Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of a Proposal To Extend a Pilot Program That Permits BOX to Have No Minimum Size Requirement for Orders Entered Into the Price Improvement Period (PIP) Process Until July 18, 2012, 39940-39942 [2011-16950]
Download as PDF
<![CDATA[
sroberts on DSK5SPTVN1PROD with NOTICES
39940
Federal Register / Vol. 76, No. 130 / Thursday, July 7, 2011 / Notices
quarter, broken down by reference
entity, security, or index; and
(B) The total unit volume and/or
notional amount executed during the
quarter, broken down by reference
entity, security, or index;
(ii) The CDS CCP shall establish and
maintain adequate safeguards and
procedures to protect members’
confidential trading information. Such
safeguards and procedures shall
include:
(A) Limiting access to the confidential
trading information of members to those
employees of the CDS CCP who are
operating the system or responsible for
its compliance with this exemption or
any other applicable rules; and
(B) Establishing and maintaining
standards controlling employees of the
CDS CCP trading for their own accounts.
The CDS CCP must establish and
maintain adequate oversight procedures
to ensure that the safeguards and
procedures established pursuant to this
condition are followed; and
(iii) Each CDS CCP shall directly or
indirectly make available to the public
on terms that are fair and reasonable
and not unreasonably discriminatory:
(A) All end-of-day settlement prices
and any other prices with respect to
Cleared CDS that it may establish to
calculate mark-to-market margin
requirements for its clearing members;
and
(B) Any other pricing or valuation
information with respect to Cleared CDS
as is published or distributed by the
CDS CCP.
(4) Any member of an CDS CCP shall
be exempt from the requirements of
section 5 of the Exchange Act solely to
the extent such member uses any
facility of the CDS CCP to effect any
transaction in Cleared CDS, or to report
any such transaction, in connection
with the CDS CCP’s clearance and risk
management process for Cleared CDS.
(b) Definitions.
(1) For purposes of this exemption,
the term ‘‘central counterparty’’ means a
clearing agency that interposes itself
between the counterparties to securitybased swap transactions, acting
functionally as the buyer to every seller
and the seller to every buyer.
(2) For purposes of this exemption,
the term ‘‘CDS CCP’’ shall mean ICE
Trust U.S. LLC, Chicago Mercantile
Exchange Inc., and ICE Clear Europe,
Limited.
(3) For purposes of this exemption,
the term ‘‘Cleared CDS’’ shall mean a
credit default swap that is a securitybased swap that is submitted (or offered,
purchased, or sold on terms providing
for submission) to a CDS CCP, that is
offered only to, purchased only by, and
VerDate Mar<15>2010
16:26 Jul 06, 2011
Jkt 223001
sold only to persons that meet the
definition of eligible contract
participant as set forth in section 1a(12)
of the Commodity Exchange Act (as in
effect on July 20, 2010), and in which:
(i) The reference entity, the issuer of
the reference security, or the reference
security is one of the following:
(A) An entity reporting under the
Exchange Act, providing Securities Act
rule 144A(d)(4) information, or about
which financial information is
otherwise publicly available;
(B) A foreign private issuer whose
securities are listed outside the United
States and that has its principal trading
market outside the United States;
(C) A foreign sovereign debt security;
(D) An asset-backed security, as
defined in Regulation AB, issued in a
registered transaction with publicly
available distribution reports; or
(E) An asset-backed security issued or
guaranteed by the Federal National
Mortgage Association, the Federal Home
Loan Mortgage Corporation, or the
Government National Mortgage
Association; or
(ii) The reference index is an index in
which 80% or more of the index’s
weighting is comprised of the entities or
securities described in subparagraph (i).
It Is Hereby Further Ordered, pursuant
to section 36 of the Exchange Act, that
no contract entered into on or after July
16, 2011 shall be void or considered
voidable by reason of section 29(b) of
the Exchange Act because any person
that is a party to the contract violated a
provision of the Exchange Act for which
the Commission has provided
exemptive relief herein, until such time
as the underlying exemptive relief
expires.
By the Commission.
Dated: July 1, 2011.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–17040 Filed 7–6–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64779; File No. SR–BX–
2011–041]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposal To Extend a Pilot Program
That Permits BOX to Have No Minimum
Size Requirement for Orders Entered
Into the Price Improvement Period
(PIP) Process Until July 18, 2012
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
Frm 00130
Fmt 4703
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to amend
proposes to amend [sic] the
Supplementary Material to Chapter V,
Section 18 (The Price Improvement
Period ‘‘PIP’’) of the Rules of the Boston
Options Exchange Group, LLC (‘‘BOX’’)
to extend a pilot program that permits
BOX to have no minimum size
requirement for orders entered into the
PIP process (‘‘PIP Pilot Program’’). The
text of the proposed rule change is
available at the Exchange’s principal
office, at https://www.nasdaqomx.com, at
the Commission’s Public Reference
Room, and at the Commission’s Web
site at https://www.sec.gov.
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 the proposed rule
change is to extend the PIP Pilot
Program under the BOX Rules for
1 15
June 30, 2011.
PO 00000
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 29,
2011, NASDAQ OMX BX, Inc.
(‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been
substantially prepared by the Exchange.
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A) of the Act,3 and Rule 19b–
4(f)(6) thereunder,4 which renders the
proposal effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
Sfmt 4703
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
2 17
E:\FR\FM\07JYN1.SGM
07JYN1
Federal Register / Vol. 76, No. 130 / Thursday, July 7, 2011 / Notices
twelve (12) additional months. The PIP
Pilot Program allows BOX to have no
minimum size requirement for orders
entered into the PIP process.5 BOX has
committed to provide certain data to the
Commission during the PIP Pilot
Program.6 The proposed rule change
retains the text of Supplementary
Material .01 to Section 18 of Chapter V
of the BOX Rules and seeks to extend
the operation of the PIP Pilot Program
until July 18, 2012.
The Exchange notes that the PIP Pilot
Program guarantees Participants the
right to trade with their customer orders
that are less than 50 contracts. In
particular, any order entered into the
PIP is guaranteed an execution at the
end of the auction at a price at least
equal to the national best bid or offer.
In further support of this proposed rule
change, and as required by the Original
PIP Pilot Program Approval Order, the
Exchange represents that BOX has been
submitting to the Exchange and to the
Commission a PIP Pilot Program Report,
offering detailed data from, and analysis
of, the PIP Pilot Program. Although BOX
is submitting the reports, the Exchange
notes that it is also responsible for the
timeliness and the accuracy of the
information.
To aid the Commission in its
evaluation of the PIP Pilot Program,
BOX has represented to the Exchange
that BOX will provide the following
additional information each month: (1)
The number of orders of 50 contracts or
greater entered into the PIP auction; (2)
The percentage of all orders of 50
contracts or greater sent to BOX that are
entered into BOX’s PIP auction; (3) The
spread in the option, at the time an
order of 50 contracts or greater is
submitted to the PIP auction; (4) Of PIP
trades for orders of fewer than 50
contracts, the percentage done at the
National Best Bid or Offer (‘‘NBBO’’)
plus $.01, plus $.02, plus $.03, etc.; (5)
sroberts on DSK5SPTVN1PROD with NOTICES
5 The
Pilot Program is currently set to expire on
July 18, 2011. See Securities Exchange Act Release
No. 62512 (July 16, 2010), 75 FR 43223 (July 23,
2010) (SR–BX–2010–046). See also Securities and
Exchange Act Release Nos. 60337 (July 17, 2009),
74 FR 36805 (July 24, 2009) (SR–BX–2009–38);
58942 (November 13, 2008), 73 FR 70394
(November 20, 2008) (SR–BSE–2008–49); 58195
(July 18, 2008), 73 FR 43801 (July 28, 2008) (SR–
BSE–2008–39); 55999 (July 2, 2007), 72 FR 37549
(July 10, 2007) (SR–BSE–2007–27); 54066 (June 29,
2006), 71 FR 38434 (July 6, 2006) (SR–BSE–2006–
24); 52149 (July 28, 2005), 70 FR 44704 (August 3,
2005) (SR–BSE–2005–22); 49068 (January 13, 2004),
69 FR 2775 (January 20, 2004) (SR–BSE–2002–15)
(‘‘Original PIP Pilot Program Approval Order’’); and
51821 (June 10, 2005), 70 FR 35143 (June 16, 2005)
(SR–BSE–2004–51) (Order Approval Relating to the
Trading of Market Orders on the Boston Options
Exchange).
6 See Securities Exchange Act Release No. 51821
(June 10, 2005), 70 FR 35143 (June 16, 2005) (SR–
BSE–2004–51).
VerDate Mar<15>2010
16:26 Jul 06, 2011
Jkt 223001
Of PIP trades for orders of 50 contracts
or greater, the percentage done at the
NBBO plus $.01, plus $.02, plus $.03,
etc.; (6) The number of orders submitted
by Order Flow Providers (‘‘OFPs’’) when
the spread was $.05, $.10, $.15, etc. For
each spread, BOX will specify the
percentage of contracts in orders of
fewer than 50 contracts submitted to
BOX’s PIP that were traded by: (a) The
OFP that submitted the order to the PIP;
(b) BOX Market Makers assigned to the
class; (c) other BOX Participants; (d)
Public Customer Orders (including
Customer PIP Orders (‘‘CPOs’’)); and (e)
unrelated orders (orders in standard
increments entered during the PIP). For
each spread, BOX will also specify the
percentage of contracts in orders of 50
contracts or greater submitted to BOX’s
PIP that were traded by: (a) The OFP
that submitted the order to the PIP; (b)
BOX Market Makers assigned to the
class; (c) other BOX Participants; (d)
Public Customer Orders (including
CPOs); and (e) unrelated orders (orders
in standard increments entered during
PIP); (7) For the first Wednesday of each
month: (a) the total number of PIP
auctions on that date; (b) the number of
PIP auctions where the order submitted
to the PIP was fewer than 50 contracts;
(c) the number of PIP auctions where
the order submitted to the PIP was 50
contracts or greater; (d) the number of
PIP auctions (for orders of fewer than 50
contracts) with 0 participants (excluding
the initiating participant), 1 participant
(excluding the initiating participant), 2
participants (excluding the initiating
participant), 3 participants (excluding
the initiating participant), 4 participants
(excluding the initiating participant),
etc., and (e) the number of PIP auctions
(for orders of 50 contracts or greater)
with 0 participants (excluding the
initiating participant), 1 participant
(excluding the initiating participant), 2
participants (excluding the initiating
participant), 3 participants (excluding
the initiating participant), 4 participants
(excluding the initiating participant),
etc.; and (8) For the third Wednesday of
each month: (a) The total number of PIP
auctions on that date; (b) the number of
PIP auctions where the order submitted
to the PIP was fewer than 50 contracts;
(c) the number of PIP auctions where
the order submitted to the PIP was 50
contracts or greater; (d) the number of
PIP auctions (for orders of fewer than 50
contracts) with 0 participants (excluding
the initiating participant), 1 participant
(excluding the initiating participant), 2
participants (excluding the initiating
participant), 3 participants (excluding
the initiating participant), 4 participants
(excluding the initiating participant),
PO 00000
Frm 00131
Fmt 4703
Sfmt 4703
39941
etc., and (e) the number of PIP auctions
(for orders of 50 contracts or greater)
with 0 participants (excluding the
initiating participant), 1 participant
(excluding the initiating participant), 2
participants (excluding the initiating
participant), 3 participants (excluding
the initiating participant), 4 participants
(excluding the initiating participant),
etc.
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the Act,7
in general, and Section 6(b)(5) of the
Act,8 in particular, in that it is designed
to foster cooperation and coordination
with persons engaged in regulating,
clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism for a free and open market
and a national market system and, in
general, to protect investors and the
public interest. The Exchange believes
that the data demonstrates that there is
sufficient investor interest and demand
to extend the PIP Pilot Program for an
additional twelve (12) months. The
Exchange represents that the Pilot
Program is designed to provide
investors with real and significant price
improvement regardless of the size of
the order.
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
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 9 and Rule
19b–4(f)(6) thereunder.10 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) by its terms,
7 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
9 15 U.S.C. 78s(b)(3)(A)(iii).
10 17 CFR 240.19b–4(f)(6).
8 15
E:\FR\FM\07JYN1.SGM
07JYN1
39942
Federal Register / Vol. 76, No. 130 / Thursday, July 7, 2011 / Notices
become operative prior to 30 days from
the date on which it was filed, 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 upon filing with the
Commission pursuant to Section
19(b)(3)(A) of the Act 11 and Rule 19b–
4(f)(6)(iii) thereunder.12
The Exchange has requested that the
Commission waive the 30-day operative
delay period. The Commission believes
that waiver of the 30-day operative
delay period is consistent with the
protection of investors and the public
interest because such waiver will allow
the PIP Pilot program to continue
without interruption. Accordingly, the
Commission designates the proposed
rule change operative upon filing with
the Commission.13
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.14
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–BX–2011–041 on the
subject line.
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–BX–2011–041. 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 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–BX–
2011–041 and should be submitted on
or before July 28, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Cathy H. Ahn,
Deputy Secretary.
Paper Comments
[FR Doc. 2011–16950 Filed 7–6–11; 8:45 am]
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
BILLING CODE 8011–01–P
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii). 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 met this requirement.
13 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
14 15 U.S.C. 78s(b)(3)(C).
sroberts on DSK5SPTVN1PROD with NOTICES
12 17
16:26 Jul 06, 2011
Jkt 223001
PO 00000
[Release No. 34–64789; File No. SR–
NASDAQ–2011–087]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify Its
Co-Location Fee Schedule To
Establish Fees for Access to Market
Data Feeds From the Toronto Stock
Exchange and the TSX Venture
Exchange
July 1, 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 June 23,
2011, The NASDAQ Stock Market LLC
(‘‘NASDAQ’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III 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 the Substance
of the Proposed Rule Change
The Exchange proposes to modify its
co-location fee schedule to establish fees
for access to market data feeds from the
Toronto Stock Exchange (‘‘TSX’’) and
the TSX Venture Exchange (‘‘TSXV’’).
The Exchange will implement the
proposed change on July 1, 2011. The
text of the proposed rule change is
available at https://
nasdaq.cchwallstreet.com/, at the
Exchange’s principal office, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
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.
11 15
VerDate Mar<15>2010
SECURITIES AND EXCHANGE
COMMISSION
1 15
15 17
CFR 200.30–3(a)(12).
Frm 00132
Fmt 4703
Sfmt 4703
2 17
E:\FR\FM\07JYN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
07JYN1
]]>Agencies
[Federal Register Volume 76, Number 130 (Thursday, July 7, 2011)]
[Notices]
[Pages 39940-39942]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-16950]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64779; File No. SR-BX-2011-041]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposal To Extend a Pilot
Program That Permits BOX to Have No Minimum Size Requirement for Orders
Entered Into the Price Improvement Period (PIP) Process Until July 18,
2012
June 30, 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 June 29, 2011, NASDAQ OMX BX, Inc. (``Exchange'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I and II below, which Items have been
substantially prepared by the Exchange. The Exchange has filed the
proposed rule change pursuant to Section 19(b)(3)(A) of the Act,\3\ and
Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal effective
upon filing with the Commission. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange proposes to amend proposes to amend [sic] the
Supplementary Material to Chapter V, Section 18 (The Price Improvement
Period ``PIP'') of the Rules of the Boston Options Exchange Group, LLC
(``BOX'') to extend a pilot program that permits BOX to have no minimum
size requirement for orders entered into the PIP process (``PIP Pilot
Program''). The text of the proposed rule change is available at the
Exchange's principal office, at https://www.nasdaqomx.com, at the
Commission's Public Reference Room, and at the Commission's Web site at
https://www.sec.gov.
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 the proposed rule change is to extend the PIP Pilot
Program under the BOX Rules for
[[Page 39941]]
twelve (12) additional months. The PIP Pilot Program allows BOX to have
no minimum size requirement for orders entered into the PIP process.\5\
BOX has committed to provide certain data to the Commission during the
PIP Pilot Program.\6\ The proposed rule change retains the text of
Supplementary Material .01 to Section 18 of Chapter V of the BOX Rules
and seeks to extend the operation of the PIP Pilot Program until July
18, 2012.
---------------------------------------------------------------------------
\5\ The Pilot Program is currently set to expire on July 18,
2011. See Securities Exchange Act Release No. 62512 (July 16, 2010),
75 FR 43223 (July 23, 2010) (SR-BX-2010-046). See also Securities
and Exchange Act Release Nos. 60337 (July 17, 2009), 74 FR 36805
(July 24, 2009) (SR-BX-2009-38); 58942 (November 13, 2008), 73 FR
70394 (November 20, 2008) (SR-BSE-2008-49); 58195 (July 18, 2008),
73 FR 43801 (July 28, 2008) (SR-BSE-2008-39); 55999 (July 2, 2007),
72 FR 37549 (July 10, 2007) (SR-BSE-2007-27); 54066 (June 29, 2006),
71 FR 38434 (July 6, 2006) (SR-BSE-2006-24); 52149 (July 28, 2005),
70 FR 44704 (August 3, 2005) (SR-BSE-2005-22); 49068 (January 13,
2004), 69 FR 2775 (January 20, 2004) (SR-BSE-2002-15) (``Original
PIP Pilot Program Approval Order''); and 51821 (June 10, 2005), 70
FR 35143 (June 16, 2005) (SR-BSE-2004-51) (Order Approval Relating
to the Trading of Market Orders on the Boston Options Exchange).
\6\ See Securities Exchange Act Release No. 51821 (June 10,
2005), 70 FR 35143 (June 16, 2005) (SR-BSE-2004-51).
---------------------------------------------------------------------------
The Exchange notes that the PIP Pilot Program guarantees
Participants the right to trade with their customer orders that are
less than 50 contracts. In particular, any order entered into the PIP
is guaranteed an execution at the end of the auction at a price at
least equal to the national best bid or offer. In further support of
this proposed rule change, and as required by the Original PIP Pilot
Program Approval Order, the Exchange represents that BOX has been
submitting to the Exchange and to the Commission a PIP Pilot Program
Report, offering detailed data from, and analysis of, the PIP Pilot
Program. Although BOX is submitting the reports, the Exchange notes
that it is also responsible for the timeliness and the accuracy of the
information.
To aid the Commission in its evaluation of the PIP Pilot Program,
BOX has represented to the Exchange that BOX will provide the following
additional information each month: (1) The number of orders of 50
contracts or greater entered into the PIP auction; (2) The percentage
of all orders of 50 contracts or greater sent to BOX that are entered
into BOX's PIP auction; (3) The spread in the option, at the time an
order of 50 contracts or greater is submitted to the PIP auction; (4)
Of PIP trades for orders of fewer than 50 contracts, the percentage
done at the National Best Bid or Offer (``NBBO'') plus $.01, plus $.02,
plus $.03, etc.; (5) Of PIP trades for orders of 50 contracts or
greater, the percentage done at the NBBO plus $.01, plus $.02, plus
$.03, etc.; (6) The number of orders submitted by Order Flow Providers
(``OFPs'') when the spread was $.05, $.10, $.15, etc. For each spread,
BOX will specify the percentage of contracts in orders of fewer than 50
contracts submitted to BOX's PIP that were traded by: (a) The OFP that
submitted the order to the PIP; (b) BOX Market Makers assigned to the
class; (c) other BOX Participants; (d) Public Customer Orders
(including Customer PIP Orders (``CPOs'')); and (e) unrelated orders
(orders in standard increments entered during the PIP). For each
spread, BOX will also specify the percentage of contracts in orders of
50 contracts or greater submitted to BOX's PIP that were traded by: (a)
The OFP that submitted the order to the PIP; (b) BOX Market Makers
assigned to the class; (c) other BOX Participants; (d) Public Customer
Orders (including CPOs); and (e) unrelated orders (orders in standard
increments entered during PIP); (7) For the first Wednesday of each
month: (a) the total number of PIP auctions on that date; (b) the
number of PIP auctions where the order submitted to the PIP was fewer
than 50 contracts; (c) the number of PIP auctions where the order
submitted to the PIP was 50 contracts or greater; (d) the number of PIP
auctions (for orders of fewer than 50 contracts) with 0 participants
(excluding the initiating participant), 1 participant (excluding the
initiating participant), 2 participants (excluding the initiating
participant), 3 participants (excluding the initiating participant), 4
participants (excluding the initiating participant), etc., and (e) the
number of PIP auctions (for orders of 50 contracts or greater) with 0
participants (excluding the initiating participant), 1 participant
(excluding the initiating participant), 2 participants (excluding the
initiating participant), 3 participants (excluding the initiating
participant), 4 participants (excluding the initiating participant),
etc.; and (8) For the third Wednesday of each month: (a) The total
number of PIP auctions on that date; (b) the number of PIP auctions
where the order submitted to the PIP was fewer than 50 contracts; (c)
the number of PIP auctions where the order submitted to the PIP was 50
contracts or greater; (d) the number of PIP auctions (for orders of
fewer than 50 contracts) with 0 participants (excluding the initiating
participant), 1 participant (excluding the initiating participant), 2
participants (excluding the initiating participant), 3 participants
(excluding the initiating participant), 4 participants (excluding the
initiating participant), etc., and (e) the number of PIP auctions (for
orders of 50 contracts or greater) with 0 participants (excluding the
initiating participant), 1 participant (excluding the initiating
participant), 2 participants (excluding the initiating participant), 3
participants (excluding the initiating participant), 4 participants
(excluding the initiating participant), etc.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\7\ in general, and Section
6(b)(5) of the Act,\8\ in particular, in that it is designed to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism for a free and open market and a national market
system and, in general, to protect investors and the public interest.
The Exchange believes that the data demonstrates that there is
sufficient investor interest and demand to extend the PIP Pilot Program
for an additional twelve (12) months. The Exchange represents that the
Pilot Program is designed to provide investors with real and
significant price improvement regardless of the size of the order.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 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 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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) by its terms,
[[Page 39942]]
become operative prior to 30 days from the date on which it was filed,
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 upon filing with the Commission
pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6)(iii) thereunder.\12\
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(6).
\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6)(iii). 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 met this requirement.
---------------------------------------------------------------------------
The Exchange has requested that the Commission waive the 30-day
operative delay period. The Commission believes that waiver of the 30-
day operative delay period is consistent with the protection of
investors and the public interest because such waiver will allow the
PIP Pilot program to continue without interruption. Accordingly, the
Commission designates the proposed rule change operative upon filing
with the Commission.\13\
---------------------------------------------------------------------------
\13\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.\14\
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------
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-BX-2011-041 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-BX-2011-041. 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 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-BX-2011-041 and should be
submitted on or before July 28, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-16950 Filed 7-6-11; 8:45 am]
BILLING CODE 8011-01-P
