Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by The NASDAQ Stock Market, LLC to Establish a $5 Strike Price Program, 2156-2158 [2011-438]
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mstockstill on DSKH9S0YB1PROD with NOTICES
2156
Federal Register / Vol. 76, No. 8 / Wednesday, January 12, 2011 / Notices
clients with information about how
their proxies were voted.
Rule 206(4)–6 contains ‘‘collection of
information’’ requirements within the
meaning of the Paperwork Reduction
Act. The respondents are investment
advisers registered with the Commission
that vote proxies with respect to clients’
securities. Advisory clients of these
investment advisers use the information
required by the rule to assess
investment advisers’ proxy voting
policies and procedures and to monitor
the advisers’ performance of their proxy
voting activities. The information also is
used by the Commission staff in its
examination and oversight program.
Without the information collected under
the rules, advisory clients would not
have information they need to assess the
adviser’s services and monitor the
adviser’s handling of their accounts, and
the Commission would be less efficient
and effective in its programs.
The estimated number of investment
advisers subject to the collection of
information requirements under the rule
is 10,207. It is estimated that each of
these advisers is required to spend on
average 10 hours annually documenting
its proxy voting procedures under the
requirements of the rule, for a total
burden of 102,070 hours. We further
estimate that on average, approximately
121 clients of each adviser would
request copies of the underlying policies
and procedures. We estimate that it
would take these advisers 0.1 hours per
client to deliver copies of the policies
and procedures, for a total burden of
123,505 hours. Accordingly, we
estimate that rule 206(4)–6 results in an
annual aggregate burden of collection
for SEC-registered investment advisers
of a total of 225,575 hours.
Written comments are invited on:
(a) Whether the collections of
information are necessary for the proper
performance of the functions of the
Commission, including whether the
information has practical utility; (b) the
accuracy of the Commission’s estimate
of the burdens of the collections of
information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burdens of the collections
of information on respondents,
including through the use of automated
collection techniques or other forms of
information technology. Consideration
will be given to comments and
suggestions submitted in writing within
60 days of this publication.
Please direct your written comments
to Thomas Bayer, Chief Information
Officer, Securities and Exchange
Commission, c/o Remi Pavlik-Simon,
6432 General Green Way, Alexandria,
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VA 22312; or send an e-mail to:
PRA_Mailbox@sec.gov.
Dated: January 5, 2011.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–448 Filed 1–11–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of Investor
Education and Advocacy,
Washington, DC 20549–0213.
Extension:
Rule 18f–1 and Form N–18f–1; SEC
File No. 270–187; OMB Control No.
3235–0211.
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 350l–3520), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Rule 18f–1 (17 CFR 270.18f–1)
enables a registered open-end
management investment company
(‘‘fund’’) that may redeem its securities
in-kind, by making a one-time election,
to commit to make cash redemptions
pursuant to certain requirements
without violating section 18(f) of the
Investment Company Act of 1940 (15
U.S.C. 80a–18(f)). A fund relying on the
rule must file Form N–18F–1 (17 CFR
274.51) to notify the Commission of this
election. The Commission staff
estimates that approximately 52 funds
file Form N–18F–1 annually, and that
each response takes approximately one
hour. Based on these estimates, the total
annual burden hours associated with
the rule is estimated to be 52 hours.
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act, and is not
derived from a comprehensive or even
a representative survey or study of the
costs of Commission rules. An agency
may not conduct or sponsor, and a
person is not required to respond to, a
collection of information unless it
displays a currently valid OMB control
number.
Written comments are invited on: (a)
Whether the collection of information is
necessary for the proper performance of
the functions of the Commission,
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including whether the information has
practical utility; (b) the accuracy of the
Commission’s estimate of the burden of
the collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information collected; and (d)
ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing within 60 days of this
publication.
Please direct your written comments
to Thomas Bayer, Chief Information
Officer, Securities and Exchange
Commission, C/O Remi Pavlik-Simon,
6432 General Green Way, Alexandria,
VA 22312; or send an e-mail to:
PRA_Mailbox@sec.gov.
Dated: January 5, 2011.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–447 Filed 1–11–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63650; File No. SR–
NASDAQ–2011–001]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by The
NASDAQ Stock Market, LLC to
Establish a $5 Strike Price Program
January 6, 2011.
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 January
3, 2011, The NASDAQ Stock Market
LLC (‘‘NASDAQ’’ or ‘‘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 NASDAQ Stock Market LLC
proposes to amend Chapter IV,
Securities Traded on NOM, Section 6,
Series of Open Contracts Open for
Trading, to allow the Exchange to list
1 15
2 17
E:\FR\FM\12JAN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
12JAN1
Federal Register / Vol. 76, No. 8 / Wednesday, January 12, 2011 / Notices
and trade series in intervals of $5 or
greater where the strike price is more
than $200 in up to five option classes on
individual stocks.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://
www.nasdaq.cchwallstreet.com, at the
principal office of the Exchange, on the
Commission’s Web site at https://
www.sec.gov, 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. 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
mstockstill on DSKH9S0YB1PROD with NOTICES
1. Purpose
The purpose of this proposed rule
change is to modify Chapter IV, Section
6(d) to allow the Exchange to list and
trade series in intervals of $5 or greater
where the strike price is more than $200
in up to five option classes on
individual stocks (‘‘$5 Strike Price
Program’’) to provide investors and
traders additional opportunities and
strategies to hedge high priced
securities.
Currently, Chapter IV, Section 6(d)(iii)
permits strike price intervals of $10 or
greater where the strike price is greater
than $200.3 The Exchange is proposing
to add the proposed $5 Strike Price
Program as an exception to the $10 or
greater program language in Chapter IV,
Section 6. The proposal would allow the
Exchange to list series in intervals of $5
or greater where the strike price is more
than $200 in up to five option classes on
individual stocks. The Exchange
specifically proposes to create a new
section (d)(v) to Chapter IV, Section 6
which would state, ‘‘Nasdaq may list
series in intervals of $5 or greater where
the strike price is more than $200 in up
to five (5) option classes on individual
stocks.’’
3 Chapter IV, Section 6(d) also permits strike price
intervals of $5 or greater where the strike price is
greater than $25.00; and $2.50 or greater where the
strike price is $25.00 or less.
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The Exchange believes the $5 Strike
Price Program would offer investors a
greater selection of strike prices at a
lower cost. For example, if an investor
wanted to purchase an option with an
expiration of approximately one month,
a $5 strike interval could offer a wider
choice of strike prices, which may result
in reduced outlays in order to purchase
the option. By way of illustration, using
Google, Inc. (‘‘GOOG’’) as an example, if
GOOG would trade at $610 4 with
approximately one month remaining
until expiration, the front month (one
month remaining) at-the-money call
option (the 610 strike) would trade at
approximately $17.50 and the next
highest available strike (the 620 strike)
would trade at approximately $13.00.
By offering a 615 strike an investor
would be able to trade a GOOG front
month call option at approximately
$15.25, thus providing an additional
choice at a different price point.
Similarly, if an investor wanted to
hedge exposure to an underlying stock
position by selling call options, the
investor may choose an option term
with two months remaining until
expiration. An additional $5 strike
interval could offer additional and
varying yields to the investor. For
example if Apple, Inc. (‘‘AAPL’’) would
trade at $310 5 with approximately two
months remaining until expiration, the
second month (two months remaining)
at-the-money call option (the 310 strike)
would trade at approximately $14.50
and the next highest available strike (the
320) strike would trade at $9.90. The
310 strike would yield a return of 4.67%
and the 320 strike would yield a return
of 3.20%. If the 315 strike were
available, that series would be priced at
approximately $12.20 (a yield of 3.93%)
and would minimize the risk of having
the underlying stock called away at
expiration.
With regard to the impact of this
proposal on system capacity, the
Exchange has analyzed its capacity and
represents that it and the Options Price
Reporting Authority have the necessary
systems capacity to handle the potential
additional traffic associated with the
listing and trading of classes on
individual stocks $5 Strike Price
Program.
The proposed $5 Strike Price Program
would provide investors increased
opportunities to improve returns and
4 The prices listed in this example are
assumptions and not based on actual prices. The
assumptions are made for illustrative purposes only
using the stock price as a hypothetical.
5 The prices listed in this example are
assumptions and not based on actual prices. The
assumptions are made for illustrative purposes only
using the stock price as a hypothetical.
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2157
manage risk in the trading of equity
options that overlie high priced stocks.
In addition, the proposed $5 Strike Price
Program would allow investors to
establish equity options positions that
are better tailored to meet their
investment, trading and risk
management requirements.
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
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. The
Exchange believes the $5 Strike Price
Program proposal would provide the
investing public and other market
participants increased opportunities
because a $5 series in high priced stocks
would provide market participants
additional opportunities to hedge high
priced securities. This would allow
investors to better manage their risk
exposure. Moreover, the Exchange
believes the proposed $5 Strike Price
Program would benefit investors by
giving them more flexibility to closely
tailor their investment decisions in a
greater number of securities.
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 solicited
or received.
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
6 15
7 15
E:\FR\FM\12JAN1.SGM
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
12JAN1
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Federal Register / Vol. 76, No. 8 / Wednesday, January 12, 2011 / Notices
19(b)(3)(A) of the Act 8 and Rule 19b–
4(f)(6) thereunder.9
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.10 Therefore, the
Commission designates the proposal
operative upon filing.11
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–NASDAQ–2011–001 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– NASDAQ–2011–001. This
file number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
8 15
U.S.C. 78s(b)(3)(A).
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.
10 See Securities Exchange Act Release No. 63654
(January 6, 2011) (SR–Phlx–2010–158) (order
approving establishment of a $5 Strike Price
Program).
11 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).
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9 17
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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 SRNASDAQ–2011–001 and should be
submitted on or before February 2, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–438 Filed 1–11–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63651; File No. SR–CBOE–
2011–002]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Establish a $5 Strike
Price Program
January 6, 2011.
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 January
3, 2011, the Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’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 Exchange filed the
proposal as a ‘‘non-controversial’’
proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(6) thereunder.4 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
CBOE proposes to amend
Interpretation and Policy .01 to Rule 5.5
to allow CBOE to list and trade series in
intervals of $5 or greater where the
strike price is more than $200 in up to
five option classes on individual stocks.
The text of the rule proposal is available
on the Exchange’s Web site (https://
www.cboe.org/legal), at the Exchange’s
principal office, 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 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 purpose of this proposed rule
change is to modify Interpretation and
Policy .01 to Rule 5.5 to allow the
Exchange to list and trade series in
intervals of $5 or greater where the
strike price is more than $200 in up to
five option classes on individual stocks
(‘‘$5 Strike Price Program’’) to provide
investors and traders with additional
opportunities and strategies to hedge
high priced securities.
Currently, Interpretation and Policy
.01(e) to Rule 5.5 permits strike price
intervals of $10 or greater where the
strike price is greater than $200.5 The
3 15
4 17
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Sfmt 4703
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
5 Interpretation and Policy .01(d) permits strike
intervals of $2.50 or greater where the strike price
is $25 or less and Interpretation and Policy .01(c)
E:\FR\FM\12JAN1.SGM
12JAN1
]]>Agencies
[Federal Register Volume 76, Number 8 (Wednesday, January 12, 2011)]
[Notices]
[Pages 2156-2158]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-438]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63650; File No. SR-NASDAQ-2011-001]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by The NASDAQ Stock Market, LLC
to Establish a $5 Strike Price Program
January 6, 2011.
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 January 3, 2011, The NASDAQ Stock Market LLC (``NASDAQ'' or
``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 NASDAQ Stock Market LLC proposes to amend Chapter IV,
Securities Traded on NOM, Section 6, Series of Open Contracts Open for
Trading, to allow the Exchange to list
[[Page 2157]]
and trade series in intervals of $5 or greater where the strike price
is more than $200 in up to five option classes on individual stocks.
The text of the proposed rule change is available on the Exchange's
Web site at https://www.nasdaq.cchwallstreet.com, at the principal
office of the Exchange, on the Commission's Web site at https://www.sec.gov, 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. 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 proposed rule change is to modify Chapter IV,
Section 6(d) to allow the Exchange to list and trade series in
intervals of $5 or greater where the strike price is more than $200 in
up to five option classes on individual stocks (``$5 Strike Price
Program'') to provide investors and traders additional opportunities
and strategies to hedge high priced securities.
Currently, Chapter IV, Section 6(d)(iii) permits strike price
intervals of $10 or greater where the strike price is greater than
$200.\3\ The Exchange is proposing to add the proposed $5 Strike Price
Program as an exception to the $10 or greater program language in
Chapter IV, Section 6. The proposal would allow the Exchange to list
series in intervals of $5 or greater where the strike price is more
than $200 in up to five option classes on individual stocks. The
Exchange specifically proposes to create a new section (d)(v) to
Chapter IV, Section 6 which would state, ``Nasdaq may list series in
intervals of $5 or greater where the strike price is more than $200 in
up to five (5) option classes on individual stocks.''
---------------------------------------------------------------------------
\3\ Chapter IV, Section 6(d) also permits strike price intervals
of $5 or greater where the strike price is greater than $25.00; and
$2.50 or greater where the strike price is $25.00 or less.
---------------------------------------------------------------------------
The Exchange believes the $5 Strike Price Program would offer
investors a greater selection of strike prices at a lower cost. For
example, if an investor wanted to purchase an option with an expiration
of approximately one month, a $5 strike interval could offer a wider
choice of strike prices, which may result in reduced outlays in order
to purchase the option. By way of illustration, using Google, Inc.
(``GOOG'') as an example, if GOOG would trade at $610 \4\ with
approximately one month remaining until expiration, the front month
(one month remaining) at-the-money call option (the 610 strike) would
trade at approximately $17.50 and the next highest available strike
(the 620 strike) would trade at approximately $13.00. By offering a 615
strike an investor would be able to trade a GOOG front month call
option at approximately $15.25, thus providing an additional choice at
a different price point.
---------------------------------------------------------------------------
\4\ The prices listed in this example are assumptions and not
based on actual prices. The assumptions are made for illustrative
purposes only using the stock price as a hypothetical.
---------------------------------------------------------------------------
Similarly, if an investor wanted to hedge exposure to an underlying
stock position by selling call options, the investor may choose an
option term with two months remaining until expiration. An additional
$5 strike interval could offer additional and varying yields to the
investor. For example if Apple, Inc. (``AAPL'') would trade at $310 \5\
with approximately two months remaining until expiration, the second
month (two months remaining) at-the-money call option (the 310 strike)
would trade at approximately $14.50 and the next highest available
strike (the 320) strike would trade at $9.90. The 310 strike would
yield a return of 4.67% and the 320 strike would yield a return of
3.20%. If the 315 strike were available, that series would be priced at
approximately $12.20 (a yield of 3.93%) and would minimize the risk of
having the underlying stock called away at expiration.
---------------------------------------------------------------------------
\5\ The prices listed in this example are assumptions and not
based on actual prices. The assumptions are made for illustrative
purposes only using the stock price as a hypothetical.
---------------------------------------------------------------------------
With regard to the impact of this proposal on system capacity, the
Exchange has analyzed its capacity and represents that it and the
Options Price Reporting Authority have the necessary systems capacity
to handle the potential additional traffic associated with the listing
and trading of classes on individual stocks $5 Strike Price Program.
The proposed $5 Strike Price Program would provide investors
increased opportunities to improve returns and manage risk in the
trading of equity options that overlie high priced stocks. In addition,
the proposed $5 Strike Price Program would allow investors to establish
equity options positions that are better tailored to meet their
investment, trading and risk management requirements.
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 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.
The Exchange believes the $5 Strike Price Program proposal would
provide the investing public and other market participants increased
opportunities because a $5 series in high priced stocks would provide
market participants additional opportunities to hedge high priced
securities. This would allow investors to better manage their risk
exposure. Moreover, the Exchange believes the proposed $5 Strike Price
Program would benefit investors by giving them more flexibility to
closely tailor their investment decisions in a greater number of
securities.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants, or Others
No written comments were solicited or received.
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
[[Page 2158]]
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 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.
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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.\10\
Therefore, the Commission designates the proposal operative upon
filing.\11\
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\10\ See Securities Exchange Act Release No. 63654 (January 6,
2011) (SR-Phlx-2010-158) (order approving establishment of a $5
Strike Price Program).
\11\ 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).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2011-001 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- NASDAQ-2011-001. 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-
NASDAQ-2011-001 and should be submitted on or before February 2, 2011.
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\12\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-438 Filed 1-11-11; 8:45 am]
BILLING CODE 8011-01-P
