Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Fee Schedule by Adding Definitions for the Strategy Executions That Qualify for Transaction Fee Caps, 42759-42760 [2011-18040]

Download as PDF Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Notices Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64875; File No. SR– NYSEArca–2011–43] sroberts on DSK5SPTVN1PROD with NOTICES Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed All submissions should refer to File Rule Change Amending Its Fee Number SR–CBOE–2011–061. This file Schedule by Adding Definitions for the number should be included on the subject line if e-mail is used. To help the Strategy Executions That Qualify for Transaction Fee Caps Commission process and review your comments more efficiently, please use July 13, 2011. only one method. The Commission will Pursuant to Section 19(b)(1) of the post all comments on the Commission’s Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 Internet Web site (http://www.sec.gov/ notice is hereby given that, on June 30, rules/sro/shtml). Copies of the 2011, NYSE Arca, Inc. (the ‘‘Exchange’’ submission, all subsequent or ‘‘NYSE Arca’’) filed with the amendments, all written statements Securities and Exchange Commission with respect to the proposed rule (the ‘‘Commission’’) the proposed rule change that are filed with the change as described in Items I, II, and Commission, and all written III below, which Items have been communications relating to the prepared by the Exchange. The proposed rule change between the Commission is publishing this notice to Commission and any person, other than solicit comments on the proposed rule those that may be withheld from the change from interested persons. public in accordance with the I. Self-Regulatory Organization’s provisions of 5 U.S.C. 552, will be Statement of the Terms of Substance of available for Web site viewing and the Proposed Rule Change printing in the Commission’s Public Reference Room, 100 F Street, NE., The Exchange proposes to amend its Washington, DC 20549, on official Fee Schedule by adding definitions for the Strategy Executions that qualify for business days between the hours of 10 transaction fee caps. The text of the a.m. and 3 p.m. Copies of such filing will also be available for inspection and proposed rule change is available at the Exchange, at http://www.nyse.com, at copying at the principal office of the the Commission’s Public Reference Exchange. All comments received will Room, and at the Commission’s Web be posted without change; the site at http://www.sec.gov. Commission does not edit personal identifying information from II. Self-Regulatory Organization’s submissions. You should submit only Statement of the Purpose of, and Statutory Basis for, the Proposed Rule information that you wish to make Change available publicly. All submissions should refer to File No. SR–CBOE– In its filing with the Commission, the 2011–061 and should be submitted on self-regulatory organization included or before August 9, 2011. statements concerning the purpose of, and basis for, the proposed rule change For the Commission, by the Division of and discussed any comments it received Trading and Markets, pursuant to delegated on the proposed rule change. The text authority.16 of those statements may be examined at Cathy H. Ahn, the places specified in Item IV below. Deputy Secretary. The Exchange has prepared summaries, [FR Doc. 2011–18074 Filed 7–18–11; 8:45 am] set forth in sections A, B, and C below, BILLING CODE 8011–01–P of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose NYSE Arca proposes to amend its Fee Schedule by adding definitions for the 1 15 16 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 17:20 Jul 18, 2011 2 17 Jkt 223001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00086 Fmt 4703 Sfmt 4703 42759 Strategy Executions that qualify for transaction fee caps. The Exchange does not propose to change any fees in the Fee Schedule. In 2003, the Exchange amended its Fee Schedule to cap transaction fees for Strategy Executions involving reversals and conversions, dividend spreads, and box spreads.3 The Exchange subsequently expanded the Strategy Executions eligible for the transaction fee cap to include short stock interest spreads, merger spreads and jelly rolls.4 In its previous rule filings, the Exchange described the requirements that Strategy Executions must meet to qualify for the transaction fee cap; however these Strategy Executions were not defined in the Fee Schedule. The Exchange is now proposing to define the Strategy Executions in order to provide additional clarity and transparency in the Fee Schedule.5 The Exchange proposes to define each of the six Strategy Executions that qualify for the cap in new endnote 9: 6 • A ‘‘reversal’’ is established by combining a short security position with a short put and a long call position that shares the same strike and expiration. A ‘‘conversion’’ is established by combining a long position in the underlying security with a long put and a short call position that shares the same strike and expiration. • A ‘‘dividend spread’’ is defined as transactions done to achieve a dividend arbitrage involving the purchase, sale and exercise of in-the-money options of the same class, executed prior to the date on which the underlying stock goes ex-dividend. • A ‘‘box spread’’ is defined as transactions involving a long call option and a short put option at one strike, combined with a short call option and long put at a different strike, to create synthetic long and synthetic short stock positions, respectively. • A ‘‘short stock interest spread’’ is defined as transactions done to achieve a short stock interest arbitrage involving 3 See Exchange Act Release No. 48363 (August 19, 2003), 68 FR 51625 (August 27, 2003) (SR–PCX– 2003–39) (the ‘‘2003 Release’’). 4 See Exchange Act Release No. 51787 (June 6, 2005), 70 FR 34174 (June 13, 2005) (SR–PCX–2005– 65) (the ‘‘2005 Release’’) and Exchange Act Release No. 60101 (June 11, 2009), 74 FR 29249 (June 19, 2009) (SR–NYSEArca–2009–49) (the ‘‘2009 Release’’). 5 The Commission notes that the definitions proposed by the Exchange in the instant filing slightly differ from the definitions set forth in the 2003 Release, the 2005 Release, and the 2009 Release. 6 The Chicago Board Options Exchange, Incorporated (‘‘CBOE’’) already has these strategies, with the exception of the box spread, defined in its fee schedule. See (http://www.cboe.com/publish/ feeschedule/CBOEFeeSchedule.pdf). E:\FR\FM\19JYN1.SGM 19JYN1 42760 Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / Notices the purchase, sale and exercise of inthe-money options of the same class. • A ‘‘merger spread’’ is defined as transactions done to achieve a merger arbitrage involving the purchase, sale and exercise of options of the same class and expiration date, each executed prior to the date on which shareholders of record are required to elect their respective form of consideration, i.e., cash or stock. A ‘‘jelly roll’’ is created by entering into two separate positions simultaneously. One position involves buying a put and selling a call with the same strike price and expiration. The second position involves selling a put and buying a call, with the same strike price, but with a different expiration from the first position. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Securities Exchange Act of 1934 (the ‘‘Act’’),7 in general, and Section 6(b)(5) of the Act,8 in particular, in that it is designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest. In this respect, the Exchange is not proposing any changes to the fees within its Fee Schedule, but rather adding definitions for the Strategy Executions that qualify for the transaction fee caps. This change will better inform investors and the public of the necessary requirements for a Strategy Execution to qualify for the fee caps. 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 sroberts on DSK5SPTVN1PROD with NOTICES 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 The foregoing rule change is effective upon filing pursuant to Section 7 15 8 15 19(b)(3)(A)(i) 9 of the Act and Rule 19b– 4(f)(1) 10 thereunder, as constituting a stated interpretation of the meaning, administration and enforcement of an existing rule of the Exchange. The proposed rule change provides definitions for existing terms in the Fee Schedule, and the definitions are consistent with the manner in which the Exchange interpreted those terms. At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NYSEArca–2011–43 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–NYSEArca–2011–43. 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 website (http://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 website viewing and U.S.C. 78f. U.S.C. 78f(b)(5). VerDate Mar<15>2010 19:59 Jul 18, 2011 9 15 U.S.C. 78s(b)(3)(A)(i). CFR 240.19b–4(f)(1). 10 17 Jkt 223001 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 printing in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– NYSEArca–2011–43 and should be submitted on or before August 9, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–18040 Filed 7–18–11; 8:45 am] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION SBA Council on Underserved Communities Meeting AGENCY: U.S. Small Business Administration (SBA). ACTION: Notice of Federal advisory committee meeting. SUMMARY: The SBA is issuing this notice to announce the location, date, time, and agenda for the first meeting of the SBA Council on Underserved Communities. The meeting will be open to the public. DATES: The meeting will be held on Thursday, August 4, 2011 from 9:30 a.m. to 12:30 p.m. Eastern Standard Time. ADDRESSES: The meeting will be held at the U.S. Small Business Administration: 409 3rd St SW., Eisenhower Conference Room, Second Floor, Washington, DC 20024. Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (5 U.S.C., Appendix 2), SBA announces the meeting of the SBA Council on Underserved Communities (the ‘‘Council’’). The Council is tasked with providing advice, ideas and opinions on SBA programs and services and issues of interest to small businesses in underserved communities. For more information, please visit http:// www.sba.gov/content/councilunderserved-communities-cuc. SUPPLEMENTARY INFORMATION: 11 17 E:\FR\FM\19JYN1.SGM CFR 200.30–3(a)(12). 19JYN1

Agencies

[Federal Register Volume 76, Number 138 (Tuesday, July 19, 2011)]
[Notices]
[Pages 42759-42760]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-18040]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64875; File No. SR-NYSEArca-2011-43]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending Its Fee 
Schedule by Adding Definitions for the Strategy Executions That Qualify 
for Transaction Fee Caps

July 13, 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 30, 2011, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its Fee Schedule by adding 
definitions for the Strategy Executions that qualify for transaction 
fee caps. The text of the proposed rule change is available at the 
Exchange, at http://www.nyse.com, at the Commission's Public Reference 
Room, and at the Commission's Web site at http://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 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NYSE Arca proposes to amend its Fee Schedule by adding definitions 
for the Strategy Executions that qualify for transaction fee caps. The 
Exchange does not propose to change any fees in the Fee Schedule.
    In 2003, the Exchange amended its Fee Schedule to cap transaction 
fees for Strategy Executions involving reversals and conversions, 
dividend spreads, and box spreads.\3\ The Exchange subsequently 
expanded the Strategy Executions eligible for the transaction fee cap 
to include short stock interest spreads, merger spreads and jelly 
rolls.\4\ In its previous rule filings, the Exchange described the 
requirements that Strategy Executions must meet to qualify for the 
transaction fee cap; however these Strategy Executions were not defined 
in the Fee Schedule. The Exchange is now proposing to define the 
Strategy Executions in order to provide additional clarity and 
transparency in the Fee Schedule.\5\
---------------------------------------------------------------------------

    \3\ See Exchange Act Release No. 48363 (August 19, 2003), 68 FR 
51625 (August 27, 2003) (SR-PCX-2003-39) (the ``2003 Release'').
    \4\ See Exchange Act Release No. 51787 (June 6, 2005), 70 FR 
34174 (June 13, 2005) (SR-PCX-2005-65) (the ``2005 Release'') and 
Exchange Act Release No. 60101 (June 11, 2009), 74 FR 29249 (June 
19, 2009) (SR-NYSEArca-2009-49) (the ``2009 Release'').
    \5\ The Commission notes that the definitions proposed by the 
Exchange in the instant filing slightly differ from the definitions 
set forth in the 2003 Release, the 2005 Release, and the 2009 
Release.
---------------------------------------------------------------------------

    The Exchange proposes to define each of the six Strategy Executions 
that qualify for the cap in new endnote 9: \6\
---------------------------------------------------------------------------

    \6\ The Chicago Board Options Exchange, Incorporated (``CBOE'') 
already has these strategies, with the exception of the box spread, 
defined in its fee schedule. See (http://www.cboe.com/publish/feeschedule/CBOEFeeSchedule.pdf).
---------------------------------------------------------------------------

     A ``reversal'' is established by combining a short 
security position with a short put and a long call position that shares 
the same strike and expiration. A ``conversion'' is established by 
combining a long position in the underlying security with a long put 
and a short call position that shares the same strike and expiration.
     A ``dividend spread'' is defined as transactions done to 
achieve a dividend arbitrage involving the purchase, sale and exercise 
of in-the-money options of the same class, executed prior to the date 
on which the underlying stock goes ex-dividend.
     A ``box spread'' is defined as transactions involving a 
long call option and a short put option at one strike, combined with a 
short call option and long put at a different strike, to create 
synthetic long and synthetic short stock positions, respectively.
     A ``short stock interest spread'' is defined as 
transactions done to achieve a short stock interest arbitrage involving

[[Page 42760]]

the purchase, sale and exercise of in-the-money options of the same 
class.
     A ``merger spread'' is defined as transactions done to 
achieve a merger arbitrage involving the purchase, sale and exercise of 
options of the same class and expiration date, each executed prior to 
the date on which shareholders of record are required to elect their 
respective form of consideration, i.e., cash or stock.
    A ``jelly roll'' is created by entering into two separate positions 
simultaneously. One position involves buying a put and selling a call 
with the same strike price and expiration. The second position involves 
selling a put and buying a call, with the same strike price, but with a 
different expiration from the first position.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Securities Exchange Act of 1934 
(the ``Act''),\7\ in general, and Section 6(b)(5) of the Act,\8\ in 
particular, in that it is designed to promote just and equitable 
principles of trade, remove impediments to and perfect the mechanisms 
of a free and open market and a national market system and, in general, 
to protect investors and the public interest. In this respect, the 
Exchange is not proposing any changes to the fees within its Fee 
Schedule, but rather adding definitions for the Strategy Executions 
that qualify for the transaction fee caps. This change will better 
inform investors and the public of the necessary requirements for a 
Strategy Execution to qualify for the fee caps.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f.
    \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 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

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A)(i) \9\ of the Act and Rule 19b-4(f)(1) \10\ 
thereunder, as constituting a stated interpretation of the meaning, 
administration and enforcement of an existing rule of the Exchange. The 
proposed rule change provides definitions for existing terms in the Fee 
Schedule, and the definitions are consistent with the manner in which 
the Exchange interpreted those terms. At any time within 60 days of the 
filing of such 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(i).
    \10\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2011-43 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-NYSEArca-2011-43. 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 website (http://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 website 
viewing and printing in the Commission's Public Reference Room, 100 F 
Street, NE., Washington, DC 20549, on official business days between 
the hours of 10 a.m. and 3 p.m. Copies of the filing also will be 
available for inspection and copying at the principal office of the 
Exchange. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
NYSEArca-2011-43 and should be submitted on or before August 9, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-18040 Filed 7-18-11; 8:45 am]
BILLING CODE 8011-01-P