Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Exercise Deadline for Quarterly Options Series, 59576-59577 [E6-16625]
Download as PDF
59576
Federal Register / Vol. 71, No. 195 / Tuesday, October 10, 2006 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54541; File No. SR–
NYSEArca–2006–66]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to the Exercise
Deadline for Quarterly Options Series
September 29, 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
September 25, 2006, NYSE Arca, Inc.
(‘‘NYSE Arca’’or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’)
the proposed rule change as described
in Items I and II below, which Items
have been substantially prepared by the
Exchange. The Commission has
designated this proposed rule change as
non-controversial under Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b–4(f)(6) thereunder,4 which renders
the proposed rule change effective upon
filing with the Commission. 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
NYSE Arca Rule 6.24(c) by adding a
provision regarding the exercise cut-off
time for Quarterly Option Series. The
text of the proposed rule change, as
amended, is set forth below. Proposed
new language is in italics.
*
*
*
*
*
Rules of NYSE Arca, Inc.
Rule 6 Option Contracts Traded on the
Exchange
jlentini on PROD1PC65 with NOTICES
*
*
*
*
*
Rule 6.24. Exercise of Option Contracts
(a)–(b)—No change.
(c) Exercise cut-off time. Option
holders have until 2:30 p.m. (PST) on
the business day immediately prior to
the expiration date or, in the case of
Quarterly Options Series, on the
expiration date, to make a final decision
to exercise or not exercise an expiring
option. For customer accounts, OTP
Holders and OTP Firms may not accept
exercise instructions after 2:30 p.m.
(PST) but have until 3:30 p.m. (PST) to
1 15
U.S.C. 78s(b)(1).
240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 CFR
VerDate Aug<31>2005
16:42 Oct 06, 2006
Jkt 211001
submit a Contrary Exercise Advice. For
non-customer accounts, OTP Holders
and OTP Firms may not accept exercise
instructions after 2:30 p.m. (PST) but
have until 3:30 p.m. (PST) to submit a
Contrary Exercise Advice if such OTP
Holders and OTP Firms employs an
electronic submission procedure with
time stamp for the submission of
exercise instructions by option holders.
Consistent with Commentary .04, OTP
Holders and OTP Firms are required to
submit a Contrary Exercise Advice by
2:30 p.m. (PST) for non-customer
accounts if such OTP Holders and OTP
Firms do not employ an electronic
submission procedure with time stamp
for the submission of exercise
instructions by option holders.
(d)–(g)—No change.
*
*
*
*
*
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 proposes to amend its
rule to add a provision to Rule 6.24(c)
addressing the exercise cut-off time for
Quarterly Option Series. Presently,
option holders have until 2:30 p.m.
(Pacific Time) on the business day
immediately prior to the expiration date
to make a decision to exercise or not to
exercise an expiring option (standard
equity and index options). Standard
listed options expire on the third
Saturday of a month. Option holders
make their decision whether or not to
exercise based on the closing price of
the underlying security on the last
trading day of any given option series’
cycle, typically the Friday immediately
before the expiration Saturday. Unlike
standard listed options, Quarterly
Option Series expire on the last
business day of a calendar quarter. If an
option holder were to be required to
make a decision to exercise or not
exercise a Quarterly Option Series on
PO 00000
Frm 00151
Fmt 4703
Sfmt 4703
the day before the expiration of the
option, they would have to make that
decision without the knowledge of what
the closing price of the underlying
security would be on expiration. The
Exchange is now proposing to add a
provision to NSYE Arca Rule 6.24(c)
that will designate a new exercise cutoff time for Quarterly Options Series.
The new proposed time will be 2:30
p.m. (Pacific Time) on the day that the
quarterly option expires. This change
will allow option holders the full time
needed to make an accurate decision
whether or not to an exercise an
expiring option.
2. Statutory Basis
The Exchange believes that the
proposed rule is consistent with Section
6(b) of the Act 5 in general, and Section
6(b)(5) of the Act,6 that the rules of an
exchange be 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.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes that the
proposed rule change will not impose
any burden on competition that is 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 solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A) of the Act 7 and
subparagraph (f)(6) of Rule 19b–4
thereunder.8 Because the foregoing
proposed rule change (i) Does not
significantly affect the protection of
investors or the public interest; (ii) does
not impose any significant burden on
competition; and (iii) the proposed rule
change does not become operative for 30
days after the date on which it was filed,
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
5 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
7 15 U.S.C. 78s(b)(3)(A).
8 17 CFR 240.19b–4(f)(6).
6 15
E:\FR\FM\10OCN1.SGM
10OCN1
Federal Register / Vol. 71, No. 195 / Tuesday, October 10, 2006 / Notices
19(b)(3)(A) of the Act and Rule 19b–
4(f)(6)(iii) thereunder.9
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
waive the operative delay if such action
is consistent with the protection of
investors and the public interest. The
Exchange has asked the Commission to
waive the operative delay to permit the
proposed rule change to become
effective prior to the 30th day after
filing.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest.
Waiving the operative delay will allow
the Exchange to permit exercise of a
Quarterly Options Series at any time
until the close of business on its
expiration date starting with the third
quarter 2006 expirations on Friday,
September 29, 2006, and consequently
will benefit investors. Therefore the
Commission has determined to waive
the 30-day delay and allow the
proposed rule change to become
operative immediately.10
At any time within sixty (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:
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
Number SR–NYSEArca–2006–66. 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 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–NYSEArca–2006–66 and
should be submitted on or before
October 31, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Nancy M. Morris,
Secretary.
[FR Doc. E6–16625 Filed 10–6–06; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
jlentini on PROD1PC65 with NOTICES
• 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
Number SR–NYSEArca–2006–66 on the
subject line.
9 Rule 19b–4(f)(6)(iii) requires the Exchange to
give written notice to the Commission of its intent
to file the proposed rule change five business days
prior to filing. The Commission has determined to
waive the five-day pre-filing requirement for this
proposal.
10 For purposes only of waiving the operative
delay of this proposal, the Commission notes that
it has considered the proposed rule’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
VerDate Aug<31>2005
16:42 Oct 06, 2006
Jkt 211001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54555; File No. SR–Phlx–
2006–60]
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing and Order Granting
Accelerated Approval to a Proposed
Rule Change Relating to NMS Linkage
and Phlx’s Covered Sale Fee
October 2, 2006.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
11 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00152
Fmt 4703
Sfmt 4703
59577
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on
September 25, 2006, the Philadelphia
Stock Exchange, Inc. (‘‘Phlx’’ 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 Phlx. The Commission is publishing
this notice to solicit comments on the
proposed rule change from interested
persons and is approving the proposal
on an accelerated basis.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Phlx proposes to amend its Rule 607,
its Summary of Equity Charges, and the
Nasdaq-100 Index Tracking StockSM Fee
Schedule 3 to allow the Exchange to
charge the Covered Sale Fee to members
and member organizations engaged in
executing sales on another exchange or
on a participant in the NASD’s
Alternative Display Facility (‘‘ADF’’)
that were routed over the NMS Linkage
Plan or the Intermarket Trading System
(‘‘ITS’’).4 Phlx also proposes to amend
its Rule 607 to allow the Exchange to
enter into arrangements with ADF
participants to pass the Covered Sale
Fee among the ADF participants where
the Exchange has collected the Covered
Sale Fee from its members and member
organizations for sales executed on ADF
participants through ITS, and when
ADF participants have collected a fee
from their members for sales executed
on the Exchange through ITS. In
addition, Phlx also proposes to amend
Rule 607 to allow the Exchange to enter
into arrangements with other exchanges
to pass the Covered Sale Fee among the
applicable exchanges where the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 The Nasdaq-100, Nasdaq-100 Index, Nasdaq,
The Nasdaq Stock Market, Nasdaq-100 SharesSM,
Nasdaq-100 TrustSM, Nasdaq-100 Index Tracking
StockSM, and QQQSM are trademarks or service
marks of The Nasdaq Stock Market, LLC (‘‘Nasdaq’’)
and have been licensed for use for certain purposes
by the Phlx pursuant to a License Agreement with
Nasdaq. The Nasdaq-100 Index (‘‘Index’’) is
determined, composed, and calculated by Nasdaq
without regard to the Licensee, the Nasdaq-100
TrustSM, or the beneficial owners of Nasdaq-100
SharesSM. Nasdaq has complete control and sole
discretion in determining, comprising, or
calculating the Index or in modifying in any way
its method for determining, comprising, or
calculating the Index in the future.
4 The Commission published a notice relating to
the NMS Linkage Plan. See Securities Exchange Act
Release No. 54239 (July 28, 2006), 71 FR 44328
(August 4, 2006) (File No. 4–524). An NMS Linkage
Plan, dated August 1, 2006, reflecting Phlx’s
inclusion as a participant, was sent to the
Commission on August 8, 2006. The participants
requested that the NMS Linkage Plan commence on
October 1, 2006.
2 17
E:\FR\FM\10OCN1.SGM
10OCN1
Agencies
[Federal Register Volume 71, Number 195 (Tuesday, October 10, 2006)]
[Notices]
[Pages 59576-59577]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-16625]
[[Page 59576]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54541; File No. SR-NYSEArca-2006-66]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Relating to the
Exercise Deadline for Quarterly Options Series
September 29, 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 September 25, 2006, NYSE Arca, Inc. (``NYSE Arca''or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'' or
``SEC'') the proposed rule change as described in Items I and II below,
which Items have been substantially prepared by the Exchange. The
Commission has designated this proposed rule change as non-
controversial under Section 19(b)(3)(A)(iii) of the Act \3\ and Rule
19b-4(f)(6) thereunder,\4\ which renders the proposed rule change
effective upon filing with the Commission. 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\ CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend NYSE Arca Rule 6.24(c) by adding a
provision regarding the exercise cut-off time for Quarterly Option
Series. The text of the proposed rule change, as amended, is set forth
below. Proposed new language is in italics.
* * * * *
Rules of NYSE Arca, Inc.
Rule 6 Option Contracts Traded on the Exchange
* * * * *
Rule 6.24. Exercise of Option Contracts
(a)-(b)--No change.
(c) Exercise cut-off time. Option holders have until 2:30 p.m.
(PST) on the business day immediately prior to the expiration date or,
in the case of Quarterly Options Series, on the expiration date, to
make a final decision to exercise or not exercise an expiring option.
For customer accounts, OTP Holders and OTP Firms may not accept
exercise instructions after 2:30 p.m. (PST) but have until 3:30 p.m.
(PST) to submit a Contrary Exercise Advice. For non-customer accounts,
OTP Holders and OTP Firms may not accept exercise instructions after
2:30 p.m. (PST) but have until 3:30 p.m. (PST) to submit a Contrary
Exercise Advice if such OTP Holders and OTP Firms employs an electronic
submission procedure with time stamp for the submission of exercise
instructions by option holders. Consistent with Commentary .04, OTP
Holders and OTP Firms are required to submit a Contrary Exercise Advice
by 2:30 p.m. (PST) for non-customer accounts if such OTP Holders and
OTP Firms do not employ an electronic submission procedure with time
stamp for the submission of exercise instructions by option holders.
(d)-(g)--No change.
* * * * *
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 proposes to amend its rule to add a provision to Rule
6.24(c) addressing the exercise cut-off time for Quarterly Option
Series. Presently, option holders have until 2:30 p.m. (Pacific Time)
on the business day immediately prior to the expiration date to make a
decision to exercise or not to exercise an expiring option (standard
equity and index options). Standard listed options expire on the third
Saturday of a month. Option holders make their decision whether or not
to exercise based on the closing price of the underlying security on
the last trading day of any given option series' cycle, typically the
Friday immediately before the expiration Saturday. Unlike standard
listed options, Quarterly Option Series expire on the last business day
of a calendar quarter. If an option holder were to be required to make
a decision to exercise or not exercise a Quarterly Option Series on the
day before the expiration of the option, they would have to make that
decision without the knowledge of what the closing price of the
underlying security would be on expiration. The Exchange is now
proposing to add a provision to NSYE Arca Rule 6.24(c) that will
designate a new exercise cut-off time for Quarterly Options Series. The
new proposed time will be 2:30 p.m. (Pacific Time) on the day that the
quarterly option expires. This change will allow option holders the
full time needed to make an accurate decision whether or not to an
exercise an expiring option.
2. Statutory Basis
The Exchange believes that the proposed rule is consistent with
Section 6(b) of the Act \5\ in general, and Section 6(b)(5) of the
Act,\6\ that the rules of an exchange be 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.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that the proposed rule change will not impose
any burden on competition that is 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 solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \7\ and subparagraph (f)(6) of Rule 19b-4
thereunder.\8\ Because the foregoing proposed rule change (i) Does not
significantly affect the protection of investors or the public
interest; (ii) does not impose any significant burden on competition;
and (iii) the proposed rule change does not become operative for 30
days after the date on which it was filed, 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
[[Page 59577]]
19(b)(3)(A) of the Act and Rule 19b-4(f)(6)(iii) thereunder.\9\
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6).
\9\ Rule 19b-4(f)(6)(iii) requires the Exchange to give written
notice to the Commission of its intent to file the proposed rule
change five business days prior to filing. The Commission has
determined to waive the five-day pre-filing requirement for this
proposal.
---------------------------------------------------------------------------
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 waive the operative
delay if such action is consistent with the protection of investors and
the public interest. The Exchange has asked the Commission to waive the
operative delay to permit the proposed rule change to become effective
prior to the 30th day after filing.
The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
Waiving the operative delay will allow the Exchange to permit exercise
of a Quarterly Options Series at any time until the close of business
on its expiration date starting with the third quarter 2006 expirations
on Friday, September 29, 2006, and consequently will benefit investors.
Therefore the Commission has determined to waive the 30-day delay and
allow the proposed rule change to become operative immediately.\10\
---------------------------------------------------------------------------
\10\ For purposes only of waiving the operative delay of this
proposal, the Commission notes that it has considered the proposed
rule's impact on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
---------------------------------------------------------------------------
At any time within sixty (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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2006-66 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 Number SR-NYSEArca-2006-66. 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 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-NYSEArca-2006-66 and should be submitted on or before
October 31, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Nancy M. Morris,
Secretary.
[FR Doc. E6-16625 Filed 10-6-06; 8:45 am]
BILLING CODE 8011-01-P