Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Clarify Reciprocal Listing Respecting a $5 Strike Program for Stock Options, 2160-2162 [2011-443]
Download as PDF
<![CDATA[
2160
Federal Register / Vol. 76, No. 8 / Wednesday, January 12, 2011 / Notices
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:
mstockstill on DSKH9S0YB1PROD with NOTICES
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–CBOE–2011–002 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–CBOE–2011–002. 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
VerDate Mar<15>2010
17:25 Jan 11, 2011
Jkt 223001
available publicly. All submissions
should refer to File Number SR–CBOE–
2011–002 and should be submitted on
or before February 2, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–439 Filed 1–11–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63656; File No. SR–CBOE–
2011–003]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Clarify Reciprocal
Listing Respecting a $5 Strike Program
for Stock Options
January 6, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on January 4,
2011, the Chicago Board Options
Exchange, Incorporated (‘‘Exchange’’ or
‘‘CBOE’’) filed with the Securities and
Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The 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 clarify that the
Exchange may list $5 strike prices on
any other option classes designated by
other securities exchanges that employ
a $5 Strike Program. The text of the rule
proposal is available on the Exchange’s
Web site (https://www.cboe.org/legal), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
1 15
PO 00000
Frm 00080
Fmt 4703
Sfmt 4703
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
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Recently, the Exchange proposed to
adopt a $5 Strike Program (by modifying
Interpretation and Policy .01 to Rule
5.5), which will 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 (5) option classes
on individual stocks (‘‘$5 Strike
Program’’).5 The purpose of this
proposed rule change is to amend the
text of Rule 5.5.01 to clarify that the
Exchange may list $5 strike prices on
any other option classes designated by
other securities exchanges that employ
a $5 Strike Program.
The Exchange has several strike
setting programs that permit the
Exchange to choose a fixed number of
classes to participate in the programs.
For each of these programs, the
Exchange’s rules also expressly set forth
reciprocity provisions.6 In other words,
the Exchange is permitted to list series
for classes that are selected by other
securities exchanges that employ similar
programs under their respective rules.
While the recent proposal to establish
the $5 Strike Program did not
specifically address a reciprocity
provision, the Exchange’s existing strike
setting programs demonstrate the intent
5 See
SR–CBOE–2011–002.
Rules 5.5(d)(1) and 24.9(a)(2)(A)(i), which
permit the Exchange to select five option classes to
participate in the Short Term Option Series
Program and to also list Short Term Option Series
on any option classes that are selected by other
securities exchanges that employ a similar program
under their rules. See also Rules 5.5(e)(1) and
24.9(a)(2)(B)(i), which permit the Exchange to select
five option classes to participate in the Quarterly
Option Series Program and to also list Quarterly
Option Series on any option classes that are
selected by other securities exchanges that employ
a similar program under their rules. Reciprocity
provisions also exist for the $2.50 Strike Program,
the $1 Strike Program and the $0.50 Strike Program.
See Rules 5.5.01(a), 5.5.05(a) and 5.5.01(b).
6 See
E:\FR\FM\12JAN1.SGM
12JAN1
Federal Register / Vol. 76, No. 8 / Wednesday, January 12, 2011 / Notices
of a reciprocity provision and the need
for it to implement the $5 Strike
Program. Clarifying that reciprocity is
permitted is pro-competitive and will
eliminate confusion. For example,
CBOE will be able to list all series in
option classes chosen by other
exchanges and investors will be able to
access these series across all exchanges
that employ a $5 Strike Program. CBOE
believes that this is consistent with the
goals of the National Market System and
the concepts of price improvement and
best execution. Also, because all of the
existing strike price programs that have
been adopted by the various exchanges
include reciprocity provisions, the
Exchange believes that the current
proposal will eliminate confusion and
prevent listing errors amongst the
exchanges.
It is expected that other options
exchanges that have also proposed to
establish a $5 Strike Program will
submit similar clarifying proposals.
mstockstill on DSKH9S0YB1PROD with NOTICES
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the Act 7
and the rules and regulations
thereunder and, in particular, the
requirements of Section 6(b) of the Act.8
Specifically, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 9 requirements that
the rules of an exchange be 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
codifying a reciprocity provision to the
$5 Strike Price Program eliminate
investor confusion and promote
competition. While the reciprocity
provision will generate additional quote
traffic, the Exchange does not believe
that this increased traffic will become
unmanageable since the proposal is
limited to a fixed number of classes per
exchange. Further, the Exchange does
not believe that the proposal will result
in a material proliferation of additional
series because it is limited to a fixed
number of classes per exchange and the
Exchange does not believe that the
additional price points will result in
fractured liquidity.
7 15
U.S.C. 78s(b)(1).
U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
8 15
VerDate Mar<15>2010
17:25 Jan 11, 2011
Jkt 223001
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CBOE 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 with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not significantly affect the
protection of investors or the public
interest, does not impose any significant
burden on competition, and, by its
terms, does not become operative for 30
days from the date on which it was
filed, or such shorter time as the
Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 10 and Rule 19b–
4(f)(6) thereunder.11
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 proposed reciprocity
provision is similar to reciprocity
provisions in place for other option
strike price programs,12 which have
been previously approved by the
Commission.13 Therefore, the
Commission designates the proposal
operative upon filing.14
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
10 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.
12 See Rule 5.5, Interpretations and Policies
.01(a)(1) ($1 Strike Program), .01(b) ($0.50 Strike
Program), and .05(a) ($2.50 Strike Program).
13 See, e.g., Securities Exchange Act Release No.
60694 (September 18, 2009); 74 FR 49048
(September 25, 2009) (SR–Phlx-2009–65)
(approving NASDAQ OMX PHLX’s $0.50 Strike
Program, with reciprocity provision).
14 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).
11 17
PO 00000
Frm 00081
Fmt 4703
Sfmt 4703
2161
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–CBOE–2011–003 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–CBOE–2011–003. 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–CBOE–
2011–003 and should be submitted on
or before February 2, 2011.
E:\FR\FM\12JAN1.SGM
12JAN1
2162
Federal Register / Vol. 76, No. 8 / Wednesday, January 12, 2011 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Elizabeth M. Murphy,
Secretary.
https://www.msrb.org/Rules-andInterpretations/SEC–Filings/2010–
Filings.aspx, at the MSRB’s principal
office, and at the Commission’s Public
Reference Room.
[FR Doc. 2011–443 Filed 1–11–11; 8:45 am]
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
MSRB 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 MSRB has
prepared summaries, set forth in
Sections A, B, and C below, of the most
significant aspects of such statements.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63645; File No. SR–MSRB–
2010–18]
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Notice of Filing and Immediate
Effectiveness of Revisions to the
Selection Specifications for the
Municipal Securities Representative
Qualification Examination (Series 52)
Program
January 5, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (‘‘the
Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
23, 2010, the Municipal Securities
Rulemaking Board (‘‘Board’’ or ‘‘MSRB’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’) a
proposed rule change as described in
Items I, II, and III below, which Items
have been substantially prepared by the
MSRB. The MSRB has designated the
proposed rule change as constituting a
stated policy, practice, or interpretation
with respect to the meaning,
administration, or enforcement of an
existing rule of the self-regulatory
organization pursuant to Section
19(b)(3)(A)(i) 3 of the Act and Rule 19b–
4(f)(1) thereunder,4 which renders the
proposal effective upon filing with the
Commission. The MSRB proposes to
implement the revised Series 52
examination program on January 3,
2011. The Commission is publishing
this notice to solicit comments on the
proposed rule change from interested
persons.
mstockstill on DSKH9S0YB1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The MSRB is filing with the
Commission revisions to the selection
specifications for the Municipal
Securities Representative Qualification
Examination (Series 52) program.
The text of the proposed rule change
is available on the MSRB’s Web site at
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(i).
4 17 CFR 240.19b–4(f)(1).
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Section 15B(b)(2)(A) of the Act 5
authorizes the MSRB to prescribe
standards of training, experience,
competence, and such other
qualifications as the Board finds
necessary or appropriate in the public
interest or for the protection of investors
and municipal entities or obligated
persons. On November 10, 2010, the
MSRB filed with the Commission a
proposed rule change (File No. SR–
MSRB–2010–12) consisting of revisions
to the study outline and selection
specifications for the Municipal
Securities Representative Qualification
(Series 52) program. On November 12,
2010, the Commission published a
notice of filing and immediate
effectiveness for the revisions to the
study outline and selection
specifications for the Series 52
program.6 The MSRB recently became
aware that the selection specifications
filed with the Commission on November
10, 2010, contained a technical error
and the MSRB is filing this proposed
rule change to correct that error. The
selection specifications indicate how
many questions are asked per
examination on every topic.
2. Statutory Basis
The MSRB believes that the proposed
revisions to the selection specifications
are consistent with the provisions of
Section 15B(b)(2)(A) of the Act, which
authorizes the MSRB to prescribe
standards of training, experience,
1 15
VerDate Mar<15>2010
17:25 Jan 11, 2011
U.S.C. 78o–4(b)(2)(A).
Release No. 34–63310 (November 12, 2010);
75 FR 70760 (November 18, 2010).
competence, and such other
qualifications as the Board finds
necessary or appropriate in the public
interest or for the protection of investors
and municipal entities or obligated
persons. Section 15B(b)(2)(A) of the Act
also provides that the Board may
appropriately classify municipal
securities brokers, municipal securities
dealers, and municipal advisors, and
persons associated with municipal
securities brokers, municipal securities
dealers, and municipal advisors and
require persons in any such class to pass
tests prescribed by the Board.
The MSRB believes that the proposed
revisions to the selection specifications
are consistent with the provisions of
Section 15B(b)(2)(A) of the Act in that
the revisions will ensure that certain
key concepts or rules are tested on each
administration of the examination in
order to test the competency of
individuals seeking to qualify as
municipal securities representatives
with respect to their knowledge about
MSRB rules and the municipal
securities market.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The MSRB 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, as amended.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
Written comments were neither
solicited nor received on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The proposed rule change has become
effective pursuant to Section
19(b)(3)(A)(i) of the Act 7 and Rule 19b–
–4(f)(1) 8 thereunder, in that the
proposed rule change constitutes a
stated policy, practice, or interpretation
with respect to the meaning,
administration, or enforcement of an
existing rule of the self-regulatory
organization. The MSRB proposes to
implement the revised Series 52
examination program on January 3,
2011. 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
5 15
6 See
Jkt 223001
PO 00000
Frm 00082
Fmt 4703
Sfmt 4703
7 15
8 17
E:\FR\FM\12JAN1.SGM
U.S.C. 78s(b)(3)(A)(i).
CFR 240.19b–4(f)(1).
12JAN1
]]>Agencies
[Federal Register Volume 76, Number 8 (Wednesday, January 12, 2011)]
[Notices]
[Pages 2160-2162]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-443]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63656; File No. SR-CBOE-2011-003]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Clarify Reciprocal Listing Respecting a $5 Strike
Program for Stock Options
January 6, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on January 4, 2011, the Chicago Board Options Exchange,
Incorporated (``Exchange'' or ``CBOE'') filed with the Securities and
Exchange Commission (the ``Commission'') the proposed rule change as
described in Items I and II below, which Items have been prepared by
the Exchange. The 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
CBOE proposes to clarify that the Exchange may list $5 strike
prices on any other option classes designated by other securities
exchanges that employ a $5 Strike Program. The text of the rule
proposal is available on the Exchange's Web site (https://www.cboe.org/legal), at the Exchange's Office of the Secretary, 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
Recently, the Exchange proposed to adopt a $5 Strike Program (by
modifying Interpretation and Policy .01 to Rule 5.5), which will 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 (5) option
classes on individual stocks (``$5 Strike Program'').\5\ The purpose of
this proposed rule change is to amend the text of Rule 5.5.01 to
clarify that the Exchange may list $5 strike prices on any other option
classes designated by other securities exchanges that employ a $5
Strike Program.
---------------------------------------------------------------------------
\5\ See SR-CBOE-2011-002.
---------------------------------------------------------------------------
The Exchange has several strike setting programs that permit the
Exchange to choose a fixed number of classes to participate in the
programs. For each of these programs, the Exchange's rules also
expressly set forth reciprocity provisions.\6\ In other words, the
Exchange is permitted to list series for classes that are selected by
other securities exchanges that employ similar programs under their
respective rules.
---------------------------------------------------------------------------
\6\ See Rules 5.5(d)(1) and 24.9(a)(2)(A)(i), which permit the
Exchange to select five option classes to participate in the Short
Term Option Series Program and to also list Short Term Option Series
on any option classes that are selected by other securities
exchanges that employ a similar program under their rules. See also
Rules 5.5(e)(1) and 24.9(a)(2)(B)(i), which permit the Exchange to
select five option classes to participate in the Quarterly Option
Series Program and to also list Quarterly Option Series on any
option classes that are selected by other securities exchanges that
employ a similar program under their rules. Reciprocity provisions
also exist for the $2.50 Strike Program, the $1 Strike Program and
the $0.50 Strike Program. See Rules 5.5.01(a), 5.5.05(a) and
5.5.01(b).
---------------------------------------------------------------------------
While the recent proposal to establish the $5 Strike Program did
not specifically address a reciprocity provision, the Exchange's
existing strike setting programs demonstrate the intent
[[Page 2161]]
of a reciprocity provision and the need for it to implement the $5
Strike Program. Clarifying that reciprocity is permitted is pro-
competitive and will eliminate confusion. For example, CBOE will be
able to list all series in option classes chosen by other exchanges and
investors will be able to access these series across all exchanges that
employ a $5 Strike Program. CBOE believes that this is consistent with
the goals of the National Market System and the concepts of price
improvement and best execution. Also, because all of the existing
strike price programs that have been adopted by the various exchanges
include reciprocity provisions, the Exchange believes that the current
proposal will eliminate confusion and prevent listing errors amongst
the exchanges.
It is expected that other options exchanges that have also proposed
to establish a $5 Strike Program will submit similar clarifying
proposals.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act \7\ and the rules and regulations thereunder and, in
particular, the requirements of Section 6(b) of the Act.\8\
Specifically, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \9\ requirements that the rules of
an exchange be 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 codifying a reciprocity
provision to the $5 Strike Price Program eliminate investor confusion
and promote competition. While the reciprocity provision will generate
additional quote traffic, the Exchange does not believe that this
increased traffic will become unmanageable since the proposal is
limited to a fixed number of classes per exchange. Further, the
Exchange does not believe that the proposal will result in a material
proliferation of additional series because it is limited to a fixed
number of classes per exchange and the Exchange does not believe that
the additional price points will result in fractured liquidity.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78s(b)(1).
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
CBOE 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 with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not significantly
affect the protection of investors or the public interest, does not
impose any significant burden on competition, and, by its terms, does
not become operative for 30 days from the date on which it was filed,
or such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
---------------------------------------------------------------------------
The Exchange has requested that the Commission waive the 30-day
operative delay. The Commission believes that waiver of the operative
delay is consistent with the protection of investors and the public
interest because the proposed reciprocity provision is similar to
reciprocity provisions in place for other option strike price
programs,\12\ which have been previously approved by the
Commission.\13\ Therefore, the Commission designates the proposal
operative upon filing.\14\
---------------------------------------------------------------------------
\12\ See Rule 5.5, Interpretations and Policies .01(a)(1) ($1
Strike Program), .01(b) ($0.50 Strike Program), and .05(a) ($2.50
Strike Program).
\13\ See, e.g., Securities Exchange Act Release No. 60694
(September 18, 2009); 74 FR 49048 (September 25, 2009) (SR-Phlx-
2009-65) (approving NASDAQ OMX PHLX's $0.50 Strike Program, with
reciprocity provision).
\14\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-CBOE-2011-003 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-CBOE-2011-003. 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-CBOE-2011-003 and should be
submitted on or before February 2, 2011.
[[Page 2162]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-443 Filed 1-11-11; 8:45 am]
BILLING CODE 8011-01-P
