Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 903G To Permit the Exchange To List Flexible Exchange Options on Index and Equity Securities That Are Eligible for Non-FLEX Options Trading, and That Have Non-FLEX Options on Such Index and Equity Securities Listed and Traded on at Least One National Securities Exchange, Even if the Exchange Does Not List Such Non-FLEX Options, 36598-36600 [2011-15605]
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36598
Federal Register / Vol. 76, No. 120 / Wednesday, June 22, 2011 / Notices
as required by Rule 19d–1(c)(2) under
the Act,11 which governs minor rule
violation plans.
In approving this proposed rule
change, the Commission in no way
minimizes the importance of
compliance with CHX rules and all
other rules subject to the imposition of
fines under the MRP. The Commission
believes that the violation of any selfregulatory organization’s rules, as well
as Commission rules, is a serious matter.
However, the MRP provides a
reasonable means of addressing rule
violations that do not rise to the level of
requiring formal disciplinary
proceedings, while providing greater
flexibility in handling certain violations.
The Commission expects that CHX will
continue to conduct surveillance with
due diligence and make a determination
based on its findings, on a case-by-case
basis, whether a fine of more or less
than the recommended amount is
appropriate for a violation under the
MRP or whether a violation requires
formal disciplinary action under CHX
Article 12.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act 12 and Rule
19d–1(c)(2) under the Act,13 that the
proposed rule change (SR–CHX–2011–
07) be, and hereby is, approved and
declared effective.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–15553 Filed 6–21–11; 8:45 am]
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BILLING CODE 8011–01–P
11 17
CFR 240.19d–1(c)(2).
12 15 U.S.C. 78s(b)(2).
13 17 CFR 240.19d–1(c)(2).
14 17 CFR 200.30–3(a)(12); 17 CFR 200.30–
3(a)(44).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64693; File No. SR–
NYSEAmex–2011–38]
Self-Regulatory Organizations; NYSE
Amex LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending Rule 903G To
Permit the Exchange To List Flexible
Exchange Options on Index and Equity
Securities That Are Eligible for NonFLEX Options Trading, and That Have
Non-FLEX Options on Such Index and
Equity Securities Listed and Traded on
at Least One National Securities
Exchange, Even if the Exchange Does
Not List Such Non-FLEX Options
June 16, 2011.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b-4 thereunder,3
notice is hereby given that on June 3,
2011, NYSE Amex LLC (the ‘‘Exchange’’
or ‘‘NYSE Amex’’) 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 self-regulatory organization. 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 the Substance
of the Proposed Rule Change
The Exchange proposes to amend
Rule 903G (Terms of FLEX Options) to
permit the Exchange to list Flexible
Exchange Options (‘‘FLEX Options’’) on
index and equity securities that are
eligible for Non-FLEX Options trading,
and that have Non-FLEX Options on
such index and equity securities listed
and traded on at least one national
securities exchange, even if the
Exchange does not list such Non-FLEX
Options. The text of the proposed rule
change is available at the Exchange, the
Commission’s Public Reference Room,
and https://www.nyse.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange is proposing to amend
Rule 903G (Terms of FLEX Options) to
permit trading of FLEX Options series in
securities whose Non-FLEX Options are
listed and traded on a national
securities exchange(s), based on a
recently adopted rule change of the
Chicago Board Options Exchange
(‘‘CBOE’’).4
Rule 903G currently permits the
Exchange to approve and open for
trading FLEX Options only after the
particular index or equity security has
been approved for Non-FLEX Options
trading.
The Exchange proposes to adopt a
rule change similar to a rule change
recently adopted by the CBOE to allow
FLEX Equity Options on any security
that meets the standards of NYSE Amex
Rule 915, and that has Non-FLEX
Options on such security listed and
traded on at least one options exchange,
regardless of whether the Exchange
trades such Non-FLEX Options.
Similarly, the CBOE rule change also
adopted a provision to allow FLEX
Index Options on any index that meets
its listing standards. NYSE Amex
proposes to adopt a similar provision
that would permit FLEX Index Options
on any index that meets the standards
of Rule 901C, and that has Non-FLEX
Options on such index listed and traded
on at least one options exchange, even
if the Exchange does not list and trade
such Non-FLEX Options.
The Exchange also proposes to
designate 903G(c)(1) as ‘‘reserved’’
because the text in that provision stating
that FLEX Equity Option transactions
are limited to transactions in options on
underlying securities that have been
approved by the Exchange in
accordance with Rule 915 would no
longer be applicable.
As an alternative to the over-thecounter marketplace and other national
security exchanges, the Exchange
proposes to increase the spectrum of
indexes and equity securities that are
4 See Securities Exchange Act Release No. 60585
(August 28, 2009), 74 FR 46257 (September 8,
2009). Unlike CBOE’s rule, we have clarified that
our proposed rule would only permit the trading of
FLEX Options on securities whose Non-Flex
Options are listed and traded on at least one options
exchange.
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Federal Register / Vol. 76, No. 120 / Wednesday, June 22, 2011 / Notices
eligible for FLEX Options trading on the
Exchange, even if the Exchange does not
list Non-FLEX Options on such indexes
or equity securities. In this regard, the
Exchange does not list options on every
NMS stock or index that is eligible for
options trading, even if permitted to do
so according to its listing standards, but
recognizes that market participants may
want access to options on such indexes
and equity securities, in addition to the
certainty and safeguards that a regulated
and standardized marketplace provides.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Securities Exchange Act of 1934
(the ‘‘Act’’),5 in general, and furthers the
objectives of Section 6(b)(5) of the Act,6
in particular, because it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest. The Exchange believes
that its proposal to permit the Exchange
to list FLEX Options on indexes and
equity securities that are eligible for
Non-FLEX Options trading and whose
Non-FLEX Options are listed and traded
on at least one national securities
exchange, even if the Exchange does not
list such Non-FLEX Options, would
provide market participants with
additional means to manage their risk
exposures and carry out their
investment objectives with listed
options. In this regard, the Exchange’s
proposal would increase competition in
the FLEX Options market. In addition,
the Exchange’s proposal is consistent
with investor protection and the public
interest in that it is limited to FLEX
Options on securities that would be
eligible to have, and in fact have, NonFLEX Options listed and traded on
them. The criteria for such underlying
securities has been carefully crafted
over the years to ensure that only
appropriate securities have standardized
options listed on them (e.g., securities
with sufficient trading volume and
shareholders).
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U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). Pursuant to Rule 19b–
4(f)(6)(iii) under the Act, the Exchange is required
to give the Commission written notice of its intent
to file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Commission
notes that the Exchange has satisfied this
requirement.
9 17 CFR 240.19b–4(f)(6).
10 17 CFR 240.19b–4(f)(6)(iii).
8 17
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
6 15
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change:
(i) Does not significantly affect the
protection of investors or the public
interest; (ii) does not impose any
significant burden on competition; and
(iii) does not become operative for 30
days after the date of the filing, or such
shorter time as the Commission may
designate if consistent with the
protection of investors and the public
interest, the proposed rule change has
become effective pursuant to Section
19(b)(3)(A) of the Act 7 and Rule 19b–
4(f)(6) thereunder.8
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 9 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 10
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The Exchange has
requested that the Commission waive
the 30-day operative delay so that the
Exchange could immediately list FLEX
Options on indexes and equity
securities that are eligible for non-FLEX
Options trading, and that have nonFLEX Options on such index and equity
securities listed and traded on at least
one national securities exchange, even if
the Exchange does not list non-FLEX
Options on such indexes and equity
securities. In support of the waiver, the
Exchange believes that it would benefit
the marketplace and the investing
public because it would provide market
participants with additional means to
manage their risk exposures and carry
out their investment objectives with
listed options.
The Commission believes that waiver
of the operative delay is consistent with
the protection of investors and the
public interest. In making this
7 15
B. Self-Regulatory Organization’s
Statement on Burden on Competition
5 15
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.
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36599
determination, the Commission notes
that NYSE Amex’s proposed rule change
is substantially similar to CBOE’s FLEX
rules, which also permit CBOE to list
FLEX options on securities that are
eligible for non-FLEX options trading,
even if CBOE does not list non-FLEX
options on such securities.11 The
Commission notes that the CBOE’s
proposal was subject to full notice and
comment, and the Commission received
no comments on CBOE’s rule proposal.
Further, the Commission notes that
NYSE Amex’s proposal adds
clarification to the rules, noting
expressly that its rules would only
permit the trading of FLEX Options on
securities whose non-FLEX Options are
listed and traded on at least one
national securities exchange. This
provision will help to ensure that
adequate exchange requirements are met
for trading these products and that the
FLEX market will provide an alternative
to certain investors that want to
customize specified options terms not
available in the standardized market. In
addition to the factors noted above, the
Commission also believes that waiver of
the operative delay will allow the NYSE
Amex to immediately compete with
other exchanges for the trading of such
FLEX options, thereby providing
investors another venue on which to
trade these products. For these reasons,
the Commission designates, consistent
with the protection of investors and the
public interest, that the proposed rule
change become operative immediately
upon filing.12
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend the 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
11 See
supra note 4.
purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
12 For
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Federal Register / Vol. 76, No. 120 / Wednesday, June 22, 2011 / Notices
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–NYSEAmex–2011–38 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 No.
SR–NYSEAmex–2011–38. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official
business days between the hours of
10 a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal office of NYSE
Amex. 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 No.
SR–NYSEAmex–2011–38 and should be
submitted on or before July 13, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–15605 Filed 6–21–11; 8:45 am]
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BILLING CODE 8011–01–P
13 17
CFR 200.30–3(a)(12).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64690; File No. SR–
NYSEArca–2011–17]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Order Granting Approval of
Proposed Rule Change Relating to the
Listing and Trading of the Madrona
Forward Domestic ETF, Madrona
Forward International ETF, and
Madrona Forward Global Bond ETF
June 16, 2011.
I. Introduction
On April 13, 2011, NYSE Arca, Inc.
(‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 list and trade shares
(‘‘Shares’’) of the Madrona Forward
Domestic ETF, Madrona Forward
International ETF, and Madrona
Forward Global Bond ETF (each a
‘‘Fund,’’ and, together, the ‘‘Funds’’)
under NYSE Arca Equities Rule 8.600.
The proposed rule change was
published in the Federal Register on
May 2, 2011.3 The Commission received
no comments on the proposal. This
order grants approval of the proposed
rule change.
II. Description of the Proposal
The Exchange proposes to list and
trade the Shares pursuant to NYSE Arca
Equities Rule 8.600. The Shares will be
offered by the AdvisorShares Trust
(‘‘Trust’’), a statutory trust organized
under the laws of the State of Delaware
and registered with the Commission as
an open-end management investment
company.4 The investment advisor for
the Funds is AdvisorShares
Investments, LLC (‘‘Adviser’’). Madrona
Funds LLC is the Funds’ sub-adviser
(‘‘Sub-Adviser’’) and provides day-today portfolio management of the Funds.
Foreside Fund Services, LLC
(‘‘Distributor’’) is the principal
underwriter and distributor of the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 64342
(April 26, 2011), 76 FR 24548 (‘‘Notice’’).
4 The Trust is registered under the Investment
Company Act of 1940 (‘‘1940 Act’’). On November
30, 2010, the Trust filed with the Commission Form
N–1A under the Securities Act of 1933 (15 U.S.C.
77a) and under the 1940 Act relating to the Funds
(File Nos. 333–157876 and 811–22110)
(‘‘Registration Statement’’). The Trust has also filed
an Application for an Order under Section 6(c) of
the 1940 Act for exemptions from various
provisions of the 1940 Act and rules thereunder
(File No. 812–13677), dated May 6, 2010
(‘‘Exemptive Application’’).
2 17
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Fmt 4703
Sfmt 4703
Funds’ Shares. The Bank of New York
Mellon Corporation (‘‘Administrator’’)
serves as administrator, custodian, and
transfer agent for the Funds. The
Exchange states that neither the Adviser
nor the Sub-Adviser is affiliated with a
broker-dealer.5
With respect to each of the Funds, the
Sub-Adviser will employ a forwardlooking fundamental investment process
when making capital allocation
decisions across investment strategies
for the Funds. The underlying
investment process for the Madrona
Forward Domestic ETF and the
Madrona Forward International ETF is
based on a measure of forecasted
earnings and projected growth relative
to the price of the equities. The
underlying investment process for the
Madrona Forward Global Bond ETF is
based on fundamental yield curve
analysis and a measure of mean
reversion for future expected yield
curve trajectory. Each Fund will utilize
a core investment allocation strategy
seeking to replace what the SubAdviser’s investment committee deems
inefficient index methodologies for core
investing that are prevalent in the
marketplace. The Funds will invest in
actively managed, broadly diversified
portfolios and differ from most
traditional indices in that the
proportion, or weighting, of the
securities in the Funds are based on
forward-looking fundamental analysis
rather than only on market
capitalization of such securities. Risk
management guidelines will be
employed to protect against dramatic
over- or under-weighting of individual
securities, reducing company specific
risks.
Madrona Forward Domestic ETF
The investment objective of this Fund
is to seek long-term capital appreciation
above the capital appreciation of its
benchmark, the S&P 500 Index. The
Sub-Adviser will seek to achieve the
Fund’s investment objective primarily
by selecting a portfolio of up to 500 of
the largest U.S. exchange-traded equity
securities.6 The Sub-Adviser will select
the securities for the Fund’s portfolio
5 See Commentary .06 to NYSE Arca Equities
Rule 8.600. The Exchange represents that, in the
event (a) the Adviser or Sub-Adviser becomes
newly affiliated with a broker-dealer, or (b) any new
adviser or sub-adviser becomes affiliated with a
broker-dealer, such adviser and/or sub-adviser will
implement a fire wall with respect to such brokerdealer regarding access to information concerning
the composition and/or changes to the portfolio,
and will be subject to procedures designed to
prevent the use and dissemination of material nonpublic information regarding such portfolio.
6 The Fund may hold only equity securities
traded in the U.S. on registered exchanges and will
hold a minimum of 13 equity components.
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]]>Agencies
[Federal Register Volume 76, Number 120 (Wednesday, June 22, 2011)]
[Notices]
[Pages 36598-36600]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-15605]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64693; File No. SR-NYSEAmex-2011-38]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending Rule 903G
To Permit the Exchange To List Flexible Exchange Options on Index and
Equity Securities That Are Eligible for Non-FLEX Options Trading, and
That Have Non-FLEX Options on Such Index and Equity Securities Listed
and Traded on at Least One National Securities Exchange, Even if the
Exchange Does Not List Such Non-FLEX Options
June 16, 2011.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on June 3, 2011, NYSE Amex LLC (the ``Exchange'' or ``NYSE
Amex'') 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 self-regulatory
organization. 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\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange proposes to amend Rule 903G (Terms of FLEX Options) to
permit the Exchange to list Flexible Exchange Options (``FLEX
Options'') on index and equity securities that are eligible for Non-
FLEX Options trading, and that have Non-FLEX Options on such index and
equity securities listed and traded on at least one national securities
exchange, even if the Exchange does not list such Non-FLEX Options. The
text of the proposed rule change is available at the Exchange, the
Commission's Public Reference Room, and https://www.nyse.com.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing to amend Rule 903G (Terms of FLEX
Options) to permit trading of FLEX Options series in securities whose
Non-FLEX Options are listed and traded on a national securities
exchange(s), based on a recently adopted rule change of the Chicago
Board Options Exchange (``CBOE'').\4\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 60585 (August 28,
2009), 74 FR 46257 (September 8, 2009). Unlike CBOE's rule, we have
clarified that our proposed rule would only permit the trading of
FLEX Options on securities whose Non-Flex Options are listed and
traded on at least one options exchange.
---------------------------------------------------------------------------
Rule 903G currently permits the Exchange to approve and open for
trading FLEX Options only after the particular index or equity security
has been approved for Non-FLEX Options trading.
The Exchange proposes to adopt a rule change similar to a rule
change recently adopted by the CBOE to allow FLEX Equity Options on any
security that meets the standards of NYSE Amex Rule 915, and that has
Non-FLEX Options on such security listed and traded on at least one
options exchange, regardless of whether the Exchange trades such Non-
FLEX Options.
Similarly, the CBOE rule change also adopted a provision to allow
FLEX Index Options on any index that meets its listing standards. NYSE
Amex proposes to adopt a similar provision that would permit FLEX Index
Options on any index that meets the standards of Rule 901C, and that
has Non-FLEX Options on such index listed and traded on at least one
options exchange, even if the Exchange does not list and trade such
Non-FLEX Options.
The Exchange also proposes to designate 903G(c)(1) as ``reserved''
because the text in that provision stating that FLEX Equity Option
transactions are limited to transactions in options on underlying
securities that have been approved by the Exchange in accordance with
Rule 915 would no longer be applicable.
As an alternative to the over-the-counter marketplace and other
national security exchanges, the Exchange proposes to increase the
spectrum of indexes and equity securities that are
[[Page 36599]]
eligible for FLEX Options trading on the Exchange, even if the Exchange
does not list Non-FLEX Options on such indexes or equity securities. In
this regard, the Exchange does not list options on every NMS stock or
index that is eligible for options trading, even if permitted to do so
according to its listing standards, but recognizes that market
participants may want access to options on such indexes and equity
securities, in addition to the certainty and safeguards that a
regulated and standardized marketplace provides.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Securities Exchange Act of 1934 (the ``Act''),\5\ in
general, and furthers the objectives of Section 6(b)(5) of the Act,\6\
in particular, because it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system, and, in
general, to protect investors and the public interest. The Exchange
believes that its proposal to permit the Exchange to list FLEX Options
on indexes and equity securities that are eligible for Non-FLEX Options
trading and whose Non-FLEX Options are listed and traded on at least
one national securities exchange, even if the Exchange does not list
such Non-FLEX Options, would provide market participants with
additional means to manage their risk exposures and carry out their
investment objectives with listed options. In this regard, the
Exchange's proposal would increase competition in the FLEX Options
market. In addition, the Exchange's proposal is consistent with
investor protection and the public interest in that it is limited to
FLEX Options on securities that would be eligible to have, and in fact
have, Non-FLEX Options listed and traded on them. The criteria for such
underlying securities has been carefully crafted over the years to
ensure that only appropriate securities have standardized options
listed on them (e.g., securities with sufficient trading volume and
shareholders).
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
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 proposed rule change: (i) Does not significantly affect
the protection of investors or the public interest; (ii) does not
impose any significant burden on competition; and (iii) does not become
operative for 30 days after the date of the filing, or such shorter
time as the Commission may designate if consistent with the protection
of investors and the public interest, the proposed rule change has
become effective pursuant to Section 19(b)(3)(A) of the Act \7\ and
Rule 19b-4(f)(6) thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii)
under the Act, the Exchange is required to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Commission notes that the Exchange has satisfied this
requirement.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \9\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \10\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has requested that the Commission waive the 30-day operative delay so
that the Exchange could immediately list FLEX Options on indexes and
equity securities that are eligible for non-FLEX Options trading, and
that have non-FLEX Options on such index and equity securities listed
and traded on at least one national securities exchange, even if the
Exchange does not list non-FLEX Options on such indexes and equity
securities. In support of the waiver, the Exchange believes that it
would benefit the marketplace and the investing public because it would
provide market participants with additional means to manage their risk
exposures and carry out their investment objectives with listed
options.
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\9\ 17 CFR 240.19b-4(f)(6).
\10\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiver of the operative delay is
consistent with the protection of investors and the public interest. In
making this determination, the Commission notes that NYSE Amex's
proposed rule change is substantially similar to CBOE's FLEX rules,
which also permit CBOE to list FLEX options on securities that are
eligible for non-FLEX options trading, even if CBOE does not list non-
FLEX options on such securities.\11\ The Commission notes that the
CBOE's proposal was subject to full notice and comment, and the
Commission received no comments on CBOE's rule proposal. Further, the
Commission notes that NYSE Amex's proposal adds clarification to the
rules, noting expressly that its rules would only permit the trading of
FLEX Options on securities whose non-FLEX Options are listed and traded
on at least one national securities exchange. This provision will help
to ensure that adequate exchange requirements are met for trading these
products and that the FLEX market will provide an alternative to
certain investors that want to customize specified options terms not
available in the standardized market. In addition to the factors noted
above, the Commission also believes that waiver of the operative delay
will allow the NYSE Amex to immediately compete with other exchanges
for the trading of such FLEX options, thereby providing investors
another venue on which to trade these products. For these reasons, the
Commission designates, consistent with the protection of investors and
the public interest, that the proposed rule change become operative
immediately upon filing.\12\
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\11\ See supra note 4.
\12\ 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. 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 the 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
[[Page 36600]]
Send an e-mail to rule-comments@sec.gov. Please include
File No. SR-NYSEAmex-2011-38 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 No. SR-NYSEAmex-2011-38. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of NYSE Amex. 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 No. SR-NYSEAmex-2011-38 and should be
submitted on or before July 13, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-15605 Filed 6-21-11; 8:45 am]
BILLING CODE 8011-01-P
