Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX LLC Relating to Option Expiration Months and Series of Options Open for Trading on the Exchange, 2931-2934 [2011-901]
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Federal Register / Vol. 76, No. 11 / Tuesday, January 18, 2011 / Notices
Commission a Request of the United
States Postal Service to Add Parcel
Select Contract 1 to Competitive Product
List. Documents are available at https://
www.prc.gov, Docket Nos. MC2011–16,
CP2011–53.
gives notice that on December 30, 2010,
it filed with the Postal Regulatory
Commission a Request of the United
States Postal Service to Add Priority
Mail Contract 35 to Competitive Product
List. Documents are available at https://
www.prc.gov, Docket Nos. MC2011–18,
CP2011–57.
2931
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63609; File No. SR–
NYSEArca–2010–116]
Neva R. Watson,
Attorney, Legislative.
BILLING CODE 7710–12–P
December 27, 2010.
BILLING CODE 7710–12–P
[FR Doc. 2011–856 Filed 1–14–11; 8:45 am]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change Relating to the Listing
and Trading of the WisdomTree Asia
Bond Fund
[FR Doc. 2011–859 Filed 1–14–11; 8:45 am]
Neva R. Watson,
Attorney, Legislative.
Correction
In notice document 2010–32943
beginning on page 194 the issue of
Monday, January 3, 2011 make the
following correction:
On page 199, in the third column, in
the last line before the signature block,
‘‘January 18, 2011’’ should read ‘‘January
24, 2011’’.
POSTAL SERVICE
Product Change—Priority Mail
Negotiated Service Agreement
SECURITIES AND EXCHANGE
COMMISSION
Postal ServiceTM.
Notice.
AGENCY:
ACTION:
Sunshine Act Meeting
Postal Service notice of filing
of a request with the Postal Regulatory
Commission to add a domestic shipping
services contract to the list of Negotiated
Service Agreements in the Mail
Classification Schedule’s Competitive
Products List pursuant to 39 U.S.C. 3642
and 3632(b)(3).
DATES: January 18, 2011.
FOR FURTHER INFORMATION CONTACT:
Elizabeth A. Reed, 202–268–3179.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that on December 30, 2010,
it filed with the Postal Regulatory
Commission a Request of the United
States Postal Service to Add Priority
Mail Contract 34 to Competitive Product
List. Documents are available at https://
www.prc.gov, Docket Nos. MC2011–17,
CP2011–56.
SUMMARY:
Neva R. Watson,
Attorney, Legislative.
[FR Doc. 2011–858 Filed 1–14–11; 8:45 am]
BILLING CODE 7710–12–P
Institution and settlement of injunctive
actions;
Institution and settlement of administrative
proceedings; and
Other matters relating to enforcement
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POSTAL SERVICE
Product Change—Priority Mail
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Postal ServiceTM.
Notice.
AGENCY:
ACTION:
Postal Service notice of filing
of a request with the Postal Regulatory
Commission to add a domestic shipping
services contract to the list of Negotiated
Service Agreements in the Mail
Classification Schedule’s Competitive
Products List pursuant to 39 U.S.C. 3642
and 3632(b)(3).
DATES: January 18, 2011.
FOR FURTHER INFORMATION CONTACT:
Elizabeth A. Reed, 202–268–3179.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
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SUMMARY:
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Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold a Closed Meeting
on Thursday, January 20, 2011 at 2 p.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the Closed Meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (7), 9(B) and (10)
and 17 CFR 200.402(a)(3), (5), (7), 9(ii)
and (10), permit consideration of the
scheduled matters at the Closed
Meeting.
Commissioner Paredes, as duty
officer, voted to consider the items
listed for the Closed Meeting in a closed
session.
The subject matter of the Closed
Meeting scheduled for Thursday,
January 20, 2011 will be:
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed, please
contact:
The Office of the Secretary at (202)
551–5400.
Dated: January 13, 2011.
Elizabeth M. Murphy,
Secretary.
[FR Doc. C1–2010–32943 Filed 1–14–11; 8:45 am]
BILLING CODE 1505–01–D
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63700; File No. SR–Phlx–
2011–04]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by NASDAQ
OMX PHLX LLC Relating to Option
Expiration Months and Series of
Options Open for Trading on the
Exchange
January 11, 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
4, 2011, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing with the
Commission a proposal to amend
Exchange Rule 1012 (Series of Options
Open for Trading) to clarify that the
Exchange will open at least one
expiration month and one series for
each class of stock options or Exchange
Traded Fund Share (‘‘ETF’’) options
[FR Doc. 2011–1074 Filed 1–13–11; 4:15 pm]
1 15
BILLING CODE 8011–01–P
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 76, No. 11 / Tuesday, January 18, 2011 / Notices
open for trading on the Exchange; and
that the Exchange may open additional
series of stock options or ETF options
under certain circumstances. The
proposed change is based directly on
the recently approved rules of another
options exchange, namely Chapter IV,
Sections 6 and 8 of the NASDAQ
Options Market.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://nasdaqomxphlx.cchwallstreet.
com/NASDAQOMXPHLX/Filings/, 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 and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
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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 amend Exchange Rule 1012
to clarify that the Exchange will open at
least one expiration month and one
series for each class of stock options or
ETF options open for trading on the
Exchange; and that the Exchange may
open additional series of stock options
or ETF options under certain
circumstances. The proposed change is
based directly on the recently approved
rules of another options exchange,
namely Chapter IV, Sections 6 and 8 of
the NASDAQ Options Market.
The NASDAQ OMX Group, Inc.
(‘‘NASDAQ OMX’’) owns several U.S.
registered securities exchanges that are
self-regulatory organizations—Phlx,
with its equity, securities, and options
exchanges; The NASDAQ Stock Market
LLC (‘‘NASDAQ’’) and the NASDAQ
Options Market (‘‘NOM’’); and NASDAQ
OMX BX, Inc. (‘‘BX’’). In 2008, the
Commission approved the
establishment of NOM and rules
pertaining thereto 3 that, among others,
3 See Securities Exchange Act Release No. 57478
(March 12, 2008), 73 FR 14521 (March 18, 2008)
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included NOM Chapter IV, Section 6
regarding series of options contracts
open for trading 4 and Section 8
regarding long-term options contracts.5
The rule changes proposed by the
Exchange to Phlx Rule 1012(a) and
Commentary .03 are, to the extent
practicable, identical to specified rule
provisions in NOM Chapter IV, Sections
6 and 8 as discussed below.
The Exchange believes that its
proposal is proper, and indeed
desirable, in light of its objective to
continue to harmonize the listing rules
of the two options exchanges under the
NASDAQ OMX umbrella and thereby
maximize operating efficiencies.
Rule 1012 has developed in the latter
portion of the last century to indicate
when, among other things, the Exchange
may open months and series, including
long-term series, in classes of stock
options, ETF options, and foreign
currency options (‘‘FCOs’’) 6 that have
been approved for listing and trading on
the Exchange. Rule 1012(a) indicates
how the Exchange initially fixes
expiration months and series in these
(SR–NASDAQ–2007–004 and SR–NASDAQ–2007–
080) (order approving rules for trading of options
on the NASDAQ Options Market, including Chapter
IV, Sections 6 and 8).
4 NOM Chapter IV, Sec 6 states, in relevant part:
(b) At the commencement of trading on NOM of a
particular class of options, NOM will open a
minimum of one (1) series of options in that class.
The exercise price of the series will be fixed at a
price per share, relative to the underlying stock
price in the primary market at about the time that
class of options is first opened for trading on NOM.
(c) Additional series of options of the same class
may be opened for trading on NOM when Nasdaq
deems it necessary to maintain an orderly market,
to meet Customer demand or when the market price
of the underlying stock moves more than five strike
prices from the initial exercise price or prices. The
opening of a new series of options shall not affect
the series of options of the same class previously
opened. New series of options on an individual
stock may be added until the beginning of the
month in which the options contract will expire.
Due to unusual market conditions, Nasdaq, in its
discretion, may add a new series of options on an
individual stock until five (5) business days prior
to expiration.
5 NOM Chapter IV, Sec 8 states: (a)
Notwithstanding conflicting language in Section 5
of this Chapter IV (Series of Options Contracts Open
for Trading), Nasdaq may list long-term options
contracts that expire from twelve (12) to thirty-nine
(39) months from the time they are listed. There
may be up to six (6) additional expiration months.
Strike price interval, bid/ask differential and
continuity rules shall not apply to such options
series until the time to expiration is less than nine
(9) months.
(b) After a new long-term options contract series
is listed, such series will be opened for trading
either when there is buying or selling interest, or
forty (40) minutes prior to the close, whichever
occurs first. No quotations will be posted for such
options series until they are opened for trading.
6 FCOs are also known as World Currency
Options and in Rule 1012 are known as U.S. DollarSettled Foreign Currency Options.
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options.7 The Exchange now conforms
portions of its older Rule 1012 to the
more recently-approved NOM rules in
Chapter IV, Sections 6 and 8.
First, the Exchange proposes to state
in Rule 1012(a)(i)(A) that at the
commencement of trading on the
Exchange of a particular class of stock
or ETF options, the Exchange will open
at least one expiration month and series
for each class of options open for
trading on the Exchange, thereby
replacing the current language in
subsection (a)(i)(A) about opening not
less than three expiration months in
every option class open for trading. The
proposed language regarding one
expiration month is taken directly from
NOM Chapter IV, Section 6(e). The
proposed language regarding one
expiration series is taken directly from
NOM Chapter IV, Section 6(b). These
NOM rules have been continually in use
for years.8 The Exchange notes that the
proposed change affords additional
flexibility so that multiple option
classes and series are not mandated if
they are not needed, thereby potentially
reducing the proliferation of classes and
series.
Second, the Exchange proposes to add
new language in Rule 1012 (a)(i)(B) to
state that it may open additional option
series when the Exchange deems it
necessary to maintain an orderly
market, to meet customer demand or
when the market price of the underlying
stock moves more than five strike prices
from the initial exercise price or prices.
New series of options on an individual
stock may be added until the beginning
of the month in which the options
contract will expire. Additionally, due
to unusual market conditions, the
Exchange, in its discretion, may add a
new series of options on an individual
stock until five (5) business days prior
7 Rule 1012(a)(i) states, in relevant part: At the
commencement of trading on the Exchange of a
particular class of stock or Exchange-Traded Fund
Share options, series of options therein having three
different expiration months will normally be
opened, the first such expiration month being
within approximately three months thereafter, the
second such month being approximately three
months after the first and the third being
approximately three months after the second.
Additional series of stock or Exchange-Traded Fund
Share options of the same class may be opened for
trading on the Exchange at or about the time a prior
series expires and the expiration month of each
such series shall normally be approximately nine
months following the opening of such series. The
exercise price of each series of stock or ExchangeTraded Fund Share options opened for trading on
the Exchange shall be fixed at a price per share
which is reasonably close to the price per share at
which the underlying stock or Exchange-Traded
Fund Share is traded in the primary market at or
about the time such series of options is first opened
for trading on the Exchange.
8 See supra note 3.
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to expiration. The language for this
proposed rule change is likewise taken
directly from NOM rules, specifically
Chapter IV, Section 6(c).9 The Exchange
notes that the proposed language
establishes specific criteria that are not
all currently elucidated in Rule 1012 10
for adding new series to an existing
option class up to five business days
prior to expiration.11
Moreover, Rule 1012 has developed
over several decades to include stock
options, ETF options and FCOs traded
on the Exchange. As such, discussion
regarding these various types of options
is sometimes commingled within Rule
1012. The Exchange is now proposing to
clarify the rule by splitting out
discussion regarding stock options and
ETF options, which are similarly treated
within the rule. Specifically, the
Exchange proposes to relocate the
criteria for additional series of stock and
ETF options from its present location in
subsection (a)(iv), where it is applicable
to FCOs as well as stock and ETF
options, to subsection (a)(i)(B), where it
would be applicable only to stock and
ETF options.12 Subsection (a)(iv) as
proposed would be renamed (a)(iii)(E)
and would pertain only to FCOs.
The Exchange’s proposal is being
done to conform and harmonize certain
Phlx rules to recently-approved Nasdaq
Options Market rules regarding opening
initial months and series and adding
series of stock options and ETF options.
The Exchange believes that
harmonization of the rules of the two
options exchanges under the NASDAQ
OMX umbrella would be beneficial to
the Exchange and its traders, market
participants, and public investors in
general.
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2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 13 in general, and furthers the
objectives of Section 6(b)(5) of the Act 14
9 The Exchange also proposes to transfer language
from subsection (a)(iv) of Rule 1012 into subsection
(a)(i)(B), stating that the opening of a new series of
options shall not affect the series of options of the
same class previously opened. Similar language is
present in NOM Chapter IV, Section 6(c).
10 See supra note 7.
11 The Exchange has been following the practice
of not adding new series of options on individual
stocks within five days of expiration.
12 In a similar vein, Commentary .03 is moved to
new subsection (a)(i)(D) so that it would be in the
section of the rule applicable only to stock and ETF
options. Commentary .03 is conformed to the
language of NOM Chapter IV, Section 8 by
removing the superfluous language from the rule:
There may be up to six Traded Fund Share options
series, options having up to thirty-nine months
from the time they are listed until expiration.
13 15 U.S.C. 78f(b).
14 15 U.S.C. 78f(b)(5).
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in particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, and to remove
impediments to and perfect the
mechanisms of a free and open market
and a national market system. The
Exchange proposes to clarify that it will
open at least one expiration month and
one series for each class of stock options
or ETF options open for trading on the
Exchange and clarify under what
circumstances it may open additional
series of stock options or ETF options,
and thereby harmonize the rules of Phlx
and NOM. The harmonization of the
rules of the two options exchanges
would be beneficial to the Exchange and
its traders, market participants, and
public investors in general.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
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 15 and Rule 19b–
4(f)(6) thereunder.16
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
15 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.
16 17
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2933
because the proposed rule change is
substantially similar to that of another
exchange that has been approved by the
Commission.17 Therefore, the
Commission designates the proposal
operative upon filing.18
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–Phlx–2011–04 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–Phlx–2011–04. 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.,
17 See
supra note 3.
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).
18 For
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Federal Register / Vol. 76, No. 11 / Tuesday, January 18, 2011 / Notices
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–Phlx–
2011–04 and should be submitted on or
before February 8, 2011.
comments on the proposed rule change
from interested persons.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Elizabeth M. Murphy,
Secretary.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
CBOE 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. CBOE has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of such statements.
[FR Doc. 2011–901 Filed 1–14–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63701; File No. SR–CBOE–
2010–116]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Related to Exchange
Fees for Fiscal Year 2011
January 11, 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
29, 2010, 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, II and III
below, which Items have been prepared
by CBOE. The Exchange has designated
the proposal as one establishing or
changing a due, fee, or other charge
imposed by CBOE under Section
19(b)(3)(A) of the Act 3 and Rule 19b–
4(f)(2) thereunder.4 The Commission is
publishing this notice to solicit
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Chicago Board Options Exchange,
Incorporated (‘‘CBOE’’ or ‘‘Exchange’’)
proposes to amend its Fees Schedule to
make various changes for Fiscal Year
2011. The text of the proposed rule
change 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.
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 proposed rule
change is to amend the CBOE Fees
Schedule to make various fee changes.
The proposed changes are the product
of the Exchange’s annual budget review.
The fee changes were approved by the
Exchange’s Board of Directors pursuant
to CBOE Rule 2.22 and will take effect
on January 3, 2011. The Exchange
proposes to amend the following fees:
Clearing Trading Permit Holder
Proprietary Sliding Scale: The Clearing
Trading Permit Holder Proprietary
Sliding Scale reduces a Clearing Trading
Permit Holder’s (‘‘CTPH’’) per contract
transaction fee based on the number of
contracts the CTPH trades in a month.
The Exchange proposes to replace the
existing Clearing Trading Permit Holder
Proprietary Sliding Scale with: (1) A
Multiply-Listed Options Fee Cap for
CTPH Proprietary Orders, and (2) a
CBOE Proprietary Products Sliding
Scale for CTPH Proprietary Orders, as
further described below.
Multiply-Listed Options Fee Cap: The
Exchange proposes to cap CTPH
Proprietary transaction fees in all
products except options on OEX, XEO,
SPX, and volatility indexes,5 in the
aggregate, at $75,000 per month per
CTPH, except that any AIM Execution
Fees incurred by a CTPH would not
count towards the cap (AIM Execution
Fees are described below). A CTPH
would continue to pay any AIM
Execution Fees after reaching the cap in
a month. AIM Execution Fees would be
excluded from the proposed fee cap
because the AIM Execution Fee is a
discounted fee ($.05 per contract) and
therefore the Exchange believes those
fees should not count towards the cap.
The proposed fee cap is similar to a
‘‘Firm Related Equity Option Cap’’ in
place at NASDAQ OMX PHLX, LLC.6
The Exchange believes the proposed fee
cap would create an incentive for
CTPHs to continue to send order flow to
the Exchange.
CBOE Proprietary Products Sliding
Scale: The Exchange proposes to adopt
a CBOE Proprietary Products Sliding
Scale that would reduce the standard
CTPH Proprietary transaction fee in
OEX, XEO, SPX, and volatility indexes
(‘‘CBOE Proprietary Products’’) 7
provided a CTPH reaches certain
volume thresholds in multiply-listed
options on the Exchange in a month as
described below.
Specifically, the standard CTPH
Proprietary transaction fee in CBOE
Proprietary Products would be reduced
to the fees shown in the following table
for CTPHs that execute at least 375,000
contracts but less than 1,500,000
contracts in multiply-listed options on
the Exchange in a month, excluding
contracts executed in AIM that incurred
the AIM Execution Fee (the AIM
Execution Fee is described below).8
CBOE proprietary product contracts per month
First .................................................
mstockstill on DSKH9S0YB1PROD with NOTICES
Tiers
First 750,000 ..........................................................................................
19 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).
4 17 CFR 240.19b–4(f)(2).
5 OEX is the symbol for options on the S&P 100
index, XEO is the symbol for European-Style
options on the S&P 100 index and SPX is the
symbol for options on the S&P 500 index. Volatility
1 15
VerDate Mar<15>2010
16:24 Jan 14, 2011
Jkt 223001
indexes include options on the CBOE Volatility
Index (VIX).
6 NASDAQ OMX PHLX Firms are subject to a
maximum fee of $75,000. See NASDAQ OMX
PHLX, LLC Fee Schedule, Section II (Equity
Options Fees).
7 The CTPH Proprietary transaction fee in CBOE
Proprietary Products (as defined) is currently $.20
per contract and is proposed to be changed to $.25
per contract (as described below).
PO 00000
Frm 00057
Fmt 4703
Sfmt 4703
Rate
18 cents
8 Contracts executed in AIM that incurred the
AIM Execution Fee would be excluded from the
sliding scale for the same reason that AIM
Execution Fees would not apply to the MultiplyListed Options Fee Cap; the Exchange believes it is
appropriate to exclude such contracts from the
proposed sliding scale because such contracts have
already received a discounted transaction fee ($.05
per contract).
E:\FR\FM\18JAN1.SGM
18JAN1
]]>Agencies
[Federal Register Volume 76, Number 11 (Tuesday, January 18, 2011)]
[Notices]
[Pages 2931-2934]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-901]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63700; File No. SR-Phlx-2011-04]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NASDAQ OMX PHLX LLC Relating
to Option Expiration Months and Series of Options Open for Trading on
the Exchange
January 11, 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 4, 2011, NASDAQ OMX PHLX LLC (``Phlx'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the Exchange. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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\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 is filing with the Commission a proposal to amend
Exchange Rule 1012 (Series of Options Open for Trading) to clarify that
the Exchange will open at least one expiration month and one series for
each class of stock options or Exchange Traded Fund Share (``ETF'')
options
[[Page 2932]]
open for trading on the Exchange; and that the Exchange may open
additional series of stock options or ETF options under certain
circumstances. The proposed change is based directly on the recently
approved rules of another options exchange, namely Chapter IV, Sections
6 and 8 of the NASDAQ Options Market.
The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaqomxphlx.cchwallstreet.com/NASDAQOMXPHLX/Filings/, 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 and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this proposed rule change is to amend Exchange Rule
1012 to clarify that the Exchange will open at least one expiration
month and one series for each class of stock options or ETF options
open for trading on the Exchange; and that the Exchange may open
additional series of stock options or ETF options under certain
circumstances. The proposed change is based directly on the recently
approved rules of another options exchange, namely Chapter IV, Sections
6 and 8 of the NASDAQ Options Market.
The NASDAQ OMX Group, Inc. (``NASDAQ OMX'') owns several U.S.
registered securities exchanges that are self-regulatory
organizations--Phlx, with its equity, securities, and options
exchanges; The NASDAQ Stock Market LLC (``NASDAQ'') and the NASDAQ
Options Market (``NOM''); and NASDAQ OMX BX, Inc. (``BX''). In 2008,
the Commission approved the establishment of NOM and rules pertaining
thereto \3\ that, among others, included NOM Chapter IV, Section 6
regarding series of options contracts open for trading \4\ and Section
8 regarding long-term options contracts.\5\ The rule changes proposed
by the Exchange to Phlx Rule 1012(a) and Commentary .03 are, to the
extent practicable, identical to specified rule provisions in NOM
Chapter IV, Sections 6 and 8 as discussed below.
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\3\ See Securities Exchange Act Release No. 57478 (March 12,
2008), 73 FR 14521 (March 18, 2008) (SR-NASDAQ-2007-004 and SR-
NASDAQ-2007-080) (order approving rules for trading of options on
the NASDAQ Options Market, including Chapter IV, Sections 6 and 8).
\4\ NOM Chapter IV, Sec 6 states, in relevant part: (b) At the
commencement of trading on NOM of a particular class of options, NOM
will open a minimum of one (1) series of options in that class. The
exercise price of the series will be fixed at a price per share,
relative to the underlying stock price in the primary market at
about the time that class of options is first opened for trading on
NOM.
(c) Additional series of options of the same class may be opened
for trading on NOM when Nasdaq deems it necessary to maintain an
orderly market, to meet Customer demand or when the market price of
the underlying stock moves more than five strike prices from the
initial exercise price or prices. The opening of a new series of
options shall not affect the series of options of the same class
previously opened. New series of options on an individual stock may
be added until the beginning of the month in which the options
contract will expire. Due to unusual market conditions, Nasdaq, in
its discretion, may add a new series of options on an individual
stock until five (5) business days prior to expiration.
\5\ NOM Chapter IV, Sec 8 states: (a) Notwithstanding
conflicting language in Section 5 of this Chapter IV (Series of
Options Contracts Open for Trading), Nasdaq may list long-term
options contracts that expire from twelve (12) to thirty-nine (39)
months from the time they are listed. There may be up to six (6)
additional expiration months. Strike price interval, bid/ask
differential and continuity rules shall not apply to such options
series until the time to expiration is less than nine (9) months.
(b) After a new long-term options contract series is listed,
such series will be opened for trading either when there is buying
or selling interest, or forty (40) minutes prior to the close,
whichever occurs first. No quotations will be posted for such
options series until they are opened for trading.
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The Exchange believes that its proposal is proper, and indeed
desirable, in light of its objective to continue to harmonize the
listing rules of the two options exchanges under the NASDAQ OMX
umbrella and thereby maximize operating efficiencies.
Rule 1012 has developed in the latter portion of the last century
to indicate when, among other things, the Exchange may open months and
series, including long-term series, in classes of stock options, ETF
options, and foreign currency options (``FCOs'') \6\ that have been
approved for listing and trading on the Exchange. Rule 1012(a)
indicates how the Exchange initially fixes expiration months and series
in these options.\7\ The Exchange now conforms portions of its older
Rule 1012 to the more recently-approved NOM rules in Chapter IV,
Sections 6 and 8.
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\6\ FCOs are also known as World Currency Options and in Rule
1012 are known as U.S. Dollar-Settled Foreign Currency Options.
\7\ Rule 1012(a)(i) states, in relevant part: At the
commencement of trading on the Exchange of a particular class of
stock or Exchange-Traded Fund Share options, series of options
therein having three different expiration months will normally be
opened, the first such expiration month being within approximately
three months thereafter, the second such month being approximately
three months after the first and the third being approximately three
months after the second. Additional series of stock or Exchange-
Traded Fund Share options of the same class may be opened for
trading on the Exchange at or about the time a prior series expires
and the expiration month of each such series shall normally be
approximately nine months following the opening of such series. The
exercise price of each series of stock or Exchange-Traded Fund Share
options opened for trading on the Exchange shall be fixed at a price
per share which is reasonably close to the price per share at which
the underlying stock or Exchange-Traded Fund Share is traded in the
primary market at or about the time such series of options is first
opened for trading on the Exchange.
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First, the Exchange proposes to state in Rule 1012(a)(i)(A) that at
the commencement of trading on the Exchange of a particular class of
stock or ETF options, the Exchange will open at least one expiration
month and series for each class of options open for trading on the
Exchange, thereby replacing the current language in subsection
(a)(i)(A) about opening not less than three expiration months in every
option class open for trading. The proposed language regarding one
expiration month is taken directly from NOM Chapter IV, Section 6(e).
The proposed language regarding one expiration series is taken directly
from NOM Chapter IV, Section 6(b). These NOM rules have been
continually in use for years.\8\ The Exchange notes that the proposed
change affords additional flexibility so that multiple option classes
and series are not mandated if they are not needed, thereby potentially
reducing the proliferation of classes and series.
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\8\ See supra note 3.
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Second, the Exchange proposes to add new language in Rule 1012
(a)(i)(B) to state that it may open additional option series when the
Exchange deems it necessary to maintain an orderly market, to meet
customer demand or when the market price of the underlying stock moves
more than five strike prices from the initial exercise price or prices.
New series of options on an individual stock may be added until the
beginning of the month in which the options contract will expire.
Additionally, due to unusual market conditions, the Exchange, in its
discretion, may add a new series of options on an individual stock
until five (5) business days prior
[[Page 2933]]
to expiration. The language for this proposed rule change is likewise
taken directly from NOM rules, specifically Chapter IV, Section
6(c).\9\ The Exchange notes that the proposed language establishes
specific criteria that are not all currently elucidated in Rule 1012
\10\ for adding new series to an existing option class up to five
business days prior to expiration.\11\
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\9\ The Exchange also proposes to transfer language from
subsection (a)(iv) of Rule 1012 into subsection (a)(i)(B), stating
that the opening of a new series of options shall not affect the
series of options of the same class previously opened. Similar
language is present in NOM Chapter IV, Section 6(c).
\10\ See supra note 7.
\11\ The Exchange has been following the practice of not adding
new series of options on individual stocks within five days of
expiration.
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Moreover, Rule 1012 has developed over several decades to include
stock options, ETF options and FCOs traded on the Exchange. As such,
discussion regarding these various types of options is sometimes
commingled within Rule 1012. The Exchange is now proposing to clarify
the rule by splitting out discussion regarding stock options and ETF
options, which are similarly treated within the rule. Specifically, the
Exchange proposes to relocate the criteria for additional series of
stock and ETF options from its present location in subsection (a)(iv),
where it is applicable to FCOs as well as stock and ETF options, to
subsection (a)(i)(B), where it would be applicable only to stock and
ETF options.\12\ Subsection (a)(iv) as proposed would be renamed
(a)(iii)(E) and would pertain only to FCOs.
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\12\ In a similar vein, Commentary .03 is moved to new
subsection (a)(i)(D) so that it would be in the section of the rule
applicable only to stock and ETF options. Commentary .03 is
conformed to the language of NOM Chapter IV, Section 8 by removing
the superfluous language from the rule: There may be up to six
Traded Fund Share options series, options having up to thirty-nine
months from the time they are listed until expiration.
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The Exchange's proposal is being done to conform and harmonize
certain Phlx rules to recently-approved Nasdaq Options Market rules
regarding opening initial months and series and adding series of stock
options and ETF options. The Exchange believes that harmonization of
the rules of the two options exchanges under the NASDAQ OMX umbrella
would be beneficial to the Exchange and its traders, market
participants, and public investors in general.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \13\ in general, and furthers the objectives of Section
6(b)(5) of the Act \14\ in particular, in that it is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, and to remove impediments to and perfect the mechanisms of
a free and open market and a national market system. The Exchange
proposes to clarify that it will open at least one expiration month and
one series for each class of stock options or ETF options open for
trading on the Exchange and clarify under what circumstances it may
open additional series of stock options or ETF options, and thereby
harmonize the rules of Phlx and NOM. The harmonization of the rules of
the two options exchanges would be beneficial to the Exchange and its
traders, market participants, and public investors in general.
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\13\ 15 U.S.C. 78f(b).
\14\ 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 either 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 19(b)(3)(A) of the Act \15\ and Rule 19b-
4(f)(6) thereunder.\16\
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 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 proposed rule change is substantially similar to
that of another exchange that has been approved by the Commission.\17\
Therefore, the Commission designates the proposal operative upon
filing.\18\
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\17\ See supra note 3.
\18\ 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-Phlx-2011-04 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2011-04. 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.,
[[Page 2934]]
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-Phlx-2011-04 and should be
submitted on or before February 8, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-901 Filed 1-14-11; 8:45 am]
BILLING CODE 8011-01-P
