Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Reestablishing a Pilot Program Relating to Cabinet Trades Until June 1, 2011, 77932-77934 [2010-31290]

Download as PDF 77932 Federal Register / Vol. 75, No. 239 / Tuesday, December 14, 2010 / Notices 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 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 srobinson on DSKHWCL6B1PROD with NOTICES 1. Purpose ISE currently has a payment-for-orderflow (‘‘PFOF’’) program pursuant to which the Exchange charges a PFOF fee of $0.65 per contract for all options classes that are not in the penny pilot program and are not subject to the Exchange’s maker/taker fees. For penny pilot classes, the Exchange charges a PFOF fee of $0.25 per contract. The Exchange’s PFOF fee currently does not apply to market makers executing a Public Customer Order in the Exchange’s Price Improvement Mechanism (‘‘PIM’’). For competitive reasons, the Exchange now proposes to apply its PFOF fee for Public Customer Orders executed in the Exchange’s PIM. As a result of this change, ISE will be more competitive with the PFOF fee that at least one other options exchange 3 assesses for these types of orders. This proposed fee change will also allow ISE market makers to better compete for order flow. The Exchange has designated this proposal to be operative on December 1, 2010. 2. Statutory Basis The basis under the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’) for this proposed rule change is the requirement under Section 6(b)(4) that an exchange have an equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. In particular, the proposed fee change will 3 For example, the Chicago Board Options Exchange, Inc. (‘‘CBOE’’) currently charges a marketing fee of up to $0.65 per contract for customer orders executed in its Automated Improvement Mechanism. See CBOE Fees Schedule dated October 29, 2010. VerDate Mar<15>2010 17:09 Dec 13, 2010 Jkt 223001 allow the Exchange and its market makers to better compete for order flow and thus enhance competition. B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule change does not 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 The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3) of the Act 4 and Rule 19b–4(f)(2) thereunder 5 because it establishes a due, fee, or other charge imposed on its members by ISE. 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–ISE–2010–113 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–ISE–2010–113. This file 4 15 5 17 PO 00000 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). Frm 00112 Fmt 4703 Sfmt 4703 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,6 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–ISE– 2010–113 and should be submitted on or before January 4, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–31328 Filed 12–13–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–63475; File No. SR– NYSEAMEX–2010–114] Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Reestablishing a Pilot Program Relating to Cabinet Trades Until June 1, 2011 December 8, 2010. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 6 The text of the proposed rule change is available on the Commission’s Web site at https:// www.sec.gov. 7 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. E:\FR\FM\14DEN1.SGM 14DEN1 Federal Register / Vol. 75, No. 239 / Tuesday, December 14, 2010 / Notices notice is hereby given that on December 2, 2010, NYSE Amex LLC (‘‘Exchange’’ or ‘‘NYSE Amex’’) 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 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 establish and extend its program that allows transactions to take place at a price that is below $1 per option contract until June 1, 201 [sic]. The text of the proposed rule change is available at the Exchange, 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 the Statutory Basis for, the Proposed Rule Change srobinson on DSKHWCL6B1PROD with NOTICES 1. Purpose The purpose of this filing is to reestablish the Pilot Program 3 under Rule 968NY to allow accommodation transactions (‘‘Cabinet Trades’’) to take place at a price that is below $1 per option contract, and to extend the program to June 1, 2011. The Exchange proposes to extend the program to the same date as The Chicago Board Options Exchange (‘‘CBOE’’).4 The Pilot Program expired on July 1, 2010. An ‘‘accommodation’’ or ‘‘cabinet’’ trade refers to trades in listed options on the Exchange that are worthless or not actively traded. Cabinet trading is 3 See Securities Exchange Act Release No. 61726 (March 17, 2010), 75 FR 14234 (March 24, 2010) (SR–NYSE Amex–2010–21). 4 See Securities Exchange Act Release No. 62192 (May 28, 2010), 75 FR 31828 (June 4, 2010) (SR– CBOE–2010–052). VerDate Mar<15>2010 17:09 Dec 13, 2010 Jkt 223001 generally conducted in accordance with the Exchange Rules, except as provided in Exchange Rule 968NY Cabinet Trades (Accommodation Transactions), which sets forth specific procedures for engaging in cabinet trades. Rule 968NY currently provides for cabinet transactions to occur via open outcry at a cabinet price of a $1 per option contract in any options series open for trading in the Exchange, except that the Rule is not applicable to trading in option classes participating in the Penny Pilot Program. Under the procedures, bids and offers (whether opening or closing a position) at a price of $1 per option contract may be represented in the trading crowd by a Floor Broker or by a Market-Maker or provided in response to a request by a Trading Official, a Floor Broker or a Market-Maker, but must yield priority to all resting orders in the Cabinet (those orders held by the Trading Official, and which resting cabinet orders may be closing only). So long as both the buyer and the seller yield to orders resting in the cabinet book, opening cabinet bids can trade with opening cabinet offers at $1 per option contract. The Exchange temporarily amended the procedures through July 1, 2010 to allow transactions to take place in open outcry at a price of at least $0 but less than $1 per option contract. These lower priced transactions were permitted to be traded pursuant to the same procedures applicable to $1 cabinet trades, except that (i) bids and offers for opening transactions were only permitted to accommodate closing transactions in order to limit use of the procedure to liquidations of existing positions, and (ii) the procedures were also made available for trading in option classes participating in the Penny Pilot Program.5 The Exchange believed (and continues to believe) that allowing a price of at least $0 but less than $1 would better accommodate the closing of options positions in series that were worthless or not actively traded, particularly due to recent market conditions which had resulted in a significant number of series being outof-the-money. For example, a market participant might have a long position 5 Currently the $1 cabinet trading procedures are limited to options classes traded in $0.05 or $0.10 standard increment. The $1 cabinet trading procedures are not available in Penny Pilot Program classes because in those classes an option series can trade in a standard increment as low as $0.01 per share (or $1.00 per option contract with a 100 share multiplier). Because the instant rule change would allow trading below $0.01 per share (or $1.00 per option contract with a 100 share multiplier), the procedures would be made available for all classes, including those classes participating in the Penny Pilot Program. PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 77933 in a call series with a strike price of $100 and the underlying stock might be trading at $30. In such an instance, there might not otherwise be a market for that person to close-out the position even at the $1 cabinet price (e.g., the series might be quoted no bid). As with other accommodation liquidations under Rule 968NY, transactions that occur for less than $1 will not be disseminated to the public on the consolidated tape. In addition, as with other accommodation liquidations under Rule 968NY, the transactions will be exempt from the Consolidated Options Audit Trail (‘‘COATS’’) requirements of Exchange Rule 955NY. Order Format and System Entry Requirements. However, the Exchange will maintain quotation, order and transaction information for the transactions in the same format as the COATS data is maintained. In this regard, all transactions for less than $1 must be reported to the Exchange following the close of each business day. The Pilot Program lapsed on July 1, 2010. The Exchange is proposing to reinstate the Program at this time to be in place for end-of-year liquidations. During the period from July 1 to date, no sub-penny cabinet trades were executed on the Exchange. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with Section 6(b) 6 of the Securities Exchange Act of 1934 (the ‘‘Act’’), in general, and furthers the objectives of Section 6(b)(5) 7 in particular in that it is designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, to remove impediments to and to perfect the mechanism for a free and open market and a national market system and, in general, to protect investors and the public interest. The Exchange believes that allowing for liquidations at a price less than $1 per option contract will better facilitate the closing of options positions that are worthless or not actively trading, especially in Penny Pilot issues where Cabinet Trades are not otherwise permitted. 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. 6 15 7 15 E:\FR\FM\14DEN1.SGM U.S.C. 78f(b). U.S.C. 78f(b)(5). 14DEN1 77934 Federal Register / Vol. 75, No. 239 / Tuesday, December 14, 2010 / Notices C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others change is consistent with the Act. Comments may be submitted by any of the following methods: No written comments were solicited or received with respect to the proposed rule change. • 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–2010–114 on the subject line. Electronic Comments III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 8 and Rule 19b–4(f)(6) thereunder 9 because the proposal does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) by its terms, become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest.10 The Exchange has requested that the Commission waive the 30-day operative delay period. The Commission hereby grants the request. The Commission notes that the proposal is nearly identical to the rules of another exchange.11 Therefore, the Commission believes it is consistent with the protection of investors and the public interest to waive the 30-day operative delay and designates the proposal as operative upon filing.12 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.13 IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule 8 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 10 In addition, Rule 19b–4(f)(6) provides that the Exchange must provide the Commission 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 satisfied this requirement. 11 See CBOE Rule 6.54, Interpretations and Policies .03. 12 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 13 15 U.S.C. 78s(b)(3)(C). srobinson on DSKHWCL6B1PROD with NOTICES 9 17 VerDate Mar<15>2010 18:24 Dec 13, 2010 Jkt 223001 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–2010–114. 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 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 Number SR– NYSEAmex–2010–114 and should be submitted on or before January 4, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–31290 Filed 12–13–10; 8:45 am] BILLING CODE 8011–01–P 14 17 PO 00000 CFR 200.30–3(a)(12). Frm 00114 Fmt 4703 Sfmt 4703 SMALL BUSINESS ADMINISTRATION Small Business Information Security Task Force U.S. Small Business Administration. ACTION: Notice of meeting minutes. AGENCY: The SBA is issuing this notice to publish meeting minutes for the Small Business Information Security Task Force Meeting. DATES: 1 p.m., Wednesday, November 10, 2010. ADDRESSES: The meeting was held via teleconference. SUMMARY: Pursuant to section 507(i)(4)(A) of the Credit Card Accountability Responsibility and Disclosure Act of 2009, SBA submits the meeting minutes for the second meeting of the Small Business Information Security Task Force. Chairman Rusty Pickens called the meeting to order on November 10, 2010 at 1 p.m. Roll call was taken and a quorum was established. An overview of the last meeting was provided. Introductions were provided for Dr. Babita Gupta, and Katherine White, both of whom were unable to attend the first meeting. Dr. Gupta and Ms. White then each provided a brief overview to the group. Ms. Frances Henderson provided that the focus for today is on what resources the group will need going forward in terms of personnel, systems, and software as there will be lots of material to collate before being able to produce a final report. Input to define tasks and how to keep the group on schedule were sought. It was indicated the work plan will continue to be developed. Mr. Pickens recapped the Task Force scope of work and asked everyone to keep the charter readily available and to review Section 507 of the authorizing law as it provides the requirements for the work the Task Force has been directed to complete. The focus is to examine resources available nationwide for small business on privacy and technology concerns and then collate the data. A gap analysis then needs to be performed to determine how effective the programs are and provide a report to the Administrator with recommendations of what can be done to improve on them. The Task Force has until the end of 2013 to complete the report but it is hoped that the work could be completed sooner. It was also clarified that there is no authorization for the Task Force to establish any new programs; the Task Force has only been directed to report to the Administrator their recommendations. SUPPLEMENTARY INFORMATION: E:\FR\FM\14DEN1.SGM 14DEN1

Agencies

[Federal Register Volume 75, Number 239 (Tuesday, December 14, 2010)]
[Notices]
[Pages 77932-77934]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-31290]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63475; File No. SR-NYSEAMEX-2010-114]


Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Reestablishing a 
Pilot Program Relating to Cabinet Trades Until June 1, 2011

December 8, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\

[[Page 77933]]

notice is hereby given that on December 2, 2010, NYSE Amex LLC 
(``Exchange'' or ``NYSE Amex'') 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 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to establish and extend its program that 
allows transactions to take place at a price that is below $1 per 
option contract until June 1, 201 [sic]. The text of the proposed rule 
change is available at the Exchange, 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this filing is to re-establish the Pilot Program \3\ 
under Rule 968NY to allow accommodation transactions (``Cabinet 
Trades'') to take place at a price that is below $1 per option 
contract, and to extend the program to June 1, 2011. The Exchange 
proposes to extend the program to the same date as The Chicago Board 
Options Exchange (``CBOE'').\4\ The Pilot Program expired on July 1, 
2010.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 61726 (March 17, 
2010), 75 FR 14234 (March 24, 2010) (SR-NYSE Amex-2010-21).
    \4\ See Securities Exchange Act Release No. 62192 (May 28, 
2010), 75 FR 31828 (June 4, 2010) (SR-CBOE-2010-052).
---------------------------------------------------------------------------

    An ``accommodation'' or ``cabinet'' trade refers to trades in 
listed options on the Exchange that are worthless or not actively 
traded. Cabinet trading is generally conducted in accordance with the 
Exchange Rules, except as provided in Exchange Rule 968NY Cabinet 
Trades (Accommodation Transactions), which sets forth specific 
procedures for engaging in cabinet trades. Rule 968NY currently 
provides for cabinet transactions to occur via open outcry at a cabinet 
price of a $1 per option contract in any options series open for 
trading in the Exchange, except that the Rule is not applicable to 
trading in option classes participating in the Penny Pilot Program. 
Under the procedures, bids and offers (whether opening or closing a 
position) at a price of $1 per option contract may be represented in 
the trading crowd by a Floor Broker or by a Market-Maker or provided in 
response to a request by a Trading Official, a Floor Broker or a 
Market-Maker, but must yield priority to all resting orders in the 
Cabinet (those orders held by the Trading Official, and which resting 
cabinet orders may be closing only). So long as both the buyer and the 
seller yield to orders resting in the cabinet book, opening cabinet 
bids can trade with opening cabinet offers at $1 per option contract.
    The Exchange temporarily amended the procedures through July 1, 
2010 to allow transactions to take place in open outcry at a price of 
at least $0 but less than $1 per option contract. These lower priced 
transactions were permitted to be traded pursuant to the same 
procedures applicable to $1 cabinet trades, except that (i) bids and 
offers for opening transactions were only permitted to accommodate 
closing transactions in order to limit use of the procedure to 
liquidations of existing positions, and (ii) the procedures were also 
made available for trading in option classes participating in the Penny 
Pilot Program.\5\ The Exchange believed (and continues to believe) that 
allowing a price of at least $0 but less than $1 would better 
accommodate the closing of options positions in series that were 
worthless or not actively traded, particularly due to recent market 
conditions which had resulted in a significant number of series being 
out-of-the-money. For example, a market participant might have a long 
position in a call series with a strike price of $100 and the 
underlying stock might be trading at $30. In such an instance, there 
might not otherwise be a market for that person to close-out the 
position even at the $1 cabinet price (e.g., the series might be quoted 
no bid).
---------------------------------------------------------------------------

    \5\ Currently the $1 cabinet trading procedures are limited to 
options classes traded in $0.05 or $0.10 standard increment. The $1 
cabinet trading procedures are not available in Penny Pilot Program 
classes because in those classes an option series can trade in a 
standard increment as low as $0.01 per share (or $1.00 per option 
contract with a 100 share multiplier). Because the instant rule 
change would allow trading below $0.01 per share (or $1.00 per 
option contract with a 100 share multiplier), the procedures would 
be made available for all classes, including those classes 
participating in the Penny Pilot Program.
---------------------------------------------------------------------------

    As with other accommodation liquidations under Rule 968NY, 
transactions that occur for less than $1 will not be disseminated to 
the public on the consolidated tape. In addition, as with other 
accommodation liquidations under Rule 968NY, the transactions will be 
exempt from the Consolidated Options Audit Trail (``COATS'') 
requirements of Exchange Rule 955NY. Order Format and System Entry 
Requirements. However, the Exchange will maintain quotation, order and 
transaction information for the transactions in the same format as the 
COATS data is maintained. In this regard, all transactions for less 
than $1 must be reported to the Exchange following the close of each 
business day.
    The Pilot Program lapsed on July 1, 2010. The Exchange is proposing 
to reinstate the Program at this time to be in place for end-of-year 
liquidations. During the period from July 1 to date, no sub-penny 
cabinet trades were executed on the Exchange.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) \6\ of the Securities Exchange Act of 1934 (the ``Act''), 
in general, and furthers the objectives of Section 6(b)(5) \7\ in 
particular in that it is designed to promote just and equitable 
principles of trade, to prevent fraudulent and manipulative acts, to 
remove impediments to and to perfect the mechanism for a free and open 
market and a national market system and, in general, to protect 
investors and the public interest. The Exchange believes that allowing 
for liquidations at a price less than $1 per option contract will 
better facilitate the closing of options positions that are worthless 
or not actively trading, especially in Penny Pilot issues where Cabinet 
Trades are not otherwise permitted.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 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.

[[Page 77934]]

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 foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder \9\ because 
the proposal does not: (i) Significantly affect the protection of 
investors or the public interest; (ii) impose any significant burden on 
competition; and (iii) by its terms, become operative for 30 days from 
the date on which it was filed, or such shorter time as the Commission 
may designate if consistent with the protection of investors and the 
public interest.\10\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ In addition, Rule 19b-4(f)(6) provides that the Exchange 
must provide the Commission 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 satisfied this 
requirement.
---------------------------------------------------------------------------

    The Exchange has requested that the Commission waive the 30-day 
operative delay period. The Commission hereby grants the request. The 
Commission notes that the proposal is nearly identical to the rules of 
another exchange.\11\ Therefore, the Commission believes it is 
consistent with the protection of investors and the public interest to 
waive the 30-day operative delay and designates the proposal as 
operative upon filing.\12\
---------------------------------------------------------------------------

    \11\ See CBOE Rule 6.54, Interpretations and Policies .03.
    \12\ For purposes only of waiving the operative delay for this 
proposal, 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.\13\
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

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-NYSEAmex-2010-114 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-2010-114. 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 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 Number SR-
NYSEAmex-2010-114 and should be submitted on or before January 4, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31290 Filed 12-13-10; 8:45 am]
BILLING CODE 8011-01-P
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