Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Arca, Inc. To Establish a Pilot Program To List Series With Additional Expiration Months for Each Class of Options Opened for Trading on the Exchange, 65545-65546 [2010-26926]
Download as PDF
Federal Register / Vol. 75, No. 205 / Monday, October 25, 2010 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Florence E. Harmon,
Deputy Secretary.
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.
[FR Doc. 2010–26826 Filed 10–22–10; 8:45 am]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63133; File No. SR–
NYSEArca–2010–93]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by NYSE
Arca, Inc. To Establish a Pilot Program
To List Series With Additional
Expiration Months for Each Class of
Options Opened for Trading on the
Exchange
October 19, 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 October
18, 2010, NYSE Arca, Inc. (‘‘NYSE Arca’’
or 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
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to adopt
Commentary .09 to NYSE Arca Options
Rule 6.4 to establish a Pilot Program to
list additional expiration months for
each class of options opened for trading
on the Exchange. The text of the
proposed rule change is available at the
Exchange, on the Commission’s Web
site at https://www.sec.gov, at the
Commission’s Public Reference Room,
and https://www.nyse.com.
emcdonald on DSK2BSOYB1PROD with NOTICES
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
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1. Purpose
The Exchange proposes to adopt a
Pilot Program to list additional
expiration months for each class of
options opened for trading on the
Exchange, similar to a Pilot Program
recently approved for use by the
International Securities Exchange, Inc.
(‘‘ISE’’),3 by adding proposed
Commentary .09 to NYSE Arca Options
Rule 6.4, Series of Options Open for
Trading.
Pursuant to NYSE Arca Rule 6.4(a),
the Exchange currently opens four
expiration months for each class of
options open for trading on the
Exchange, the first two being the two
nearest months, regardless of the
quarterly cycle on which that class
trades; the third and fourth being the
next two months of the quarterly cycle
previously designated for that specific
class. For example, if the Exchange
listed in late May a new equity option
on a January-April-July-October
quarterly cycle, the Exchange would list
the two nearest term months (June and
July) and the next two months of the
cycle (October and January). When the
June series expires, the Exchange would
add the August series as the next nearest
month. And when the July series
expires, the Exchange would add the
September series.
The Exchange believes that there is
market demand for a greater number of
expiration months. The Exchange
therefore proposes to adopt a Pilot
Program pursuant to which it will list
up to an additional two expiration
months, for a total of six expiration
months for each class of options open
for trading on the Exchange. The
proposal will become effective on a
pilot basis for a period of twelve months
to commence on the next full month
after approval is received to establish
the pilot program. Under the proposal,
the additional months listed pursuant to
the pilot program will result in four
consecutive expiration months plus two
months from the quarterly cycle. For
example, for option classes in the
January cycle that have expiration
months of June, July, October, and
January, the Exchange would
14 17
1 15
VerDate Mar<15>2010
16:05 Oct 22, 2010
3 See Exchange Act Release No. 63104 (October
14, 2010) approving SR–ISE–2010–91.
Jkt 223001
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
65545
additionally list the August and
September series. For options classes in
the February quarterly cycle that have
expiration months of October,
November, February, and May, the
Exchange would additionally list the
December and January series. Under the
proposal, no additional LEAP Series
will be created.
The Exchange seeks to limit the
proposed rule change to 20 actively
traded options classes. By limiting the
pilot to a small number of classes, the
Exchange will be able to gauge interest
in the pilot while limiting any
additional demands on system
resources. It has been estimated that this
pilot could add up to six or seven
percent to current quote traffic, although
changes in market maker quoting
behavior may reduce that increase by up
to half. The Exchange believes that a
limited pilot is a prudent step to
determine actual market demand for
additional expiration months.
If the Exchange were to propose an
extension or an expansion of the pilot
program, or should the Exchange
propose to make the pilot program
permanent, NYSE Arca will submit,
along with any filing proposing such
amendments to the pilot program, a
pilot program report (‘‘Report’’) that will
provide an analysis of the Pilot Program
covering the first nine months of the
pilot program and shall submit the
Report to the Commission at least sixty
(60) days prior to the expiration date of
the pilot program. The Report will
include, at a minimum: (1) Data and
written analysis on the open interest
and trading volume in the classes for
which additional expiration months
were opened; (2) an assessment of the
appropriateness of the options classes
selected for the pilot program; (3) an
assessment of the impact of the pilot
program on the capacity on NYSE Arca,
OPRA, and on 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 pilot
program and how NYSE Arca addressed
such problems; (5) any complaints that
NYSE Arca received during the
operation of the pilot program and how
NYSE Arca addressed them; and (6) any
additional information that would assist
the Commission in assessing the
operation of the Pilot Program.
Finally, the Exchange represents that
it has the necessary systems capacity to
support new options series that will
result from the introduction of
additional expiration months listed
pursuant to this proposed rule change.
E:\FR\FM\25OCN1.SGM
25OCN1
65546
Federal Register / Vol. 75, No. 205 / Monday, October 25, 2010 / Notices
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Securities Exchange Act of 1934 4
(the ‘‘Act’’) in general, and furthers the
objectives of Section 6(b)(5) of the Act 5
in particular, in that it is 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. In
particular, the Exchange believes listing
additional near-term expiration months
will offer investors more variety in
trading options series that were
previously not available. The Exchange
believes this proposal will also generate
additional volume in these options
classes without significantly taxing
system resources.
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 significantly affect the
protection of investors or the public
interest, does not impose any significant
burden on competition, and, by its
terms, does not become operative for 30
days from the date on which it was
filed, or such shorter time as the
Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 6 and Rule 19b–
4(f)(6) thereunder.7
The Exchange has requested that the
Commission waive the 30-day operative
delay. The Commission believes that
waiver of the operative delay is
4 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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 the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
emcdonald on DSK2BSOYB1PROD with NOTICES
5 15
VerDate Mar<15>2010
16:05 Oct 22, 2010
Jkt 223001
consistent with the protection of
investors and the public interest
because the proposal is substantially
similar to that of another exchange that
has been approved by the Commission.8
Therefore, the Commission designates
the proposal operative upon filing.9
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 rulecomments@sec.gov. Please include File
Number SR–NYSEArca–2010–93 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–2010–93. 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–
NYSEArca–2010–93 and should be
submitted on or before November 15,
2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–26926 Filed 10–22–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63126; File No. SR–NSCC–
2010–11]
Self-Regulatory Organizations;
National Securities Clearing
Corporation; Notice of Filing of
Proposed Rule Change To Enhance
the Reconfirmation and Pricing
Service, Including the Creation of the
Obligation Warehouse
October 18, 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 October
5, 2010, the National Securities Clearing
Corporation (‘‘NSCC’’) 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
primarily by NSCC.3 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The purpose of this proposed rule
change is to enhance the Reconfirmation
and Pricing Service (‘‘RECAPS’’) process,
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 The text of the proposed rule change is attached
as Exhibit 5 to NSCC’s filing and is available at
https://www.dtcc.com/downloads/legal/rule_filings/
2010/nscc/2010-11.pdf.
1 15
8 See
supra note 3.
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 For
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
E:\FR\FM\25OCN1.SGM
25OCN1
Agencies
[Federal Register Volume 75, Number 205 (Monday, October 25, 2010)]
[Notices]
[Pages 65545-65546]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-26926]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63133; File No. SR-NYSEArca-2010-93]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NYSE Arca, Inc. To Establish a
Pilot Program To List Series With Additional Expiration Months for Each
Class of Options Opened for Trading on the Exchange
October 19, 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 October 18, 2010, NYSE Arca, Inc. (``NYSE Arca'' or 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 Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to adopt Commentary .09 to NYSE Arca Options
Rule 6.4 to establish a Pilot Program to list additional expiration
months for each class of options opened for trading on the Exchange.
The text of the proposed rule change is available at the Exchange, on
the Commission's Web site at https://www.sec.gov, at the Commission's
Public Reference Room, and https://www.nyse.com.
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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to adopt a Pilot Program to list additional
expiration months for each class of options opened for trading on the
Exchange, similar to a Pilot Program recently approved for use by the
International Securities Exchange, Inc. (``ISE''),\3\ by adding
proposed Commentary .09 to NYSE Arca Options Rule 6.4, Series of
Options Open for Trading.
---------------------------------------------------------------------------
\3\ See Exchange Act Release No. 63104 (October 14, 2010)
approving SR-ISE-2010-91.
---------------------------------------------------------------------------
Pursuant to NYSE Arca Rule 6.4(a), the Exchange currently opens
four expiration months for each class of options open for trading on
the Exchange, the first two being the two nearest months, regardless of
the quarterly cycle on which that class trades; the third and fourth
being the next two months of the quarterly cycle previously designated
for that specific class. For example, if the Exchange listed in late
May a new equity option on a January-April-July-October quarterly
cycle, the Exchange would list the two nearest term months (June and
July) and the next two months of the cycle (October and January). When
the June series expires, the Exchange would add the August series as
the next nearest month. And when the July series expires, the Exchange
would add the September series.
The Exchange believes that there is market demand for a greater
number of expiration months. The Exchange therefore proposes to adopt a
Pilot Program pursuant to which it will list up to an additional two
expiration months, for a total of six expiration months for each class
of options open for trading on the Exchange. The proposal will become
effective on a pilot basis for a period of twelve months to commence on
the next full month after approval is received to establish the pilot
program. Under the proposal, the additional months listed pursuant to
the pilot program will result in four consecutive expiration months
plus two months from the quarterly cycle. For example, for option
classes in the January cycle that have expiration months of June, July,
October, and January, the Exchange would additionally list the August
and September series. For options classes in the February quarterly
cycle that have expiration months of October, November, February, and
May, the Exchange would additionally list the December and January
series. Under the proposal, no additional LEAP Series will be created.
The Exchange seeks to limit the proposed rule change to 20 actively
traded options classes. By limiting the pilot to a small number of
classes, the Exchange will be able to gauge interest in the pilot while
limiting any additional demands on system resources. It has been
estimated that this pilot could add up to six or seven percent to
current quote traffic, although changes in market maker quoting
behavior may reduce that increase by up to half. The Exchange believes
that a limited pilot is a prudent step to determine actual market
demand for additional expiration months.
If the Exchange were to propose an extension or an expansion of the
pilot program, or should the Exchange propose to make the pilot program
permanent, NYSE Arca will submit, along with any filing proposing such
amendments to the pilot program, a pilot program report (``Report'')
that will provide an analysis of the Pilot Program covering the first
nine months of the pilot program and shall submit the Report to the
Commission at least sixty (60) days prior to the expiration date of the
pilot program. The Report will include, at a minimum: (1) Data and
written analysis on the open interest and trading volume in the classes
for which additional expiration months were opened; (2) an assessment
of the appropriateness of the options classes selected for the pilot
program; (3) an assessment of the impact of the pilot program on the
capacity on NYSE Arca, OPRA, and on 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 pilot program
and how NYSE Arca addressed such problems; (5) any complaints that NYSE
Arca received during the operation of the pilot program and how NYSE
Arca addressed them; and (6) any additional information that would
assist the Commission in assessing the operation of the Pilot Program.
Finally, the Exchange represents that it has the necessary systems
capacity to support new options series that will result from the
introduction of additional expiration months listed pursuant to this
proposed rule change.
[[Page 65546]]
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Securities Exchange Act of 1934 \4\ (the ``Act'') in
general, and furthers the objectives of Section 6(b)(5) of the Act \5\
in particular, in that it is 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. In particular, the
Exchange believes listing additional near-term expiration months will
offer investors more variety in trading options series that were
previously not available. The Exchange believes this proposal will also
generate additional volume in these options classes without
significantly taxing system resources.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b).
\5\ 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 significantly
affect the protection of investors or the public interest, does not
impose any significant burden on competition, and, by its terms, does
not become operative for 30 days from the date on which it was filed,
or such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-
4(f)(6) thereunder.\7\
---------------------------------------------------------------------------
\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 the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
---------------------------------------------------------------------------
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 has been approved by the Commission.\8\
Therefore, the Commission designates the proposal operative upon
filing.\9\
---------------------------------------------------------------------------
\8\ See supra note 3.
\9\ 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 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-NYSEArca-2010-93 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-2010-93. 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-
NYSEArca-2010-93 and should be submitted on or before November 15,
2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-26926 Filed 10-22-10; 8:45 am]
BILLING CODE 8011-01-P