Joint Industry Plan; Order Approving Amendment No. 3 to the Plan for the Purpose of Developing and Implementing Procedures Designed To Facilitate the Listing and Trading of Standardized Options, 43173-43174 [E9-20538]
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jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 164 / Wednesday, August 26, 2009 / Notices
total hourly burden per year for all
funds to comply with current
information collection requirements
under rule 12b–1, is 157,675 hours (371
fund families × 425 hours per fund
family = 157,675 hours) over the three
year period for which we are requesting
approval of the information collection
burden).
If a currently operating fund seeks to
(i) adopt a new Rule 12b–1 plan or (ii)
materially increase the amount it spends
for distribution under its Rule 12b–1
plan, Rule 12b–1 requires that the fund
obtain shareholder approval. As a
consequence, the fund will incur the
cost of a proxy. Based on conversations
with fund industry representatives,
Commission staff estimates that
approximately three funds per year
prepare a proxy in connection with the
adoption or material amendment of a
Rule 12b–1 plan. The staff further
estimates that the cost of each fund’s
proxy is $30,000. Thus the total annual
cost burden of Rule 12b–1 to the fund
industry is $90,000 (3 funds requiring a
proxy × $30,000 per proxy).
The collections of information
required by Rule 12b–1 are necessary to
obtain the benefits of the rule. Notices
to the Commission will not be kept
confidential. An agency may not
conduct or sponsor, and a person is not
required to respond to a collection of
information unless it displays a
currently valid control number.
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
(b) the accuracy of the agency’s estimate
of the burden of the collection of
information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
in writing within 60 days of this
publication.
Please direct your written comments
to Charles Boucher, Director/CIO,
Securities and Exchange Commission,
C/O Shirley Martinson, 6432 General
Green Way, Alexandria, VA 22312; or
send an e-mail to:
PRA_Mailbox@sec.gov.
pursuant to other rules, and would keep these
records in any case as a matter of business practice.
VerDate Nov<24>2008
17:05 Aug 25, 2009
Jkt 217001
Dated: August 19, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–20529 Filed 8–25–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60531; File No. 4–443]
Joint Industry Plan; Order Approving
Amendment No. 3 to the Plan for the
Purpose of Developing and
Implementing Procedures Designed To
Facilitate the Listing and Trading of
Standardized Options
August 19, 2009.
I. Introduction
On June 30, 2009, June 16, 2009, June
12, 2009, June 22, 2009, June 18, 2009,
June 23, 2009, July 8, 2009, the Chicago
Board Options Exchange, Incorporated
(‘‘CBOE’’), International Securities
Exchange, LLC (‘‘ISE’’), NASDAQ Stock
Market LLC (‘‘NASDAQ’’), NASDAQ
OMX BX, Inc. (‘‘BX’’), NASDAQ OMX
PHLX (‘‘Phlx’’), NYSE Amex LLC
(‘‘NYSE Amex’’), NYSE Arca Inc.
(‘‘NYSE Arca’’), and The Options
Clearing Corporation (‘‘OCC’’),
respectively, filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
11A of the Securities Exchange Act of
1934 (‘‘Act’’) 1 and Rule 608
thereunder,2 Amendment No. 3 to the
Plan for the Purpose of Developing and
Implementing Procedures Designed to
Facilitate the Listing and Trading of
Standardized Options (‘‘Plan’’ or
‘‘OLPP’’).3 Amendment No. 3 would
apply uniform objective standards to the
range of options series exercise (or
strike) prices available for trading on the
Plan Sponsor exchanges.
The proposed Amendment was
published for comment in the Federal
Register on July 28, 2009.4 The
Commission received no comment
letters in response to the Notice. This
1 15
U.S.C. 78k–1.
CFR 242.608.
3 On July 6, 2001, the Commission approved the
OLPP, which was originally proposed by the
American Stock Exchange LLC (k/n/a NYSE Amex),
CBOE, ISE, OCC, Philadelphia Stock Exchange, Inc.
(k/n/a Phlx), and Pacific Exchange, Inc. (k/n/a
NYSE Arca). See Securities Exchange Act Release
No. 44521, 66 FR 36809 (July 13, 2001). On
February 5, 2004, the Boston Stock Exchange, Inc.
(k/n/a BX) was added as a sponsor to the OLPP. See
Securities Exchange Act Release No. 49199, 69 FR
7030 (February 12, 2004). On March 21, 2008,
NASDAQ was added as a sponsor to the OLPP. See
Securities Exchange Act Release No. 57546 (March
21, 2008), 73 FR 16393 (March 27, 2008).
4 See Securities Exchange Act Release No. 60365
(July 22, 2009), 74 FR 37266 (‘‘Notice’’).
2 17
PO 00000
Frm 00080
Fmt 4703
Sfmt 4703
43173
order approves Amendment No. 3 to the
OLPP.
II. Description of the Proposed
Amendment
Amendment No. 3 would apply
uniform objective standards to the range
of options series exercise (or strike)
prices available for trading on the Plan
Sponsor exchanges as a quote mitigation
strategy. Specifically, the proposal
applies certain ‘‘range limitations’’ to
the addition of new series strike prices
for options classes overlying equity
securities, Exchange Traded Fund
Shares, or Trust Issued Receipts. As
proposed, if the price of the underlying
security is less than or equal to $20, the
Series Selecting Exchange would not list
new option series with an exercise price
more than 100 percent above or below
the price of the underlying security.5 If
the price of the underlying security is
greater than $20, the Series Selecting
Exchange would not list new option
series with an exercise price more than
50 percent above or below the price of
the underlying security.
The proposed Amendment provides
for an objective basis upon which the
underlying prices for the price range
limitations described above would be
determined, specifically, in regards to
intra-day add-on series and next-day
series additions, new expiration months
and for option series to be added as a
result of pre-market trading.
Furthermore, 8 a.m. Chicago time is
proposed as the earliest permissible
time at which a Series Selecting
Exchange may notify the OCC, and each
other exchange also trading the same
options class, that it has commenced
trading new series as a result of premarket trading. This earliest permissible
time is established to ensure that outlier
prices for the underlying security which
occur at 6 a.m. Chicago time, for
example (i.e., well in advance of the
opening of the standard trading session),
are not relied upon for purposes of the
exercise price range limitations.
The proposal also allows each Plan
Sponsor exchange to designate up to
five underlying securities to except from
the aforementioned 50 percent
restriction and instead apply the 100
percent restriction. These designations
would be made on an annual basis and
could not be removed during the
calendar year unless the option class
was delisted by the designating
exchange, in which case the designating
exchange could designate another class
to replace the delisted class. If a
5 This restriction would not prohibit the listing of
at least three options series per expiration month
in an option class.
E:\FR\FM\26AUN1.SGM
26AUN1
43174
Federal Register / Vol. 74, No. 164 / Wednesday, August 26, 2009 / Notices
designated class is delisted by the
designating exchange but continues to
trade on at least one other exchange, any
additional series for the class which are
added from that point forward would
again be subject to the proposed
exercise price range limitations, unless
the class is subsequently designated by
another exchange. The proposal also
provides an exchange with a procedure
to request, if conditions warrant,
additional case-by-case exceptions even
when it has already so designated five
underlying securities.
In addition, a procedure is created for
a Series Listing Exchange to request an
exemption, on a case-by-case basis, from
the 100 percent range limitation,
whereby, if unanimously agreed upon
by all exchanges that list the particular
options class, the Series Listing
Exchange may list options series with
strike prices that are more than 100
percent above or below the price of the
underlying security.6
The proposal would not allow for the
listing of options series that would
otherwise be prohibited by the rules of
a Series Selecting Exchange or the Plan,
nor does it restrict the ability of an
exchange to list options series that have
been properly listed by another
exchange. The proposal also expressly
eliminates the applicability of the strike
price range limitations with regard to:
(1) The listing of $1 strike prices in
option classes participating in the $1
Strike Program, where instead, the
Series Selecting Exchange would be
permitted to list $1 strike prices to the
fullest extent as permitted under its
rules for the $1 Strike Program; and (2)
the listing of series of Flexible Exchange
Options.
III. Discussion
After careful review, the Commission
finds that Amendment No. 3 is
consistent with the requirements of the
Act and the rules and regulations
thereunder.7 Specifically, the
Commission finds that Amendment No.
3 to the OLPP is consistent with section
11A of the Act 8 and Rule 608
thereunder 9 in that it is necessary or
appropriate in the public interest, for
the protection of investors and the
maintenance of fair and orderly markets,
to remove impediments to, and perfect
jlentini on DSKJ8SOYB1PROD with NOTICES
6 Application
of any of the aforementioned
exceptions and/or exemptions to the strike price
range limitations for an underlying security would
be available to all exchanges listing options on such
security.
7 In approving this proposed Amendment, the
Commission has considered its impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
8 15 U.S.C. 78k–1.
9 17 CFR 242.608.
VerDate Nov<24>2008
17:05 Aug 25, 2009
Jkt 217001
the mechanisms of, a national market
system.
The Commission notes that according
to one study cited by the Plan Sponsor
exchanges, the options industry would
expect an approximate four percent
reduction in the number of series
traded, with only a nominal reduction
in trading volume, upon
implementation of the changes
proposed in this Amendment.10
Therefore, the Commission believes that
adopting uniform objective standards to
the range of options series exercise (or
strike) prices available for trading on the
Plan Sponsor exchanges should reduce
the number of option series available for
trading, and thus should reduce
increases in the options quote message
traffic because market participants will
not be submitting quotes in those series.
Accordingly, the Commission believes
that it is necessary or appropriate in the
public interest, for the protection of
investors and the maintenance of fair
and orderly markets, to remove
impediments to, and perfect
mechanisms of, a national market
system to approve Amendment No. 3 to
the OLPP.
IV. Conclusion
It is therefore ordered, pursuant to
Section 11A of the Act,11 and Rule 608
thereunder,12 that proposed
Amendment No. 3 to the OLPP be, and
it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–20538 Filed 8–25–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60514; File No. SR–
NASDAQ–2009–075]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Order Granting Accelerated
Approval of a Proposed Rule Change
Relating to the Listing Standards for
Selected Equity-Linked Debt Securities
August 17, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
10 See
Notice, supra note 4.
U.S.C. 78k–1.
12 17 CFR 242.608.
13 17 CFR 200.30–3(a)(29).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
11 15
PO 00000
Frm 00081
Fmt 4703
Sfmt 4703
notice is hereby given that on August 6,
2009, The NASDAQ Stock Market LLC
(‘‘Nasdaq’’ or the ‘‘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 Nasdaq. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons and is
approving the proposed rule change on
an accelerated basis.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq is proposing to amend Nasdaq
Rule 5715, the Exchange’s listing
standards for selected equity-linked
debt securities (‘‘SEEDS’’). The text of
the proposed rule change is available
from Nasdaq’s Web site at https://
nasdaq.cchwallstreet.com, at Nasdaq’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,
Nasdaq 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 III below, and
is set forth in Sections A, B, and C
below.
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
Nasdaq Rule 5715, the Exchange’s
listing standards for SEEDS, to provide
for greater flexibility in the listing
criteria for such securities, as set forth
below. The proposed substantive rule
changes herein are based upon the rules
of NYSE Arca, Inc. (‘‘NYSEArca’’) 3 and
the American Stock Exchange LLC
(‘‘Amex’’).4 Similar proposed rule
changes by other national securities
3 See Securities Exchange Act Release No. 57219
(Jan. 29, 2008), 73 FR 6542 (Feb. 4, 2008) (SR–
NYSEArca–2008–13).
4 See Securities Exchange Act Release No. 55733
(May 10, 2007), 72 FR 27602 (May 16, 2007) (SR–
Amex–2007–34) (the ‘‘May 2007 Amex Order’’) and
Securities Exchange Act Release No. 56629 (October
9, 2007), 72 FR 58689 (October 16, 2007) (SR–
Amex–2007–87) (the ‘‘October 2007 Amex Order’’).
These two orders approved changes to Section
107A of the Amex Company Guide.
E:\FR\FM\26AUN1.SGM
26AUN1
]]>Agencies
[Federal Register Volume 74, Number 164 (Wednesday, August 26, 2009)]
[Notices]
[Pages 43173-43174]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-20538]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-60531; File No. 4-443]
Joint Industry Plan; Order Approving Amendment No. 3 to the Plan
for the Purpose of Developing and Implementing Procedures Designed To
Facilitate the Listing and Trading of Standardized Options
August 19, 2009.
I. Introduction
On June 30, 2009, June 16, 2009, June 12, 2009, June 22, 2009, June
18, 2009, June 23, 2009, July 8, 2009, the Chicago Board Options
Exchange, Incorporated (``CBOE''), International Securities Exchange,
LLC (``ISE''), NASDAQ Stock Market LLC (``NASDAQ''), NASDAQ OMX BX,
Inc. (``BX''), NASDAQ OMX PHLX (``Phlx''), NYSE Amex LLC (``NYSE
Amex''), NYSE Arca Inc. (``NYSE Arca''), and The Options Clearing
Corporation (``OCC''), respectively, filed with the Securities and
Exchange Commission (``Commission''), pursuant to Section 11A of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 608
thereunder,\2\ Amendment No. 3 to the Plan for the Purpose of
Developing and Implementing Procedures Designed to Facilitate the
Listing and Trading of Standardized Options (``Plan'' or ``OLPP'').\3\
Amendment No. 3 would apply uniform objective standards to the range of
options series exercise (or strike) prices available for trading on the
Plan Sponsor exchanges.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78k-1.
\2\ 17 CFR 242.608.
\3\ On July 6, 2001, the Commission approved the OLPP, which was
originally proposed by the American Stock Exchange LLC (k/n/a NYSE
Amex), CBOE, ISE, OCC, Philadelphia Stock Exchange, Inc. (k/n/a
Phlx), and Pacific Exchange, Inc. (k/n/a NYSE Arca). See Securities
Exchange Act Release No. 44521, 66 FR 36809 (July 13, 2001). On
February 5, 2004, the Boston Stock Exchange, Inc. (k/n/a BX) was
added as a sponsor to the OLPP. See Securities Exchange Act Release
No. 49199, 69 FR 7030 (February 12, 2004). On March 21, 2008, NASDAQ
was added as a sponsor to the OLPP. See Securities Exchange Act
Release No. 57546 (March 21, 2008), 73 FR 16393 (March 27, 2008).
---------------------------------------------------------------------------
The proposed Amendment was published for comment in the Federal
Register on July 28, 2009.\4\ The Commission received no comment
letters in response to the Notice. This order approves Amendment No. 3
to the OLPP.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 60365 (July 22,
2009), 74 FR 37266 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Amendment
Amendment No. 3 would apply uniform objective standards to the
range of options series exercise (or strike) prices available for
trading on the Plan Sponsor exchanges as a quote mitigation strategy.
Specifically, the proposal applies certain ``range limitations'' to the
addition of new series strike prices for options classes overlying
equity securities, Exchange Traded Fund Shares, or Trust Issued
Receipts. As proposed, if the price of the underlying security is less
than or equal to $20, the Series Selecting Exchange would not list new
option series with an exercise price more than 100 percent above or
below the price of the underlying security.\5\ If the price of the
underlying security is greater than $20, the Series Selecting Exchange
would not list new option series with an exercise price more than 50
percent above or below the price of the underlying security.
---------------------------------------------------------------------------
\5\ This restriction would not prohibit the listing of at least
three options series per expiration month in an option class.
---------------------------------------------------------------------------
The proposed Amendment provides for an objective basis upon which
the underlying prices for the price range limitations described above
would be determined, specifically, in regards to intra-day add-on
series and next-day series additions, new expiration months and for
option series to be added as a result of pre-market trading.
Furthermore, 8 a.m. Chicago time is proposed as the earliest
permissible time at which a Series Selecting Exchange may notify the
OCC, and each other exchange also trading the same options class, that
it has commenced trading new series as a result of pre-market trading.
This earliest permissible time is established to ensure that outlier
prices for the underlying security which occur at 6 a.m. Chicago time,
for example (i.e., well in advance of the opening of the standard
trading session), are not relied upon for purposes of the exercise
price range limitations.
The proposal also allows each Plan Sponsor exchange to designate up
to five underlying securities to except from the aforementioned 50
percent restriction and instead apply the 100 percent restriction.
These designations would be made on an annual basis and could not be
removed during the calendar year unless the option class was delisted
by the designating exchange, in which case the designating exchange
could designate another class to replace the delisted class. If a
[[Page 43174]]
designated class is delisted by the designating exchange but continues
to trade on at least one other exchange, any additional series for the
class which are added from that point forward would again be subject to
the proposed exercise price range limitations, unless the class is
subsequently designated by another exchange. The proposal also provides
an exchange with a procedure to request, if conditions warrant,
additional case-by-case exceptions even when it has already so
designated five underlying securities.
In addition, a procedure is created for a Series Listing Exchange
to request an exemption, on a case-by-case basis, from the 100 percent
range limitation, whereby, if unanimously agreed upon by all exchanges
that list the particular options class, the Series Listing Exchange may
list options series with strike prices that are more than 100 percent
above or below the price of the underlying security.\6\
---------------------------------------------------------------------------
\6\ Application of any of the aforementioned exceptions and/or
exemptions to the strike price range limitations for an underlying
security would be available to all exchanges listing options on such
security.
---------------------------------------------------------------------------
The proposal would not allow for the listing of options series that
would otherwise be prohibited by the rules of a Series Selecting
Exchange or the Plan, nor does it restrict the ability of an exchange
to list options series that have been properly listed by another
exchange. The proposal also expressly eliminates the applicability of
the strike price range limitations with regard to: (1) The listing of
$1 strike prices in option classes participating in the $1 Strike
Program, where instead, the Series Selecting Exchange would be
permitted to list $1 strike prices to the fullest extent as permitted
under its rules for the $1 Strike Program; and (2) the listing of
series of Flexible Exchange Options.
III. Discussion
After careful review, the Commission finds that Amendment No. 3 is
consistent with the requirements of the Act and the rules and
regulations thereunder.\7\ Specifically, the Commission finds that
Amendment No. 3 to the OLPP is consistent with section 11A of the Act
\8\ and Rule 608 thereunder \9\ in that it is necessary or appropriate
in the public interest, for the protection of investors and the
maintenance of fair and orderly markets, to remove impediments to, and
perfect the mechanisms of, a national market system.
---------------------------------------------------------------------------
\7\ In approving this proposed Amendment, the Commission has
considered its impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
\8\ 15 U.S.C. 78k-1.
\9\ 17 CFR 242.608.
---------------------------------------------------------------------------
The Commission notes that according to one study cited by the Plan
Sponsor exchanges, the options industry would expect an approximate
four percent reduction in the number of series traded, with only a
nominal reduction in trading volume, upon implementation of the changes
proposed in this Amendment.\10\ Therefore, the Commission believes that
adopting uniform objective standards to the range of options series
exercise (or strike) prices available for trading on the Plan Sponsor
exchanges should reduce the number of option series available for
trading, and thus should reduce increases in the options quote message
traffic because market participants will not be submitting quotes in
those series. Accordingly, the Commission believes that it is necessary
or appropriate in the public interest, for the protection of investors
and the maintenance of fair and orderly markets, to remove impediments
to, and perfect mechanisms of, a national market system to approve
Amendment No. 3 to the OLPP.
---------------------------------------------------------------------------
\10\ See Notice, supra note 4.
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to Section 11A of the Act,\11\
and Rule 608 thereunder,\12\ that proposed Amendment No. 3 to the OLPP
be, and it hereby is, approved.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78k-1.
\12\ 17 CFR 242.608.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(29).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-20538 Filed 8-25-09; 8:45 am]
BILLING CODE 8010-01-P
