Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Extension of the Exchange's Penny Pilot Program and Replacement, on a Semi-Annual Basis, of Penny Pilot Issues that Have Been Delisted, 76062-76064 [2010-30580]
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76062
Federal Register / Vol. 75, No. 234 / Tuesday, December 7, 2010 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
(A) by order approve or disapprove
such proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
will also 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 No. SR–BATS–
2010–034 and should be submitted on
or before December 28, 2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–30577 Filed 12–6–10; 8:45 am]
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
No. SR–BATS–2010–034 on the subject
line.
emcdonald on DSK2BSOYB1PROD with NOTICES
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposal is
consistent with the Act. Comments may
be submitted by any of the following
methods:
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Extension of the Exchange’s Penny
Pilot Program and Replacement, on a
Semi-Annual Basis, of Penny Pilot
Issues that Have Been Delisted
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
No. SR–BATS–2010–034. 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 changes 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 such filing
November 30, 2010.
VerDate Mar<15>2010
18:39 Dec 06, 2010
Jkt 223001
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63395; File No. SR–Phlx2010–167]
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 2 thereunder,
notice is hereby given that on November
22, 2010, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II
and III 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 the Substance
of the Proposed Rule Change
The Exchange is filing with the
Commission a proposal to amend Phlx
Rule 1034 (Minimum Increments) to:
Extend through December 31, 2011, the
Penny Pilot Program in options classes
in certain issues (‘‘Penny Pilot’’ or
‘‘Pilot’’); and replace, on a semi-annual
basis, any Penny Pilot issues that have
been delisted.3
12 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 17 CFR 240.19b–4.
3 The Penny Pilot was established in January 2007
and in October 2009 was expanded and extended
1 15
PO 00000
Frm 00111
Fmt 4703
Sfmt 4703
The text of the proposed rule change
is available on the Exchange’s Website
at https://
nasdaqomxphlx.cchwallstreet.com/
NASDAQOMXPHLX/Filings/, at the
principal office of the Exchange, 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
Exchange 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
Exchange 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 filing is to amend
Phlx Rule 1034 to: (1) Extend through
December 31, 2011, the Penny Pilot; and
(2) replace, on a semi-annual basis, any
Penny Pilot issues that have been
delisted.
For a pilot period scheduled to expire
on December 31, 2010, the Penny Pilot
allows certain options to be quoted and
traded on the Exchange in minimum
increments of $0.01 for all series in such
options with a price of less than $3.00;
and in minimum increments of $0.05 for
all series in such options with a price
of $3.00 or higher. Options overlying the
PowerShares QQQ Trust (‘‘QQQQ’’),®
SPDR S&P 500 Exchange Traded Funds
(‘‘SPY’’), and iShares Russell 2000 Index
Funds (‘‘IWM’’), however, are quoted
through December 31, 2010. See Securities
Exchange Act Release Nos. 55153 (January 23,
2007), 72 FR 4553 (January 31, 2007)(SR–Phlx–
2006–74)(notice of filing and approval order
establishing Penny Pilot); 60873 (October 23, 2009),
74 FR 56675 (November 2, 2009)(SR–Phlx–2009–
91)(notice of filing and immediate effectiveness
expanding and extending Penny Pilot); 60966
(November 9, 2009), 74 FR 59331 (November 17,
2009)(SR–Phlx–2009–94)(notice of filing and
immediate effectiveness adding seventy-five classes
to Penny Pilot); 61454 (February 1, 2010), 75 FR
6233 (February 8, 2010)(SR–Phlx–2010–12)(notice
of filing and immediate effectiveness adding
seventy-five classes to Penny Pilot); 62028 (May 4,
2010), 75 FR 25890 (May 10, 2010)(SR–Phlx–2010–
65)(notice of filing and immediate effectiveness
adding seventy-five classes to Penny Pilot); and
62616 (July 30, 2010), 75 FR 47664 (August 6,
2010)(SR–Phlx–2010–103)(notice of filing and
immediate effectiveness adding seventy-five classes
to Penny Pilot).
E:\FR\FM\07DEN1.SGM
07DEN1
Federal Register / Vol. 75, No. 234 / Tuesday, December 7, 2010 / Notices
emcdonald on DSK2BSOYB1PROD with NOTICES
and traded in minimum increments of
$0.01 for all series regardless of the
price. Currently the Exchange trades 361
options classes pursuant to the Penny
Pilot.
The Penny Pilot is a very successful
and efficacious pricing program that is
beneficial to traders, investors, and
public customers, and the Exchange has
received numerous requests to expand
and continue it. This proposal allows
the Penny Pilot to continue in its
current format for one year through
December 31, 2011.
Commensurate with the extension of
the Penny Pilot through 2011, the
Exchange proposes to extend through
2011 the ability to replace on a semiannual basis any Penny Pilot issues that
have been delisted with the next most
actively traded multiply listed options
classes that are not yet included in the
Pilot, based on trading activity in the
previous six months. The replacement
issues would be added to the Pilot on
the second trading day following
January 1, 2011, and July 1, 2011.4 The
replacement issues will be selected
based on trading activity for the six
month period beginning June 1, 2010
and ending November 30, 2010, for the
January 2011 replacement, and the six
month period beginning December 1,
2010 and ending May 31, 2011 for the
July 2011 replacements.5
In conjunction with this extension
proposal, the Exchange agrees to submit
a report to the Commission regarding
the Penny Pilot that will include: (1)
Data and analysis on the number of
quotations generated for options
included in the report; (2) an assessment
of the quotation spreads for the options
included in the report; (3) an assessment
of the impact of the Pilot Program on the
capacity of Phlx’s automated systems;
(4) data reflecting the size and depth of
markets; and (5) any capacity problems
or other problems that arose related to
the operation of the Pilot Program and
how the Exchange addressed them.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 6 in general, and furthers the
objectives of Section 6(b)(5) of the Act 7
in particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
4 The replacement issues will be announced to
the Exchange’s membership via an OTA posted on
the Exchange’s web site.
5 See supra note 3.
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
VerDate Mar<15>2010
18:39 Dec 06, 2010
Jkt 223001
transactions in securities, and to remove
impediments to and perfect the
mechanisms of a free and open market
and a national market system, by
extending the Penny Pilot.
The Exchange notes that the Penny
Pilot is a very successful and efficacious
pricing program that is beneficial to
traders, investors, and public customers,
and the Exchange has received
numerous requests to expand and
continue it. This proposal allows the
Penny Pilot to continue in its current
format for one year through December
31, 2011.
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
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange believes that the
foregoing proposed rule change may
take effect upon filing with the
Commission pursuant to Section
19(b)(3)(A) 8 of the Act and Rule 19b–
4(f)(6)(iii) thereunder 9 because the
foregoing proposed rule change does
not: (i) Significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate.
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
8 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change at least five business
days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
9 17
PO 00000
Frm 00112
Fmt 4703
Sfmt 4703
76063
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–Phlx-2010–167 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–Phlx-2010–167. 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 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 such 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 No. SR–Phlx-2010–
167 and should be submitted on or
before December 28, 2010.
E:\FR\FM\07DEN1.SGM
07DEN1
76064
Federal Register / Vol. 75, No. 234 / Tuesday, December 7, 2010 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–30580 Filed 12–6–10; 8:45 am]
BILLING CODE 8011–01–P
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63396; File No. SR–
NASDAQ–2010–150]
Self-Regulatory Organizations; the
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Extension of the Exchange’s Penny
Pilot Program and Replacement, on a
Semi-Annual Basis, of Penny Pilot
Issues That Have Been Delisted
November 30, 2010.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1, and Rule 19b–4 2 thereunder,
notice is hereby given that on November
22, 2010, The NASDAQ Stock Market
LLC (‘‘Nasdaq’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by Nasdaq. 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
Nasdaq is filing with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) a proposal for the
NASDAQ Options Market (‘‘NOM’’ or
‘‘Exchange’’) to amend Chapter VI,
Section 5 (Minimum Increments) to:
Extend through December 31, 2011, the
Penny Pilot Program in options classes
in certain issues (‘‘Penny Pilot’’ or
‘‘Pilot’’); and replace, on a semi-annual
basis, any Penny Pilot issues that have
been delisted.3
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 The Penny Pilot was established in March 2008
and in October 2009 was expanded and extended
through December 31, 2010. See Securities
Exchange Act Release Nos. 57579 (March 28, 2008),
73 FR 18587 (April 4, 2008) (SR–NASDAQ–2008–
026) (notice of filing and immediate effectiveness
establishing Penny Pilot); 60874 (October 23, 2009),
74 FR 56682 (November 2, 2009) (SR–NASDAQ–
2009–091) (notice of filing and immediate
effectiveness expanding and extending Penny
Pilot); 60965 (November 9, 2009), 74 FR 59292
(November 17, 2009) (SR–NASDAQ–2009–097)
(notice of filing and immediate effectiveness adding
seventy-five classes to Penny Pilot); 61455
emcdonald on DSK2BSOYB1PROD with NOTICES
1 15
VerDate Mar<15>2010
18:39 Dec 06, 2010
Jkt 223001
The text of the proposed rule change
is available from Nasdaq’s Web site at
https://nasdaq.cchwallstreet.com/
Filings/, at Nasdaq’s principal office,
and at the Commission’s Public
Reference Room.
In its filing with the Commission,
Nasdaq 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. Nasdaq 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 filing is to amend
Chapter VI, Section 5 to: (1) Extend
through December 31, 2011, the Penny
Pilot; and (2) Replace, on a semi-annual
basis, any Penny Pilot issues that have
been delisted.
For a pilot period scheduled to expire
on December 31, 2010, the Penny Pilot
allows certain options to be quoted and
traded on the Exchange in minimum
increments of $0.01 for all series in such
options with a price of less than $3.00;
and in minimum increments of $0.05 for
all series in such options with a price
of $3.00 or higher. Options overlying the
PowerShares QQQ Trust (‘‘QQQQ’’)®,
SPDR S&P 500 Exchange Traded Funds
(‘‘SPY’’), and iShares Russell 2000 Index
Funds (‘‘IWM’’), however, are quoted
and traded in minimum increments of
$0.01 for all series regardless of the
price. Currently the Exchange trades 361
options classes pursuant to the Penny
Pilot.
The Penny Pilot is a very successful
and efficacious pricing program that is
beneficial to traders, investors, and
public customers, and the Exchange has
received numerous requests to expand
and continue it. This proposal allows
(February 1, 2010), 75 FR 6239 (February 8, 2010)
(SR–NASDAQ–2010–013) (notice of filing and
immediate effectiveness adding seventy-five classes
to Penny Pilot); 62029 (May 4, 2010), 75 FR 25895
(May 10, 2010) (SR–NASDAQ–2010–053) (notice of
filing and immediate effectiveness adding seventyfive classes to Penny Pilot); and 62617 (July 30,
2010), 75 FR 47670 (August 6, 2010) (SR–
NASDAQ–2010–092) (notice of filing and
immediate effectiveness adding seventy-five classes
to Penny Pilot).
PO 00000
Frm 00113
Fmt 4703
Sfmt 4703
the Penny Pilot to continue in its
current format for one year through
December 31, 2011.
Commensurate with the extension of
the Penny Pilot through 2011, the
Exchange proposes to extend through
2011 the ability to replace on a semiannual basis any Penny Pilot issues that
have been delisted with the next most
actively traded multiply listed options
classes that are not yet included in the
Pilot, based on trading activity in the
previous six months. The replacement
issues would be added to the Pilot on
the second trading day following
January 1, 2011, and July 1, 2011.4 The
replacement issues will be selected
based on trading activity for the six
month period beginning June 1, 2010
and ending November 30, 2010, for the
January 2011 replacement, and the six
month period beginning December 1,
2010 and ending May 31, 2011 for the
July 2011 replacements.5
In conjunction with this extension
proposal, the Exchange agrees to submit
a report to the Commission regarding
the Penny Pilot that will include: (1)
Data and analysis on the number of
quotations generated for options
included in the report; (2) an assessment
of the quotation spreads for the options
included in the report; (3) an assessment
of the impact of the Pilot Program on the
capacity of NOM’s automated systems;
(4) data reflecting the size and depth of
markets; and (5) any capacity problems
or other problems that arose related to
the operation of the Pilot Program and
how the Exchange addressed them.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 6 in general, and furthers the
objectives of Section 6(b)(5) of the Act 7
in particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, and to remove
impediments to and perfect the
mechanisms of a free and open market
and a national market system, by
extending the Penny Pilot.
The Exchange notes that the Penny
Pilot is a very successful and efficacious
pricing program that is beneficial to
traders, investors, and public customers,
and the Exchange has received
numerous requests to expand and
4 The replacement issues will be announced to
the Exchange’s membership via an OTA posted on
the Exchange’s Web site.
5 See supra note 3.
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
E:\FR\FM\07DEN1.SGM
07DEN1
]]>Agencies
[Federal Register Volume 75, Number 234 (Tuesday, December 7, 2010)]
[Notices]
[Pages 76062-76064]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-30580]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63395; File No. SR-Phlx-2010-167]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Extension of the Exchange's Penny Pilot Program and Replacement, on a
Semi-Annual Basis, of Penny Pilot Issues that Have Been Delisted
November 30, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on November 22, 2010, NASDAQ OMX PHLX LLC (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II and III 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 the
Substance of the Proposed Rule Change
The Exchange is filing with the Commission a proposal to amend Phlx
Rule 1034 (Minimum Increments) to: Extend through December 31, 2011,
the Penny Pilot Program in options classes in certain issues (``Penny
Pilot'' or ``Pilot''); and replace, on a semi-annual basis, any Penny
Pilot issues that have been delisted.\3\
---------------------------------------------------------------------------
\3\ The Penny Pilot was established in January 2007 and in
October 2009 was expanded and extended through December 31, 2010.
See Securities Exchange Act Release Nos. 55153 (January 23, 2007),
72 FR 4553 (January 31, 2007)(SR-Phlx-2006-74)(notice of filing and
approval order establishing Penny Pilot); 60873 (October 23, 2009),
74 FR 56675 (November 2, 2009)(SR-Phlx-2009-91)(notice of filing and
immediate effectiveness expanding and extending Penny Pilot); 60966
(November 9, 2009), 74 FR 59331 (November 17, 2009)(SR-Phlx-2009-
94)(notice of filing and immediate effectiveness adding seventy-five
classes to Penny Pilot); 61454 (February 1, 2010), 75 FR 6233
(February 8, 2010)(SR-Phlx-2010-12)(notice of filing and immediate
effectiveness adding seventy-five classes to Penny Pilot); 62028
(May 4, 2010), 75 FR 25890 (May 10, 2010)(SR-Phlx-2010-65)(notice of
filing and immediate effectiveness adding seventy-five classes to
Penny Pilot); and 62616 (July 30, 2010), 75 FR 47664 (August 6,
2010)(SR-Phlx-2010-103)(notice of filing and immediate effectiveness
adding seventy-five classes to Penny Pilot).
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
Website at https://nasdaqomxphlx.cchwallstreet.com/NASDAQOMXPHLX/Filings/, at the principal office of the Exchange, 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 Exchange 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 Exchange 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 filing is to amend Phlx Rule 1034 to: (1)
Extend through December 31, 2011, the Penny Pilot; and (2) replace, on
a semi-annual basis, any Penny Pilot issues that have been delisted.
For a pilot period scheduled to expire on December 31, 2010, the
Penny Pilot allows certain options to be quoted and traded on the
Exchange in minimum increments of $0.01 for all series in such options
with a price of less than $3.00; and in minimum increments of $0.05 for
all series in such options with a price of $3.00 or higher. Options
overlying the PowerShares QQQ Trust (``QQQQ''),[reg] SPDR S&P 500
Exchange Traded Funds (``SPY''), and iShares Russell 2000 Index Funds
(``IWM''), however, are quoted
[[Page 76063]]
and traded in minimum increments of $0.01 for all series regardless of
the price. Currently the Exchange trades 361 options classes pursuant
to the Penny Pilot.
The Penny Pilot is a very successful and efficacious pricing
program that is beneficial to traders, investors, and public customers,
and the Exchange has received numerous requests to expand and continue
it. This proposal allows the Penny Pilot to continue in its current
format for one year through December 31, 2011.
Commensurate with the extension of the Penny Pilot through 2011,
the Exchange proposes to extend through 2011 the ability to replace on
a semi-annual basis any Penny Pilot issues that have been delisted with
the next most actively traded multiply listed options classes that are
not yet included in the Pilot, based on trading activity in the
previous six months. The replacement issues would be added to the Pilot
on the second trading day following January 1, 2011, and July 1,
2011.\4\ The replacement issues will be selected based on trading
activity for the six month period beginning June 1, 2010 and ending
November 30, 2010, for the January 2011 replacement, and the six month
period beginning December 1, 2010 and ending May 31, 2011 for the July
2011 replacements.\5\
---------------------------------------------------------------------------
\4\ The replacement issues will be announced to the Exchange's
membership via an OTA posted on the Exchange's web site.
\5\ See supra note 3.
---------------------------------------------------------------------------
In conjunction with this extension proposal, the Exchange agrees to
submit a report to the Commission regarding the Penny Pilot that will
include: (1) Data and analysis on the number of quotations generated
for options included in the report; (2) an assessment of the quotation
spreads for the options included in the report; (3) an assessment of
the impact of the Pilot Program on the capacity of Phlx's automated
systems; (4) data reflecting the size and depth of markets; and (5) any
capacity problems or other problems that arose related to the operation
of the Pilot Program and how the Exchange addressed them.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \6\ in general, and furthers the objectives of Section
6(b)(5) of the Act \7\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanisms of a free and open
market and a national market system, by extending the Penny Pilot.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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The Exchange notes that the Penny Pilot is a very successful and
efficacious pricing program that is beneficial to traders, investors,
and public customers, and the Exchange has received numerous requests
to expand and continue it. This proposal allows the Penny Pilot to
continue in its current format for one year through December 31, 2011.
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
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange believes that the foregoing proposed rule change may
take effect upon filing with the Commission pursuant to Section
19(b)(3)(A) \8\ of the Act and Rule 19b-4(f)(6)(iii) thereunder \9\
because the foregoing proposed rule change does not: (i) Significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
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-Phlx-2010-167 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-Phlx-2010-167. 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 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 such 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 No. SR-Phlx-2010-167 and should be
submitted on or before December 28, 2010.
[[Page 76064]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-30580 Filed 12-6-10; 8:45 am]
BILLING CODE 8011-01-P
