Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Arca, Inc. Amending Commentary .05 to Rule 6.4 Series of Options for Trading, 18248-18249 [2010-8151]

Download as PDF 18248 Federal Register / Vol. 75, No. 68 / Friday, April 9, 2010 / Notices The subject matter of the Open Meeting will be: Item 1: The Commission will consider whether to propose a large trader reporting requirement, pursuant to Section 13(h) of the Securities Exchange Act of 1934, which would require large traders to identify themselves to the Commission and require broker-dealers to maintain certain related transaction records. Item 2: The Commission will consider whether to propose rule amendments regarding (a) prohibiting unfairly discriminatory terms that inhibit efficient access to quotations in a listed option on exchanges, and (b) placing limits on fees for the execution of an order against any quotation in an options series that is the best bid or best offer of an exchange. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at (202) 551–5400. Dated: April 7, 2010. Elizabeth M. Murphy, Secretary. BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION srobinson on DSKHWCL6B1PROD with NOTICES Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission will hold a Closed Meeting on Wednesday, April 14, 2010 at 3 p.m. Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the Closed Meeting. Certain staff members who have an interest in the matters also may be present. The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) and 17 CFR 200.402(a)(3), (5), (7), 9(ii) and (10), permit consideration of the scheduled matters at the Closed Meeting. Commissioner Walter, as duty officer, voted to consider the items listed for the Closed Meeting in a closed session. Jkt 220001 Dated: April 6, 2010. Elizabeth M. Murphy, Secretary. [FR Doc. 2010–8209 Filed 4–7–10; 11:15 am] A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change BILLING CODE 8011–01–P 1. Purpose SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61831; File No. SR– NYSEArca–2010–20] April 2, 2010. Sunshine Act Meeting 17:07 Apr 08, 2010 Web site at https://www.nyse.com, at the Exchange’s principal office and at the Commission’s Public Reference Room. Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Arca, Inc. Amending Commentary .05 to Rule 6.4 Series of Options for Trading [FR Doc. 2010–8324 Filed 4–7–10; 4:15 pm] VerDate Nov<24>2008 The subject matter of the Closed Meeting scheduled for Wednesday, April 14, 2010 will be: Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings; An adjudicatory matter; Litigation matters; and Other matters relating to enforcement proceedings. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at (202) 551–5400. 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 31, 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 amend Rule 6.4–Series of Options for Trading by adopting new provisions governing strike price intervals. 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 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00105 Fmt 4703 Sfmt 4703 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of and basis for the proposed rule change 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. The purpose of the proposed rule change is to (i) add a provision to Rule 6.4 codifying the strike price intervals presently used by NYSE Arca for listed options, and (ii) create a provision that will allow for $5 strike price intervals of options on Exchange Traded Funds Shares (‘‘ETFs’’) where the strike price is over $200. Options traded on NYSE Arca are listed at strike price intervals of $2.50 or greater where the strike price is less than $25.00, $5.00 or greater where the strike price is greater than $25.00, and $10.00 or greater where the strike price is greater than $200.00. This listing convention for strike price intervals is the same as is presently in place at other U.S. option exchanges.3 The Exchange now proposes to adopt new Rule 6.4(f) in order to codify these standards that are presently in use at NYSE Arca. Commentary .05 to Rule 6.4–Series of Options Open for Trading states that strike price intervals of options on Exchanged-Traded Fund Shares will be $1 or greater where the strike price of the underlying asset is $200 or less. Most underlying ETF options trade for less than $200 per share; therefore most series are priced at $1 strike price intervals. However, some higher priced ETFs do have listed options series with strike prices over $200.4 NYSE Arca does not have a provision that allows ETF options to list and trade at $5 strike 3 See International Securities Exchange (‘‘ISE’’) Rule 504(d) and NYSE Amex Rule 903 Commentary .05. 4 As an example, ETF options trading under the symbols ILF, FXI, MDY and EEM all have listed strike prices greater than $200. E:\FR\FM\09APN1.SGM 09APN1 Federal Register / Vol. 75, No. 68 / Friday, April 9, 2010 / Notices price intervals where the strike price is more than $200. This limitation puts NYSE Arca at a competitive disadvantage to other exchanges that are able to list ETF options series, with strike prices over $200, at $5 price intervals. The Exchange believes that the rule proposal to allow for the listing of option series at $5 strike price intervals above $200, for options on ETFs, will enable the Exchange to competitively list and trade ETF options at appropriate strike price intervals. This proposed rule is based on similar rules in effect at NYSE Amex LLC (‘‘NYSE Amex’’), the Chicago Board Options Exchange (‘‘CBOE’’) and NASDAQ OMX PHLX.5 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the ‘‘Act’’),6 in general, and furthers the objectives of Section 6(b)(5) of the Act,7 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, 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 Exchange believes the proposed rule change will allow the Exchange to competitively list and trade ETF options at appropriate strike price intervals which are also commensurate with the rules of other options exchanges. 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. srobinson on DSKHWCL6B1PROD with NOTICES 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 Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant 5 See NYSE Amex Rule 903 Commentary .05, CBOE Rule 5.5 Commentary .08 and NASDAQ OMX PHLX Rule 1012 Commentary .05. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). VerDate Nov<24>2008 17:07 Apr 08, 2010 Jkt 220001 burden on competition; and (iii) become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, it has become effective pursuant to 19(b)(3)(A) of the Act 8 and Rule 19b–4(f)(6) thereunder.9 The Exchange has requested that the Commission waive the 30-day operative delay so that the proposal may become operative immediately upon filing, thereby giving the Exchange the ability to compete with other option exchanges by listing and trading ETF options at the same strike price intervals. The Commission finds that waiver of the operative delay is consistent with the protection of investors and the public interest because such waiver will encourage fair competition among the exchanges. Therefore, the Commission designates the proposal operative upon filing.10 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–NYSEArca–2010–20 on the subject line. 18249 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca–2010–20. 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,11 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, 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 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–2010–20 and should be submitted on or before April 30, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–8151 Filed 4–8–10; 8:45 am] BILLING CODE 8011–01–P Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 8 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file 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. 10 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 9 17 PO 00000 Frm 00106 Fmt 4703 Sfmt 9990 11 The text of the proposed rule change is available on the Commission’s Web site at https:// www.sec.gov. 12 17 CFR 200.30–3(a)(12). E:\FR\FM\09APN1.SGM 09APN1

Agencies

[Federal Register Volume 75, Number 68 (Friday, April 9, 2010)]
[Notices]
[Pages 18248-18249]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-8151]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61831; File No. SR-NYSEArca-2010-20]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NYSE Arca, Inc. Amending 
Commentary .05 to Rule 6.4 Series of Options for Trading

April 2, 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 31, 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 amend Rule 6.4-Series of Options for 
Trading by adopting new provisions governing strike price intervals. 
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 the proposed rule change is to (i) add a provision 
to Rule 6.4 codifying the strike price intervals presently used by NYSE 
Arca for listed options, and (ii) create a provision that will allow 
for $5 strike price intervals of options on Exchange Traded Funds 
Shares (``ETFs'') where the strike price is over $200.
    Options traded on NYSE Arca are listed at strike price intervals of 
$2.50 or greater where the strike price is less than $25.00, $5.00 or 
greater where the strike price is greater than $25.00, and $10.00 or 
greater where the strike price is greater than $200.00. This listing 
convention for strike price intervals is the same as is presently in 
place at other U.S. option exchanges.\3\ The Exchange now proposes to 
adopt new Rule 6.4(f) in order to codify these standards that are 
presently in use at NYSE Arca.
---------------------------------------------------------------------------

    \3\ See International Securities Exchange (``ISE'') Rule 504(d) 
and NYSE Amex Rule 903 Commentary .05.
---------------------------------------------------------------------------

    Commentary .05 to Rule 6.4-Series of Options Open for Trading 
states that strike price intervals of options on Exchanged-Traded Fund 
Shares will be $1 or greater where the strike price of the underlying 
asset is $200 or less. Most underlying ETF options trade for less than 
$200 per share; therefore most series are priced at $1 strike price 
intervals. However, some higher priced ETFs do have listed options 
series with strike prices over $200.\4\ NYSE Arca does not have a 
provision that allows ETF options to list and trade at $5 strike

[[Page 18249]]

price intervals where the strike price is more than $200. This 
limitation puts NYSE Arca at a competitive disadvantage to other 
exchanges that are able to list ETF options series, with strike prices 
over $200, at $5 price intervals.
---------------------------------------------------------------------------

    \4\ As an example, ETF options trading under the symbols ILF, 
FXI, MDY and EEM all have listed strike prices greater than $200.
---------------------------------------------------------------------------

    The Exchange believes that the rule proposal to allow for the 
listing of option series at $5 strike price intervals above $200, for 
options on ETFs, will enable the Exchange to competitively list and 
trade ETF options at appropriate strike price intervals. This proposed 
rule is based on similar rules in effect at NYSE Amex LLC (``NYSE 
Amex''), the Chicago Board Options Exchange (``CBOE'') and NASDAQ OMX 
PHLX.\5\
---------------------------------------------------------------------------

    \5\ See NYSE Amex Rule 903 Commentary .05, CBOE Rule 5.5 
Commentary .08 and NASDAQ OMX PHLX Rule 1012 Commentary .05.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Securities Exchange Act of 1934 (the ``Act''),\6\ in 
general, and furthers the objectives of Section 6(b)(5) of the Act,\7\ 
in particular, in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, 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 Exchange 
believes the proposed rule change will allow the Exchange to 
competitively list and trade ETF options at appropriate strike price 
intervals which are also commensurate with the rules of other options 
exchanges.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    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 for 30 days after the date of the filing, or such 
shorter time as the Commission may designate, if consistent with the 
protection of investors and the public interest, it has become 
effective pursuant to 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) 
thereunder.\9\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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.
---------------------------------------------------------------------------

    The Exchange has requested that the Commission waive the 30-day 
operative delay so that the proposal may become operative immediately 
upon filing, thereby giving the Exchange the ability to compete with 
other option exchanges by listing and trading ETF options at the same 
strike price intervals. The Commission finds that waiver of the 
operative delay is consistent with the protection of investors and the 
public interest because such waiver will encourage fair competition 
among the exchanges. Therefore, the Commission designates the proposal 
operative upon filing.\10\
---------------------------------------------------------------------------

    \10\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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-NYSEArca-2010-20 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-2010-20. 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,\11\ 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, 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 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-2010-20 and should be submitted on or before 
April 30, 2010.
---------------------------------------------------------------------------

    \11\ The text of the proposed rule change is available on the 
Commission's Web site at https://www.sec.gov.
    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-8151 Filed 4-8-10; 8:45 am]
BILLING CODE 8011-01-P
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