Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Schedule of Fees and Charges Applicable to the Option Strategy Executions Pilot Program, 10980-10981 [E9-5388]

Download as PDF 10980 Federal Register / Vol. 74, No. 48 / Friday, March 13, 2009 / Notices (A) by order approve such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. 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: should be submitted on or before April 3, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–5389 Filed 3–12–09; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments [Release No. 34–59525; File No. SR– NYSEArca–2009–16] • 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–FINRA–2008–024 on the subject line. Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Schedule of Fees and Charges Applicable to the Option Strategy Executions Pilot Program Paper Comments March 6, 2009. 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 27, 2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with the All submissions should refer to File Securities and Exchange Commission Number SR–FINRA–2008–024. This file (‘‘Commission’’) the proposed rule number should be included on the change as described in Items I, II, and subject line if e-mail is used. To help the III below, which Items have been Commission process and review your prepared by the self-regulatory comments more efficiently, please use organization. The Exchange filed the only one method. The Commission will proposal pursuant to Section 19(b)(3)(A) post all comments on the Commission’s of the Act 3 and Rule 19b–4(f)(2) Internet Web site (https://www.sec.gov/ thereunder.4 The Commission is rules/sro.shtml). Copies of the publishing this notice to solicit submission, all subsequent comments on the proposed rule change amendments, all written statements from interested persons. with respect to the proposed rule change that are filed with the I. Self-Regulatory Organization’s Commission, and all written Statement of the Terms of Substance of communications relating to the the Proposed Rule Change proposed rule change between the NYSE Arca is proposing to amend its Commission and any person, other than Schedule of Fees and Charges in order those that may be withheld from the to extend the pilot program that applies public in accordance with the to Option Strategy Executions (‘‘Pilot provisions of 5 U.S.C. 552, will be Program’’) until March 1, 2010. The text available for inspection and copying in of the proposed rule change is attached the Commission’s Public Reference as Exhibit 5.5 A copy of this filing is Room, 100 F Street, NE., Washington, available on the Exchange’s Web site at DC 20549, on official business days https://www.nyse.com, at the Exchange’s between the hours of 10 a.m. and 3 p.m. principal office and at the Commission’s Copies of such filing also will be Public Reference Room. available for inspection and copying at the principal office of FINRA. All 10 17 CFR 200.30–3(a)(12). comments received will be posted 1 15 U.S.C. 78s(b)(1). without change; the Commission does 2 17 CFR 240.19b–4. not edit personal identifying 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(2). information from submissions. You 5 The Commission notes that while provided in should submit only information that you wish to make available publicly. All Exhibit 5 to the filing, the text of the proposed rule change is not attached to this notice but is available submissions should refer to File at NYSE Arca, the Commission’s Public Reference Number SR–FINRA–2008–024 and Room, and at https://www.nyse.com. sroberts on PROD1PC70 with NOTICES • Send paper comments in triplicate to Elizabeth M. Murphy, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. VerDate Nov<24>2008 17:55 Mar 12, 2009 Jkt 217001 PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 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 self-regulatory organization included statements concerning the purpose of and basis for the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization 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 proposed rule change is to extend the Pilot Program that applies to Option Strategy Executions until March 1, 2010. The transactions included as part of the Pilot Program include reversals and conversions,6 dividend spreads,7 box spreads,8 short stock interest spreads,9 and merger spreads.10 Because the referenced Options Strategy Transactions are generally executed by professionals whose profit margins are generally narrow, the Pilot Program caps the transaction fees associated with such executions at $750 per strategy execution that are executed on the same trading day in the same option class. In addition, there is also a monthly cap of $25,000 per initiating firm for all strategy executions. The Exchange believes that by keeping fees low, the Exchange is able to attract liquidity by 6 Reversals and conversions are transactions that employ calls, puts and the underlying stock to lock in a nearly risk free profit. Reversals are established by combining a short stock position with a short put and a long call position that shares the same strike and expiration. Conversions employ long positions in the underlying stock that accompany long puts and short calls sharing the same strike and expiration. 7 Dividend spreads are trades involving deep in the money options that exploit pricing differences arising around the time a stock goes ex-dividend. 8 Box Spreads is a strategy that synthesizes long and short stock positions to create a profit. Specifically, a long call and short put at one strike is combined with a short call and long put at a different strike to create synthetic long and synthetic short stock positions, respectively. 9 A short stock interest spread is a spread that uses two deep in the money put options of the same class followed by the exercise of the resulting long position in order to establish a short stock interest arbitrage position. 10 A merger spread is a transaction executed pursuant to a strategy involving the simultaneous purchase and sale of options of the same class and expiration date, but with different strike prices followed by the exercise of the resulting long option position. E:\FR\FM\13MRN1.SGM 13MRN1 Federal Register / Vol. 74, No. 48 / Friday, March 13, 2009 / Notices accommodating these transactions. Extending the Pilot Program until March 1, 2010 will allow the Exchange to keep these fees low and thus continue to attract liquidity. OTP Holders and OTP Firms who wish to benefit from the fee cap will be required to submit to the Exchange forms with supporting documentation (e.g., clearing firm transaction data) to qualify for the cap. 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: • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or The proposal is consistent with 11 of the Act, in general, and • Send an e-mail to ruleSection 6(b) Section 6(b)(4),12 in particular, in that it comments@sec.gov. Please include File Number SR–NYSEArca–2009–16 on the provides for the equitable allocation of subject line. dues, fees and other charges among its members. The Exchange believes that, Paper Comments as proposed, the cap on transaction fees for Strategy Executions applies equally • Send paper comments in triplicate to each member (ETP holder) of the to Elizabeth M. Murphy, Secretary, Exchange. The Exchange further Securities and Exchange Commission, believes that by keeping fees low with 100 F Street, NE., Washington, DC the proposed cap, the Exchange is able 20549–1090. to attract liquidity by accommodating All submissions should refer to File these transactions. Number SR–NYSEArca–2009–16. This B. Self-Regulatory Organization’s file number should be included on the Statement on Burden on Competition subject line if e-mail is used. To help the Commission process and review your The Exchange does not believe that comments more efficiently, please use the proposed rule change will impose only one method. The Commission will any burden on competition that is not post all comments on the Commission’s necessary or appropriate in furtherance Internet Web site (https://www.sec.gov/ of the purposes of the Act. rules/sro.shtml). Copies of the C. Self-Regulatory Organization’s submission, all subsequent Statement on Comments on the amendments, all written statements Proposed Rule Change Received From with respect to the proposed rule Members, Participants, or Others change that are filed with the Commission, and all written The Exchange has neither solicited communications relating to the nor received written comments on the proposed rule change between the proposed rule change. Commission and any person, other than III. Date of Effectiveness of the those that may be withheld from the Proposed Rule Change and Timing for public in accordance with the Commission Action provisions of 5 U.S.C. 552, will be available for inspection and copying in The foregoing proposed rule change the Commission’s Public Reference has become effective upon filing Room, 100 F Street, NE., Washington, pursuant to Section 19(b)(3)(A) of the DC 20549, on official business days 13 and Rule 19b–4(f)(2) 14 thereunder Act between the hours of 10 a.m. and 3 p.m. because it establishes or changes a due, Copies of such filing also will be fee, or other charge imposed by the available for inspection and copying at Exchange. At any time within 60 days of the filing of the proposed rule change, the principal office of the Exchange. All comments received will be posted the Commission may summarily without change; the Commission does abrogate such rule change if it appears not edit personal identifying to the Commission that such action is information from submissions. You necessary or appropriate in the public should submit only information that interest, for the protection of investors, you wish to make available publicly. All or otherwise in furtherance of the submissions should refer to File purposes of the Act. Number SR–NYSEArca–2009–16 and should be submitted on or before April 11 15 U.S.C. 78f(b). 3, 2009. 12 15 U.S.C. 78f(b)(4). sroberts on PROD1PC70 with NOTICES 14 17 U.S.C. 78s(b)(3)(A). CFR 19b–4(f)(2). VerDate Nov<24>2008 17:55 Mar 12, 2009 15 17 Jkt 217001 PO 00000 CFR 200.30–3(a)(12). Frm 00105 Fmt 4703 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–5388 Filed 3–12–09; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments 2. Statutory Basis 13 15 10981 Sfmt 4703 [Release No. 34–59517; File No. SR– NYSEALTR–2009–23] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Alternext U.S. LLC To Permit Two Trading Officials To Modify the Required Bid/Ask Differentials March 5, 2009. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that, on March 3, 2009, NYSE Alternext U.S. LLC (‘‘NYSE Amex’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders it 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 Exchange Rule 925NY—Obligations of Market Makers. The text of the proposed rule change is attached as Exhibit 5. A copy of this filing is available on the Exchange’s Web site at https:// www.nyse.com, at the Exchange’s principal office 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 self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 2 17 E:\FR\FM\13MRN1.SGM 13MRN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 74, Number 48 (Friday, March 13, 2009)]
[Notices]
[Pages 10980-10981]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-5388]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59525; File No. SR-NYSEArca-2009-16]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending Its 
Schedule of Fees and Charges Applicable to the Option Strategy 
Executions Pilot Program

March 6, 2009.
    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 27, 2009, NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the self-regulatory 
organization. The Exchange filed the proposal pursuant to Section 
19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(2) thereunder.\4\ 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)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NYSE Arca is proposing to amend its Schedule of Fees and Charges in 
order to extend the pilot program that applies to Option Strategy 
Executions (``Pilot Program'') until March 1, 2010. The text of the 
proposed rule change is attached as Exhibit 5.\5\ A copy of this filing 
is available on the Exchange's Web site at https://www.nyse.com, at the 
Exchange's principal office and at the Commission's Public Reference 
Room.
---------------------------------------------------------------------------

    \5\ The Commission notes that while provided in Exhibit 5 to the 
filing, the text of the proposed rule change is not attached to this 
notice but is available at NYSE Arca, the Commission's Public 
Reference Room, and at https://www.nyse.com.
---------------------------------------------------------------------------

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 self-regulatory organization 
included statements concerning the purpose of and basis for the 
proposed rule change. The text of these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
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 proposed rule change is to extend the Pilot 
Program that applies to Option Strategy Executions until March 1, 2010. 
The transactions included as part of the Pilot Program include 
reversals and conversions,\6\ dividend spreads,\7\ box spreads,\8\ 
short stock interest spreads,\9\ and merger spreads.\10\ Because the 
referenced Options Strategy Transactions are generally executed by 
professionals whose profit margins are generally narrow, the Pilot 
Program caps the transaction fees associated with such executions at 
$750 per strategy execution that are executed on the same trading day 
in the same option class. In addition, there is also a monthly cap of 
$25,000 per initiating firm for all strategy executions. The Exchange 
believes that by keeping fees low, the Exchange is able to attract 
liquidity by

[[Page 10981]]

accommodating these transactions. Extending the Pilot Program until 
March 1, 2010 will allow the Exchange to keep these fees low and thus 
continue to attract liquidity.
---------------------------------------------------------------------------

    \6\ Reversals and conversions are transactions that employ 
calls, puts and the underlying stock to lock in a nearly risk free 
profit. Reversals are established by combining a short stock 
position with a short put and a long call position that shares the 
same strike and expiration. Conversions employ long positions in the 
underlying stock that accompany long puts and short calls sharing 
the same strike and expiration.
    \7\ Dividend spreads are trades involving deep in the money 
options that exploit pricing differences arising around the time a 
stock goes ex-dividend.
    \8\ Box Spreads is a strategy that synthesizes long and short 
stock positions to create a profit. Specifically, a long call and 
short put at one strike is combined with a short call and long put 
at a different strike to create synthetic long and synthetic short 
stock positions, respectively.
    \9\ A short stock interest spread is a spread that uses two deep 
in the money put options of the same class followed by the exercise 
of the resulting long position in order to establish a short stock 
interest arbitrage position.
    \10\ A merger spread is a transaction executed pursuant to a 
strategy involving the simultaneous purchase and sale of options of 
the same class and expiration date, but with different strike prices 
followed by the exercise of the resulting long option position.
---------------------------------------------------------------------------

    OTP Holders and OTP Firms who wish to benefit from the fee cap will 
be required to submit to the Exchange forms with supporting 
documentation (e.g., clearing firm transaction data) to qualify for the 
cap.
2. Statutory Basis
    The proposal is consistent with Section 6(b) \11\ of the Act, in 
general, and Section 6(b)(4),\12\ in particular, in that it provides 
for the equitable allocation of dues, fees and other charges among its 
members. The Exchange believes that, as proposed, the cap on 
transaction fees for Strategy Executions applies equally to each member 
(ETP holder) of the Exchange. The Exchange further believes that by 
keeping fees low with the proposed cap, the Exchange is able to attract 
liquidity by accommodating these transactions.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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 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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change has become effective upon filing 
pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-4(f)(2) 
\14\ thereunder because it establishes or changes a due, fee, or other 
charge imposed by the Exchange. 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.
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 19b-4(f)(2).
---------------------------------------------------------------------------

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-2009-16 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-NYSEArca-2009-16. 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, 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-NYSEArca-2009-16 and should 
be submitted on or before April 3, 2009.
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-5388 Filed 3-12-09; 8:45 am]
BILLING CODE 8011-01-P

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