Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Establish a Short Term Option Program, 42792-42795 [2010-17851]

Download as PDF sroberts on DSKD5P82C1PROD with NOTICES 42792 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Notices Please include Docket ID NRC–2010– 0255 in the subject line of your comments. Comments submitted in writing or in electronic form will be posted on the NRC Web site and on the Federal rulemaking Web site at https:// www.regulations.gov. Because your comments will not be edited to remove any identifying or contact information, the NRC cautions you against including any information in your submission that you do not want to be publicly disclosed. The NRC requests that any party soliciting or aggregating comments received from other persons for submission to the NRC inform those persons that the NRC will not edit their comments to remove any identifying or contact information, and therefore, they should not include any information in their comments that they do not want publicly disclosed. Federal Rulemaking Web site: Go to https://www.regulations.gov and search for documents filed under Docket ID NRC–2010–0255. Address questions about NRC dockets to Carol Gallagher at 301–492–3668; e-mail at Carol.Gallagher@nrc.gov. Mail comments to: Cindy K. Bladey, Chief, Rules, Announcements, and Directives Branch (RADB), Division of Administrative Services, Office of Administration, Mail Stop: TWB–05– B01M, U.S. Nuclear Regulatory Commission, Washington, DC 20555– 0001, or by fax to RADB at 301–492– 3446. The NRC ADAMS provides text and image files of NRC’s public documents. These documents may be accessed through the NRC’s Public Electronic Reading Room on the Internet at https://www.nrc.gov/reading-rm/ adams.html. Persons who do not have access to ADAMS, or who encounter problems in accessing the documents located in ADAMS, should contact the NRC Public Document Room reference staff at 1–800–397–4209, 301–415–4737, or by e-mail at pdr.resources@nrc.gov. FOR FURTHER INFORMATION CONTACT: Mr. William F. Burton, Chief, Rulemaking and Guidance Development Branch, Division of New Reactor Licensing, Office of New Reactors, U.S. Nuclear Regulatory Commission, Washington, DC 20555–0001; telephone at 301–415– 6332 or e-mail at william.burton@nrc.gov. The NRC staff is issuing this notice to solicit public comments on the proposed SRP Section 13.5.1.1, Revision 1. After the NRC staff considers any public comments, it will make a determination regarding the proposed SRP Section 13.5.1.1, Revision 1. VerDate Mar<15>2010 18:46 Jul 21, 2010 Jkt 220001 Dated at Rockville, Maryland, this 19th day of July 2010. For the Nuclear Regulatory Commission, William F. Burton, Chief, Rulemaking and Guidance Development Branch, Division of New Reactor Licensing, Office of New Reactor. BILLING CODE 7590–01–P Washington, DC, at U.S. Postal Service Headquarters, 475 L’Enfant Plaza, SW., in the Benjamin Franklin Room. STATUS: Wednesday, August 4 at 10 a.m.—Closed; Thursday, August 5 at 8:30 a.m.—Open; and at 10:30 a.m.— Closed. MATTERS TO BE CONSIDERED: POSTAL REGULATORY COMMISSION Wednesday, August 4 at 10 a.m. (Closed) [FR Doc. 2010–17995 Filed 7–21–10; 8:45 am] Sunshine Act Meetings Wednesday, August 4, 2010 at 11 a.m. PLACE: Commission hearing room, 901 New York Avenue, NW., Suite 200, Washington, DC 20268–0001. STATUS: Parts of this meeting will be open to the public. The rest of the meeting will be closed to the public. The public session will be podcast. MATTERS TO BE CONSIDERED: PORTIONS OPEN TO THE PUBLIC: 1. Review of postal-related congressional activity. 2. Report on international activities. 3. Review of active cases. 4. Report on recent activites of the Joint Periodicals Task Force and status of the report to the Congress pursuant to secton 708 of the PAEA. 5. Report on public comments and rate and service inquiries. 6. Report on vacancies and positions recently filled. PORTIONS CLOSED TO THE PUBLIC: 7. Discussion of pending litigation. 8. Discussion of confidential personnel issues involving recruitment. 9. Discussion of contracts involving confidential commercial information. TIME AND DATE: CONTACT PERSON FOR FURTHER INFORMATION: Stephen L. Sharfman, General Counsel, Postal Regulatory Commission, at 202-789-6820 or stephen.sharfman@prc.gov (for questions concerning the agenda) and Shoshana M. Grove at 202-789-6842 or shoshana.grove@prc.gov (for questions concerning podcasting). Dated: July 20, 2010. Shoshana M. Grove, Secretary. BILLING CODE 7710–FW–S POSTAL SERVICE Board of Governors; Sunshine Act Meeting Wednesday, August 4, 2010, at 10 a.m.; Thursday, August 5, at 8:30 a.m. and 10:30 a.m. DATES AND TIMES: Frm 00115 Fmt 4703 1. Strategic Issues. 2. Pricing. 3. Financial Matters. 4. Personnel Matters and Compensation Issues. 5. Governors’ Executive Session— Discussion of prior agenda items and Board Governance. Thursday, August 5 at 8:30 a.m. (Open) 1. Approval of Minutes of Previous Meetings. 2. Remarks of the Chairman of the Board. 3. Remarks of the Postmaster General and CEO. 4. Committee Reports. 5. Quarterly Report on Financial Performance. 6. Quarterly Report on Service Performance. 7. Tentative Agenda for the September 21–22, 2010, meeting in Washington, DC. Thursday, August 5 at 10:30 a.m. (Closed—if Needed) 1. Continuation of Wednesday’s closed session agenda. CONTACT PERSON FOR MORE INFORMATION: Julie S. Moore, Secretary of the Board, U.S. Postal Service, 475 L’Enfant Plaza, SW., Washington, DC 20260–1000. Telephone (202) 268–4800. Julie S. Moore, Secretary. [FR Doc. 2010–18124 Filed 7–20–10; 4:15 pm] BILLING CODE 7710–12–P SECURITIES AND EXCHANGE COMMISSION [FR Doc. 2010–18032 Filed 7–20–10; 11:15 am] PO 00000 PLACE: Sfmt 4703 [Release No. 34–62505; File No. SR–BX– 2010–047] Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Establish a Short Term Option Program July 15, 2010. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 E:\FR\FM\22JYN1.SGM 22JYN1 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Notices (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that, on July 14, 2010, NASDAQ OMX BX, Inc. (the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Rules of the Boston Options Exchange Group, LLC (‘‘BOX’’) to permit the listing and trading of options series that expire one week after being opened for trading (‘‘Short Term Option Program’’ or ‘‘STO Program’’). The text of the proposed rule change is available from the Exchange’s Web site at https://nasdaqomxbx. cchwallstreet.com/NASDAQOMXBX/ Filings/, the principal office of the Exchange, on the Commission’s Web site at https://www.sec.gov, 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 these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. sroberts on DSKD5P82C1PROD with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this proposal is to amend the BOX Rules to establish a Short Term Option Program on the Exchange by proposing to add new Supplementary Material .07 to Chapter IV, Section 6 (Series of Options Open 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 2 17 VerDate Mar<15>2010 18:46 Jul 21, 2010 Jkt 220001 for Trading) and Supplementary Material .02 to Chapter XIV, Section 10 (Terms of Index Options Contracts) in order to list option series that expire one (1) week after being opened for trading. The Exchange also proposes to add the definition of Short Term Option Series to Chapter 1, Section 1(a) and Chapter XIV, Section 2.5 In addition, the Exchange proposes to make nonsubstantive changes to conform the language of Chapter IV, Section 6 and to renumber and reletter definitions in Chapter 1, Section 1(a) and Chapter XIV, Section 2. The Commission approved the Short Term Option Program on behalf of the Chicago Board Options Exchange (‘‘CBOE’’) on a pilot basis in 2005 and for permanent establishment in 2009.6 Thereafter, CBOE amended Rules 5.5 and 24.9 to permit opening Short Term Option Series not just on Friday but also on Thursday.7 Recently, the Commission approved 8 a permanent Short Term Option Program on behalf of the NASDAQ OMX PHLX (‘‘PHLX’’); NASDAQ Options Market (‘‘NOM’’); NYSE Arca, Inc. (‘‘NYSE Arca’’); and NYSE Amex LLC (‘‘NYSE Amex’’).9 The 5 Short Term Option Series is defined as: a series in an option class that is approved for listing and trading on BOX in which the series is opened for trading on any Thursday or Friday that is a business day and that expires on the Friday of the next business week. If a Thursday or Friday is not a business day, the series may be opened (or shall expire) on the first business day immediately prior to that Thursday or Friday, respectively. 6 CBOE refers to its short term option program as the ‘‘Weeklys Program.’’ See Securities Exchange Act Release Nos. 52011 (July 12, 2005), 70 FR 41451 (July 19, 2005) (SR–CBOE–2004–63) (Order Approving a Proposed Rule Change and Notice of Filing and Order Granting Accelerated Approval to Amendment No. 2 Thereto To List and Trade Short Term Option Series); 59824 (April 27, 2009), 74 FR 20518 (May 4, 2009) (SR–CBOE–2009–018) (Order Approving Proposed Rule Change To Permanently Establish the Short Term Option Series Pilot Program). 7 See Securities Exchange Act Release No. 62170 (May 25, 2010), 75 FR 30889 (June 2, 2010) (SR– CBOE–2010–048) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Permit CBOE To Open Short Term Option Series on Thursdays). 8 As noted above, all the text of Items I and II of this notice was prepared by the Exchange. The Commission notes, however, that it did not approve the proposed rule changes cited by the Exchange in this sentence. These proposals were filed under Section 19(b)(3)(A) of the Act for immediate effectiveness and thus were not approved by the Commission. 9 See Securities Exchange Act Release Nos. 62296 (June 15, 2010), 75 FR 35115 (June 21, 2010) (SR– PHLX–2010–084) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change by NASDAQ OMX PHLX, Inc. To Establish a Short Term Option Program); 62297 (June 15, 2010), 75 FR 35111 (June 21, 2010) (SR–NOM–2010–073) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change by The NASDAQ Stock Market LLC To Establish a Short Term Option Program); 62296 (June 15, 2010), 75 FR 35111 (June PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 42793 Exchange’s proposal is based directly on the Short Term Option Program in CBOE Rules 5.5 and 24.9; PHLX Rules 1012 and Rule 1101A; NOM Rules Chapter IV, Section 6 and Chapter XIV, Section 11; NYSE Arca Rules 5.19 and 6.4; NYSE Amex Rules 903C and 903 and ISE Rules 504 and 2009. Specifically, the Exchange proposes to establish a Short Term Option Program for non-index options (e.g., equity options and ETF options) in new Supplementary Material .07 to Chapter IV, Section 6; and for index options in new Supplementary Material .02 to Chapter XIV, Section 10. The Short Term Option Program will allow BOX to list and trade Short Term Option Series. Thus, after an option class has been approved for listing and trading on BOX, BOX may open for trading on any Thursday or Friday that is a business day (‘‘Short Term Option Opening Date’’) series of options on that class that expire on the Friday of the following business week that is a business day (‘‘Short Term Option Expiration Date’’). If the Exchange is not open for business on the respective Thursday or Friday, the Short Term Option Opening Date will be the first business day immediately prior to that respective Thursday or Friday. Similarly, if the Exchange is not open for business on the Friday of the following business week, the Short Term Option Expiration Date will be the first business day immediately prior to that Friday.10 Under the STO Program, BOX may select up to five (5) approved option classes on which Short Term Option Series could be opened. BOX also may list Short Term Option Series on any option classes that are selected by other securities exchanges that employ a similar program under their respective rules.11 For each class selected for the STO Program, BOX may open up to twenty Short Term Option Series for each expiration date in that class, with approximately the same number of strike prices above and below the value of the underlying security or calculated index value at about the time that the 21, 2010) (SR–Arca–2010–059) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Arca, Inc. to make permanent the One Week Option Series Pilot Program); 62296 (June 15, 2010), 75 FR 35111 (June 21, 2010) (SR–Amex– 2010–062) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Amex, LLC to make permanent the One Week Option Series Pilot Program). 10 See proposed Supplementary Material .07 to Chapter IV, Section 6 and Supplementary Material .02 to Chapter XIV, Section 10. 11 See proposed Supplementary Material .07(a) to Chapter IV, Section 6 and Supplementary Material .02(a) to Chapter XIV, Section 10. E:\FR\FM\22JYN1.SGM 22JYN1 42794 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Notices Short Term Option Series is opened. The interval between strike prices on Short Term Option Series shall be the same as the strike prices for series in that same option class that expire in accordance with the normal monthly expiration cycle.12 Any strike prices listed by BOX shall be within thirty percent (30%) above or below the current value of the underlying index.13 If BOX opens less than twenty Short Term Option Series for a given expiration date, additional series may be opened for trading on BOX when deemed necessary to maintain an orderly market, to meet customer demand, or when the current value of the underlying security or index moves substantially from the previously listed exercise prices. The total number of series for a given expiration date, however, will not exceed twenty series. Any additional strike prices listed by the Exchange shall be within 30% above or below the current price of the underlying security. BOX may also open additional strike prices of Short Term Option Series that are more than 30% above or below the current price of the underlying security provided that demonstrated customer interest exists for such series, as expressed by institutional, corporate or individual customers or their brokers. Market Makers trading for their own account shall not be considered when determining customer interest under this provision. Moreover, the opening of the new Short Term Option Series shall not affect the series of options of the same class previously opened.14 The Short Term Option Program provides that no Short Term Option Series may expire in the same week in which monthly option series on the same class expire or, in the case of Quarterly Options Series, on an expiration that coincides with an expiration of Quarterly Options Series on the same class.15 With regard to the impact of this proposal on system capacity, BOX has analyzed its capacity and has represented to the Exchange that it and sroberts on DSKD5P82C1PROD with NOTICES 12 See proposed Supplementary Material .07(e) to Chapter IV, Section 6 and Supplementary Material .02(e) to Chapter XIV, Section 10. 13 See proposed Supplementary Material .07(c) to Chapter IV, Section 6 and Supplementary Material .02(c) to Chapter XIV, Section 10. 14 See proposed Supplementary Material .07(d) to Chapter IV, Section 6 and Supplementary Material .02(d) to Chapter XIV, Section 10. 15 See proposed Supplementary Material .07(b) to Chapter IV, Section 6 and Supplementary Material .02(b) to Chapter XIV, Section 10. Moreover, the Exchange expects that Short Term Options Series will settle (e.g., in terms of A.M. or P.M.) in the same manner as do the monthly expiration series in the same option class. VerDate Mar<15>2010 18:46 Jul 21, 2010 Jkt 220001 the Options Price Reporting Authority (‘‘OPRA’’) have the necessary systems capacity to handle the potential additional traffic associated with the listing and trading of options pursuant to the Short Term Option Program. Finally, the Exchange is proposing to make non-substantive changes to conform the language of Chapter IV, Section 6 (Series of Options Open for Trading). Specifically, the Exchange proposes to add language to clarify that Short Term Options Series procedures are similar to Quarterly Options Series procedures and will be treated differently than standard Options Series. The Exchange believes that the Short Term Option Program will provide investors with a flexible and valuable tool to manage risk exposure, minimize capital outlays, and be more responsive to the timing of events affecting the securities that underlie options contracts. The Exchange also believes that providing the flexibility to list all Short Term Option series (equity and index) on any Thursday or Friday will help implement the program more effectively and avoid investor confusion. The Commission has requested, and BOX has agreed for the purposes of this filing, to submit one (1) report to the Commission providing an analysis of the BOX Short Term Option Program (the ‘‘Report’’).16 The Report will cover the period from the date of effectiveness of the STO Program through the first quarter of 2011, and will describe the experience of BOX with the STO Program in respect of the options classes included by BOX in such program. The Report will be submitted by May 1, 2011, under separate cover and will seek confidential treatment under the Freedom of Information Act. 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act,17 in general, and Section 6(b)(5) of 16 The Report would include the following: (1) Data and written analysis on the open interest and trading volume in the classes for which Short Term Option Series were opened; (2) an assessment of the appropriateness of the option classes selected for the STO Program; (3) an assessment of the impact of the STO Program on the capacity of BOX, OPRA, and market data vendors (to the extent data from market data vendors is available); (4) any capacity problems or other problems that arose during the operation of the STO Program and how BOX addressed such problems; (5) any complaints that the BOX or the Exchange received during the operation of the STO Program and how they were addressed; and (6) any additional information that would assist in assessing the operation of the STO Program. 17 15 U.S.C. 78f(b). PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 the Act,18 in particular, in that it is designed 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 for a free and open market and a national market system and, in general, to protect investors and the public interest. In particular, establishing a Short Term Option Program will provide investors with a flexible and valuable tool to manage risk exposure, minimize capital outlays, and be more responsive to the timing of events affecting the securities that underlie options contracts. 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 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 The Exchange has neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 19 and Rule 19b-4(f)(6) thereunder.20 Because the 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, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 21 and Rule 19b–4(f)(6) thereunder.22 18 15 U.S.C. 78f(b)(5). U.S.C. 78s(b)(3)(A)(iii). 20 17 CFR 240.19b–4(f)(6). 21 15 U.S.C. 78s(b)(3)(A). 22 17 CFR 240.19b–4(f)(6). In addition, Rule 19b4(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 Commission has waived the five-day pre-filing requirement in this case. 19 15 E:\FR\FM\22JYN1.SGM 22JYN1 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Notices The Exchange has requested that the Commission waive the 30-day operative delay. The Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest because the proposal is substantially similar to that of another exchange that was approved by the Commission.23 Therefore, the Commission designates the proposal operative upon filing.24 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: sroberts on DSKD5P82C1PROD with NOTICES 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–BX–2010–047 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–BX–2010–047. 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 23 See Securities Exchange Act Release No. 59824 (April 27, 2009), 74 FR 20518 (May 4, 2009) (SR– CBOE–2009–018). 24 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). VerDate Mar<15>2010 18:46 Jul 21, 2010 Jkt 220001 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–BX– 2010–047 and should be submitted on or before August 12, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.25 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–17851 Filed 7–21–10; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–62521; File No. SR–FINRA– 2010–006] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of Amendment No. 1 to a Proposed Rule Change and Order Granting Accelerated Approval to a Proposed Rule Change, as Modified by Amendment No. 1, To Amend the Codes of Arbitration Procedure To Provide for Attorney Representation of Non-Party Witnesses in Arbitration July 16, 2010. I. Introduction On January 22, 2010, the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) (f/k/a National Association of Securities Dealers, Inc. (‘‘NASD’’)) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder, 2 a proposed rule change to amend Rule 12602 of the Code of Arbitration Procedure for Customer Disputes (‘‘Customer Code’’) and Rule 13602 of the Code of Arbitration Procedure for PO 00000 25 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 Frm 00118 Fmt 4703 Sfmt 4703 42795 Industry Disputes (‘‘Industry Code’’) (collectively, the ‘‘Codes’’) to provide that a non-party witness may be represented by an attorney at an arbitration hearing while the witness is testifying. The proposed rule change was published for comment in the Federal Register on February 23, 2010.3 The Commission received three comments in response to the proposed rule change.4 FINRA responded to the comments and on June 14, 2010 filed Amendment No. 1 to the proposed rule change.5 The Commission is publishing this notice and order to solicit comments on Amendment No. 1 and to approve the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. II. Description of the Proposed Rule Change FINRA proposed to amend Rules 12602 and 13602 of the Codes to provide that a non-party witness has the right to be represented by an attorney at an arbitration proceeding held in a United States hearing location while the witness is testifying. The attorney would have to be in good standing and admitted to practice before the Supreme Court of the United States or the highest court of any state of the United States, the District of Columbia, or any commonwealth, territory, or possession of the United States, unless state law prohibits such representation. Under the proposal, the panel would have the authority to determine the extent to which the attorney could participate at the hearing. While the Codes expressly allow a party in an arbitration proceeding to be represented by an attorney at any stage in the proceeding,6 they do not address attorney representation of a non-party witness. As stated in the notice, FINRA 3 See Securities Exchange Act Release No. 61517 (February 16, 2010), 75 FR 8169 (February 23, 2010), (SR–FINRA–2010–006) (‘‘Notice’’). 4 See letter from William A. Jacobson, Director, Cornell Securities Law Clinic and Rubina Ali, Cornell Law School, dated March 16, 2010 (‘‘Cornell Letter’’), letter from Richard P. Ryder, dated April 16, 2010 (‘‘Ryder Letter’’) and letter from Scott R. Shewan, President, Public Investors Arbitration Bar Association, dated April 28, 2010 (‘‘PIABA Letter’’). The Ryder Letter and the PIABA Letter were submitted several weeks after the expiration of the comment period. 5 See Amendment No. 1 dated June 14, 2010 (‘‘Amendment No. 1’’). The text of Amendment No. 1 is available on FINRA’s Web site at http:www.finra.org, at the principal office of FINRA, and on the Commission’s Internet Web site ( https://www.sec.gov.rules.sro.html). 6 Rules 12208 and 13208 of the Codes (Representation of Parties) provide that parties have the right to be represented by an attorney at any stage in an arbitration proceeding. They also allow parties to be represented by a person who is not an attorney subject to certain limitations. E:\FR\FM\22JYN1.SGM 22JYN1

Agencies

[Federal Register Volume 75, Number 140 (Thursday, July 22, 2010)]
[Notices]
[Pages 42792-42795]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-17851]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62505; File No. SR-BX-2010-047]


Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To 
Establish a Short Term Option Program

July 15, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 42793]]

(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on July 14, 2010, NASDAQ OMX BX, Inc. (the ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``Commission'') 
the proposed rule change as described in Items I and II below, which 
Items have been prepared by the Exchange. The Exchange filed the 
proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and 
Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal effective 
upon filing with the Commission. The Commission is publishing this 
notice to solicit comments on the proposed rule from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Rules of the Boston Options 
Exchange Group, LLC (``BOX'') to permit the listing and trading of 
options series that expire one week after being opened for trading 
(``Short Term Option Program'' or ``STO Program''). The text of the 
proposed rule change is available from the Exchange's Web site at 
https://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/, the 
principal office of the Exchange, on the Commission's Web site at 
https://www.sec.gov, 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 these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
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
    The purpose of this proposal is to amend the BOX Rules to establish 
a Short Term Option Program on the Exchange by proposing to add new 
Supplementary Material .07 to Chapter IV, Section 6 (Series of Options 
Open for Trading) and Supplementary Material .02 to Chapter XIV, 
Section 10 (Terms of Index Options Contracts) in order to list option 
series that expire one (1) week after being opened for trading. The 
Exchange also proposes to add the definition of Short Term Option 
Series to Chapter 1, Section 1(a) and Chapter XIV, Section 2.\5\ In 
addition, the Exchange proposes to make non-substantive changes to 
conform the language of Chapter IV, Section 6 and to renumber and 
reletter definitions in Chapter 1, Section 1(a) and Chapter XIV, 
Section 2.
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    \5\ Short Term Option Series is defined as: a series in an 
option class that is approved for listing and trading on BOX in 
which the series is opened for trading on any Thursday or Friday 
that is a business day and that expires on the Friday of the next 
business week. If a Thursday or Friday is not a business day, the 
series may be opened (or shall expire) on the first business day 
immediately prior to that Thursday or Friday, respectively.
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    The Commission approved the Short Term Option Program on behalf of 
the Chicago Board Options Exchange (``CBOE'') on a pilot basis in 2005 
and for permanent establishment in 2009.\6\ Thereafter, CBOE amended 
Rules 5.5 and 24.9 to permit opening Short Term Option Series not just 
on Friday but also on Thursday.\7\ Recently, the Commission approved 
\8\ a permanent Short Term Option Program on behalf of the NASDAQ OMX 
PHLX (``PHLX''); NASDAQ Options Market (``NOM''); NYSE Arca, Inc. 
(``NYSE Arca''); and NYSE Amex LLC (``NYSE Amex'').\9\ The Exchange's 
proposal is based directly on the Short Term Option Program in CBOE 
Rules 5.5 and 24.9; PHLX Rules 1012 and Rule 1101A; NOM Rules Chapter 
IV, Section 6 and Chapter XIV, Section 11; NYSE Arca Rules 5.19 and 
6.4; NYSE Amex Rules 903C and 903 and ISE Rules 504 and 2009.
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    \6\ CBOE refers to its short term option program as the 
``Weeklys Program.'' See Securities Exchange Act Release Nos. 52011 
(July 12, 2005), 70 FR 41451 (July 19, 2005) (SR-CBOE-2004-63) 
(Order Approving a Proposed Rule Change and Notice of Filing and 
Order Granting Accelerated Approval to Amendment No. 2 Thereto To 
List and Trade Short Term Option Series); 59824 (April 27, 2009), 74 
FR 20518 (May 4, 2009) (SR-CBOE-2009-018) (Order Approving Proposed 
Rule Change To Permanently Establish the Short Term Option Series 
Pilot Program).
    \7\ See Securities Exchange Act Release No. 62170 (May 25, 
2010), 75 FR 30889 (June 2, 2010) (SR-CBOE-2010-048) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Permit 
CBOE To Open Short Term Option Series on Thursdays).
    \8\ As noted above, all the text of Items I and II of this 
notice was prepared by the Exchange. The Commission notes, however, 
that it did not approve the proposed rule changes cited by the 
Exchange in this sentence. These proposals were filed under Section 
19(b)(3)(A) of the Act for immediate effectiveness and thus were not 
approved by the Commission.
    \9\ See Securities Exchange Act Release Nos. 62296 (June 15, 
2010), 75 FR 35115 (June 21, 2010) (SR-PHLX-2010-084) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change by 
NASDAQ OMX PHLX, Inc. To Establish a Short Term Option Program); 
62297 (June 15, 2010), 75 FR 35111 (June 21, 2010) (SR-NOM-2010-073) 
(Notice of Filing and Immediate Effectiveness of a Proposed Rule 
Change by The NASDAQ Stock Market LLC To Establish a Short Term 
Option Program); 62296 (June 15, 2010), 75 FR 35111 (June 21, 2010) 
(SR-Arca-2010-059) (Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change by NYSE Arca, Inc. to make permanent the One 
Week Option Series Pilot Program); 62296 (June 15, 2010), 75 FR 
35111 (June 21, 2010) (SR-Amex-2010-062) (Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change by NYSE Amex, LLC to 
make permanent the One Week Option Series Pilot Program).
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    Specifically, the Exchange proposes to establish a Short Term 
Option Program for non-index options (e.g., equity options and ETF 
options) in new Supplementary Material .07 to Chapter IV, Section 6; 
and for index options in new Supplementary Material .02 to Chapter XIV, 
Section 10. The Short Term Option Program will allow BOX to list and 
trade Short Term Option Series. Thus, after an option class has been 
approved for listing and trading on BOX, BOX may open for trading on 
any Thursday or Friday that is a business day (``Short Term Option 
Opening Date'') series of options on that class that expire on the 
Friday of the following business week that is a business day (``Short 
Term Option Expiration Date''). If the Exchange is not open for 
business on the respective Thursday or Friday, the Short Term Option 
Opening Date will be the first business day immediately prior to that 
respective Thursday or Friday. Similarly, if the Exchange is not open 
for business on the Friday of the following business week, the Short 
Term Option Expiration Date will be the first business day immediately 
prior to that Friday.\10\
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    \10\ See proposed Supplementary Material .07 to Chapter IV, 
Section 6 and Supplementary Material .02 to Chapter XIV, Section 10.
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    Under the STO Program, BOX may select up to five (5) approved 
option classes on which Short Term Option Series could be opened. BOX 
also may list Short Term Option Series on any option classes that are 
selected by other securities exchanges that employ a similar program 
under their respective rules.\11\
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    \11\ See proposed Supplementary Material .07(a) to Chapter IV, 
Section 6 and Supplementary Material .02(a) to Chapter XIV, Section 
10.
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    For each class selected for the STO Program, BOX may open up to 
twenty Short Term Option Series for each expiration date in that class, 
with approximately the same number of strike prices above and below the 
value of the underlying security or calculated index value at about the 
time that the

[[Page 42794]]

Short Term Option Series is opened. The interval between strike prices 
on Short Term Option Series shall be the same as the strike prices for 
series in that same option class that expire in accordance with the 
normal monthly expiration cycle.\12\ Any strike prices listed by BOX 
shall be within thirty percent (30%) above or below the current value 
of the underlying index.\13\
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    \12\ See proposed Supplementary Material .07(e) to Chapter IV, 
Section 6 and Supplementary Material .02(e) to Chapter XIV, Section 
10.
    \13\ See proposed Supplementary Material .07(c) to Chapter IV, 
Section 6 and Supplementary Material .02(c) to Chapter XIV, Section 
10.
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    If BOX opens less than twenty Short Term Option Series for a given 
expiration date, additional series may be opened for trading on BOX 
when deemed necessary to maintain an orderly market, to meet customer 
demand, or when the current value of the underlying security or index 
moves substantially from the previously listed exercise prices. The 
total number of series for a given expiration date, however, will not 
exceed twenty series. Any additional strike prices listed by the 
Exchange shall be within 30% above or below the current price of the 
underlying security. BOX may also open additional strike prices of 
Short Term Option Series that are more than 30% above or below the 
current price of the underlying security provided that demonstrated 
customer interest exists for such series, as expressed by 
institutional, corporate or individual customers or their brokers. 
Market Makers trading for their own account shall not be considered 
when determining customer interest under this provision. Moreover, the 
opening of the new Short Term Option Series shall not affect the series 
of options of the same class previously opened.\14\
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    \14\ See proposed Supplementary Material .07(d) to Chapter IV, 
Section 6 and Supplementary Material .02(d) to Chapter XIV, Section 
10.
---------------------------------------------------------------------------

    The Short Term Option Program provides that no Short Term Option 
Series may expire in the same week in which monthly option series on 
the same class expire or, in the case of Quarterly Options Series, on 
an expiration that coincides with an expiration of Quarterly Options 
Series on the same class.\15\
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    \15\ See proposed Supplementary Material .07(b) to Chapter IV, 
Section 6 and Supplementary Material .02(b) to Chapter XIV, Section 
10. Moreover, the Exchange expects that Short Term Options Series 
will settle (e.g., in terms of A.M. or P.M.) in the same manner as 
do the monthly expiration series in the same option class.
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    With regard to the impact of this proposal on system capacity, BOX 
has analyzed its capacity and has represented to the Exchange that it 
and the Options Price Reporting Authority (``OPRA'') have the necessary 
systems capacity to handle the potential additional traffic associated 
with the listing and trading of options pursuant to the Short Term 
Option Program.
    Finally, the Exchange is proposing to make non-substantive changes 
to conform the language of Chapter IV, Section 6 (Series of Options 
Open for Trading). Specifically, the Exchange proposes to add language 
to clarify that Short Term Options Series procedures are similar to 
Quarterly Options Series procedures and will be treated differently 
than standard Options Series.
    The Exchange believes that the Short Term Option Program will 
provide investors with a flexible and valuable tool to manage risk 
exposure, minimize capital outlays, and be more responsive to the 
timing of events affecting the securities that underlie options 
contracts. The Exchange also believes that providing the flexibility to 
list all Short Term Option series (equity and index) on any Thursday or 
Friday will help implement the program more effectively and avoid 
investor confusion.
    The Commission has requested, and BOX has agreed for the purposes 
of this filing, to submit one (1) report to the Commission providing an 
analysis of the BOX Short Term Option Program (the ``Report'').\16\ The 
Report will cover the period from the date of effectiveness of the STO 
Program through the first quarter of 2011, and will describe the 
experience of BOX with the STO Program in respect of the options 
classes included by BOX in such program. The Report will be submitted 
by May 1, 2011, under separate cover and will seek confidential 
treatment under the Freedom of Information Act.
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    \16\ The Report would include the following: (1) Data and 
written analysis on the open interest and trading volume in the 
classes for which Short Term Option Series were opened; (2) an 
assessment of the appropriateness of the option classes selected for 
the STO Program; (3) an assessment of the impact of the STO Program 
on the capacity of BOX, OPRA, and market data vendors (to the extent 
data from market data vendors is available); (4) any capacity 
problems or other problems that arose during the operation of the 
STO Program and how BOX addressed such problems; (5) any complaints 
that the BOX or the Exchange received during the operation of the 
STO Program and how they were addressed; and (6) any additional 
information that would assist in assessing the operation of the STO 
Program.
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2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\17\ in general, and Section 
6(b)(5) of the Act,\18\ in particular, in that it is designed 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 for a free and open market and a national market 
system and, in general, to protect investors and the public interest. 
In particular, establishing a Short Term Option Program will provide 
investors with a flexible and valuable tool to manage risk exposure, 
minimize capital outlays, and be more responsive to the timing of 
events affecting the securities that underlie options contracts.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f(b).
    \18\ 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 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

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \19\ and Rule 19b-4(f)(6) thereunder.\20\ 
Because the 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, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \21\ and Rule 19b-
4(f)(6) thereunder.\22\
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    \19\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \20\ 17 CFR 240.19b-4(f)(6).
    \21\ 15 U.S.C. 78s(b)(3)(A).
    \22\ 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 
Commission has waived the five-day pre-filing requirement in this 
case.

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[[Page 42795]]

    The Exchange has requested that the Commission waive the 30-day 
operative delay. The Commission believes that waiver of the operative 
delay is consistent with the protection of investors and the public 
interest because the proposal is substantially similar to that of 
another exchange that was approved by the Commission.\23\ Therefore, 
the Commission designates the proposal operative upon filing.\24\
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    \23\ See Securities Exchange Act Release No. 59824 (April 27, 
2009), 74 FR 20518 (May 4, 2009) (SR-CBOE-2009-018).
    \24\ 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).
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    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-BX-2010-047 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-BX-2010-047. 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 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-BX-2010-047 and should be 
submitted on or before August 12, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\25\
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    \25\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-17851 Filed 7-21-10; 8:45 am]
BILLING CODE 8010-01-P
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