Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Allow All SPY and IWM Option Series To Quote in Penny Increments, 1434-1436 [2010-204]

Download as PDF 1434 Federal Register / Vol. 75, No. 6 / Monday, January 11, 2010 / Notices 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 either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange believes that the foregoing proposed rule change may take effect upon filing with the Commission pursuant to Section 19(b)(3)(A) 10 of the Act and Rule 19b– 4(f)(6)(iii) thereunder 11 because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate.12 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. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–Phlx–2009–110 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, srobinson on DSKHWCL6B1PROD with NOTICES 10 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6)(iii). 12 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange’s intent to file the proposed rule change along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 11 17 VerDate Nov<24>2008 16:06 Jan 08, 2010 Jkt 220001 Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–Phlx–2009–110. 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 the filing also will be available for inspection and copying at the principal office of the self-regulatory organization. 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–Phlx– 2009–110 and should be submitted on or before February 1, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–205 Filed 1–8–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61281; File No. SR– NASDAQ–2009–115] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Allow All SPY and IWM Option Series To Quote in Penny Increments January 4, 2010. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 13 17 PO 00000 CFR 200.30–3(a)(12). Frm 00102 Fmt 4703 Sfmt 4703 (‘‘Act’’) 1 and Rule 19b–4 2 thereunder, notice is hereby given that on December 24, 2009, The NASDAQ Stock Market LLC (‘‘Nasdaq’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Nasdaq is filing with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) a proposal for the NASDAQ Options Market (‘‘NOM’’ or ‘‘Exchange’’) to quote all series of options on SPDR S&P 500 Exchange Traded Funds (SPY) and options on iShares Russell 2000 Index Funds (IWM) in penny increments ($0.01) pursuant to the Penny Pilot (‘‘Penny Pilot’’ or ‘‘Pilot’’), effective February 1, 2010.3 This date corresponds with the phase-in date for additional classes for the Penny Pilot. The Exchange requests that the Commission waive the 30-day operative delay period contained in Exchange Act Rule 19b–4(f)(6)(iii).4 The text of the proposed rule change is available from Nasdaq’s Web site at https://nasdaq.cchwallstreet.com/ Filings/ 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 and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 The Penny Pilot was established in March 2008 and in October 2009 was expanded and extended through December 31, 2010. See Securities Exchange Act Release Nos. 57579 (March 28, 2008), 73 FR 18587 (April 4, 2008) (SR–NASDAQ–2008– 026) (notice of filing and immediate effectiveness establishing Penny Pilot); and 60874 (October 23, 2009), 74 FR 56682 (November 2, 2009) (SR– NASDAQ–2009–091) (notice of filing and immediate effectiveness expanding and extending Penny Pilot through December 31, 2010). See also Securities Exchange Act Release No. 60965 (November 9, 2009), 74 FR 59292 (November 17, 2009) (SR–NASDAQ–2009–097) (notice of filing and immediate effectiveness adding seventy-five classes to Penny Pilot). 4 17 CFR 240.19b–4(f)(6)(iii). 2 17 E:\FR\FM\11JAN1.SGM 11JAN1 Federal Register / Vol. 75, No. 6 / Monday, January 11, 2010 / Notices in Item IV below. Nasdaq 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 the Statutory Basis for, the Proposed Rule Change srobinson on DSKHWCL6B1PROD with NOTICES 1. Purpose The purpose of this filing is to enable the Exchange to quote all series of options on SPDR S&P 500 Exchange Traded Funds (‘‘SPY’’) and options on iShares Russell 2000 Index Funds (‘‘IWM’’) in penny increments pursuant to the Penny Pilot, effective February 1, 2010. In the Exchange’s immediately effective filing to extend and expand the Penny Pilot through December 31, 2010, the Exchange proposed expanding the Pilot four times on a quarterly basis.5 In addition to sixty-three options classes that were in the Penny Pilot, the Exchange has recently added the next seventy-five most actively traded multiply listed options classes based on the national average daily volume (‘‘ADV’’) for the six months prior to selection, closing under $200 per share on the Expiration Friday prior to expansion.6 The minimum quotation variation for all classes included in the Pilot, except for options on PowerShares QQQ (‘‘QQQQ’’),7 is $0.01 for all quotations in option series that are quoted at less than $3.00 per contract, and $0.05 for all quotations in option series that are quoted at $3.00 or greater. Thus, the current minimum quoting increment for bids and offers in SPY and IWM is $0.01 for all options series below $3.00 and $0.05 for all options series $3.00 and above. The Exchange now proposes to eliminate the $3.00 breakpoint that exists for SPY and IWM and designate all options series of SPY and IWM as eligible to quote in $0.01 increments, regardless of premium value. The Exchange will communicate the proposed change to its membership via an Options Trader Alert (‘‘OTA’’) posted on the Exchange’s Web site. 5 See Securities Exchange Act Release No. 60874 (October 23, 2009), 74 FR 56682 (November 2, 2009) (SR–NASDAQ–2009–091) (notice of filing and immediate effectiveness). 6 The month immediately preceding the addition of options to the Penny Pilot was not used for the purpose of the six month analysis, and index option products were included only if the underlying index levels were under 200. See Securities Exchange Act Release No. 60965 (November 9, 2009), 74 FR 59292 (November 17, 2009) (SR– NASDAQ–2009–097) (notice of filing and immediate effectiveness). 7 Options on QQQQ are quoted in $0.01 increments for all series. VerDate Nov<24>2008 16:06 Jan 08, 2010 Jkt 220001 The Exchange notes that although the Pilot has contributed to some increase in quote message traffic, it has been manageable by the Exchange and the Options Price Reporting Authority (‘‘OPRA’’), with no significant disruption in the dissemination of pricing information. The Exchange believes that the benefits to public customers and other market participants who are able to express their true prices to buy and sell options have been demonstrated to outweigh the increase in quote traffic. Moreover, the Exchange’s rule change proposal is sufficiently limited such that it is unlikely to increase quotation message traffic beyond the capacity of the Exchange’s or OPRA’s systems, or to disrupt the timely dissemination of information. The Exchange believes that its proposal to eliminate the breakpoint for penny quoting of all SPY and IWM option series should facilitate the continuing narrowing of spreads, thereby lowering costs to the benefit of investors. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 8 in general, and furthers the objectives of Section 6(b)(5) of the Act 9 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanisms of a free and open market and a national market system by allowing all SPY and IWM option series to quote in penny intervals. B. Self-Regulatory Organization’s Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in 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 Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange believes that the foregoing proposed rule change may 8 15 9 15 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00103 Fmt 4703 Sfmt 4703 1435 take effect upon filing with the Commission pursuant to Section 19(b)(3)(A) 10 of the Act and Rule 19b– 4(f)(6)(iii) thereunder 11 because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate.12 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. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NASDAQ–2009–115 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–NASDAQ–2009–115. 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 10 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6)(iii). 12 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 19b–4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange’s intent to file the proposed rule change along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 11 17 E:\FR\FM\11JAN1.SGM 11JAN1 1436 Federal Register / Vol. 75, No. 6 / Monday, January 11, 2010 / Notices 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 the filing also will be available for inspection and copying at the principal office of the self-regulatory organization. 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– NASDAQ–2009–115 and should be submitted on or before February 1, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–204 Filed 1–8–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61283; File No. SR–BX– 2009–082] Self-Regulatory Organizations; NASDAQ OMX BX; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Facilitate Annual Membership Billing Conducted by BX Using the FINRA CRD System srobinson on DSKHWCL6B1PROD with NOTICES January 4, 2010. 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 December 14, 2009, NASDAQ OMX BX, Inc. (the ‘‘Exchange’’ or ‘‘BX’’) 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 BX. BX has designated the proposed rule change as one that is concerned solely with the administration of the self-regulatory organization pursuant to Rule 19b– 13 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. VerDate Nov<24>2008 16:06 Jan 08, 2010 4(f)(3) under the Act,3 which renders the proposal 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 BX submits this proposed rule change to facilitate annual membership billing conducted by the Financial Industry Regulatory Authority (‘‘FINRA’’) on behalf of BX. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, BX 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. BX 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 BX is proposing to allow FINRA to deduct an annual $3,000 membership fee from Boston Options Exchange Group, LLC (‘‘BOX’’) participants’ CRD accounts and promptly refund the charge back to the same participants’ accounts. Pursuant to a regulatory services agreement, FINRA is providing BX with certain regulatory services, including the collection of annual membership fees from BX members pursuant to BX Rule 7001(a). BOX participants are not subject to the BX annual membership fee. Due to a limitation with FINRA’s systems, FINRA is unable to differentiate between BX members and BOX participants. As a consequence, FINRA must deduct the BX fee from both member and participant accounts. BX is proposing to promptly refund the charge to BOX participants after collection by FINRA. Specifically, after receipt of the lump sum payment from FINRA representing the collection of funds from both member and participant accounts, BX will provide to FINRA the BOX participant funds together with a list of each participant to which FINRA must remit pro-rata payment. BOX has 3 17 Jkt 220001 PO 00000 CFR 240.19b–4(f)(3). Frm 00104 Fmt 4703 Sfmt 4703 provided its participants with notice of the impending charge and rebate. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,4 in general and with Sections 6(b)(5) of the Act,5 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The proposed change will facilitate FINRA’s operation of the CRD system, while ensuring that BOX participants are not improperly charged a fee. B. Self-Regulatory Organization’s Statement on Burden on Competition BX does not believe that the proposed rule change will impose any burden on competition 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 either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Pursuant to Section 19(b)(3)(A)(iii) of the Act 6 and Rule 19b–4(f)(3) thereunder,7 the Exchange has designated this proposal as one that is concerned solely with the administration of the self-regulatory organization, which renders the proposed rule change effective upon filing. 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: 4 15 U.S.C. 78f. U.S.C. 78f(b)(5). 6 15 U.S.C. 78s(b)(3)(A)(iii). 7 17 CFR 240.19b–4(f)(3). 5 15 E:\FR\FM\11JAN1.SGM 11JAN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 75, Number 6 (Monday, January 11, 2010)]
[Notices]
[Pages 1434-1436]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-204]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61281; File No. SR-NASDAQ-2009-115]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Allow All SPY and IWM Option Series To Quote in Penny Increments

January 4, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on December 24, 2009, The NASDAQ Stock Market LLC (``Nasdaq'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, II,
and III 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.
---------------------------------------------------------------------------

\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

Nasdaq is filing with the Securities and Exchange Commission
(``SEC'' or ``Commission'') a proposal for the NASDAQ Options Market
(``NOM'' or ``Exchange'') to quote all series of options on SPDR S&P
500 Exchange Traded Funds (SPY) and options on iShares Russell 2000
Index Funds (IWM) in penny increments ($0.01) pursuant to the Penny
Pilot (``Penny Pilot'' or ``Pilot''), effective February 1, 2010.\3\
This date corresponds with the phase-in date for additional classes for
the Penny Pilot.
---------------------------------------------------------------------------

\3\ The Penny Pilot was established in March 2008 and in October
2009 was expanded and extended through December 31, 2010. See
Securities Exchange Act Release Nos. 57579 (March 28, 2008), 73 FR
18587 (April 4, 2008) (SR-NASDAQ-2008-026) (notice of filing and
immediate effectiveness establishing Penny Pilot); and 60874
(October 23, 2009), 74 FR 56682 (November 2, 2009) (SR-NASDAQ-2009-
091) (notice of filing and immediate effectiveness expanding and
extending Penny Pilot through December 31, 2010). See also
Securities Exchange Act Release No. 60965 (November 9, 2009), 74 FR
59292 (November 17, 2009) (SR-NASDAQ-2009-097) (notice of filing and
immediate effectiveness adding seventy-five classes to Penny Pilot).
---------------------------------------------------------------------------

The Exchange requests that the Commission waive the 30-day
operative delay period contained in Exchange Act Rule 19b-
4(f)(6)(iii).\4\
---------------------------------------------------------------------------

\4\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

The text of the proposed rule change is available from Nasdaq's Web
site at https://nasdaq.cchwallstreet.com/Filings/ 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 and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified

[[Page 1435]]

in Item IV below. Nasdaq 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 the
Statutory Basis for, the Proposed Rule Change

1. Purpose
The purpose of this filing is to enable the Exchange to quote all
series of options on SPDR S&P 500 Exchange Traded Funds (``SPY'') and
options on iShares Russell 2000 Index Funds (``IWM'') in penny
increments pursuant to the Penny Pilot, effective February 1, 2010.
In the Exchange's immediately effective filing to extend and expand
the Penny Pilot through December 31, 2010, the Exchange proposed
expanding the Pilot four times on a quarterly basis.\5\ In addition to
sixty-three options classes that were in the Penny Pilot, the Exchange
has recently added the next seventy-five most actively traded multiply
listed options classes based on the national average daily volume
(``ADV'') for the six months prior to selection, closing under $200 per
share on the Expiration Friday prior to expansion.\6\ The minimum
quotation variation for all classes included in the Pilot, except for
options on PowerShares QQQ (``QQQQ''),\7\ is $0.01 for all quotations
in option series that are quoted at less than $3.00 per contract, and
$0.05 for all quotations in option series that are quoted at $3.00 or
greater. Thus, the current minimum quoting increment for bids and
offers in SPY and IWM is $0.01 for all options series below $3.00 and
$0.05 for all options series $3.00 and above.
---------------------------------------------------------------------------

\5\ See Securities Exchange Act Release No. 60874 (October 23,
2009), 74 FR 56682 (November 2, 2009) (SR-NASDAQ-2009-091) (notice
of filing and immediate effectiveness).
\6\ The month immediately preceding the addition of options to
the Penny Pilot was not used for the purpose of the six month
analysis, and index option products were included only if the
underlying index levels were under 200. See Securities Exchange Act
Release No. 60965 (November 9, 2009), 74 FR 59292 (November 17,
2009) (SR-NASDAQ-2009-097) (notice of filing and immediate
effectiveness).
\7\ Options on QQQQ are quoted in $0.01 increments for all
series.
---------------------------------------------------------------------------

The Exchange now proposes to eliminate the $3.00 breakpoint that
exists for SPY and IWM and designate all options series of SPY and IWM
as eligible to quote in $0.01 increments, regardless of premium value.
The Exchange will communicate the proposed change to its membership via
an Options Trader Alert (``OTA'') posted on the Exchange's Web site.
The Exchange notes that although the Pilot has contributed to some
increase in quote message traffic, it has been manageable by the
Exchange and the Options Price Reporting Authority (``OPRA''), with no
significant disruption in the dissemination of pricing information. The
Exchange believes that the benefits to public customers and other
market participants who are able to express their true prices to buy
and sell options have been demonstrated to outweigh the increase in
quote traffic. Moreover, the Exchange's rule change proposal is
sufficiently limited such that it is unlikely to increase quotation
message traffic beyond the capacity of the Exchange's or OPRA's
systems, or to disrupt the timely dissemination of information.
The Exchange believes that its proposal to eliminate the breakpoint
for penny quoting of all SPY and IWM option series should facilitate
the continuing narrowing of spreads, thereby lowering costs to the
benefit of investors.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \8\ in general, and furthers the objectives of Section
6(b)(5) of the Act \9\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanisms of a free and open
market and a national market system by allowing all SPY and IWM option
series to quote in penny intervals.
---------------------------------------------------------------------------

\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

Nasdaq does not believe that the proposed rule change will result
in 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

Written comments were neither solicited nor received.

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

The Exchange believes that the foregoing proposed rule change may
take effect upon filing with the Commission pursuant to Section
19(b)(3)(A) \10\ of the Act and Rule 19b-4(f)(6)(iii) thereunder \11\
because the foregoing proposed rule change does not: (i) Significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative prior
to 30 days from the date on which it was filed, or such shorter time as
the Commission may designate.\12\
---------------------------------------------------------------------------

\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires the Exchange to give the Commission written
notice of the Exchange's intent to file the proposed rule change
along with a brief description and the text of the proposed rule
change, at least five business days prior to the date of filing of
the proposed rule change, or such shorter time as designated by the
Commission. The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

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.

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-NASDAQ-2009-115 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-NASDAQ-2009-115. 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

[[Page 1436]]

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 the filing also will be available for inspection and
copying at the principal office of the self-regulatory organization.
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-NASDAQ-2009-
115 and should be submitted on or before February 1, 2010.
---------------------------------------------------------------------------

\13\ 17 CFR 200.30-3(a)(12).

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-204 Filed 1-8-10; 8:45 am]
BILLING CODE 8011-01-P

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