Self-Regulatory Organizations; NASDAQ OMX BX; Notice of Filing and Immediate Effectiveness of a Proposal To Amend the Definition of Theoretical Price, 1543-1544 [2012-180]

Download as PDF Federal Register / Vol. 77, No. 6 / Tuesday, January 10, 2012 / Notices C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.5 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: mstockstill on DSK4VPTVN1PROD with NOTICES Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–NASDAQ–2011–175 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–NASDAQ–2011–175. This file number should be included on the subject line if email 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 5 15 U.S.C. 78s(b)(3)(a)(ii). [sic] VerDate Mar<15>2010 18:28 Jan 09, 2012 Jkt 226001 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 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 offices 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–NASDAQ–2011–175, and should be submitted on or before January 31, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–179 Filed 1–9–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66093; File No. SR–BX– 2011–086] Self-Regulatory Organizations; NASDAQ OMX BX; Notice of Filing and Immediate Effectiveness of a Proposal To Amend the Definition of Theoretical Price January 4, 2012. Pursuant to Section 19(b)(1) under the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 22, 2011, NASDAQ OMX BX (the ‘‘Exchange’’) 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 Exchange has designated the proposed rule change as constituting a non-controversial rule change under Rule 19b–4(f)(6) under the Act,3 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 1 15 Frm 00091 Fmt 4703 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 Chapter V, Section 20 (Obvious and Catastrophic Errors) of the Rules of the Boston Options Exchange Group, LLC (‘‘BOX’’) to amend the definition of theoretical price. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing a change to Chapter V, Section 20 (Obvious and Catastrophic Errors). Under the current rule, an obvious error occurs when the execution price of a transaction is above or below the Theoretical Price for the series by a specified amount. Currently, the ‘‘Theoretical Price’’ of an option series is defined in the rule, if the series is traded on at least one other options exchange, as the ‘‘National Best Bid with respect to an erroneous sell transaction, and National Best Offer with respect to an erroneous buy transaction, just prior to the trade in question.’’ If there are no quotes for comparison, the Theoretical Price is determined by the Market Regulation Center (‘‘MRC’’).4 The Exchange is now proposing to amend the definition of Theoretical Price so that when the series is traded on at least one other options exchange, the Theoretical Price will be the midpoint of the National Best Bid or Offer (‘‘NBBO’’), just prior to the trade in question. Alternatively, if there are no quotes for comparison, the Theoretical 4 MRC is defined in the BOX Rules to mean the Exchange’s facilities for surveilling and regulating the conduct of business for options on BOX. MRC personnel are employees of BOXR and are not affiliated with BOX Options Participants. 6 17 PO 00000 1543 Sfmt 4703 E:\FR\FM\10JAN1.SGM 10JAN1 1544 Federal Register / Vol. 77, No. 6 / Tuesday, January 10, 2012 / Notices necessary or appropriate in furtherance of the purposes of the Act. 100 F Street NE., Washington, DC 20549–1090. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others 2. Statutory Basis This proposed rule change is designed to allow personnel of the MRC (i.e., BOXR) an alternative solution in reviewing a transaction in order to provide the opportunity for potential relief to a party affected by an obvious error. The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ‘‘Act’’) and the rules and regulations thereunder and, in particular, the requirements of Section 6(b) of the Act.5 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 6 requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest, by improving the obvious error process on BOX. Using the mid-point of the NBBO as the Theoretical Price should reduce the risk to parties trading on BOX. The Exchange believes the proposed rule change will incorporate an objective approach in determining obvious errors that is consistent with other options exchanges. The Exchange believes that the change would benefit investors and market participants that are members of multiple exchanges by more closely aligning the Exchange’s rules with respect to obvious errors with those of other electronic options exchanges, while continuing to utilize an objective standard when making adjustment decisions. As such, the Exchange believes that its process for rendering and reviewing trade adjustment determinations is consistent with the Act, and with the maintenance of a fair and orderly market and the protection of investors and the public interest. mstockstill on DSK4VPTVN1PROD with NOTICES Price will continue to be determined by the MRC. This proposed rule change would amend this provision to be substantially similar to Chapter V, Section 6(c)(i) of the NASDAQ Options Market (‘‘NOM’’) and Rule 20.6(c)(1) of BATS Options. No written comments were either solicited or received. All submissions should refer to File Number SR–BX–2011–086. This file number should be included on the subject line if email 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–BX– 2011–086 and should be submitted on or before January 31, 2012. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not 5 15 6 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). VerDate Mar<15>2010 18:28 Jan 09, 2012 Jkt 226001 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action This proposed rule change is filed pursuant to paragraph (A) of section 19(b)(3) of the Exchange Act 7 and Rule 19b-–(f)(6) thereunder.8 This 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 after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest.9 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 email to rulecomments@sec.gov. Please include File Number SR–BX–2011–086 on the subject line. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–180 Filed 1–9–12; 8:45 am] BILLING CODE 8011–01–P Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 7 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 9 As required under Rule 19b–4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change along with a brief description and the 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. 8 17 PO 00000 Frm 00092 Fmt 4703 Sfmt 9990 10 17 E:\FR\FM\10JAN1.SGM CFR 200.30–3(a)(12). 10JAN1

Agencies

[Federal Register Volume 77, Number 6 (Tuesday, January 10, 2012)]
[Notices]
[Pages 1543-1544]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-180]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66093; File No. SR-BX-2011-086]


Self-Regulatory Organizations; NASDAQ OMX BX; Notice of Filing 
and Immediate Effectiveness of a Proposal To Amend the Definition of 
Theoretical Price

January 4, 2012.
    Pursuant to Section 19(b)(1) under the Securities Exchange Act of 
1934 (the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on December 22, 2011, NASDAQ OMX BX (the ``Exchange'') 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 Exchange has designated the 
proposed rule change as constituting a non-controversial rule change 
under Rule 19b-4(f)(6) under the Act,\3\ which renders the proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Chapter V, Section 20 (Obvious and 
Catastrophic Errors) of the Rules of the Boston Options Exchange Group, 
LLC (``BOX'') to amend the definition of theoretical price.

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

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

1. Purpose
    The Exchange is proposing a change to Chapter V, Section 20 
(Obvious and Catastrophic Errors). Under the current rule, an obvious 
error occurs when the execution price of a transaction is above or 
below the Theoretical Price for the series by a specified amount. 
Currently, the ``Theoretical Price'' of an option series is defined in 
the rule, if the series is traded on at least one other options 
exchange, as the ``National Best Bid with respect to an erroneous sell 
transaction, and National Best Offer with respect to an erroneous buy 
transaction, just prior to the trade in question.'' If there are no 
quotes for comparison, the Theoretical Price is determined by the 
Market Regulation Center (``MRC'').\4\
---------------------------------------------------------------------------

    \4\ MRC is defined in the BOX Rules to mean the Exchange's 
facilities for surveilling and regulating the conduct of business 
for options on BOX. MRC personnel are employees of BOXR and are not 
affiliated with BOX Options Participants.
---------------------------------------------------------------------------

    The Exchange is now proposing to amend the definition of 
Theoretical Price so that when the series is traded on at least one 
other options exchange, the Theoretical Price will be the mid-point of 
the National Best Bid or Offer (``NBBO''), just prior to the trade in 
question. Alternatively, if there are no quotes for comparison, the 
Theoretical

[[Page 1544]]

Price will continue to be determined by the MRC. This proposed rule 
change would amend this provision to be substantially similar to 
Chapter V, Section 6(c)(i) of the NASDAQ Options Market (``NOM'') and 
Rule 20.6(c)(1) of BATS Options.
2. Statutory Basis
    This proposed rule change is designed to allow personnel of the MRC 
(i.e., BOXR) an alternative solution in reviewing a transaction in 
order to provide the opportunity for potential relief to a party 
affected by an obvious error. The Exchange believes the proposed rule 
change is consistent with the Securities Exchange Act of 1934 (the 
``Act'') and the rules and regulations thereunder and, in particular, 
the requirements of Section 6(b) of the Act.\5\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \6\ requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in facilitating transactions in 
securities, and to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general to 
protect investors and the public interest, by improving the obvious 
error process on BOX.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Using the mid-point of the NBBO as the Theoretical Price should 
reduce the risk to parties trading on BOX. The Exchange believes the 
proposed rule change will incorporate an objective approach in 
determining obvious errors that is consistent with other options 
exchanges. The Exchange believes that the change would benefit 
investors and market participants that are members of multiple 
exchanges by more closely aligning the Exchange's rules with respect to 
obvious errors with those of other electronic options exchanges, while 
continuing to utilize an objective standard when making adjustment 
decisions. As such, the Exchange believes that its process for 
rendering and reviewing trade adjustment determinations is consistent 
with the Act, and with the maintenance of a fair and orderly market and 
the protection of investors and the public interest.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    This proposed rule change is filed pursuant to paragraph (A) of 
section 19(b)(3) of the Exchange Act \7\ and Rule 19b--(f)(6) 
thereunder.\8\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    This 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 after the date of the filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest.\9\
---------------------------------------------------------------------------

    \9\ As required under Rule 19b-4(f)(6)(iii), the Exchange 
provided the Commission with written notice of its intent to file 
the proposed rule change along with a brief description and the 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.
---------------------------------------------------------------------------

    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 email to rule-comments@sec.gov. Please include 
File Number SR-BX-2011-086 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BX-2011-086. This file 
number should be included on the subject line if email 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-BX-2011-086 and should be 
submitted on or before January 31, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-180 Filed 1-9-12; 8:45 am]
BILLING CODE 8011-01-P
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