amend its rules to codify and conform the listing of
options expiration months to the industry standard. Specifically, the
Exchange is proposing to add new paragraph (b) to Amex Rule 903 to
provide that the Exchange will usually open four expiration months for
each class of options open for trading on the Exchange. The first two
expiration months will be the two nearest term months, regardless of
the quarterly cycle on which the options class trades while the third
and fourth expiration months will be the next two months of the
quarterly cycle previously designated by the Exchange for the specific
class. For example, if the Exchange listed, in late April, a new stock
option on a January-April-July-October quarterly cycle, the Exchange
would list the two nearest term months (May and June) and the next two
expiration months of the cycle (July and October). When the May series
expires, the Exchange would then add the January series. When the June
series expires, the Exchange would add the August series as the next
nearest month, and would not add April.
---------------------------------------------------------------------------
\7\ See, e.g., Chicago Board Options Exchange, Incorporated
(``CBOE'') Rule 5.5 and International Securities Exchange, Inc.
(``ISE'') Rule 504.
---------------------------------------------------------------------------
Current Exchange Rule 903 permits additional expiration month
series of the same options class to be added at or about the time a
prior expiration month series expires. The rules of the other options
exchanges provide that, due to unusual market conditions, new series of
options on an individual stock (including an Exchange-Traded Fund
[[Page 9842]]
Share) may be added up until five business days prior to expiration.\8\
The Amex states that the rules of the other options exchanges also
permit new series of options on individual stocks and Exchange-Traded
Fund Shares to be added until the beginning of the month in which the
options contracts expire. In order to conform to market convention, the
Exchange is proposing to add new paragraph (d) to Amex Rule 903 as well
as Commentary .04. New paragraph (d) provides for the opening of
additional series of options of the same class, which new series would
not affect the prior series of the same class previously opened, in the
event the Exchange deems such to be necessary to maintain an orderly
market, to meet customer demand or when the market price of the
underlying stock or Exchange-Traded Fund Share moves substantially from
the initial exercise price or prices. Commentary .04 provides that such
new series of options on individual stocks and Exchange-Traded Fund
Shares may be added until five business days prior to expiration. It
also provides that a new series of FLEX Equity Options may be added on
any business day prior to the expiration date.
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\8\ The Exchange received Commission approval in 1985 relating
to the manner of adding additional options series. See Securities
Exchange Act Release No. 21929 (April 10, 1985), 50 FR 15258 (April
17, 1985). This proposal seeks to implement this prior Commission
approval.
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The Exchange believes that its Rule 903 should be amended as
proposed in order to conform the Exchange's options offering and
listing standards to previously approved rule filings as well as to
conform to industry standard.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
section 6(b) of the Act \9\ in general and furthers the objectives of
section 6(b)(5) of the Act \10\ 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 regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest; and is not designed to
permit unfair discrimination between customers, issuers, brokers, or
dealers, or to regulate by virtue of any authority conferred by the Act
matters not related to the purpose of the Act or the administration of
the Exchange.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Amex does not believe that the proposed rule change will impose
any burden on competition that is not necessary or appropriate in the
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
The Amex has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms does not become operative for 30 days after the
date of this filing, or such shorter time as the Commission may
designate if consistent with the protection of investors and the public
interest, the proposed rule change has become effective pursuant to
section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.
A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest.
The Amex has asked the Commission to waive the 30-day operative
delay. The Commission believes that the proposed rule change does not
raise any new regulatory issues; the proposed rule is identical to CBOE
Rule 5.5 and ISE Rule 504. Waiver of the 30-day operative period would
enable the Exchange to implement the proposal as quickly as possible,
and thereby provide for greater uniformity with respect to the manner
in which options series are offered and listed. Therefore, the
Commission finds that waiving the 30-day operative delay is consistent
with the protection of investors and the public interest.\11\ For this
reason, the Commission designates that the proposal has become
effective and operative immediately upon filing with the Commission.
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\11\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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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.\12\
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\12\ See Rule 19b-4(f)(6)(iii), 17 CFR 240.19b-4(f)(6)(iii).
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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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File No. SR-Amex-2006-16 on the subject line.
Paper comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File No. SR-Amex-2006-16. 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 (https://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 inspection and
copying in the Commission's Public Reference Room. Copies of such
filing will also be available for inspection and copying at the
principal office of the Amex. 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
[[Page 9843]]
submissions should refer to File No. SR-Amex-2006-16 and should be
submitted on or before March 20, 2006.
For the Commission, by the Division of Market Regulation, pursuant
to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
Nancy M. Morris,
Secretary.
[FR Doc. E6-2688 Filed 2-24-06; 8:45 am]
BILLING CODE 8010-01-P
