Self-Regulatory Organizations; The Options Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Flexibly Structured Options, 15794-15795 [E9-7774]
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15794
Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices
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 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–NYSE–
2009–35 and should be submitted on or
before April 28, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–7711 Filed 4–6–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59675; File No. SR–OCC–
2009–05]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change Relating to
Flexibly Structured Options
April 1, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934,1 notice
is hereby given that on March 19, 2009,
The Options Clearing Corporation
(‘‘OCC’’) filed with the Securities and
Exchange Commission the proposed
rule change as described in Items I, II,
and III below, which Items have been
prepared primarily by OCC. OCC filed
the proposed rule change pursuant to
15 17
1 15
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
VerDate Nov<24>2008
17:13 Apr 06, 2009
Jkt 217001
Section 19(b)(3)(A)(iii) of the Act 2 and
Rule 19b–4(f)(4) thereunder 3 so that the
proposal was 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 the Substance
of the Proposed Rule Change
The proposed rule change will amend
OCC’s By-Laws in order to clear and
settle flexibly structured options traded
on the Chicago Board Options Exchange
(‘‘CBOE’’).
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
OCC 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. OCC 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
Flexibly structured options are
options that give investors the ability to
customize basic option features
including size, expiration date, exercise
style, and certain exercise prices.
Currently, options exchanges generally
do not permit flexibly structured
options to be customized to expire on
the same expiration date as any series of
non-flexibly structured options that are
listed for trading.4 However, pursuant to
a recent CBOE rule change, CBOE
eliminated this restriction so that the
parties to a flexibly structured option
transaction can choose an expiration
date that coincides with that of a series
of non-flexibly structured options.5 As a
result of eliminating the expiration date
restriction, it is now possible for new
2 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(4).
4 There are exceptions to this general prohibition.
Subject to certain aggregation requirements for
cash-settled options, CBOE permits flexibly
structured options to expire on the same day as
non-flexibly structured quarterly options and nonflexibly structured weekly options. Non-flexibly
structured weekly options are called ‘‘short term
options’’ in OCC’s By-Laws and Rules. CBOE Rules
24A.7(d) and 24B.7(d).
5 Securities Exchange Act Release No. 59417 (Feb.
18, 2009), 74 FR 8591 (Feb. 25, 2009) [SR–CBOE–
2008–115].
3 17
PO 00000
Frm 00106
Fmt 4703
Sfmt 4703
flexibly structured options to become
fungible with a series of non-flexibly
structured options that are subsequently
listed for trading. Thus, CBOE now
permits flexibly structured options to be
traded before identical non-flexibly
structured options are listed for trading.
Once an option series is listed on CBOE
for trading as a non-flexibly structured
option series, (i) all existing flexibly
structured options having identical
terms as the non-flexibly structured
option series will be fully fungible with
options in such series and (ii) any
further trading in such series would be
as non-flexibly structured options. As
an exception to the foregoing, flexibly
structured options will not become
fungible with subsequently-introduced
non-flexibly structured quarterly
options or short term options.
In order to clear and settle flexibly
structured options traded on CBOE in a
manner that is consistent with CBOE’s
rules, OCC will change the definition of
‘‘flexibly structured option’’ in Article I
of its By-Laws to clarify that an option
will be classified as a flexibly structured
option only if its variable terms do not
correspond to the variable terms of any
series of non-flexibly structured options
listed for trading other than a series of
quarterly options or short term options.
Furthermore, existing flexibly
structured options will be fungible with
options in a subsequently listed nonflexibly structured option series other
than quarterly options or short term
options that have identical variable
terms and will not be classified as
flexibly structured options. The
definition of ‘‘flexibly structured
option’’ in Article XVII, Section 1 of
OCC’s By-Laws will be deleted because
such definition is redundant. OCC will
also amend the definition of ‘‘variable
terms’’ in Article I of the By-Laws to
clarify that the expiration date is a
variable term for all types of options.
Finally, other parts of the definition will
also be revised to group together
variable terms of option contracts and
variable terms of futures contracts.
Prior to this rule change, OCC’s rules
provided that an expiring flexibly
structured index option with an exercise
settlement amount of $1.00 or more was
automatically exercised on its
expiration date. In comparison, an
expiring non-flexibly structured index
option with an exercise settlement
amount of $1.00 or more except
quarterly options or short term options
was subject to the ‘‘exercise by
exception’’ procedures under which the
option will be exercised on its
expiration date if the option holder does
not give contrary exercise instructions.
However, as described above, flexibly
E:\FR\FM\07APN1.SGM
07APN1
Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices
structured options that become fungible
with non-flexibly structured options
will cease to be classified as flexibly
structured options. Therefore, such
flexibly structured options will cease to
be subject to automatic exercise at
expiration and will instead be subject to
exercise by exception like the nonflexibly structured options with which
they have become fungible.
OCC believes that the proposed
changes to OCC’s By-Laws and Rules are
consistent with the purposes and
requirements of Section 17A of the Act 6
because they are designed to promote
the prompt and accurate clearance and
settlement of transactions in, including
exercises of, flexibly structured options
and to foster cooperation and
coordination with persons engaged in
the clearance and settlement of such
transactions, to remove impediments to
and perfect the mechanism of a national
system for the prompt and accurate
clearance and settlement of such
transactions, and, in general, to protect
investors and the public interest. It
accomplishes these purposes by
maintaining consistency between OCC’s
By-Laws and Rules and CBOE’s rules as
applied to the clearance and settlement
of flexibly structured options. The
proposed rule change is not inconsistent
with the existing By-Laws and Rules of
OCC, including any rules proposed to be
amended.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
OCC does not believe that the
proposed rule change would impose any
burden on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
OCC has not solicited or received
written comments with respect to the
proposed rule change. OCC will notify
the Commission of any written
comments it receives.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 7 and Rule 19b–4(f)
thereunder because the proposed rule
effects a change in an existing OCC
service that (i) does not adversely affect
the safeguarding of securities or funds
in OCC’s custody or control or for which
OCC is responsible and (ii) does not
significantly affect OCC’s respective
6 15
7 15
U.S.C. 78q–1.
U.S.C. 78a(b)(3)(A).
VerDate Nov<24>2008
17:13 Apr 06, 2009
Jkt 217001
rights or obligations or persons using
the service. At any time within 60 days
of the filing of the proposed rule change,
the Commission may summarily
abrogated 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 rulecomment@sec.gov. Please include File
No. SR–OCC–2009–05 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 No.
SR–OCC–2009–05. 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. to 3 p.m.
Copies of such filing also will be
available for inspection and copying at
OCC’s principal office and on OCC’s
Web site at https://www.theocc.com/
publications/rules/proposed_changes/
proposed_changes.jsp. All comments
received will be posted without change;
the Commission does not edit personal
PO 00000
Frm 00107
Fmt 4703
Sfmt 4703
15795
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File No. SR–OCC–2009–
05 and should be submitted on or before
April 28, 2009.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.8
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–7774 Filed 4–6–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59679; File No. SR–ISE–
2007–97]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing of Proposed Rule
Change and Amendment No. 1 Thereto
Relating to Market Data Fees
April 1, 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 October
5, 2007, International Securities
Exchange, LLC (the ‘‘Exchange’’ or the
‘‘ISE’’) 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 Exchange.
On March 9, 2009, the Exchange filed
Amendment No. 1 to the proposed rule
change.3 The Commission is publishing
this notice to solicit comments on the
proposed rule change, as modified by
Amendment No. 1, from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is proposing to amend
its Schedule of Fees to establish fees for
a real-time depth of market data
offering. The text of the proposed rule
change is available on the Exchange’s
Web site (https://www.ise.com), at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
8 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Amendment No. 1 replaced and superseded the
original filing in its entirety.
1 15
E:\FR\FM\07APN1.SGM
07APN1
]]>Agencies
[Federal Register Volume 74, Number 65 (Tuesday, April 7, 2009)]
[Notices]
[Pages 15794-15795]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-7774]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59675; File No. SR-OCC-2009-05]
Self-Regulatory Organizations; The Options Clearing Corporation;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Flexibly Structured Options
April 1, 2009.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934,\1\ notice is hereby given that on March 19, 2009, The Options
Clearing Corporation (``OCC'') filed with the Securities and Exchange
Commission the proposed rule change as described in Items I, II, and
III below, which Items have been prepared primarily by OCC. OCC filed
the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the
Act \2\ and Rule 19b-4(f)(4) thereunder \3\ so that the proposal was
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\ 15 U.S.C. 78s(b)(3)(A)(iii).
\3\ 17 CFR 240.19b-4(f)(4).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The proposed rule change will amend OCC's By-Laws in order to clear
and settle flexibly structured options traded on the Chicago Board
Options Exchange (``CBOE'').
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, OCC 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. OCC 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
Flexibly structured options are options that give investors the
ability to customize basic option features including size, expiration
date, exercise style, and certain exercise prices. Currently, options
exchanges generally do not permit flexibly structured options to be
customized to expire on the same expiration date as any series of non-
flexibly structured options that are listed for trading.\4\ However,
pursuant to a recent CBOE rule change, CBOE eliminated this restriction
so that the parties to a flexibly structured option transaction can
choose an expiration date that coincides with that of a series of non-
flexibly structured options.\5\ As a result of eliminating the
expiration date restriction, it is now possible for new flexibly
structured options to become fungible with a series of non-flexibly
structured options that are subsequently listed for trading. Thus, CBOE
now permits flexibly structured options to be traded before identical
non-flexibly structured options are listed for trading. Once an option
series is listed on CBOE for trading as a non-flexibly structured
option series, (i) all existing flexibly structured options having
identical terms as the non-flexibly structured option series will be
fully fungible with options in such series and (ii) any further trading
in such series would be as non-flexibly structured options. As an
exception to the foregoing, flexibly structured options will not become
fungible with subsequently-introduced non-flexibly structured quarterly
options or short term options.
---------------------------------------------------------------------------
\4\ There are exceptions to this general prohibition. Subject to
certain aggregation requirements for cash-settled options, CBOE
permits flexibly structured options to expire on the same day as
non-flexibly structured quarterly options and non-flexibly
structured weekly options. Non-flexibly structured weekly options
are called ``short term options'' in OCC's By-Laws and Rules. CBOE
Rules 24A.7(d) and 24B.7(d).
\5\ Securities Exchange Act Release No. 59417 (Feb. 18, 2009),
74 FR 8591 (Feb. 25, 2009) [SR-CBOE-2008-115].
---------------------------------------------------------------------------
In order to clear and settle flexibly structured options traded on
CBOE in a manner that is consistent with CBOE's rules, OCC will change
the definition of ``flexibly structured option'' in Article I of its
By-Laws to clarify that an option will be classified as a flexibly
structured option only if its variable terms do not correspond to the
variable terms of any series of non-flexibly structured options listed
for trading other than a series of quarterly options or short term
options. Furthermore, existing flexibly structured options will be
fungible with options in a subsequently listed non-flexibly structured
option series other than quarterly options or short term options that
have identical variable terms and will not be classified as flexibly
structured options. The definition of ``flexibly structured option'' in
Article XVII, Section 1 of OCC's By-Laws will be deleted because such
definition is redundant. OCC will also amend the definition of
``variable terms'' in Article I of the By-Laws to clarify that the
expiration date is a variable term for all types of options. Finally,
other parts of the definition will also be revised to group together
variable terms of option contracts and variable terms of futures
contracts.
Prior to this rule change, OCC's rules provided that an expiring
flexibly structured index option with an exercise settlement amount of
$1.00 or more was automatically exercised on its expiration date. In
comparison, an expiring non-flexibly structured index option with an
exercise settlement amount of $1.00 or more except quarterly options or
short term options was subject to the ``exercise by exception''
procedures under which the option will be exercised on its expiration
date if the option holder does not give contrary exercise instructions.
However, as described above, flexibly
[[Page 15795]]
structured options that become fungible with non-flexibly structured
options will cease to be classified as flexibly structured options.
Therefore, such flexibly structured options will cease to be subject to
automatic exercise at expiration and will instead be subject to
exercise by exception like the non-flexibly structured options with
which they have become fungible.
OCC believes that the proposed changes to OCC's By-Laws and Rules
are consistent with the purposes and requirements of Section 17A of the
Act \6\ because they are designed to promote the prompt and accurate
clearance and settlement of transactions in, including exercises of,
flexibly structured options and to foster cooperation and coordination
with persons engaged in the clearance and settlement of such
transactions, to remove impediments to and perfect the mechanism of a
national system for the prompt and accurate clearance and settlement of
such transactions, and, in general, to protect investors and the public
interest. It accomplishes these purposes by maintaining consistency
between OCC's By-Laws and Rules and CBOE's rules as applied to the
clearance and settlement of flexibly structured options. The proposed
rule change is not inconsistent with the existing By-Laws and Rules of
OCC, including any rules proposed to be amended.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
OCC does not believe that the proposed rule change would impose any
burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
OCC has not solicited or received written comments with respect to
the proposed rule change. OCC will notify the Commission of any written
comments it receives.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \7\ and Rule 19b-4(f) thereunder because the
proposed rule effects a change in an existing OCC service that (i) does
not adversely affect the safeguarding of securities or funds in OCC's
custody or control or for which OCC is responsible and (ii) does not
significantly affect OCC's respective rights or obligations or persons
using the service. At any time within 60 days of the filing of the
proposed rule change, the Commission may summarily abrogated 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.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78a(b)(3)(A).
---------------------------------------------------------------------------
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-comment@sec.gov. Please include
File No. SR-OCC-2009-05 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 No. SR-OCC-2009-05. 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. to 3 p.m. Copies of such filing also will be available for
inspection and copying at OCC's principal office and on OCC's Web site
at https://www.theocc.com/publications/rules/proposed_changes/proposed_changes.jsp. 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 No. SR-
OCC-2009-05 and should be submitted on or before April 28, 2009.
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------
\8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-7774 Filed 4-6-09; 8:45 am]
BILLING CODE 8010-01-P
