Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Order Granting Approval of Proposed Rule Change Expanding Its Short Term Option Program, 8793-8794 [2011-3315]

Download as PDF Federal Register / Vol. 76, No. 31 / Tuesday, February 15, 2011 / Notices regard, the fees charged and rebates offered by NASDAQ for routing orders to PSX are reasonable and equitable, in that the decision to use NASDAQ as a router is entirely voluntarily, and members can avail themselves of numerous other means of directing orders to PSX, including becoming members of PHLX or using any of a number of competitive routing services offered by other exchanges and brokers. Electronic Comments B. Self-Regulatory Organization’s Statement on Burden on Competition NASDAQ does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. Because the market for order execution and routing is extremely competitive, members may readily opt to disfavor NASDAQ’s execution and routing services if they believe that alternatives offer them better value. NASDAQ’s reduction of Closing Cross fees is reflective of the need to ensure that fees are set at competitively viable levels, and its change to routing fees is necessary to reflect pricing changes at PSX. • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. 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. jdjones on DSK8KYBLC1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.7 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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: 7 15 U.S.C. 78s(b)(3)(a)(ii). VerDate Mar<15>2010 15:51 Feb 14, 2011 • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NASDAQ–2011–017 on the subject line. Paper Comments SECURITIES AND EXCHANGE COMMISSION [Release No. 34–63875; File No. SR–Phlx2010–183] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Order Granting Approval of Proposed Rule Change Expanding Its Short Term Option Program February 9, 2011. I. Introduction On December 15, 2010, NASDAQ OMX PHLX LLC (‘‘Phlx’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant All submissions should refer to File to Section 19(b)(1) of the Securities Number SR–NASDAQ–2011–017. This Exchange Act of 1934 (‘‘Act’’)1 and Rule file number should be included on the 19b–4 thereunder,2 a proposed rule subject line if e-mail is used. To help the change to expand the Short Term Commission process and review your Option Program (‘‘Program’’) to allow the comments more efficiently, please use Exchange to select up to 15 option only one method. The Commission will classes on which Short Term Option post all comments on the Commission’s Series may be listed. The proposed rule Internet Web site (http://www.sec.gov/ change was published for comment in rules/sro.shtml). Copies of the the Federal Register on December 28, submission, all subsequent 2010.3 The Commission received no amendments, all written statements comment letters on the proposal. This with respect to the proposed rule order approves the proposed rule change that are filed with the change. Commission, and all written II. Description of the Proposal communications relating to the Currently, Rule 1101A(b)(vi)(A) and proposed rule change between the Commission and any person, other than Commentary .11(a) to Rule 1012 permit the Exchange to open for trading on any those that may be withheld from the Thursday or Friday that is a business public in accordance with the day series of options on no more than provisions of 5 U.S.C. 552, will be five option classes that expire on the available for Web site viewing and Friday of the following business week printing in the Commission’s Public that is a business day. The Exchange has Reference Room, 100 F Street, NE., proposed to increase from five to 15 the Washington, DC 20549, on official number of option classes that may be business days between the hours of 10 opened pursuant to the Program. a.m. and 3 p.m. Copies of the filing also In its filing, the Exchange stated that, will be available for inspection and because of the five-class limit imposed copying at the principal office of the by the Program, on numerous occasions Exchange. All comments received will it has had to eliminate option classes be posted without change; the from the Program in order to select new Commission does not edit personal classes, even though demand remained identifying information from for the eliminated classes. The Exchange submissions. You should submit only noted that it believes an expansion of information that you wish to make the current Program would allow the available publicly. All submissions Exchange to better meet customer should refer to File Number SR– demand for short-term option classes. Phlx stated that it has analyzed its NASDAQ–2011–017 and should be capacity and represented that it believes submitted on or before March 8, 2011. that it and the Options Price Reporting For the Commission, by the Division of Authority (‘‘OPRA’’) have the necessary Trading and Markets, pursuant to delegated systems capacity to handle the potential authority.8 additional traffic associated with trading Cathy H. Ahn, of an expanded number of classes in the Deputy Secretary. Program. [FR Doc. 2011–3270 Filed 2–14–11; 8:45 am] 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Securities Exchange Act Release No. 63594 (December 21, 2010), 75 FR 81689 (‘‘Notice’’). BILLING CODE 8011–01–P 2 17 8 17 Jkt 223001 8793 PO 00000 CFR 200.30–3(a)(12). Frm 00087 Fmt 4703 Sfmt 4703 E:\FR\FM\15FEN1.SGM 15FEN1 8794 Federal Register / Vol. 76, No. 31 / Tuesday, February 15, 2011 / Notices Finally the Exchange submitted a report to the Commission providing an analysis of the Program (the ‘‘Report’’). The Report covered the period from the date of effectiveness of the Program through November 2010, and described the experience of the Exchange with the Program in respect of the options classes included by the Exchange in the Program.4 The Report was submitted on a confidential basis under separate cover. jdjones on DSK8KYBLC1PROD with NOTICES III. Discussion The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.5 Specifically, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act,6 which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, 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 Commission believes that the proposal strikes a reasonable balance between the Exchange’s desire to offer a wider array of investment opportunities and the need to avoid unnecessary proliferation of options series. The Commission expects the Exchange to monitor the trading volume associated with the additional options series listed as a result of this proposal and the effect of these additional series on market fragmentation and on the capacity of the Exchange’s, OPRA’s, and vendors’ automated systems. In approving this proposal, the Commission notes that Exchange has represented that it believes the Exchange and OPRA have the necessary 4 The Report included the following: (1) Data and written analysis on the open interest and trading volume in the classes for which Short Term Option Series were opened; (2) an assessment of the appropriateness of the option classes selected for the Program; (3) an assessment of the impact of the Program on the capacity of the Exchange, OPRA, and market data vendors (to the extent data from market data vendors are available); (4) any capacity problems or other problems that arose during the operation of the Program and how the Exchange addressed such problems; (5) any complaints that the Exchange received during the operation of the Program and how the Exchange addressed them; and (6) any additional information that would assist in assessing the operation of the Program. 5 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 6 15 U.S.C. 78f(b)(5). VerDate Mar<15>2010 15:51 Feb 14, 2011 Jkt 223001 systems capacity to handle the potential additional traffic associated with trading of an expanded number of classes in the Program. the Exchange’s Web site (http:// www.cboe.org/legal), at the Exchange’s principal office, and at the Commission’s Public Reference Room. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,7 that the proposed rule change (SR–Phlx-2010– 183) be, and it hereby is, approved. 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. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–3315 Filed 2–14–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–63877; File No. SR–CBOE– 2011–012] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Expand the Short Term Option Series Program February 9, 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 31, 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 Rules 5.5 and 24.9 to expand the Exchange’s Short Term Option Series Program (‘‘Weeklys Program’’) so that the Exchange may select fifteen option classes on which Weekly options may be opened. The text of the rule proposal is available on 7 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 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). 8 17 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 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 Rules 5.5 and 24.9 to expand the Weeklys Program so that the Exchange may select fifteen option classes on which Weekly options may be opened.5 The Weeklys Program is codified in Rule 5.5 and 24.9. These rules provide that after an option class has been approved for listing and trading on the Exchange, the Exchange may open for trading on any Thursday or Friday that is a business day series of options on no more than five option classes that expire on the Friday of the following business week that is a business day. In addition to the five-option class limitation, there is also a limitation that no more than twenty series for each expiration date in those classes that may be opened for trading.6 Furthermore, the strike price of 5 On July 12, 2005, the Commission approved the Weeklys Program on a pilot basis. See Securities Exchange Act Release No. 52011 (July 12, 2005), 70 FR 41451 (July 19, 2005) (SR–CBOE–2004–63). The Weeklys Program was made permanent on April 27, 2009. See Securities Exchange Act Release No. 59824 (April 27, 2009), 74 FR 20518 (May 4, 2009) (SR–CBOE–2009–018). 6 However, if the Exchange opens less than twenty (20) Weekly options for a Weekly Option Expiration Date, additional series may be opened for trading on the Exchange when the Exchange deems it necessary to maintain an orderly market, to meet customer demand or when the market price of the underlying security moves substantially from the exercise price or prices of the series already opened. Any additional strike prices listed by the Exchange shall be within thirty percent (30%) above or below the current price of the underlying security. The Exchange may also open additional strike prices of Weekly Option Series that are more than 30% above or below the current price of the underlying security provided that demonstrated customer interest exists for such series, as E:\FR\FM\15FEN1.SGM 15FEN1

Agencies

[Federal Register Volume 76, Number 31 (Tuesday, February 15, 2011)]
[Notices]
[Pages 8793-8794]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-3315]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63875; File No. SR-Phlx-2010-183]


Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Order 
Granting Approval of Proposed Rule Change Expanding Its Short Term 
Option Program

February 9, 2011.

I. Introduction

    On December 15, 2010, NASDAQ OMX PHLX LLC (``Phlx'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'')\1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to expand the Short Term Option Program 
(``Program'') to allow the Exchange to select up to 15 option classes 
on which Short Term Option Series may be listed. The proposed rule 
change was published for comment in the Federal Register on December 
28, 2010.\3\ The Commission received no comment letters on the 
proposal. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 63594 (December 21, 
2010), 75 FR 81689 (``Notice'').
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II. Description of the Proposal

    Currently, Rule 1101A(b)(vi)(A) and Commentary .11(a) to Rule 1012 
permit the Exchange to open for trading on any Thursday or Friday that 
is a business day series of options on no more than five option classes 
that expire on the Friday of the following business week that is a 
business day. The Exchange has proposed to increase from five to 15 the 
number of option classes that may be opened pursuant to the Program.
    In its filing, the Exchange stated that, because of the five-class 
limit imposed by the Program, on numerous occasions it has had to 
eliminate option classes from the Program in order to select new 
classes, even though demand remained for the eliminated classes. The 
Exchange noted that it believes an expansion of the current Program 
would allow the Exchange to better meet customer demand for short-term 
option classes.
    Phlx stated that it has analyzed its capacity and represented that 
it believes that it and the Options Price Reporting Authority 
(``OPRA'') have the necessary systems capacity to handle the potential 
additional traffic associated with trading of an expanded number of 
classes in the Program.

[[Page 8794]]

    Finally the Exchange submitted a report to the Commission providing 
an analysis of the Program (the ``Report''). The Report covered the 
period from the date of effectiveness of the Program through November 
2010, and described the experience of the Exchange with the Program in 
respect of the options classes included by the Exchange in the 
Program.\4\ The Report was submitted on a confidential basis under 
separate cover.
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    \4\ The Report included the following: (1) Data and written 
analysis on the open interest and trading volume in the classes for 
which Short Term Option Series were opened; (2) an assessment of the 
appropriateness of the option classes selected for the Program; (3) 
an assessment of the impact of the Program on the capacity of the 
Exchange, OPRA, and market data vendors (to the extent data from 
market data vendors are available); (4) any capacity problems or 
other problems that arose during the operation of the Program and 
how the Exchange addressed such problems; (5) any complaints that 
the Exchange received during the operation of the Program and how 
the Exchange addressed them; and (6) any additional information that 
would assist in assessing the operation of the Program.
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III. Discussion

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\5\ 
Specifically, the Commission finds that the proposal is consistent with 
Section 6(b)(5) of the Act,\6\ which requires, among other things, that 
the rules of a national securities exchange be designed to promote just 
and equitable principles of trade, to prevent fraudulent and 
manipulative acts, 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.
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    \5\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the proposal strikes a reasonable 
balance between the Exchange's desire to offer a wider array of 
investment opportunities and the need to avoid unnecessary 
proliferation of options series. The Commission expects the Exchange to 
monitor the trading volume associated with the additional options 
series listed as a result of this proposal and the effect of these 
additional series on market fragmentation and on the capacity of the 
Exchange's, OPRA's, and vendors' automated systems.
    In approving this proposal, the Commission notes that Exchange has 
represented that it believes the Exchange and OPRA have the necessary 
systems capacity to handle the potential additional traffic associated 
with trading of an expanded number of classes in the Program.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-Phlx-2010-183) be, and it 
hereby is, approved.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-3315 Filed 2-14-11; 8:45 am]
BILLING CODE 8011-01-P