Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Retire a Pilot Program and Harmonize the Exchange's rules Regarding Listing Expirations with the Existing Rules of Other Exchanges, 66105-66107 [2011-27520]
Download as PDF
<![CDATA[
Federal Register / Vol. 76, No. 206 / Tuesday, October 25, 2011 / Notices
sroberts on DSK5SPTVN1PROD with NOTICES
the Act,22 the Division also received
data from a commenter purporting to
show a decline in average price
improvement and average percentage of
contracts price improved in the PIP.23
The Suspension Order states that the
Commission has not reached any
conclusions with respect to the issues
involved.24 To the contrary, the
Suspension Order seeks additional
comment and data with respect to the
issues raised by the filing,25 and the
institution of proceedings will provide
the Commission the opportunity to
more fully assess the issues raised,
including a further assessment of the
facts underlying the issues.
Third, the Division’s action pursuant
to delegated authority to suspend the
filing and institute proceedings is an
interim step that does not involve a
conclusion of law that is clearly
erroneous. The Suspension Order states
that the Commission has not reached
any conclusions with respect to the
issues involved,26 and no finding as to
whether the proposed rule change is
consistent with the Act was made in the
Suspension Order. To the contrary, the
Suspension Order seeks additional
comment and data with respect to the
issues raised by the filing, which will
help the Commission further assess the
proposed rule change and inform its
ultimate decision as to whether the
proposed rule change is consistent with
the Act. Based on the proposed rule
change as filed, the comments received,
and BOX’s response to comments, the
Commission finds that the Division
acted appropriately in finding that it is
appropriate in the public interest, for
the protection of investors, and
otherwise in furtherance of the purposes
of the Act to temporarily suspend the
filing.27
Fourth, the BOX Petition does not
specifically allege that the Division’s
action pursuant to delegated authority
was an exercise of discretion or decision
of law or policy that is important and
that the Commission should review
pursuant to the standard of Rule
431(b)(2). For purposes of determining
whether to grant de novo review of the
Division’s exercise of delegated
authority with respect to the Suspension
22 The Division noted this data in the Suspension
Order. See Suspension Order, supra note 3, at
58067.
23 See Citadel Letter, supra note 10, at 3.
24 See Suspension Order, supra note 3, at 58067.
25 See id. at 58067–68.
26 See id. at 58067.
27 Pursuant to the provisions of Section
19(b)(3)(C) of the Act, the Commission must
institute proceedings to determine whether to
approve or disapprove an immediately effective
rule change if it suspends such rule change. See 15
U.S.C. 78s(b)(3)(C).
VerDate Mar<15>2010
18:10 Oct 24, 2011
Jkt 226001
Order, the Commission does not believe
that the act of suspending and
instituting proceedings in this filing
embodies an exercise of discretion or a
decision of law or policy that is
important and that the Commission
should review. The Commission
believes that the Division acted
appropriately, based on the record, in
determining that the underlying BOX
proposed rule change does merit
additional opportunity for comment and
Commission consideration. The
Division’s Suspension Order is the
proper statutory mechanism to
commence that process and conduct
such review.
Finally, in its petition, BOX requests,
if the Commission does determine to
institute proceedings to determine
whether to approve or disapprove the
proposal, that the Commission not stay
the effectiveness of the PIP fee during
the course of the proceedings.28 BOX
notes its belief that the proposed fees
allow it to compete with larger options
exchanges that charge payment for order
flow fees that, in BOX’s view, are
substantially similar to the proposed
fees and that suspension of the fees
would cause unfair harm to BOX.29
However, under Section 19(b)(3)(C) of
the Act,30 the Commission cannot
institute proceedings to determine
whether to approve or disapprove an
immediately effective rule change
unless it first suspends the rule change.
The Commission does not find a
sufficient basis in the BOX Petition to
diverge from the process contemplated
in the statute in this case by lifting the
suspension of the BOX PIP fee while it
conducts the proceedings to determine
whether to approve or disapprove
BOX’s proposed rule change.
Importantly, commenters have raised
material concerns (including one who
presented supporting data) that call into
question whether BOX’s proposal
unduly burdens competition and
whether it is consistent with the Act.
Among other things, the Commission
will consider these issues, as well as
BOX’s assertion that its proposed fees
are comparable to fees in effect at other
options exchanges, during the conduct
of the proceedings on BOX’s proposal.
By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–27517 Filed 10–24–11; 8:45 am]
BILLING CODE 8011–01–P
BOX Petition, supra note 2, at 10.
id. at 9–10.
30 See 15 U.S.C. 78s(b)(3)(C).
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65590; File No. SR–
NYSEAmex–2011–80]
Self-Regulatory Organizations; NYSE
Amex LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Retire a Pilot Program
and Harmonize the Exchange’s rules
Regarding Listing Expirations with the
Existing Rules of Other Exchanges
October 19, 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 October
13, 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
NYSE Amex Options Rule 903 (Series of
Options Open for Trading) and
Commentary .11 thereto to retire a pilot
program and harmonize the Exchange’s
rules regarding listing expirations with
the existing rules of other exchanges.
The text of the proposed rule change is
available at the Exchange, at https://
www.nyse.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
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.
28 See
29 See
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
66105
1 15
2 17
E:\FR\FM\25OCN1.SGM
U.S.C.78s(b)(1).
CFR 240.19b–4.
25OCN1
66106
Federal Register / Vol. 76, No. 206 / Tuesday, October 25, 2011 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
sroberts on DSK5SPTVN1PROD with NOTICES
1. Purpose
The purpose of the proposed rule
change is to retire the Additional
Expiration Months Pilot Program (‘‘Pilot
Program’’) and to amend the Exchange’s
rules regarding listing expirations. This
filing is based on the existing rules of
the NASDAQ Options Market
(‘‘NOM’’) 3 and NASDAQ OMX PHLX
LLC (‘‘PHLX’’).4
NYSE Amex Options Rules Governing
Listing of Expirations
Pursuant to NYSE Amex Rule 903, the
Exchange typically opens four
expiration months for each class of
options open for trading on the
Exchange: The first two being the two
nearest months, regardless of the
quarterly cycle on which that class
trades, and the third and fourth being
the next two months of the quarterly
cycle previously designated by the
Exchange for that specific class. For
competitive reasons, in 2010 the
Exchange established the Pilot Program
pursuant to which it could list up to an
additional two expiration months, for a
total of six expiration months for each
class of options open for trading on the
Exchange.5 The filing to establish the
Pilot Program was substantially similar
in all material respects to a proposal of
the International Securities Exchange,
LLC (‘‘ISE’’).6
After NYSE Amex and ISE established
their respective Pilot Programs, ISE
submitted a filing in response to a PHLX
filing regarding the listing of
expirations.7 In the PHLX filing, PHLX
amended its rules that so that it could
open ‘‘at least one expiration month’’ for
each class of standard options open for
trading on PHLX.8 PHLX stated in its
filing that this amendment was ‘‘based
directly on the recently approved rules
of another options exchange, namely
3 See NOM Chapter IV, Section 6 (Series of
Options Contracts Open for Trading). See also
Securities Exchange Act Release No. 57478 (March
12, 2008), 73 FR 14521 (March 18, 2008) (SR–
NASDAQ–2007–004 and SR–NASDAQ–2007–080).
4 See PHLX Rule 1012 (Series of Options Open for
Trading). See also Securities Exchange Act Release
No. 63700 (January 11, 2011), 76 FR 2931 (January
18, 2011) (SR–Phlx–2011–04). The PHLX filing was
based on NOM’s existing rules.
5 See Securities Exchange Act Release No. 63170
(October 25, 2010), 75 FR 66818 (October 29, 2010)
(SR–NYSEAmex–2010–99).
6 See Securities Exchange Act Release No. 63104
(October 14, 2010), 75 FR 64773 (October 20, 2010)
(SR–ISE–2010–91).
7 See Securities Exchange Act Release No. 64343
(April 26, 2011), 76 FR 24546 (May 2, 2011) (SR–
ISE–2011–26). See also supra note 4.
8 See supra note 4 at 2932.
VerDate Mar<15>2010
18:10 Oct 24, 2011
Jkt 226001
Chapter IV, Sections 6 and 8 of NOM.’’9
Since PHLX’s rules did not hard code an
upper limit on the maximum number of
expirations that could be listed per
class, ISE believed that PHLX (and
NOM) had the ability to list expirations
that ISE would not be able to then list
under its rules. As a result, ISE
amended its rules by adding new
Supplementary Material .10 to ISE Rule
504 and Supplementary Material .04 to
ISE Rule 2009 to permit ISE to list
additional expiration months on options
classes opened for trading on ISE if such
expiration months are opened for
trading on at least one other national
securities exchange.10
Because the Exchange had adopted a
Pilot Program similar to ISE’s, the
Exchange adopted new Commentary .14
to Rule 903 that permits the Exchange
to list additional expiration months on
options classes opened for trading on
the Exchange if such expiration months
are opened for trading on at least one
other national securities exchange.11
Retire Additional Expiration Months
Pilot and Adopt Amended Rules
The Exchange established the Pilot
Program for competitive reasons. Now
that the Exchange has the ability to
match the expiration listings of other
exchanges 12 (that may exceed six
expirations and may occur on a regular
basis) the Exchange believes that the
Pilot Program is no longer necessary and
is proposing to retire it. To effect this
change, the Exchange is proposing to
delete the text of Commentary .11 to
Rule 903, which sets forth the terms of
the Pilot Program, which is currently
scheduled to expire on October 31,
2011.13
As noted, the Exchange’s ability to
match the expirations listed by other
exchanges is set forth in Commentary
.14 to Rule 903. This provision,
however, only provides the Exchange
with the ability to match expirations
initiated by other options exchanges. To
encourage competition and to place the
Exchange on a level playing field, the
Exchange should have the same ability
as PHLX and NOM to initiate
expirations. Therefore, the Exchange is
proposing to harmonize its rules with
the rules of PHLX and NOM by
clarifying that NYSE Amex will open at
least one expiration month and one
series for each class open for trading on
9 Id.
10 See
supra note 7 at 24547.
Securities Exchange Act Release No. 64519
(May 19, 2011), 76 FR 30411 (May 25, 2011) (SR–
NYSEAmex–2011–33).
12 See Commentary .14 to Rule 903.
13 The Exchange proposes to mark Commentary
.11 to Rule 903 as ‘‘Reserved.’’
11 See
PO 00000
Frm 00075
Fmt 4703
Sfmt 4703
the Exchange. To effect this change, the
Exchange is proposing to amend the text
of Rule 903(b) and (c) to track the rule
text of NOM Chapter IV, Section 6 and
PHLX Rule 1012.
Finally, the Exchange is proposing to
slightly modify Rule 903 regarding the
opening of additional series.
Specifically, the Exchange proposes to
amend Rule 903(c) to permit the listing
of additional series when (among other
reasons) the market price of the
underlying stock moves more than five
strike prices from the initial exercise
price or prices.14 Currently, Rule 903(c)
permits the listing of additional series
when the market price of the underlying
stock moves substantially from the
initial exercise price or prices. This
proposed rule change again tracks PHLX
and NOM’s existing rule text.
The Exchange believes the proposed
rule change is proper, and indeed
necessary, in light of the need to have
rules that do not put the Exchange at a
competitive disadvantage. The
Exchange’s proposal puts the Exchange
in the same position as PHLX and NOM
and provides the Exchange with the
same ability to initiate and match
identical expirations across exchanges
for products that are multiply-listed and
fungible with one another. The
Exchange believes that the proposed
rule change should encourage
competition and be beneficial to traders
and market participants by providing
them with a means to trade on the
Exchange securities that are initiated by
the Exchange and listed and traded on
other exchanges.
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 would permit the
Exchange to accommodate requests
made by ATP Holders and other market
participants to list additional expiration
months and thus encourages
14 Rule 903(d) also permits the Exchange to add
additional series of options of the same class when
the Exchange deems it necessary to maintain an
orderly market and to meet customer demand.
These ‘‘additional series’’ provisions are similar to
existing provisions in NOM Chapter IV, Section 6
and PHLX Rule 1012.
15 15 U.S.C. 78f(b).
16 15 U.S.C. 78f(b)(5).
E:\FR\FM\25OCN1.SGM
25OCN1
Federal Register / Vol. 76, No. 206 / Tuesday, October 25, 2011 / Notices
competition without harming investors
or the public interest.
investors, or otherwise in furtherance of
the purposes of the Act.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
IV. Solicitation of Comments
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
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
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
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 should promote
competition by allowing the Exchange,
without undue delay, to incorporate
rules that previously have been adopted
by other exchanges and thereby to list
and trade option series that are trading
on those other options exchanges.
Therefore, the Commission designates
the proposal operative upon filing.19
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
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 this requirement.
19 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).
sroberts on DSK5SPTVN1PROD with NOTICES
18 17
VerDate Mar<15>2010
18:10 Oct 24, 2011
Jkt 226001
Paper Comments
Fmt 4703
[FR Doc. 2011–27520 Filed 10–24–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Retire a Pilot Program
and Harmonize the Exchange’s Rules
Regarding Listing Expirations With the
Existing Rules of Other Exchanges
October 19, 2011.
• 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–NYSEAmex–2011–80. 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 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–
NYSEAmex–2011–80 and should be
submitted on or before November 15,
2011.
Frm 00076
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Kevin M. O’Neill,
Deputy Secretary.
[Release No. 34–65591; File No. SR–
NYSEArca–2011–73]
• 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–2011–80 on
the subject line.
PO 00000
66107
Sfmt 4703
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 October
13, 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 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
NYSE Arca Options Rule 6.4 (Series of
Options Open for Trading) and
Commentary .09 thereto to retire a pilot
program and harmonize the Exchange’s
rules regarding listing expirations with
the existing rules of other exchanges.
The text of the proposed rule change is
available at the Exchange, at https://
www.nyse.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
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
20 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\25OCN1.SGM
25OCN1
]]>Agencies
[Federal Register Volume 76, Number 206 (Tuesday, October 25, 2011)]
[Notices]
[Pages 66105-66107]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-27520]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65590; File No. SR-NYSEAmex-2011-80]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change to Retire a Pilot
Program and Harmonize the Exchange's rules Regarding Listing
Expirations with the Existing Rules of Other Exchanges
October 19, 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 October 13, 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend NYSE Amex Options Rule 903 (Series
of Options Open for Trading) and Commentary .11 thereto to retire a
pilot program and harmonize the Exchange's rules regarding listing
expirations with the existing rules of other exchanges. The text of the
proposed rule change is available at the Exchange, at https://www.nyse.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 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.
[[Page 66106]]
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to retire the Additional
Expiration Months Pilot Program (``Pilot Program'') and to amend the
Exchange's rules regarding listing expirations. This filing is based on
the existing rules of the NASDAQ Options Market (``NOM'') \3\ and
NASDAQ OMX PHLX LLC (``PHLX'').\4\
---------------------------------------------------------------------------
\3\ See NOM Chapter IV, Section 6 (Series of Options Contracts
Open for Trading). See also Securities Exchange Act Release No.
57478 (March 12, 2008), 73 FR 14521 (March 18, 2008) (SR-NASDAQ-
2007-004 and SR-NASDAQ-2007-080).
\4\ See PHLX Rule 1012 (Series of Options Open for Trading). See
also Securities Exchange Act Release No. 63700 (January 11, 2011),
76 FR 2931 (January 18, 2011) (SR-Phlx-2011-04). The PHLX filing was
based on NOM's existing rules.
---------------------------------------------------------------------------
NYSE Amex Options Rules Governing Listing of Expirations
Pursuant to NYSE Amex Rule 903, the Exchange typically opens four
expiration months for each class of options open for trading on the
Exchange: The first two being the two nearest months, regardless of the
quarterly cycle on which that class trades, and the third and fourth
being the next two months of the quarterly cycle previously designated
by the Exchange for that specific class. For competitive reasons, in
2010 the Exchange established the Pilot Program pursuant to which it
could list up to an additional two expiration months, for a total of
six expiration months for each class of options open for trading on the
Exchange.\5\ The filing to establish the Pilot Program was
substantially similar in all material respects to a proposal of the
International Securities Exchange, LLC (``ISE'').\6\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 63170 (October 25,
2010), 75 FR 66818 (October 29, 2010) (SR-NYSEAmex-2010-99).
\6\ See Securities Exchange Act Release No. 63104 (October 14,
2010), 75 FR 64773 (October 20, 2010) (SR-ISE-2010-91).
---------------------------------------------------------------------------
After NYSE Amex and ISE established their respective Pilot
Programs, ISE submitted a filing in response to a PHLX filing regarding
the listing of expirations.\7\ In the PHLX filing, PHLX amended its
rules that so that it could open ``at least one expiration month'' for
each class of standard options open for trading on PHLX.\8\ PHLX stated
in its filing that this amendment was ``based directly on the recently
approved rules of another options exchange, namely Chapter IV, Sections
6 and 8 of NOM.''\9\ Since PHLX's rules did not hard code an upper
limit on the maximum number of expirations that could be listed per
class, ISE believed that PHLX (and NOM) had the ability to list
expirations that ISE would not be able to then list under its rules. As
a result, ISE amended its rules by adding new Supplementary Material
.10 to ISE Rule 504 and Supplementary Material .04 to ISE Rule 2009 to
permit ISE to list additional expiration months on options classes
opened for trading on ISE if such expiration months are opened for
trading on at least one other national securities exchange.\10\
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 64343 (April 26,
2011), 76 FR 24546 (May 2, 2011) (SR-ISE-2011-26). See also supra
note 4.
\8\ See supra note 4 at 2932.
\9\ Id.
\10\ See supra note 7 at 24547.
---------------------------------------------------------------------------
Because the Exchange had adopted a Pilot Program similar to ISE's,
the Exchange adopted new Commentary .14 to Rule 903 that permits the
Exchange to list additional expiration months on options classes opened
for trading on the Exchange if such expiration months are opened for
trading on at least one other national securities exchange.\11\
---------------------------------------------------------------------------
\11\ See Securities Exchange Act Release No. 64519 (May 19,
2011), 76 FR 30411 (May 25, 2011) (SR-NYSEAmex-2011-33).
---------------------------------------------------------------------------
Retire Additional Expiration Months Pilot and Adopt Amended Rules
The Exchange established the Pilot Program for competitive reasons.
Now that the Exchange has the ability to match the expiration listings
of other exchanges \12\ (that may exceed six expirations and may occur
on a regular basis) the Exchange believes that the Pilot Program is no
longer necessary and is proposing to retire it. To effect this change,
the Exchange is proposing to delete the text of Commentary .11 to Rule
903, which sets forth the terms of the Pilot Program, which is
currently scheduled to expire on October 31, 2011.\13\
---------------------------------------------------------------------------
\12\ See Commentary .14 to Rule 903.
\13\ The Exchange proposes to mark Commentary .11 to Rule 903 as
``Reserved.''
---------------------------------------------------------------------------
As noted, the Exchange's ability to match the expirations listed by
other exchanges is set forth in Commentary .14 to Rule 903. This
provision, however, only provides the Exchange with the ability to
match expirations initiated by other options exchanges. To encourage
competition and to place the Exchange on a level playing field, the
Exchange should have the same ability as PHLX and NOM to initiate
expirations. Therefore, the Exchange is proposing to harmonize its
rules with the rules of PHLX and NOM by clarifying that NYSE Amex will
open at least one expiration month and one series for each class open
for trading on the Exchange. To effect this change, the Exchange is
proposing to amend the text of Rule 903(b) and (c) to track the rule
text of NOM Chapter IV, Section 6 and PHLX Rule 1012.
Finally, the Exchange is proposing to slightly modify Rule 903
regarding the opening of additional series. Specifically, the Exchange
proposes to amend Rule 903(c) to permit the listing of additional
series when (among other reasons) the market price of the underlying
stock moves more than five strike prices from the initial exercise
price or prices.\14\ Currently, Rule 903(c) permits the listing of
additional series when the market price of the underlying stock moves
substantially from the initial exercise price or prices. This proposed
rule change again tracks PHLX and NOM's existing rule text.
---------------------------------------------------------------------------
\14\ Rule 903(d) also permits the Exchange to add additional
series of options of the same class when the Exchange deems it
necessary to maintain an orderly market and to meet customer demand.
These ``additional series'' provisions are similar to existing
provisions in NOM Chapter IV, Section 6 and PHLX Rule 1012.
---------------------------------------------------------------------------
The Exchange believes the proposed rule change is proper, and
indeed necessary, in light of the need to have rules that do not put
the Exchange at a competitive disadvantage. The Exchange's proposal
puts the Exchange in the same position as PHLX and NOM and provides the
Exchange with the same ability to initiate and match identical
expirations across exchanges for products that are multiply-listed and
fungible with one another. The Exchange believes that the proposed rule
change should encourage competition and be beneficial to traders and
market participants by providing them with a means to trade on the
Exchange securities that are initiated by the Exchange and listed and
traded on other exchanges.
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 would permit
the Exchange to accommodate requests made by ATP Holders and other
market participants to list additional expiration months and thus
encourages
[[Page 66107]]
competition without harming investors or the public interest.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the 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\
---------------------------------------------------------------------------
\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 this requirement.
---------------------------------------------------------------------------
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 should promote competition by allowing
the Exchange, without undue delay, to incorporate rules that previously
have been adopted by other exchanges and thereby to list and trade
option series that are trading on those other options exchanges.
Therefore, the Commission designates the proposal operative upon
filing.\19\
---------------------------------------------------------------------------
\19\ 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).
---------------------------------------------------------------------------
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.
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-2011-80 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-NYSEAmex-2011-80.
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 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-
NYSEAmex-2011-80 and should be submitted on or before November 15,
2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
---------------------------------------------------------------------------
\20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-27520 Filed 10-24-11; 8:45 am]
BILLING CODE 8011-01-P
