Self-Regulatory Organizations; The Options Clearing Corporation; Order Approving Proposed Rule Change Relating to Weekly Options And Monthly Options, 70055-70056 [2010-28830]
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Federal Register / Vol. 75, No. 220 / Tuesday, November 16, 2010 / Notices
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–2010–102 and should be
submitted on or before December 7,
2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–28829 Filed 11–15–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISION
[Release No. 34–63293; File No. SR–OCC–
2010–16]
Self-Regulatory Organizations; The
Options Clearing Corporation; Order
Approving Proposed Rule Change
Relating to Weekly Options And
Monthly Options
mstockstill on DSKH9S0YB1PROD with NOTICES
November 9, 2010.
I. Introduction
On September 15, 2010, The Options
Clearing Corporation (‘‘OCC’’) filed with
the Securities and Exchange
Commission proposed rule change SR–
OCC–2010–16 pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder.2 The proposed rule change
will accommodate options that expire
on (a) any Friday of a calendar month
other than the third Friday of a calendar
month (‘‘Weekly Options’’) or (b) on the
last trading day of a calendar month
(‘‘Monthly Options’’). The proposed rule
change was published for comment in
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Mar<15>2010
19:33 Nov 15, 2010
Jkt 223001
the Federal Register on September 28,
2010.3 No comment letters were
received on the proposal. This order
approves the proposal.
II. Description of the Proposal
The purpose of the proposed rule
change is to allow OCC to clear and to
settle the Weekly Options and Monthly
Options on broad-based indexes
(‘‘Weekly Index Options’’ and ‘‘Monthly
Index Options,’’ respectively) that were
recently approved by the Commission
for listing on a pilot program basis on
the Chicago Board Options Exchange,
Incorporated, (‘‘CBOE’’).4 Series of
Weekly Index Options will expire on a
Friday of a calendar month other than
the third Friday, and Monthly Index
Options will expire on the last trading
day of a calendar month. If the last
trading day of the month is a Friday,
CBOE would opt to list Monthly Index
Options over Weekly Index Options.
Weekly Index Options and Monthly
Index Options will be European-style,
P.M.-settled contracts. These contracts
will be subject to ‘‘automatic exercise
procedures,’’ which means that these
contracts will automatically be
exercised at expiration if immediately
prior to expiration the contract’s
settlement amount equals or exceeds a
predetermined amount without the
opportunity for the clearing member to
submit contrary exercise instructions.
Weekly Options and Monthly Options
proposed by CBOE can be cleared and
settled by OCC with relatively minor
revisions to OCC’s current By-Laws and
Rules to provide for options that expire
on a monthly or weekly schedule.5 In
particular, OCC will amend Article I,
Section 1 of its By-Laws to include
definitions covering Weekly and
Monthly Options. Rule 801, which
relates to the submission of exercise
notices, will be changed to permit a
Weekly or Monthly Option to be
exercised on the business day before the
expiration date and to include Weekly
Index Options and Monthly Index
Options in the listing of options series
subject to automatic exercise.
Interpretation and Policy .03 to Rule
805, which relates to expiration date
3 Securities Exchange Act Release No. 62942
(Sept. 20, 2010), 75 FR 59779.
4 Securities Exchange Act Release No. 62911
(Sept. 14, 2010), 75 FR 57539 (Sept. 21, 2010).
5 OCC’s By-laws and Rules already accommodate
equity and index options that expire on a day other
than a Saturday following the third Friday of the
month. For example, they accommodate quarterly
options, which expire on the last business day of
a calendar quarter, and short term options, which
expire a week after their introduction for trading.
Quarterly index options and short term index
options are also subject to automatic exercise
procedures.
PO 00000
Frm 00143
Fmt 4703
Sfmt 4703
70055
exercise processing, will be amended to
permit OCC to specify time frames for
submitting exercise instructions and
furnishing reports with respect to
Weekly and Monthly Options on equity
interests that are different than those
time frames in effect for conventional
options.6 A conforming change to Rule
1804, which supplements Rule 805, also
will be made to add Weekly Index
Options and Monthly Index Options to
the list of options series subject to
automatic exercise.
III. Discussion
The Commission finds that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to DTC. In particular, the
Commission believes the proposal is
consistent with Section 17A(b)(3)(F) of
the Act,7 which requires that the rules
of a registered clearing agency are
designed to, among other things, remove
impediments to the perfection of the
mechanism of a national system for the
prompt and accurate clearance and
settlement of securities transactions. By
expanding its clearance and settlement
services to Weekly Index Options and
Monthly Index Options while using
substantially the same rules and
procedures that it applies to
transactions in other options with a
nonconventional expiry date, such as
Quarterly Index Options, OCC will
enable its members to avail themselves
of OCC’s automated and time-proven
clearance and settlement services for
such options, which should help OCC to
further remove impediments to and
perfect the mechanism of a national
system for the prompt and accurate
clearance and settlement of securities
transactions.
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act and in
particular Section 17A of the Act 8 and
the rules and regulations thereunder.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,9 that the
proposed rule change (File No. SR–
6 Interpretation .03 will also be amended to
clarify that it covers equity options with nonconventional expiration dates as opposed to index
options with nonconventional expiration dates,
which are subject to automatic exercise as described
in Rule 1804.
7 15 U.S.C. 78q–1(b)(3)(F).
8 15 U.S.C. 78q–1.
9 15 U.S.C. 78s(b)(2).
E:\FR\FM\16NON1.SGM
16NON1
70056
Federal Register / Vol. 75, No. 220 / Tuesday, November 16, 2010 / Notices
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.11
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–28830 Filed 11–15–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by NYSE
Amex LLC Making a Technical
Amendment to Its Rules to Insert the
Specific Date for the Additional
Expiration Months Pilot Program
November 9, 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
November 8, 2010, NYSE Amex LLC
(the ‘‘Exchange’’ or ‘‘NYSE Amex’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
mstockstill on DSKH9S0YB1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to make a
technical amendment to its rules to
insert the specific date for a pilot
program. The text of the proposed rule
change is available at the Exchange’s
principal office, 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
10 In approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition and capital formation. 15
U.S.C. 78c(f).
11 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
19:33 Nov 15, 2010
Jkt 223001
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The proposed rule change is effective
upon filing pursuant to Section
19(b)(3)(A) of the Act 7 and Rule 19b–
4(f)(1) thereunder.8 The Exchange
designates the proposed rule change as
an interpretation with respect to the
meaning, administration, or
enforcement of an existing rule.
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.
1. Purpose
[Release No. 34–63287; File No. SR–
NYSEAmex–2010–105]
VerDate Mar<15>2010
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
OCC–2010–16) be and hereby is
approved.10
The Exchange proposes to make a
technical amendment to its rules to
insert a specific date for a pilot program.
The Exchange recently adopted rules
to establish a pilot program that would
permit the Exchange to 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.3 This rule change proposes to
amend the text of Commentary .11 to
Rule 903 to insert the specific
conclusion date of the pilot program,
which is October 31, 2011.4
2. Statutory Basis
The Exchange believes that this
proposed rule change is consistent with
Section 6(b) of the Securities Exchange
Act of 1934 (‘‘Act’’),5 in general, and
furthers the objectives of Section 6(b)(5)
of the Act 6 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices,
promote just and equitable principles of
trade, 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 proposed rule change
seeks to update rule text to insert
specific dates for a pilot program in a
manner that is consistent with the pilot
program as originally proposed.
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.
3 See Securities Exchange Act Release No. 63170
(October 25, 2010), 75 FR 66818 (October 29, 2010)
(Notice of Filing and Immediate Effectiveness of
SR–NYSEAmex–2010–99).
4 Existing rule text, which became effective and
operative immediately upon filing on October 22,
2010, indicates that the Exchange will insert the
date 12 months from the next full month from
approval. Id.
5 15 U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00144
Fmt 4703
Sfmt 4703
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–NYSEAmex–2010–105 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–NYSEAmex–2010–105.
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
7 15
8 17
E:\FR\FM\16NON1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(1).
16NON1
]]>Agencies
[Federal Register Volume 75, Number 220 (Tuesday, November 16, 2010)]
[Notices]
[Pages 70055-70056]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-28830]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISION
[Release No. 34-63293; File No. SR-OCC-2010-16]
Self-Regulatory Organizations; The Options Clearing Corporation;
Order Approving Proposed Rule Change Relating to Weekly Options And
Monthly Options
November 9, 2010.
I. Introduction
On September 15, 2010, The Options Clearing Corporation (``OCC'')
filed with the Securities and Exchange Commission proposed rule change
SR-OCC-2010-16 pursuant to Section 19(b)(1) of the Securities Exchange
Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder.\2\ The proposed
rule change will accommodate options that expire on (a) any Friday of a
calendar month other than the third Friday of a calendar month
(``Weekly Options'') or (b) on the last trading day of a calendar month
(``Monthly Options''). The proposed rule change was published for
comment in the Federal Register on September 28, 2010.\3\ No comment
letters were received on the proposal. This order approves the
proposal.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Securities Exchange Act Release No. 62942 (Sept. 20, 2010),
75 FR 59779.
---------------------------------------------------------------------------
II. Description of the Proposal
The purpose of the proposed rule change is to allow OCC to clear
and to settle the Weekly Options and Monthly Options on broad-based
indexes (``Weekly Index Options'' and ``Monthly Index Options,''
respectively) that were recently approved by the Commission for listing
on a pilot program basis on the Chicago Board Options Exchange,
Incorporated, (``CBOE'').\4\ Series of Weekly Index Options will expire
on a Friday of a calendar month other than the third Friday, and
Monthly Index Options will expire on the last trading day of a calendar
month. If the last trading day of the month is a Friday, CBOE would opt
to list Monthly Index Options over Weekly Index Options. Weekly Index
Options and Monthly Index Options will be European-style, P.M.-settled
contracts. These contracts will be subject to ``automatic exercise
procedures,'' which means that these contracts will automatically be
exercised at expiration if immediately prior to expiration the
contract's settlement amount equals or exceeds a predetermined amount
without the opportunity for the clearing member to submit contrary
exercise instructions.
---------------------------------------------------------------------------
\4\ Securities Exchange Act Release No. 62911 (Sept. 14, 2010),
75 FR 57539 (Sept. 21, 2010).
---------------------------------------------------------------------------
Weekly Options and Monthly Options proposed by CBOE can be cleared
and settled by OCC with relatively minor revisions to OCC's current By-
Laws and Rules to provide for options that expire on a monthly or
weekly schedule.\5\ In particular, OCC will amend Article I, Section 1
of its By-Laws to include definitions covering Weekly and Monthly
Options. Rule 801, which relates to the submission of exercise notices,
will be changed to permit a Weekly or Monthly Option to be exercised on
the business day before the expiration date and to include Weekly Index
Options and Monthly Index Options in the listing of options series
subject to automatic exercise. Interpretation and Policy .03 to Rule
805, which relates to expiration date exercise processing, will be
amended to permit OCC to specify time frames for submitting exercise
instructions and furnishing reports with respect to Weekly and Monthly
Options on equity interests that are different than those time frames
in effect for conventional options.\6\ A conforming change to Rule
1804, which supplements Rule 805, also will be made to add Weekly Index
Options and Monthly Index Options to the list of options series subject
to automatic exercise.
---------------------------------------------------------------------------
\5\ OCC's By-laws and Rules already accommodate equity and index
options that expire on a day other than a Saturday following the
third Friday of the month. For example, they accommodate quarterly
options, which expire on the last business day of a calendar
quarter, and short term options, which expire a week after their
introduction for trading. Quarterly index options and short term
index options are also subject to automatic exercise procedures.
\6\ Interpretation .03 will also be amended to clarify that it
covers equity options with non-conventional expiration dates as
opposed to index options with nonconventional expiration dates,
which are subject to automatic exercise as described in Rule 1804.
---------------------------------------------------------------------------
III. Discussion
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to DTC. In particular, the Commission believes
the proposal is consistent with Section 17A(b)(3)(F) of the Act,\7\
which requires that the rules of a registered clearing agency are
designed to, among other things, remove impediments to the perfection
of the mechanism of a national system for the prompt and accurate
clearance and settlement of securities transactions. By expanding its
clearance and settlement services to Weekly Index Options and Monthly
Index Options while using substantially the same rules and procedures
that it applies to transactions in other options with a nonconventional
expiry date, such as Quarterly Index Options, OCC will enable its
members to avail themselves of OCC's automated and time-proven
clearance and settlement services for such options, which should help
OCC to further remove impediments to and perfect the mechanism of a
national system for the prompt and accurate clearance and settlement of
securities transactions.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
IV. Conclusion
On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the requirements of the Act and
in particular Section 17A of the Act \8\ and the rules and regulations
thereunder.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78q-1.
---------------------------------------------------------------------------
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\9\ that the proposed rule change (File No. SR-
[[Page 70056]]
OCC-2010-16) be and hereby is approved.\10\
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78s(b)(2).
\10\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).
For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-28830 Filed 11-15-10; 8:45 am]
BILLING CODE 8011-01-P
