Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Accommodate Cabinet Trades That Take Place Below $1 Per Option Contract Until July 1, 2010, 14217-14219 [2010-6509]
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Federal Register / Vol. 75, No. 56 / Wednesday, March 24, 2010 / Notices
Dated: March 17, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–6505 Filed 3–23–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
srobinson on DSKHWCL6B1PROD with NOTICES
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: U.S. Securities and Exchange
Commission, Office of Investor
Education and Advocacy,
Washington, DC 20549–0213.
Extension:
Rule 17a–12, SEC File No. 270–442,
OMB Control No. 3235–0498.
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget a
request for approval of extension of the
previously approved collection
provided for in Rule 17a–12 (17 CFR
240.17a–12) under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.) (‘‘Exchange Act’’).
Rule17a–12 under the Exchange Act
requires OTC derivatives dealers to file
quarterly Financial and Operational
Combined Uniform Single Reports
(‘‘FOCUS’’ reports) on Part IIB of Form
X–17A–5,1 the basic document for
reporting the financial and operational
condition of OTC derivatives dealers.
Rule 17a–12 also requires that OTC
derivatives dealers file audited financial
statements annually. The reports
required under Rule 17a–12 provide the
Commission with information used to
monitor the operations of OTC
derivatives dealers and to enforce their
compliance with the Commission’s
rules. These reports also enable the
Commission to review the business
activities of OTC derivatives dealers and
to anticipate, where possible, how these
dealers may be affected by significant
economic events.
The staff estimates that the average
amount of time necessary to prepare and
file the information required by Rule
17a–12 is 180 hours per OTC derivatives
dealer annually—an average of twenty
hours preparing each of four quarterly
reports and an additional 100 hours for
the annual audit. Four entities are
presently registered as OTC derivatives
dealers and the staff expects that one
additional OTC derivatives dealer, with
an application pending, will become
registered within the next three years.
Thus the total burden is estimated to be
900 hours annually ((180 × 4) + (180 ×
1)).
Comments should be directed to:
(i) Desk Officer for the Securities and
Exchange Commission Office of
Information and Regulatory Affairs,
Office of Management and Budget,
Room 10102, New Executive Office
Building, Washington, DC 20503 or by
sending an email to:
Shagufta_Ahmed@omb.eop.gov; and
(ii) Charles Boucher, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Shirley
Martinson, 6432 General Green Way,
Alexandria, Virginia 22312 or send an
e-mail to PRA_Mailbox@sec.gov.
Comments must be submitted to OMB
within 30 days of this notice.
Dated: March 17, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–6506 Filed 3–23–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61727; File No. SR–
NYSEArca–2010–13]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Accommodate
Cabinet Trades That Take Place Below
$1 Per Option Contract Until July 1,
2010
March 17, 2010.
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,
2010, NYSE Arca, Inc. (‘‘NYSE Arca’’ 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 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 adopt
Commentary .01 to Rule 6.80,
Accommodation Transactions (Cabinet
Trades), to permit transactions to take
place at a price that is below $1 per
X–17A–5 (17 CFR 249.617).
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16:24 Mar 23, 2010
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U.S.C.78s(b)(1).
2 17 CFR 240.19b–4.
PO 00000
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option contract. The text of the
proposed rule change is attached as
Exhibit 5 to the 19b–4 form. 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
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts 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 allow
accommodation transactions (‘‘Cabinet
Trades’’) to take place at a price that is
below $1 per option contract. The
Exchange proposes to adopt a rule based
on CBOE Rule 6.54, Interpretations and
Policies .03.3
Cabinet trading is generally
conducted in accordance with the
Exchange Rules, except as provided in
Exchange Rule 6.80 Accommodation
Transactions (Cabinet Trades), which
sets forth specific procedures for
engaging in cabinet trades. Rule 6.80
currently provides for cabinet
transactions to occur via open outcry at
a cabinet price of a $1 per option
contract in any options series open for
trading in the Exchange, except that the
Rule is not applicable to trading in
option classes participating in the
Penny Pilot Program. Under the
procedures, bids and offers (whether
opening or closing a position) at a price
of $1 per option contract may be
represented in the trading crowd by a
Floor Broker or by a Market-Maker or
provided in response to a request by a
Trading Official, a Floor Broker or a
Market-Maker, but must yield priority to
all resting orders in the Cabinet (those
orders held by the Trading Official, and
which resting cabinet orders may be
closing only). So long as both the buyer
and the seller yield to orders resting in
3 See Securities Exchange Act Release No. 59188
(December 30, 2008), 74 FR 480 (January 6,
2009)(SR–CBOE–2008–133).
1 15
1 Form
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Federal Register / Vol. 75, No. 56 / Wednesday, March 24, 2010 / Notices
srobinson on DSKHWCL6B1PROD with NOTICES
the cabinet book, opening cabinet bids
can trade with opening cabinet offers at
$1 per option contract.
The purpose of this rule change is to
temporarily amend the procedures
through July 1, 2010 to allow
transactions to take place in open outcry
at a price of at least $0 but less than $1
per option contract. These lower priced
transactions would be traded pursuant
to the same procedures applicable to $1
cabinet trades, except that (i) bids and
offers for opening transactions would
only be permitted to accommodate
closing transactions in order to limit use
of the procedure to liquidations of
existing positions, and (ii) the
procedures would also be made
available for trading in option classes
participating in the Penny Pilot
Program.4 The Exchange believes that
allowing a price of at least $0 but less
than $1 will better accommodate the
closing of options positions in series
that are worthless or not actively traded,
particularly due to recent market
conditions which have resulted in a
significant number of series being outof-the-money. For example, a market
participant might have a long position
in a call series with a strike price of
$100 and the underlying stock might
now be trading at $30. In such an
instance, there might not otherwise be a
market for that person to close-out its
position even at the $1 cabinet price
(e.g., the series might be quoted no bid).
As with other accommodation
liquidations under Rule 6.80,
transactions that occur for less than $1
will not be disseminated to the public
on the consolidated tape. In addition, as
with other accommodation liquidations
under Rule 6.80, the transactions will be
exempt from the Consolidated Options
Audit Trail (‘‘COATS’’) requirements of
Exchange Rule 6.67 Order Format and
System Entry Requirements. However,
the Exchange will maintain quotation,
order and transaction information for
the transactions in the same format as
the COATS data is maintained. In this
regard, all transactions for less than $1
must be reported to the Exchange
following the close of each business
day.
4 Currently the $1 cabinet trading procedures are
limited to options classes traded in $0.05 or $0.10
standard increment. The $1 cabinet trading
procedures are not available in Penny Pilot Program
classes because in those classes an option series can
trade in a standard increment as low as $0.01 per
share (or $1.00 per option contract with a 100 share
multiplier). Because the instant rule change would
allow trading below $0.01 per share (or $1.00 per
option contract with a 100 share multiplier), the
procedures would be made available for all classes,
including those classes participating in the Penny
Pilot Program.
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16:24 Mar 23, 2010
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2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with Section
6(b) 5 of the Securities Exchange Act of
1934 (the ‘‘Act’’), in general, and furthers
the objectives of Section 6(b)(5) 6 in
particular in that it is designed to
promote just and equitable principles of
trade, to prevent fraudulent and
manipulative acts, to remove
impediments to and to perfect the
mechanism for a free and open market
and a national market system and, in
general, to protect investors and the
public interest. The Exchange believes
that allowing for liquidations at a price
less than $1 per option contract will
better facilitate the closing of options
positions that are worthless or not
actively trading, especially in Penny
Pilot issues where Cabinet Trades are
not otherwise permitted.
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
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 7 and Rule 19b–4(f)(6)
thereunder because the proposal does
not: (i) Significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) by its
terms, become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate if consistent with the
protection of investors and the public
interest.8
The Exchange has requested that the
Commission waive the 30-day operative
5 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
7 15 U.S.C. 78s(b)(3)(A).
8 17 CFR 240.19b–4(f)(6). 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 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 the pre-filing requirement.
6 15
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Frm 00096
Fmt 4703
Sfmt 4703
delay period. In making such request,
the Exchange stated that immediate
operability will level the current
competitive landscape by permitting the
Exchange to implement changes similar
to those implemented by the CBOE. The
Commission hereby grants the request.
The Commission notes that the proposal
is nearly identical to the rules of another
self-regulatory organization,9 and
believes that waiver of the 30-day
period will enable the Exchange to
provide a means for investors to close
out positions that are worthless or not
actively trading without delay. Based on
the above, the Commission believes it is
consistent with the protection of
investors and the public interest to
waive the 30-day operative delay and
designates the proposal as operative
upon filing.10
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such proposed 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.11
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–NYSEArca–2010–13 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–2010–013. 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
9 See CBOE Rule 6.54, Interpretations and
Policies .03.
10 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
11 15 U.S.C. 78s(b)(3)(C).
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Federal Register / Vol. 75, No. 56 / Wednesday, March 24, 2010 / Notices
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 Web site viewing and
printing 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 offices 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–2010–13, and
should be submitted on or before April
14, 2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–6509 Filed 3–23–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61733; File No. SR–CHX–
2010–06]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Amend
CHX Article 8, Rule 14 To, Among
Other Things, Prohibit Broker
Discretionary Voting on the Elections
of Directors
srobinson on DSKHWCL6B1PROD with NOTICES
March 18, 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 March 9,
2010, the Chicago Stock Exchange, Inc.
(‘‘CHX’’ or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I and
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
II below, which Items have been
prepared by the CHX. The Exchange
filed the proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of
the Act 3 and Rule 19b–4(f)(6)
thereunder.4 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
CHX proposes to amend Article 8,
Rule 14 regarding proxy voting by
Participants which hold stock on behalf
of the beneficial owner. Specifically, the
Exchange would like to enumerate in its
rules certain matters that affect
substantially the rights and privileges of
stock and therefore should not be voted
on by Participants without instructions
from the beneficial owner. The text of
this proposed rule change is available
on the Exchange’s Web site at (https://
www.chx.com) and in 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
CHX included statements concerning
the purpose of and basis for the
proposed rule changes and discussed
any comments it received regarding the
proposal. The text of these statements
may be examined at the places specified
in Item IV below. The CHX 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
Changes
1. Purpose
The CHX is proposing to amend
Article 8, Rule 14 regarding proxy
voting by Participants which hold stock
on behalf of the beneficial owner.
Specifically, the Exchange would like to
enumerate in its rules certain matters
that affect substantially the rights and
privileges of stock and therefore should
not be voted on by Participants without
instructions from the beneficial owner.
Under the current CHX and SEC
proxy rules, Participants must deliver
proxy materials to beneficial owners
and request voting instructions in
return. If voting instructions have not
been received by the tenth day
12 17
1 15
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16:24 Mar 23, 2010
3 15
4 17
Jkt 220001
PO 00000
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
Frm 00097
Fmt 4703
Sfmt 4703
14219
preceding the meeting date, Rule 14
provides that Participants may vote on
certain matters deemed ‘‘routine’’ by the
CHX. One of the most important results
of Participant votes of uninstructed
shares is their use in establishing a
quorum at shareholder meetings.
At present, matters considered routine
by the CHX are those in which the
person signing the proxy has no
knowledge of any contest as to the
action to be taken at the meeting and
provided such action does not include
authorization for a merger,
consolidation or any other matter which
may affect substantially the legal rights
or privileges of such stock. In addition
to this guidance, CHX rules specifically
state that a Participant may not give a
proxy to vote when the matter to be
voted upon authorizes the
implementation of any equity
compensation plan, or any material
revision to the terms of any existing
equity compensation plan.
With this rule filing, CHX would like
to amend its rules to conform to the
NYSE’s rules 5 to eliminate any
disparities involving voting depending
on where the shares are held.6 CHX
would also like to enumerate in its rules
certain matters that affect substantially
the rights and privileges of stock and
therefore should not be voted on by
Participants without instructions from
the beneficial owner. These include:
Any matter that is not submitted to
stockholders by means of a proxy
statement comparable to that specified
in Schedule 14–A of Securities and
Exchange Commission; any matter that
is the subject of a counter-solicitation or
is part of a proposal made by a
stockholder which is being opposed by
management (i.e., a contest); any matter
that relates to a merger or consolidation
(except when the company’s proposal is
to merge with its own wholly owned
subsidiary, provided its shareholders
dissenting thereto do not have rights of
appraisal); and, matters that involve a
right of appraisal. Additionally, matters
that authorize mortgaging of property,
authorize or create indebtedness or
increase the authorized amount of
indebtedness, authorize or create a
preferred stock or increase the
authorized amount of an existing
preferred stock or alter the terms or
conditions of existing stock or
indebtedness will also be prohibited
5 See
NYSE Rule 452.
Commission has indicated that, while other
self-regulatory organizations currently allow
discretionary voting, it expects these markets to
make changes to conform to the NYSE’s rules to
eliminate any disparities involving voting
depending on where shares are held. See Securities
Exchange Act Release No. 34–60215 (July 1, 2009).
6 The
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]]>Agencies
[Federal Register Volume 75, Number 56 (Wednesday, March 24, 2010)]
[Notices]
[Pages 14217-14219]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-6509]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61727; File No. SR-NYSEArca-2010-13]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Accommodate
Cabinet Trades That Take Place Below $1 Per Option Contract Until July
1, 2010
March 17, 2010.
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, 2010, NYSE Arca, Inc. (``NYSE Arca'' 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 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
The Exchange proposes to adopt Commentary .01 to Rule 6.80,
Accommodation Transactions (Cabinet Trades), to permit transactions to
take place at a price that is below $1 per option contract. The text of
the proposed rule change is attached as Exhibit 5 to the 19b-4 form. 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 on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts 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 allow accommodation transactions
(``Cabinet Trades'') to take place at a price that is below $1 per
option contract. The Exchange proposes to adopt a rule based on CBOE
Rule 6.54, Interpretations and Policies .03.\3\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 59188 (December 30,
2008), 74 FR 480 (January 6, 2009)(SR-CBOE-2008-133).
---------------------------------------------------------------------------
Cabinet trading is generally conducted in accordance with the
Exchange Rules, except as provided in Exchange Rule 6.80 Accommodation
Transactions (Cabinet Trades), which sets forth specific procedures for
engaging in cabinet trades. Rule 6.80 currently provides for cabinet
transactions to occur via open outcry at a cabinet price of a $1 per
option contract in any options series open for trading in the Exchange,
except that the Rule is not applicable to trading in option classes
participating in the Penny Pilot Program. Under the procedures, bids
and offers (whether opening or closing a position) at a price of $1 per
option contract may be represented in the trading crowd by a Floor
Broker or by a Market-Maker or provided in response to a request by a
Trading Official, a Floor Broker or a Market-Maker, but must yield
priority to all resting orders in the Cabinet (those orders held by the
Trading Official, and which resting cabinet orders may be closing
only). So long as both the buyer and the seller yield to orders resting
in
[[Page 14218]]
the cabinet book, opening cabinet bids can trade with opening cabinet
offers at $1 per option contract.
The purpose of this rule change is to temporarily amend the
procedures through July 1, 2010 to allow transactions to take place in
open outcry at a price of at least $0 but less than $1 per option
contract. These lower priced transactions would be traded pursuant to
the same procedures applicable to $1 cabinet trades, except that (i)
bids and offers for opening transactions would only be permitted to
accommodate closing transactions in order to limit use of the procedure
to liquidations of existing positions, and (ii) the procedures would
also be made available for trading in option classes participating in
the Penny Pilot Program.\4\ The Exchange believes that allowing a price
of at least $0 but less than $1 will better accommodate the closing of
options positions in series that are worthless or not actively traded,
particularly due to recent market conditions which have resulted in a
significant number of series being out-of-the-money. For example, a
market participant might have a long position in a call series with a
strike price of $100 and the underlying stock might now be trading at
$30. In such an instance, there might not otherwise be a market for
that person to close-out its position even at the $1 cabinet price
(e.g., the series might be quoted no bid).
---------------------------------------------------------------------------
\4\ Currently the $1 cabinet trading procedures are limited to
options classes traded in $0.05 or $0.10 standard increment. The $1
cabinet trading procedures are not available in Penny Pilot Program
classes because in those classes an option series can trade in a
standard increment as low as $0.01 per share (or $1.00 per option
contract with a 100 share multiplier). Because the instant rule
change would allow trading below $0.01 per share (or $1.00 per
option contract with a 100 share multiplier), the procedures would
be made available for all classes, including those classes
participating in the Penny Pilot Program.
---------------------------------------------------------------------------
As with other accommodation liquidations under Rule 6.80,
transactions that occur for less than $1 will not be disseminated to
the public on the consolidated tape. In addition, as with other
accommodation liquidations under Rule 6.80, the transactions will be
exempt from the Consolidated Options Audit Trail (``COATS'')
requirements of Exchange Rule 6.67 Order Format and System Entry
Requirements. However, the Exchange will maintain quotation, order and
transaction information for the transactions in the same format as the
COATS data is maintained. In this regard, all transactions for less
than $1 must be reported to the Exchange following the close of each
business day.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) \5\ of the Securities Exchange Act of 1934 (the ``Act''),
in general, and furthers the objectives of Section 6(b)(5) \6\ in
particular in that it is designed to promote just and equitable
principles of trade, to prevent fraudulent and manipulative acts, to
remove impediments to and to perfect the mechanism for a free and open
market and a national market system and, in general, to protect
investors and the public interest. The Exchange believes that allowing
for liquidations at a price less than $1 per option contract will
better facilitate the closing of options positions that are worthless
or not actively trading, especially in Penny Pilot issues where Cabinet
Trades are not otherwise permitted.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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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
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(6) thereunder because the
proposal does not: (i) Significantly affect the protection of investors
or the public interest; (ii) impose any significant burden on
competition; and (iii) by its terms, become operative for 30 days from
the date on which it was filed, or such shorter time as the Commission
may designate if consistent with the protection of investors and the
public interest.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6). 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 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 the pre-filing requirement.
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The Exchange has requested that the Commission waive the 30-day
operative delay period. In making such request, the Exchange stated
that immediate operability will level the current competitive landscape
by permitting the Exchange to implement changes similar to those
implemented by the CBOE. The Commission hereby grants the request. The
Commission notes that the proposal is nearly identical to the rules of
another self-regulatory organization,\9\ and believes that waiver of
the 30-day period will enable the Exchange to provide a means for
investors to close out positions that are worthless or not actively
trading without delay. Based on the above, the Commission believes it
is consistent with the protection of investors and the public interest
to waive the 30-day operative delay and designates the proposal as
operative upon filing.\10\
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\9\ See CBOE Rule 6.54, Interpretations and Policies .03.
\10\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such proposed 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.\11\
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\11\ 15 U.S.C. 78s(b)(3)(C).
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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-2010-13 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-2010-013. 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
[[Page 14219]]
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 Web site viewing and printing 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 offices 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-2010-13,
and should be submitted on or before April 14, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-6509 Filed 3-23-10; 8:45 am]
BILLING CODE 8011-01-P
