Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Adding the CBOE Volatility Index Futures to the Definition of a Futures Reference Asset in Chapter IV, Section 3(k)(i)(5), 57823-57825 [2010-23603]
Download as PDF
<![CDATA[
Federal Register / Vol. 75, No. 183 / Wednesday, September 22, 2010 / Notices
Federal Register on August 9, 2010.3
The Commission received no comment
letters on the proposal. This order
approves the proposed rule change.
II. Description of the Proposal
NASDAQ is proposing to re-establish
retroactively from January 1, 2008
through July 27, 2010,4 the fee reduction
pilot program that reduced the monthly
fee that non-professional users pay to
receive NQDS from $50 to $10, to
correct for the lapse in the pilot and to
prevent the collection of the additional
$40 in monthly fees from investors for
the period during which the pilot had
lapsed.5 Prior to August 31, 2000, NQDS
data was available through authorized
vendors at a monthly rate of $50 for
professionals and non-professionals
users alike. In August 2000, NASDAQ
filed a proposed rule change to reduce
from $50 to $10 the monthly fee that
non-professional users pay to receive
NQDS data. The Commission approved
the pilot on August 22, 2000, and the fee
reduction commenced on August 31,
2000 on a one-year pilot basis.6 On
September 5, 2001, August 30, 2002,
August 18, 2003, August 23, 2004,
January 24, 2006, and March 29, 2007,
NASDAQ filed proposed rule changes to
extend the pilot for additional one-year
periods.7
NASDAQ believes that continuing the
reduction of NQDS for non-professional
users demonstrates NASDAQ’s
continued commitment to provide data
to non-professional market participants
and individual investors.
emcdonald on DSK2BSOYB1PROD with NOTICES
III. Discussion and Commission
Findings
The Commission finds that the
proposed rule change is consistent with
3 See Securities Exchange Act Release No. 62629
(August 3, 2010), 75 FR 47871 (‘‘Notice’’).
4 On July 27, 2010, NASDAQ filed a proposed
rule change to make the pilot fee reduction
permanent. See Securities Exchange Act Release
No. 62614 (July 30, 2010), 75 FR 47668 (August 6,
2010).
5 NQDS is a proprietary data product that
contains the best bid and offer quotation of each
registered market maker quoting in NASDAQ-listed
securities on the NASDAQ Stock Market. NQDS
data is used not only by firms, associated persons,
and other market professionals, but also by nonprofessionals who receive the service through
authorized vendors, including, for example, on-line
brokerage firms. For a more detailed discussion of
NQDS, see Notice.
6 See Securities Exchange Act Release No. 43190
(August 22, 2000), 65 FR 52460 (August 29, 2000).
7 See Securities Exchange Act Release Nos. 44788
(September 13, 2001), 66 FR 48303 (September 19,
2001); 46446 (August 30, 2002), 67 FR 57260
(September 9, 2002); 48386 (August 21, 2003), 68
FR 51618 (August 27, 2003); 50318 (September 3,
2004), 69 FR 54821 (September 10, 2004); 53531
(March 21, 2006), 71 FR 15506 (March 28, 2006);
and 55668 (April 25, 2007), 72 FR 24347 (May 2,
2007).
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17:32 Sep 21, 2010
Jkt 220001
the requirements of the Act and the
rules and regulations thereunder
applicable to a national securities
exchange.8 In particular, it is consistent
with Section 6(b)(4) of the Act,9 which
requires that the rules of a national
securities exchange provide for the
equitable allocation of reasonable dues,
fees, and other charges among its
members and issuers and other parties
using its facilities, and Section 6(b)(5) of
the Act,10 which requires, among other
things, that the rules of a national
securities exchange be designed 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, and
not be designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers. The
Commission also finds that the
proposed rule change is consistent with
the provisions of Section 6(b)(8) of the
Act,11 which requires that the rules of
an exchange not impose any burden on
competition not necessary or
appropriate in furtherance of the
purposes of the Act. Finally, the
Commission finds that the proposed
rule change is consistent with Rule
603(a) of Regulation NMS,12 adopted
under Section 11A(c)(1) of the Act,
which requires an exclusive processor
that distributes information with respect
to quotations for or transactions in an
NMS stock to do so on terms that are
fair and reasonable and that are not
unreasonably discriminatory.13
The Commission notes that the
proposed rule change involves the
retroactive application of a fee reduction
pilot that benefits non-professional
market participants and that has been in
effect in practice since 2000. The
Commission approved the reduced fee
pilot at its inception in 2000, and
subsequently extended the pilot as cited
above. NASDAQ charged the reduced
fee, although its NQDS fee reduction
pilot had expired, during the period
from January 1, 2008 through July 27,
2010, at which time NASDAQ filed an
immediately effective proposal that
made the reduced NQDS fee for non8 In
approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
9 15 U.S.C. 78f(b)(4).
10 15 U.S.C. 78f(b)(5).
11 15 U.S.C. 78f(b)(8).
12 17 CFR 242.603(a).
13 NASDAQ is an exclusive processor of its NQDS
data under Section 3(a)(22)(B) of the Act, 15 U.S.C.
78c(a)(22)(B), which defines an exclusive processor
as, among other things, an exchange that distributes
data on an exclusive basis on its own behalf.
PO 00000
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Fmt 4703
Sfmt 4703
57823
professionals permanent. The
Commission notes that no comments
were received from any market
participants, including NASDAQ
members, information vendors,
investors, non-professionals, or any
other interested parties, on the initial
pilot filing in 2000, on any of the pilot’s
extensions, on the immediately effective
filing for permanent approval of the
reduced fee, or on this filing. For the
reasons discussed above, the
Commission believes that retroactive
approval of the fee reduction pilot from
January 1, 2008 is appropriate.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,14 that the
proposed rule change (SR–NASDAQ–
2010–096), be, and it hereby is,
approved.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–23631 Filed 9–21–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62909; File No. SR–BX–
2010–063]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Adding the
CBOE Volatility Index Futures to the
Definition of a Futures Reference
Asset in Chapter IV, Section 3(k)(i)(5)
September 14, 2010.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on
September 8, 2010, NASDAQ OMX BX,
Inc. (the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. 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
Chapter IV, Section 3 (Criteria for
Underlying Securities) of the Rules of
the Boston Options Exchange Group,
LLC (‘‘BOX’’) to permit options on
14 15
U.S.C. 78s(b)(2).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\22SEN1.SGM
22SEN1
57824
Federal Register / Vol. 75, No. 183 / Wednesday, September 22, 2010 / Notices
Futures-Linked Securities to be based
on products linked to CBOE Volatility
Index Futures (‘‘VIX Futures’’). The text
of the proposed rule change is available
from the principal office of the
Exchange, at the Commission’s Public
Reference Room and also on the
Exchange’s Internet Web site at https://
nasdaqomxbx.cchwallstreet.com/
NASDAQOMXBX/Filings/.
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 the
Statutory Basis for, the Proposed Rule
Change
emcdonald on DSK2BSOYB1PROD with NOTICES
1. Purpose
Chapter IV, Section 3(k) of the BOX
Rules designates the listing and trading
of options on equity index-linked
securities (‘‘Equity Index-Linked
Securities’’, ‘‘Commodity-Linked
Securities’’, ‘‘Currency-Linked
Securities’’, ‘‘Fixed Income Index-Linked
Securities’’, ‘‘Futures-Linked Securities’’
and ‘‘Multifactor Index-Linked
Securities’’, collectively known as
‘‘Index-Linked Securities’’) that are
principally traded on a national
securities exchange and are defined as
an ‘‘NMS Stock’’ (as defined in Rule 600
of Regulation NMS under the Securities
and [sic] Exchange Act of 1934). BOX
proposes to amend the definition of
Futures-Linked Securities for the
trading of options on Index-Linked
Securities to include products linked to
CBOE Volatility Index (VIX) Futures.
Specifically, the Exchange proposes to
add the CBOE Volatility Index (VIX)
Futures to the definition of a Futures
Reference Asset in Chapter IV, Section
3(k)(i)(5) of the BOX Rules.
Index-Linked Securities are designed
for investors who desire to participate in
a specific market segment by providing
exposure to one or more identifiable
underlying securities, commodities,
currencies, derivative instruments or
market indexes of the foregoing
(‘‘Underlying Index’’ or ‘‘Underlying
Indexes’’). Index-Linked Securities are
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17:32 Sep 21, 2010
Jkt 220001
the non-convertible debt of an issuer
that have a term of at least one (1) year
but not greater than thirty (30) years.
Despite the fact that Index-Linked
Securities are linked to an underlying
index, each trades as a single, exchangelisted security. Accordingly, rules
pertaining to the listing and trading of
standard equity options apply to IndexLinked Securities.
Currently, the Exchange will consider
listing and trading options on IndexLinked Securities provided the IndexLinked Securities meet the criteria for
underlying securities set forth in
Chapter IV, Section 3(a)–(b) of the BOX
Rules.
Index-Linked Securities must meet
the criteria and guidelines for
underlying securities set forth in
Chapter IV, Section 3(b) of the BOX
Rules; or the Index-Linked Securities
must be redeemable at the option of the
holder at least on a weekly basis
through the issuer at a price related to
the applicable underlying Reference
Asset.3 In addition, the issuing company
is obligated to issue or repurchase the
securities in aggregation units for cash
or cash equivalents satisfactory to the
issuer of Index-Linked Securities which
underlie the option as described in the
Index-Linked Securities prospectus.
Options on Index-Linked Securities
will continue to be subject to all BOX
rules governing the trading of equity
options. The current continuing or
maintenance listing standards for
options traded on BOX will continue to
apply.
The VIX
The information in this filing relating
to the VIX was taken from the Web site
of the Chicago Board Options Exchange
(the ‘‘CBOE’’).
The VIX was originally developed by
the CBOE in 1993 and was calculated
using S&P 100® Index options. The
current methodology for the VIX was
introduced by the CBOE in September
2003 and it is now an index that uses
the quotes of certain S&P 500® Index
(‘‘SPX’’) option series to derive a
measure of the volatility of the U.S.
equity market. The VIX measures
market expectations of near term
volatility conveyed by the prices of
options on the SPX. It provides
investors with up-to-the-minute market
estimates of expected stock market
3 For the purposes of Chapter IV, Section 3(k) of
the BOX Rules, Equity Reference Assets,
Commodity Reference Assets, Currency Reference
Assets, Fixed Income Reference Assets, Futures
Reference Assets together with Multifactor
Reference Assets, collectively will be referred to as
‘‘Reference Assets’’, as defined in Chapter IV,
Section 3(k)(ii) of the BOX Rules.
PO 00000
Frm 00089
Fmt 4703
Sfmt 4703
volatility over the next 30 calendar days
by extracting implied volatilities from
real-time index option bid/ask quotes.
VIX Futures
Information regarding VIX Futures
can be found on the Web site of the
CBOE Futures Exchange (the ‘‘CFE’’).
The CFE began listing and trading VIX
Futures since March 26, 2004 under the
ticker symbol VX. VIX Futures trade
between the hours of 8:30 a.m.–3:15
p.m. Central Time (Chicago Time).
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the Act,4
in general, and Section 6(b)(5) of the
Act,5 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, Exchange
believes that the proposed rules
applicable to trading pursuant to generic
listing and trading criteria, together with
the Exchange’s surveillance procedures
applicable to trading in the securities
covered by the proposed rules, serve to
foster investor protection.
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
Because the foregoing proposed rule
change: (1) Does not significantly affect
the protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) by its terms does not become
operative for 30 days after the date of
this filing, or such shorter time as the
Commission may designate if consistent
4 15
5 15
E:\FR\FM\22SEN1.SGM
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
22SEN1
Federal Register / Vol. 75, No. 183 / Wednesday, September 22, 2010 / Notices
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 6 and Rule
19b–4(f)(6) thereunder.7
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing. However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange requests that the Commission
waive the 30-day operative delay so that
the Exchange can list and trade options
on Futures-Linked Securities linked to
CBOE VIX Futures immediately. The
Commission believes that waiving the
30-day operative delay to permit the
Exchange to list and trade options on
Futures-Linked Securities linked to
CBOE VIX Futures without delay is
consistent with the protection of
investors and the public interest.8 The
Commission notes the proposal is
substantively identical to proposals that
were recently approved by the
Commission, and does not raise any
new regulatory issues.9 For these
reasons, the Commission designates the
proposed rule change as operative upon
filing.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend 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.
6 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
provide the Commission with written notice of its
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 fulfilled this requirement.
8 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
9 See Securities Exchange Act Release No. 60857
(Oct. 21, 2009), 74 FR 55611 (Oct. 28, 2009) (SR–
CBOE–2009–074); See also Securities Exchange Act
Release No. 60822 (Oct. 14, 2009), 74 FR 54114
(Oct. 21, 2009) (SR–NYSEArca–2009–77); and
Securities Exchange Act Release No. 60823 (Oct. 14,
2009), 74 FR 54112 (Oct. 21, 2009) (SR–
NYSEAmex–2009–59).
emcdonald on DSK2BSOYB1PROD with NOTICES
7 17
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17:32 Sep 21, 2010
Jkt 220001
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–BX–2010–063 on the
subject line.
57825
DEPARTMENT OF STATE
[Public Notice 7182]
Culturally Significant Objects Imported
for Exhibition Determinations:
‘‘Artifacts From Auschwitz-Birkenau’’
Notice is hereby given of the
following determinations: Pursuant to
the authority vested in me by the Act of
October 19, 1965 (79 Stat. 985; 22 U.S.C.
2459), Executive Order 12047 of March
Paper Comments
27, 1978, the Foreign Affairs Reform and
• Send paper comments in triplicate
Restructuring Act of 1998 (112 Stat.
to Elizabeth M. Murphy, Secretary,
2681, et seq.; 22 U.S.C. 6501 note, et
Securities and Exchange Commission,
seq.), Delegation of Authority No. 234 of
100 F Street, NE., Washington, DC
October 1, 1999, and Delegation of
20549–1090.
Authority No. 236–3 of August 28, 2000,
All submissions should refer to File
I hereby determine that the objects to be
Number SR–BX–2010–063. This file
included in the exhibition ‘‘Artifacts
number should be included on the
from Auschwitz-Birkenau,’’ imported
subject line if e-mail is used. To help the
from abroad for temporary exhibition
Commission process and review your
within the United States, are of cultural
comments more efficiently, please use
significance. The objects are imported
only one method. The Commission will
pursuant to a loan agreement with the
post all comments on the Commission’s
foreign owner or custodian. I also
Internet website (https://www.sec.gov/
determine that the exhibition or display
rules/sro.shtml). Copies of the
of the exhibit objects at the Los Angeles
submission, all subsequent
Museum of the Holocaust, Los Angeles,
amendments, all written statements
CA, from on or about October 14, 2010,
with respect to the proposed rule
until on or about October 13, 2014, and
change that are filed with the
at possible additional exhibitions or
Commission, and all written
venues yet to be determined, is in the
communications relating to the
national interest. I have ordered that
proposed rule change between the
Public Notice of these Determinations
Commission and any person, other than
be published in the Federal Register.
those that may be withheld from the
FOR FURTHER INFORMATION CONTACT: For
public in accordance with the
further information, including a list of
provisions of 5 U.S.C. 552, will be
the exhibit objects, contact Julie
available for website viewing and
Simpson, Attorney-Adviser, Office of
printing in the Commission’s Public
the Legal Adviser, U.S. Department of
Reference Room, 100 F Street, NE.,
State (telephone: 202–632–6467). The
Washington, DC 20549, on official
mailing address is U.S. Department of
business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also State, SA–5, L/PD, Fifth Floor (Suite
5H03), Washington, DC 20522–0505.
will be available for inspection and
Dated: September 16, 2010.
copying at the principal office of the
Exchange.10 All comments received will Ann Stock,
be posted without change; the
Assistant Secretary, Bureau of Educational
Commission does not edit personal
and Cultural Affairs, Department of State.
identifying information from
[FR Doc. 2010–23687 Filed 9–21–10; 8:45 am]
submissions. You should submit only
BILLING CODE 4710–05–P
information that you wish to make
available publicly. All submissions
should refer to File Number SR–BX–
DEPARTMENT OF STATE
2010–063 and should be submitted on
[Public Notice 7181]
or before October 13, 2010.
For the Commission, by the Division of
Culturally Significant Objects Imported
Trading and Markets, pursuant to delegated
for Exhibition Determinations:
authority.11
‘‘Ancient Chinese Bronzes From the
Florence E. Harmon,
Shouyang Studio: The Katherine and
Deputy Secretary.
George Fan Collection’’
[FR Doc. 2010–23603 Filed 9–21–10; 8:45 am]
BILLING CODE 8010–01–P
10 The text of the proposed rule change is
available on the Commission’s Web site at https://
www.sec.gov.
11 17 CFR 200.30–3(a)(12).
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
SUMMARY:
Notice is hereby given of the
following determinations: Pursuant to
the authority vested in me by the Act of
October 19, 1965 (79 Stat. 985; 22 U.S.C.
2459), Executive Order 12047 of March
27, 1978, the Foreign Affairs Reform and
SUMMARY:
E:\FR\FM\22SEN1.SGM
22SEN1
]]>Agencies
[Federal Register Volume 75, Number 183 (Wednesday, September 22, 2010)]
[Notices]
[Pages 57823-57825]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-23603]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62909; File No. SR-BX-2010-063]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Adding the
CBOE Volatility Index Futures to the Definition of a Futures Reference
Asset in Chapter IV, Section 3(k)(i)(5)
September 14, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on September 8, 2010, NASDAQ OMX BX, Inc. (the ``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I and II below, which Items have been
prepared by the self-regulatory organization. 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Chapter IV, Section 3 (Criteria for
Underlying Securities) of the Rules of the Boston Options Exchange
Group, LLC (``BOX'') to permit options on
[[Page 57824]]
Futures-Linked Securities to be based on products linked to CBOE
Volatility Index Futures (``VIX Futures''). The text of the proposed
rule change is available from the principal office of the Exchange, at
the Commission's Public Reference Room and also on the Exchange's
Internet Web site at https://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/.
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
Chapter IV, Section 3(k) of the BOX Rules designates the listing
and trading of options on equity index-linked securities (``Equity
Index-Linked Securities'', ``Commodity-Linked Securities'', ``Currency-
Linked Securities'', ``Fixed Income Index-Linked Securities'',
``Futures-Linked Securities'' and ``Multifactor Index-Linked
Securities'', collectively known as ``Index-Linked Securities'') that
are principally traded on a national securities exchange and are
defined as an ``NMS Stock'' (as defined in Rule 600 of Regulation NMS
under the Securities and [sic] Exchange Act of 1934). BOX proposes to
amend the definition of Futures-Linked Securities for the trading of
options on Index-Linked Securities to include products linked to CBOE
Volatility Index (VIX) Futures.
Specifically, the Exchange proposes to add the CBOE Volatility
Index (VIX) Futures to the definition of a Futures Reference Asset in
Chapter IV, Section 3(k)(i)(5) of the BOX Rules.
Index-Linked Securities are designed for investors who desire to
participate in a specific market segment by providing exposure to one
or more identifiable underlying securities, commodities, currencies,
derivative instruments or market indexes of the foregoing (``Underlying
Index'' or ``Underlying Indexes''). Index-Linked Securities are the
non-convertible debt of an issuer that have a term of at least one (1)
year but not greater than thirty (30) years. Despite the fact that
Index-Linked Securities are linked to an underlying index, each trades
as a single, exchange-listed security. Accordingly, rules pertaining to
the listing and trading of standard equity options apply to Index-
Linked Securities.
Currently, the Exchange will consider listing and trading options
on Index-Linked Securities provided the Index-Linked Securities meet
the criteria for underlying securities set forth in Chapter IV, Section
3(a)-(b) of the BOX Rules.
Index-Linked Securities must meet the criteria and guidelines for
underlying securities set forth in Chapter IV, Section 3(b) of the BOX
Rules; or the Index-Linked Securities must be redeemable at the option
of the holder at least on a weekly basis through the issuer at a price
related to the applicable underlying Reference Asset.\3\ In addition,
the issuing company is obligated to issue or repurchase the securities
in aggregation units for cash or cash equivalents satisfactory to the
issuer of Index-Linked Securities which underlie the option as
described in the Index-Linked Securities prospectus.
---------------------------------------------------------------------------
\3\ For the purposes of Chapter IV, Section 3(k) of the BOX
Rules, Equity Reference Assets, Commodity Reference Assets, Currency
Reference Assets, Fixed Income Reference Assets, Futures Reference
Assets together with Multifactor Reference Assets, collectively will
be referred to as ``Reference Assets'', as defined in Chapter IV,
Section 3(k)(ii) of the BOX Rules.
---------------------------------------------------------------------------
Options on Index-Linked Securities will continue to be subject to
all BOX rules governing the trading of equity options. The current
continuing or maintenance listing standards for options traded on BOX
will continue to apply.
The VIX
The information in this filing relating to the VIX was taken from
the Web site of the Chicago Board Options Exchange (the ``CBOE'').
The VIX was originally developed by the CBOE in 1993 and was
calculated using S&P 100[supreg] Index options. The current methodology
for the VIX was introduced by the CBOE in September 2003 and it is now
an index that uses the quotes of certain S&P 500[supreg] Index
(``SPX'') option series to derive a measure of the volatility of the
U.S. equity market. The VIX measures market expectations of near term
volatility conveyed by the prices of options on the SPX. It provides
investors with up-to-the-minute market estimates of expected stock
market volatility over the next 30 calendar days by extracting implied
volatilities from real-time index option bid/ask quotes.
VIX Futures
Information regarding VIX Futures can be found on the Web site of
the CBOE Futures Exchange (the ``CFE''). The CFE began listing and
trading VIX Futures since March 26, 2004 under the ticker symbol VX.
VIX Futures trade between the hours of 8:30 a.m.-3:15 p.m. Central Time
(Chicago Time).
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\4\ in general, and Section
6(b)(5) of the Act,\5\ 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, Exchange believes that the proposed rules applicable to
trading pursuant to generic listing and trading criteria, together with
the Exchange's surveillance procedures applicable to trading in the
securities covered by the proposed rules, serve to foster investor
protection.
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\4\ 15 U.S.C. 78f(b).
\5\ 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 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
Because the foregoing proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms does not become operative for 30 days after the
date of this filing, or such shorter time as the Commission may
designate if consistent
[[Page 57825]]
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 \6\ and Rule 19b-4(f)(6) thereunder.\7\
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to provide the Commission
with written notice of its 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 fulfilled this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange requests that the Commission waive
the 30-day operative delay so that the Exchange can list and trade
options on Futures-Linked Securities linked to CBOE VIX Futures
immediately. The Commission believes that waiving the 30-day operative
delay to permit the Exchange to list and trade options on Futures-
Linked Securities linked to CBOE VIX Futures without delay is
consistent with the protection of investors and the public interest.\8\
The Commission notes the proposal is substantively identical to
proposals that were recently approved by the Commission, and does not
raise any new regulatory issues.\9\ For these reasons, the Commission
designates the proposed rule change as operative upon filing.
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\8\ For purposes only of waiving the 30-day operative delay, the
Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
\9\ See Securities Exchange Act Release No. 60857 (Oct. 21,
2009), 74 FR 55611 (Oct. 28, 2009) (SR-CBOE-2009-074); See also
Securities Exchange Act Release No. 60822 (Oct. 14, 2009), 74 FR
54114 (Oct. 21, 2009) (SR-NYSEArca-2009-77); and Securities Exchange
Act Release No. 60823 (Oct. 14, 2009), 74 FR 54112 (Oct. 21, 2009)
(SR-NYSEAmex-2009-59).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend 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-2010-063 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-2010-063. 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 website (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 website 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.\10\ 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-2010-063 and should be
submitted on or before October 13, 2010.
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\10\ The text of the proposed rule change is available on the
Commission's Web site at https://www.sec.gov.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-23603 Filed 9-21-10; 8:45 am]
BILLING CODE 8010-01-P
