Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Commentary .06 to Rule 903 in Order To Simplify the $1 Strike Price Program, 61469-61472 [2011-25477]

Download as PDF Federal Register / Vol. 76, No. 192 / Tuesday, October 4, 2011 / Notices the objectives of perfecting the mechanism of a free and open market and the national market system because it promotes uniformity across markets concerning when and how to halt trading in all stocks as a result of extraordinary market volatility. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change imposes any burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) As the Commission may designated up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove such proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. pmangrum on DSK3VPTVN1PROD with NOTICES IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed changes to the market-wide circuit breaker regime are consistent with the Act. The Commission specifically requests comment on the following: • As discussed above, the proposed rule change would narrow the percentage market declines that would trigger a market-wide halt in trading. How would the proposed changes interact with the existing single-stock circuit breaker pilot program17 or, if 17 See Securities Exchange Act Release No. 64735 (June 23, 2011), 76 FR 38243 (June 29, 2011) (SR– BATS–2011–016; SR–BYX–2011–011; SR–BX– 2011–025; SR–CBOE–2011–049; SR–CHX–2011–09; SR–EDGA–2011–15; SR–EDGX–2011–14; SR– FINRA–2011–023; SR–ISE–2011–028; SR– NASDAQ–2011–067; SR–NYSE–2011–21; SR– NYSEAmex–2011–32; SR–NYSEArca–2011–26; SR– NSX–2011–06; SR–Phlx–2011–64) (approving the ‘‘Phase III Pilot Program’’). The Phase III Pilot Program has been extended through January 2012. See, e.g., Securities Exchange Act Release 65094 (August 10, 2011), 76 FR 50779 (August 16, 2011) (SR–NASDAQ–2011–011). VerDate Mar<15>2010 15:03 Oct 03, 2011 Jkt 226001 approved, the proposed NMS Plan to establish a limit-up/limit-down mechanism for individual securities?18 • To what extent could the concurrent triggering of single stock circuit breakers in many S&P 500 Index stocks lead to difficulties in calculating the index? Would the triggering of many single stock circuit breakers in a general market downturn cause the index calculation to become stale and thereby delay the triggering of the market-wide circuit breaker? • Should the market-wide circuit breaker be triggered if a sufficient number of single-stock circuit breakers or price limits are triggered, and materially affect calculations of the S&P 500 Index? • Should market centers implement rules that mandate cancellation of pending orders in the event a marketwide circuit breaker is triggered? If so, should such a rule require cancellation of all orders or only certain order types (e.g., limit orders)? Should all trading halts trigger such cancellation policies or should the cancellation policies apply only to a Level 3 Market Decline? • Should some provision be made to end the regular trading session if a market decline suddenly occurs after 3:25 p.m. but does not reach the 20% level? • In the event of a Level 3 Market Decline, should some provision be made for the markets to hold a closing auction? • Should the primary market have a longer period (e.g., 30 minutes) to reopen trading following a Level 2 Market Decline before trading resumes in other venues? • In the event of a Level 3 Market Decline, should the markets wait for the primary market to reopen trading in a particular security on the next trading day before trading in that security resumes? 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–BATS–2011–038 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–BATS–2011–038. This file number should be ncluded 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 BATS. 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 publicly available. All submissions should refer to File Number SR–BATS–2011–038 and should be submitted on or before October 25, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Elizabeth M. Murphy, Secretary. [FR Doc. 2011–25518 Filed 10–3–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65421; File No. SR– NYSEAmex-2011–70] Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Commentary .06 to Rule 903 in Order To Simplify the $1 Strike Price Program September 28, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 19 17 18 See Securities Exchange Act Release No. 64547 (May 25, 2011), 76 FR 31647 (June 1, 2011). PO 00000 Frm 00130 Fmt 4703 Sfmt 4703 61469 CFR 200.30–3(a)(12). U.S.C.78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\04OCN1.SGM 04OCN1 61470 Federal Register / Vol. 76, No. 192 / Tuesday, October 4, 2011 / Notices notice is hereby given that, on September 26, 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 Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Commentary .06 to Rule 903 in order to simplify the $1 Strike Price Program. The text of the proposed rule change is available on the Exchange’s Web site at https://www.nyse.com, at the Exchange’s principal office, on the Commission’s website at https://www.sec.gov, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the 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. pmangrum on DSK3VPTVN1PROD with NOTICES 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 Commentary .06 to Rule 903 in order to simplify the $1 Strike Price Program (‘‘Program’’). In 2003, the Commission issued an order permitting the Exchange to establish the Program on a pilot basis.3 At that time, the underlying stock had to close at or below $20 on the previous trading day in order to qualify for the Program. The range of available $1 strike price intervals was limited to a range between $3 and $20 and no strike price was permitted that was greater than $5 from the underlying stock’s closing price on the previous trading day. Series in $1 strike price intervals 3 See Securities Exchange Act Release No. 48024 (June 12, 2003), 68 FR 36617 (June 18, 2003) (SR– Amex-2003–36). VerDate Mar<15>2010 15:03 Oct 03, 2011 Jkt 226001 were not permitted within $0.50 of an existing strike. In addition, the Exchange was limited to selecting five (5) classes and reciprocal listing was permitted. Furthermore, Long-Term Equity Option Series (‘‘LEAPS’’) in $1 strike price intervals were not permitted for classes selected to participate in the Program. The Exchange renewed the pilot program on a yearly basis and, in 2008, the Commission granted permanent approval of the Program.4 At that time, the Program was expanded to increase the upper limit of the permissible strike price range from $20 to $50. In addition, the number of class selections per exchange was increased from five (5) to ten (10). Since the Program was made permanent, the number of class selections per exchange has been increased from ten (10) classes to 55 classes5 and subsequently increased from 55 classes to 150 classes.6 The most recent expansion of the Program was approved by the Commission in early 2011 and increased the number of $1 strike price intervals permitted within the $1 to $50 range.7 Amendments To Simplify NonLEAPS Rule Text These numerous expansions have resulted in very lengthy rule text that the Exchange believes is complicated and difficult to understand. The Exchange believes that the proposed changes to simplify the rule text of the Program would benefit market participants since the Program will be easier to understand and would maintain the expansions made to the Program, including those in early 2011. Through the current proposal, the Exchange also hopes to make administration of the Program easier, e.g., system programming efforts. To simplify the rules of the Program and, as a proactive attempt to mitigate any unintentional listing of improper strikes, the Exchange is proposing the following streamlining amendments: • When the price of the underlying stock is equal to or less than $20, permit $1 strike price intervals with an exercise price up to 100% above and 100% 4 See Securities Exchange Act Release No. 57110 (January 8, 2008), 73 FR 2292 (January 14, 2008) (SR–Amex-2007–141). 5 See Securities Exchange Act Release No. 59587 (March 17, 2009), 74 FR 12414 (March 24, 2009) (SR–NYSEALTR–2009–11). 6 See Securities Exchange Act Release No. 62449 (July 2, 2010), 75 FR 40012 (July 13, 2010) (SR– NYSEAmex-2010–67). 7 See Securities Exchange Act Release No. 63773 (January 25, 2011), 76 FR 5646 (February 1, 2011) (SR–NYSEAmex-2010–109). PO 00000 Frm 00131 Fmt 4703 Sfmt 4703 below the price of the underlying stock.8 o However, the above restriction would not prohibit the listing of at least five (5) strike prices above and below the price of the underlying stock per expiration month in an option class.9 Æ For example, if the price of the underlying stock is $2, the Exchange would be permitted to list the following series: $1, $2, $3, $4, $5, $6 and $7.10 • When the price of the underlying stock is greater than $20, permit $1 strike price intervals with an exercise price up to 50% above and 50% below the price of the underlying security up to $50.11 • For the purpose of adding strikes under the Program, the ‘‘price of the underlying stock’’ shall be measured in the same way as ‘‘the price of the underlying security’’ is, as set forth in Rule 903A(b)(1).12 • Prohibit the listing of additional series in $1 strike price intervals if the underlying stock closes at or above $50 in its primary market and provide that additional series in $1 strike price intervals may not be added until the underlying stock closes again below $50.13 Amendments To Simplify LEAPS Rule Text The early 2011 expansion of the Program permitted for some limited listing of LEAPS in $1 strike price intervals for classes that participate in 8 See proposed new paragraph (b)(i) to Commentary .06 to Rule 903. 9 Id. 10 Id. 11 See proposed new paragraph (b)(ii) to Commentary .06 to Rule 903. 12 See proposed new paragraph (b)(iii) to Commentary .06 to Rule 903. Rule 903A(b)(1) provides, ‘‘[t]he price of the underlying security is measured by: (1) For intra-day add-on series and next-day series additions, the daily high and low of all prices reported by all national securities exchanges; (2) for new expiration months, the daily high and low of all prices reported by all national securities exchanges on the day the Exchange determines its preliminary notification of new series; and (3) for options series to be added as a result of pre-market trading, the most recent share price reported by all national securities exchanges between 8:45 a.m. and 9:30 a.m. Eastern Time.’’ 13 See proposed new paragraph (b)(iv) to Commentary .06 to Rule 903. The Exchange believes that it is important to codify this additional series criterion because there have been conflicting interpretations among the exchanges that have adopted similar programs. The $50 price criterion for additional series was intended when the Program was originally established (as a pilot) in 2003. See supra note 4 (‘‘Amex will list an additional expiration month upon expiration of the near-term month, provided that the underlying stock prices closes below $20 on Expiration Friday. If the underlying closes at or above $20 on its primary market on Expiration Friday, the Exchange will not list an additional month of $1 strike price series until the stock again closes below $20.’’). E:\FR\FM\04OCN1.SGM 04OCN1 Federal Register / Vol. 76, No. 192 / Tuesday, October 4, 2011 / Notices the Program. The Exchange is proposing to maintain the expansion as to LEAPS, but simplify the language and provide examples of the simplified rule text. These changes are set forth in proposed new paragraph (b)(v) to Commentary .06 to Rule 903. For stocks in the Program, the Exchange may list one $1 strike price interval between each standard $5 strike price interval, with the $1 strike price interval being $2 above the standard strike for each interval above the price of the underlying stock, and $2 below the standard strike for each interval below the price of the underlying stock (‘‘$2 wings’’). For example, if the price of the underlying stock is $24.50, the Exchange may list the following standard strikes in $5 intervals: $15, $20, $25, $30 and $35. Between these standard $5 strikes, the Exchange may list the following $2 wings: $18, $27 and $32.14 In addition, the Exchange may list the $1 strike price interval which is $2 above the standard strike just below the underlying price at the time of listing. In the above example, since the standard strike just below the underlying price ($24.50) is $20, the Exchange may list a $22 strike. The Exchange may add additional LEAP strikes as the price of the underlying stock moves, consistent with the Options Listing Procedures Plan (‘‘OLPP’’). pmangrum on DSK3VPTVN1PROD with NOTICES Non-Substantive Amendments to Rule Text The early 2011 expansion of the Program prohibited the listing of $2.50 strike price intervals for classes that participate in the Program. This prohibition applies to non-LEAPS and LEAPS. The Exchange proposes to maintain this prohibition and codify it in paragraph (a) to Commentary .06 to Rule 903 (Program Description). For ease of reference, the Exchange is proposing to add the headings ‘‘Program Description,’’ ‘‘Initial and Additional Series’’ and ‘‘LEAPS’’ to Commentary .06 to Rule 903. The Exchange is proposing to more accurately reflect the nature of the Program and is proposing to make stylistic changes throughout Commentary .06 to Rule 903 by renaming the Program ‘‘The $1 Strike 14 The Exchange notes that a $2 wing is not permitted between the standard $20 and $25 strikes in the above example. This is because the $2 wings are added based on reference to the price of the underlying and as being between the standard strikes above and below the price of the underlying stock. Since the price of the underlying stock ($24.50) straddles the standard strikes of $20 and $25, no $2 wing is permitted between these standard strikes. VerDate Mar<15>2010 15:03 Oct 03, 2011 Jkt 226001 Price Interval Program’’ and by adding the phrase ‘‘price interval.’’ The Exchange proposes to reorganize current paragraphs (c) through (f) of Commentary .06 to Rule 903 and portions of the Delisting Policy therein in order to better organize Commentary .06. This would include moving current paragraph (d) out of Commentary .06 and instead including the text as new Commentary .13 to Rule 903. Lastly, the Exchange is making technical changes to Commentary .06 to Rule 903, e.g., replacing the word ‘‘security’’ with the word ‘‘stock.’’ The Exchange represents that it has the necessary systems capacity to support the increase in new options series that would result from the proposed streamlining changes to the Program. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,15 in general, and furthers the objectives of Section 6(b)(5) of the Act,16 in particular, because 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 particular, the proposed rule change seeks to reduce investor confusion and to simplify the provisions of the $1 Strike Price Interval Program. 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 foregoing proposed rule change does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and, by its terms, does not become operative for 30 days from the date on which it was 15 15 16 15 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00132 Fmt 4703 Sfmt 4703 61471 filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act17 and Rule 19b4(f)(6) thereunder.18 The Exchange has requested that the Commission waive the 30-day operative delay. The Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest because the proposal is substantially similar to that of another exchange that has been approved by the Commission.19 Therefore, the Commission designates the proposal operative upon filing.20 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: 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–NYSEAmex–2011–70 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 17 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange’s intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied the five-day prefiling requirement. 19 See Securities Exchange Act Release No. 65383 (September 22, 2011) (SR–CBOE–2011–040) (order approving proposed rule change to simplify the $1 Strike Price Interval Program). 20 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 18 17 E:\FR\FM\04OCN1.SGM 04OCN1 61472 Federal Register / Vol. 76, No. 192 / Tuesday, October 4, 2011 / Notices 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEAmex–2011–70. 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 publicly available. All submissions should refer to File Number SR– NYSEAmex–2011–70 and should be submitted on or before October 25, 2011. Restructuring Act of 1998 (112 Stat. 2681, et seq.; 22 U.S.C. 6501 note, et seq.), Delegation of Authority No. 234 of October 1, 1999, and Delegation of Authority No. 236–3 of August 28, 2000 (and, as appropriate, Delegation of Authority No. 257 of April 15, 2003), I hereby determine that the objects to be included in the exhibition ‘‘The Game of Kings: Medieval Ivory Chessmen from the Isle of Lewis,’’ imported from abroad for temporary exhibition within the United States, are of cultural significance. The objects are imported pursuant to a loan agreement with the foreign owner or custodian. I also determine that the exhibition or display of the exhibit objects at the Metropolitan Museum of Art, New York, New York, from on or about November 14, 2011, until on or about April 22, 2012, and at possible additional exhibitions or venues yet to be determined, is in the national interest. I have ordered that Public Notice of these Determinations be published in the Federal Register. For further information, including a list of the exhibit objects, contact Paul W. Manning, Attorney-Adviser, Office of the Legal Adviser, U.S. Department of State (telephone: 202–632–6469). The mailing address is U.S. Department of State, SA–5, L/PD, Fifth Floor (Suite 5H03), Washington, DC 20522–0505. FOR FURTHER INFORMATION CONTACT: Dated: September 27, 2011. J. Adam Ereli, Principal Deputy Assistant Secretary, Bureau of Educational and Cultural Affairs, Department of State. [FR Doc. 2011–25534 Filed 10–3–11; 8:45 am] For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Elizabeth M. Murphy, Secretary. BILLING CODE 4710–05–P [FR Doc. 2011–25477 Filed 10–3–11; 8:45 am] [Public Notice: 7633] BILLING CODE 8011–01–P Determination Pursuant to Section 2121(h) of the Full-Year Continuing Appropriations Act, 2011, Relating to Foreign Military Financing for Lebanon DEPARTMENT OF STATE DEPARTMENT OF STATE [Public Notice: 7634] pmangrum on DSK3VPTVN1PROD with NOTICES Culturally Significant Objects Imported for Exhibition Determinations: ‘‘The Game of Kings: Medieval Ivory Chessmen From the Isle of Lewis’’ SUMMARY: Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), Executive Order 12047 of March 27, 1978, the Foreign Affairs Reform and 21 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 15:03 Oct 03, 2011 Jkt 226001 Pursuant to Section 2121(h) of the Full-Year Continuing Appropriations Act, 2011 (Div. B, Pub. L. 112–10) (CR), I hereby determine that provision of $74,850,000 in Foreign Military Financing funds appropriated by the CR for assistance for Lebanon is in the national security interest of the United States. This determination shall be published in the Federal Register and copies shall be provided to the Congress together with the accompanying Memorandum of Justification. PO 00000 Frm 00133 Fmt 4703 Sfmt 4703 Dated: September 27, 2011. Thomas R. Nides, Deputy Secretary of State for Management and Resources. [FR Doc. 2011–25535 Filed 10–3–11; 8:45 am] BILLING CODE 4710–05–P OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE Revised Fiscal Year 2011 Tariff-Rate Quota Allocations for Refined Sugar Office of the United States Trade Representative. ACTION: Notice. AGENCY: The Office of the United States Trade Representative (USTR) is providing notice of additional countryby-country allocations of the fiscal year (FY) 2011 in-quota quantity of the tariffrate quota (TRQ) for imported refined sugar for entry through November 30, 2011. SUMMARY: Effective Date: October 4, 2011. Inquiries may be mailed or delivered to Ann Heilman-Dahl, Director of Agricultural Affairs, Office of Agricultural Affairs, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC 20508. FOR FURTHER INFORMATION CONTACT: Ann Heilman-Dahl, Office of Agricultural Affairs, telephone: 202–395–6127 or facsimile: 202–395–4579. SUPPLEMENTARY INFORMATION: Pursuant to Additional U.S. Note 5 to chapter 17 of the Harmonized Tariff Schedule of the United States (HTS), the United States maintains a tariff-rate quota for imports of refined sugar. Section 404(d)(3) of the Uruguay Round Agreements Act (19 U.S.C. 3601(d)(3)) authorizes the President to allocate the in-quota quantity of a TRQ for any agricultural product among supplying countries or customs areas. The President delegated this authority to the USTR under Presidential Proclamation 6763 (60 FR 1007). On August 5, 2010, the Secretary of Agriculture established the FY 2011 (October 1, 2010—September 30, 2011) refined sugar TRQ at an aggregate quantity of 99,111 MTRV, of which 20,344 MTRV was refined sugar other than specialty sugar. On August 17, 2010, USTR allocated this refined sugar as follows: 10,300 MTRV to Canada; 2,954 MTRV to Mexico; and 7,090 MTRV to be administered on a firstcome, first-served basis. On August 2, 2011, the Secretary of Agriculture increased the FY 2011 specialty sugar TRQ by 9,072 MTRV, resulting in a FY 2011 specialty sugar TRQ of 87,839 DATES: ADDRESSES: E:\FR\FM\04OCN1.SGM 04OCN1

Agencies

[Federal Register Volume 76, Number 192 (Tuesday, October 4, 2011)]
[Notices]
[Pages 61469-61472]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-25477]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65421; File No. SR-NYSEAmex-2011-70]


Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending Commentary 
.06 to Rule 903 in Order To Simplify the $1 Strike Price Program

September 28, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\

[[Page 61470]]

notice is hereby given that, on September 26, 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 
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 Commentary .06 to Rule 903 in order 
to simplify the $1 Strike Price Program. The text of the proposed rule 
change is available on the Exchange's Web site at https://www.nyse.com, 
at the Exchange's principal office, on the Commission's website at 
https://www.sec.gov, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the 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 Commentary .06 to Rule 903 in 
order to simplify the $1 Strike Price Program (``Program'').
    In 2003, the Commission issued an order permitting the Exchange to 
establish the Program on a pilot basis.\3\ At that time, the underlying 
stock had to close at or below $20 on the previous trading day in order 
to qualify for the Program. The range of available $1 strike price 
intervals was limited to a range between $3 and $20 and no strike price 
was permitted that was greater than $5 from the underlying stock's 
closing price on the previous trading day. Series in $1 strike price 
intervals were not permitted within $0.50 of an existing strike. In 
addition, the Exchange was limited to selecting five (5) classes and 
reciprocal listing was permitted. Furthermore, Long-Term Equity Option 
Series (``LEAPS'') in $1 strike price intervals were not permitted for 
classes selected to participate in the Program.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 48024 (June 12, 
2003), 68 FR 36617 (June 18, 2003) (SR-Amex-2003-36).
---------------------------------------------------------------------------

    The Exchange renewed the pilot program on a yearly basis and, in 
2008, the Commission granted permanent approval of the Program.\4\ At 
that time, the Program was expanded to increase the upper limit of the 
permissible strike price range from $20 to $50. In addition, the number 
of class selections per exchange was increased from five (5) to ten 
(10).
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 57110 (January 8, 
2008), 73 FR 2292 (January 14, 2008) (SR-Amex-2007-141).
---------------------------------------------------------------------------

    Since the Program was made permanent, the number of class 
selections per exchange has been increased from ten (10) classes to 55 
classes\5\ and subsequently increased from 55 classes to 150 
classes.\6\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 59587 (March 17, 
2009), 74 FR 12414 (March 24, 2009) (SR-NYSEALTR-2009-11).
    \6\ See Securities Exchange Act Release No. 62449 (July 2, 
2010), 75 FR 40012 (July 13, 2010) (SR-NYSEAmex-2010-67).
---------------------------------------------------------------------------

    The most recent expansion of the Program was approved by the 
Commission in early 2011 and increased the number of $1 strike price 
intervals permitted within the $1 to $50 range.\7\
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 63773 (January 25, 
2011), 76 FR 5646 (February 1, 2011) (SR-NYSEAmex-2010-109).
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    Amendments To Simplify Non-LEAPS Rule Text
    These numerous expansions have resulted in very lengthy rule text 
that the Exchange believes is complicated and difficult to understand. 
The Exchange believes that the proposed changes to simplify the rule 
text of the Program would benefit market participants since the Program 
will be easier to understand and would maintain the expansions made to 
the Program, including those in early 2011. Through the current 
proposal, the Exchange also hopes to make administration of the Program 
easier, e.g., system programming efforts. To simplify the rules of the 
Program and, as a proactive attempt to mitigate any unintentional 
listing of improper strikes, the Exchange is proposing the following 
streamlining amendments:
     When the price of the underlying stock is equal to or less 
than $20, permit $1 strike price intervals with an exercise price up to 
100% above and 100% below the price of the underlying stock.\8\
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    \8\ See proposed new paragraph (b)(i) to Commentary .06 to Rule 
903.
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    o However, the above restriction would not prohibit the listing of 
at least five (5) strike prices above and below the price of the 
underlying stock per expiration month in an option class.\9\
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    \9\ Id.
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    [cir] For example, if the price of the underlying stock is $2, the 
Exchange would be permitted to list the following series: $1, $2, $3, 
$4, $5, $6 and $7.\10\
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    \10\ Id.
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     When the price of the underlying stock is greater than 
$20, permit $1 strike price intervals with an exercise price up to 50% 
above and 50% below the price of the underlying security up to $50.\11\
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    \11\ See proposed new paragraph (b)(ii) to Commentary .06 to 
Rule 903.
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     For the purpose of adding strikes under the Program, the 
``price of the underlying stock'' shall be measured in the same way as 
``the price of the underlying security'' is, as set forth in Rule 
903A(b)(1).\12\
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    \12\ See proposed new paragraph (b)(iii) to Commentary .06 to 
Rule 903. Rule 903A(b)(1) provides, ``[t]he price of the underlying 
security is measured by: (1) For intra-day add-on series and next-
day series additions, the daily high and low of all prices reported 
by all national securities exchanges; (2) for new expiration months, 
the daily high and low of all prices reported by all national 
securities exchanges on the day the Exchange determines its 
preliminary notification of new series; and (3) for options series 
to be added as a result of pre-market trading, the most recent share 
price reported by all national securities exchanges between 8:45 
a.m. and 9:30 a.m. Eastern Time.''
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     Prohibit the listing of additional series in $1 strike 
price intervals if the underlying stock closes at or above $50 in its 
primary market and provide that additional series in $1 strike price 
intervals may not be added until the underlying stock closes again 
below $50.\13\
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    \13\ See proposed new paragraph (b)(iv) to Commentary .06 to 
Rule 903. The Exchange believes that it is important to codify this 
additional series criterion because there have been conflicting 
interpretations among the exchanges that have adopted similar 
programs. The $50 price criterion for additional series was intended 
when the Program was originally established (as a pilot) in 2003. 
See supra note 4 (``Amex will list an additional expiration month 
upon expiration of the near-term month, provided that the underlying 
stock prices closes below $20 on Expiration Friday. If the 
underlying closes at or above $20 on its primary market on 
Expiration Friday, the Exchange will not list an additional month of 
$1 strike price series until the stock again closes below $20.'').
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Amendments To Simplify LEAPS Rule Text
    The early 2011 expansion of the Program permitted for some limited 
listing of LEAPS in $1 strike price intervals for classes that 
participate in

[[Page 61471]]

the Program. The Exchange is proposing to maintain the expansion as to 
LEAPS, but simplify the language and provide examples of the simplified 
rule text. These changes are set forth in proposed new paragraph (b)(v) 
to Commentary .06 to Rule 903.
    For stocks in the Program, the Exchange may list one $1 strike 
price interval between each standard $5 strike price interval, with the 
$1 strike price interval being $2 above the standard strike for each 
interval above the price of the underlying stock, and $2 below the 
standard strike for each interval below the price of the underlying 
stock (``$2 wings''). For example, if the price of the underlying stock 
is $24.50, the Exchange may list the following standard strikes in $5 
intervals: $15, $20, $25, $30 and $35. Between these standard $5 
strikes, the Exchange may list the following $2 wings: $18, $27 and 
$32.\14\
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    \14\ The Exchange notes that a $2 wing is not permitted between 
the standard $20 and $25 strikes in the above example. This is 
because the $2 wings are added based on reference to the price of 
the underlying and as being between the standard strikes above and 
below the price of the underlying stock. Since the price of the 
underlying stock ($24.50) straddles the standard strikes of $20 and 
$25, no $2 wing is permitted between these standard strikes.
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    In addition, the Exchange may list the $1 strike price interval 
which is $2 above the standard strike just below the underlying price 
at the time of listing. In the above example, since the standard strike 
just below the underlying price ($24.50) is $20, the Exchange may list 
a $22 strike. The Exchange may add additional LEAP strikes as the price 
of the underlying stock moves, consistent with the Options Listing 
Procedures Plan (``OLPP'').
Non-Substantive Amendments to Rule Text
    The early 2011 expansion of the Program prohibited the listing of 
$2.50 strike price intervals for classes that participate in the 
Program. This prohibition applies to non-LEAPS and LEAPS. The Exchange 
proposes to maintain this prohibition and codify it in paragraph (a) to 
Commentary .06 to Rule 903 (Program Description).
    For ease of reference, the Exchange is proposing to add the 
headings ``Program Description,'' ``Initial and Additional Series'' and 
``LEAPS'' to Commentary .06 to Rule 903.
    The Exchange is proposing to more accurately reflect the nature of 
the Program and is proposing to make stylistic changes throughout 
Commentary .06 to Rule 903 by renaming the Program ``The $1 Strike 
Price Interval Program'' and by adding the phrase ``price interval.''
    The Exchange proposes to reorganize current paragraphs (c) through 
(f) of Commentary .06 to Rule 903 and portions of the Delisting Policy 
therein in order to better organize Commentary .06. This would include 
moving current paragraph (d) out of Commentary .06 and instead 
including the text as new Commentary .13 to Rule 903.
    Lastly, the Exchange is making technical changes to Commentary .06 
to Rule 903, e.g., replacing the word ``security'' with the word 
``stock.''
    The Exchange represents that it has the necessary systems capacity 
to support the increase in new options series that would result from 
the proposed streamlining changes to the Program.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\15\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\16\ in particular, because 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 particular, the proposed rule change seeks to 
reduce investor confusion and to simplify the provisions of the $1 
Strike Price Interval Program.
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    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition 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 foregoing proposed rule change does not significantly 
affect the protection of investors or the public interest, does not 
impose any significant burden on competition, and, by its terms, does 
not become operative for 30 days from the date on which it was filed, 
or such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act\17\ and Rule 19b-
4(f)(6) thereunder.\18\
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied the five-day prefiling requirement.
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    The Exchange has requested that the Commission waive the 30-day 
operative delay. The Commission believes that waiver of the operative 
delay is consistent with the protection of investors and the public 
interest because the proposal is substantially similar to that of 
another exchange that has been approved by the Commission.\19\ 
Therefore, the Commission designates the proposal operative upon 
filing.\20\
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    \19\ See Securities Exchange Act Release No. 65383 (September 
22, 2011) (SR-CBOE-2011-040) (order approving proposed rule change 
to simplify the $1 Strike Price Interval Program).
    \20\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

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-NYSEAmex-2011-70 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission,

[[Page 61472]]

100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEAmex-2011-70. 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 
publicly available. All submissions should refer to File Number SR-
NYSEAmex-2011-70 and should be submitted on or before October 25, 2011.

For the Commission, by the Division of Trading and Markets, pursuant 
to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-25477 Filed 10-3-11; 8:45 am]
BILLING CODE 8011-01-P
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