Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1, Amending Rule 903(h) and Related Commentary .10 To Expand the Number of Expirations Available Under the Short Term Option Series Program (“STOS Program”), To Allow for the Exchange To Delist Any Series in the STOS That Do Not Have Open Interest and To Expand the Number of Series in STOS Under Limited Circumstances, 59236-59238 [2012-23636]
Download as PDF
<![CDATA[
59236
Federal Register / Vol. 77, No. 187 / Wednesday, September 26, 2012 / Notices
cleared transactions in the Products
during a period of time in which the
Exchange experienced a bona fide
systems problem. Finally, the Exchange
proposes to amend Section 2.3(a), which
establishes a methodology for
determining whether a Founding Firm
has met its Individual Target, to provide
that credits would not be awarded for
any transactions executed during a
period of time in which the Exchange
experienced a bona fide systems
problem.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Securities Exchange
Act of 1934 (‘‘Act’’),8 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,9 in particular, in that it is
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
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities; 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. The Exchange believes
that the proposed rule change would
promote just and equitable principles of
trade by making the calculations of
Individual Target and Industry Volume
fairer by authorizing the Volume
Dispute Committee to establish
principles for excluding transactions
that occurred while bona fide systems
problems were occurring. The Exchange
believes that such principles will help
to foster cooperation among the
Founding Firms and remove
impediments to a free and open market,
further encouraging the Founding Firms
to bring order flow to the Exchange and
thus promoting liquidity for all
investors.
mstockstill on DSK4VPTVN1PROD with NOTICES
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.
8 15
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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17:27 Sep 25, 2012
Jkt 226001
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
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 designate 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
the proposed rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
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
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File No. SR–NYSEMKT–
2012–47 and should be submitted on or
before October 17, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–23634 Filed 9–25–12; 8:45 am]
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:
BILLING CODE 8011–01–P
Electronic Comments
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing of Proposed
Rule Change and Amendment No. 1,
Amending Rule 903(h) and Related
Commentary .10 To Expand the
Number of Expirations Available Under
the Short Term Option Series Program
(‘‘STOS Program’’), To Allow for the
Exchange To Delist Any Series in the
STOS That Do Not Have Open Interest
and To Expand the Number of Series
in STOS Under Limited Circumstances
• 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
No. SR–NYSEMKT–2012–47 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 No.
SR–NYSEMKT–2012–47. 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
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67897; File No. SR–
NYSEMKT–2012–42]
September 20, 2012.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on
September 6, 2012, NYSE MKT LLC (the
‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. On September
18, 2012, the Exchange filed
Amendment No. 1. The Commission is
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
E:\FR\FM\26SEN1.SGM
26SEN1
Federal Register / Vol. 77, No. 187 / Wednesday, September 26, 2012 / Notices
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
Rule 903(h) and related Commentary .10
to expand the number of expirations
available under the Short Term Option
Series Program (‘‘STOS Program’’), to
allow for the Exchange to delist any
series in the STOS that do not have
open interest and to expand the number
of series in STOS under limited
circumstances. The text of the proposed
rule change is available on the
Exchange’s Web site at www.nyse.com,
at the principal office of the Exchange,
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.
mstockstill on DSK4VPTVN1PROD with NOTICES
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 proposal is to
amend Rule 903(h) to provide for the
ability to open up to five consecutive
expirations under the Short Term
Option Series Program (‘‘STOS
Program’’) for trading on the Exchange,
to allow for the Exchange to delist any
series in the STOS that do not have
open interest and to expand the number
of series in STOS under limited
circumstances when there are no series
at least 10% but not more than 30%
away from the current price of the
underlying security.4
Currently, the Exchange may select up
to 5 currently listed option classes on
4 On July 12, 2005, the Commission approved the
Weeklies Program on a pilot basis. See Securities
Exchange Act Release No. 52014 (July 12, 2005), 70
FR 41244 (July 18, 2005) (Amex–2005–035). The
Weeklies Program was made permanent on June 23,
2010. See Securities Exchange Act Release No.
62370 (June 23, 2010), 75 FR 37870 (June 30, 2010)
(SR–NYSEAmex–2010–62).
VerDate Mar<15>2010
17:27 Sep 25, 2012
Jkt 226001
which STOS options may be opened in
the STOS Program and the Exchange
may also match any option classes that
are selected by other securities
exchanges that employ a similar
program under their respective rules.5
For each option class eligible for
participation in the STOS Program, the
Exchange may open up to 30 Short
Term Option Series for each expiration
date in that class.
This proposal seeks to allow the
Exchange to open STOS option series
for up to five consecutive week
expirations. The Exchange intends to
add a maximum of five consecutive
week expirations under the STOS
Program, however it will not add a
STOS expiration in the same week that
a monthly options series expires or, in
the case of Quarterly Option Series, on
an expiration that coincides with an
expiration of Quarterly Option Series on
the same class. In other words, the total
number of consecutive expirations will
be five, including any existing monthly
or quarterly expirations.6 This change is
being proposed notwithstanding the
current cap of 30 series per class under
the STOS Program.
The Exchange notes that the STOS
Program has been well-received by
market participants, in particular by
retail investors.7 The Exchange believes
that the current proposed revision to the
STOS Program will permit the Exchange
to meet increased customer demand and
provide market participants with the
ability to hedge in a greater number of
option classes and series.
With regard to the impact of this
proposal on system capacity, the
Exchange has analyzed its capacity and
represents that it and the Options Price
Reporting Authority have the necessary
systems capacity to handle the potential
5 See Securities Exchange Act Release Nos. 65805
(November 22, 2011), 76 FR 73750 (SR–
NYSEAmex–2011–89); 67194 (June 13, 2012), 77 FR
36579 (June 19, 2012) (SR–NYSEMKT–2012–08).
6 For example, if quarterly options expire week 1
and monthly options expire week 3 from now, the
proposal would allow the following expirations:
week 1 quarterly, week 2 STOS, week 3 monthly,
week 4 STOS, and week 5 STOS. If quarterly
options expire week 3 and monthly options expire
week 5, the following expirations would be
allowed: week 1 STOS, week 2 STOS, week 3
monthly, week 4 STOS, and week 5 quarterly.
7 Since the STOS Program [sic] been adopted, it
has seen rapid acceptance among industry
participants as evidenced by the expansion of the
number of classes eligible for the STOS Program by
various Exchanges. See Securities Exchange Act
Release Nos. 65775 (November 17, 2011), 76 FR
72473 (November 23, 2011) (SR–NASDAQ–2011–
138); 65776 (November 17, 2011), 76 FR 72482
(November 23, 2011) (SR–PHLX–2011–131); 66563
(March 9, 2012), 77 FR 15426 (March 15, 2012);
67194 (June 13, 2012), 77 FR 36597 (June 19, 2012)
(SR–NYSEMKT–2012–08); and 67178 (June 11,
2012), 77 FR 36305 (June 18, 2012) (SR–NYSEArca–
2012–60).
PO 00000
Frm 00075
Fmt 4703
Sfmt 4703
59237
additional traffic associated with trading
of an expanded number of expirations
that participate in the STOS Program.
In addition, to provide for
circumstances where the underlying
security has moved such that there are
no series that are at least 10% above or
below the current price of the
underlying security, the Exchange is
proposing to add new language to
Commentary .10 to provide that the
Exchange would delist series with no
open interest in both the call and the
put series having a: (i) Strike higher
than the highest price with open interest
in the put and/or call series for a given
expiration month; and (ii) strike lower
than the lowest strike price with open
interest in the put and/or the call series
for a given expiration month, so as to
list series that are at least 10% but not
more than 30% above or below the
current price of the underlying security.
Further, in the event that all existing
series have open interest and there are
no series at least 10% above or below
the current price of the underlying
security, the Exchange may list
additional series, in excess of the 30
allowed currently under Commentary
.10, that are at least 10% and not more
than 30% above or below the current
price of the underlying security.
The Exchange believes that it is
important to allow investors to roll
existing option positions and ensuring
that there are always series at least 10%
but not more than 30% above or below
the current price of the underlying
security will allow investors the
flexibility they need to roll existing
positions.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with Section
6(b) of the Act 8 in general, and furthers
the objectives of Section 6(b)(5),9 in
particular, in that it is designed to
promote just and equitable principles of
trade, remove impediments to and
perfect the mechanisms of a free and
open market and a national market
system and, in general, to protect
investors and the public interest.
The Exchange believes that expanding
the STOS Program will result in a
continuing benefit to investors by giving
them more flexibility to closely tailor
their investment decisions and hedging
decisions in a greater number of
securities.
The Exchange also believes that
expanding the STOS Program will
provide the investing public and other
market participants with additional
8 15
9 15
E:\FR\FM\26SEN1.SGM
U.S.C. 78f (b).
U.S.C. 78f(b)(5).
26SEN1
59238
Federal Register / Vol. 77, No. 187 / Wednesday, September 26, 2012 / Notices
opportunities to hedge their investment
thus allowing these investors to better
manage their risk exposure. While the
expansion of the STOS Program will
generate additional quote traffic, the
Exchange does not believe that this
increased traffic will become
unmanageable since the proposal
remains limited to a fixed number of
expirations.
The Exchange believes that the ability
to delist series with no open interest in
both the call and the put series will
benefit investors by devoting the current
cap in the number of series to those
series that are more closely tailored to
the investment decisions and hedging
decisions of investors.
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
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 designate 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
the proposed rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
mstockstill on DSK4VPTVN1PROD with NOTICES
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:
Number SR–NYSEMKT–2012–42 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–NYSEMKT–2012–42. 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, on business days
between the hours of 10 a.m. and 3 p.m.,
located at 100 F Street NE., Washington,
DC 20549–1090. Copies of the filing will
also be available for inspection and
copying at the NYSE’s principal office
and on its Internet Web site at
www.nyse.com. 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–
NYSEMKT–2012–42 and should be
submitted on or before October 17,
2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–23636 Filed 9–25–12; 8:45 am]
BILLING CODE 8011–01–P
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
VerDate Mar<15>2010
17:27 Sep 25, 2012
Jkt 226001
10 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00076
Fmt 4703
Sfmt 4703
DEPARTMENT OF STATE
[Public Notice 8042]
Call for Expert Reviewers to the U.S.
Government Review of the Working
Group I Contribution to the Fifth
Assessment Report of the
Intergovernmental Panel on Climate
Change (IPCC), Climate Change 2013:
The Physical Science Basis
Summary: The United States Global
Change Research Program, in
cooperation with the Department of
State, request expert review of the
Second Order Draft of the Working
Group I Contribution to the Fifth
Assessment Report of the
Intergovernmental Panel on Climate
Change (IPCC) Climate Change 2013:
The Physical Science Basis.
The United Nations Environment
Programme (UNEP) and the World
Meteorological Organization (WMO)
established the IPCC in 1988. In
accordance with its mandate and as
reaffirmed in various decisions by the
Panel, the major activity of the IPCC is
to prepare comprehensive and up-todate assessments of policy-relevant
scientific, technical, and socioeconomic information for understanding
the scientific basis of climate change,
potential impacts, and options for
mitigation and adaptation. The IPCC
develops a comprehensive assessment
spanning all the above topics
approximately every six years. The First
Assessment Report was completed in
1990, the Second Assessment Report in
1995, the Third Assessment Report in
2001, and the Fourth Assessment in
2007.
Three working group volumes and a
synthesis report comprise the Fifth
Assessment Report. Working Group I
assesses the scientific aspects of the
climate system and climate change;
Working Group II assesses the
vulnerability of socio-economic and
natural systems to climate change,
potential negative and positive
consequences, and options for adapting
to it; and Working Group III assesses
options for limiting greenhouse gas
emissions and otherwise mitigating
climate change. Procedures for the IPCC
and its preparation of reports can be
found at the following Web sites: https://
www.ipcc.ch/organization/organization
_review.shtml#.UEY0LqSe7x8 https://
ipcc.ch/organization/organization
_procedures.shtml.
In October 2009, the IPCC approved
the outline for the Working Group I
contribution to the 5th Assessment
Report (Working Group I Table of
Contents: https://www.ipcc.unibe.ch/
AR5/chapteroutline.html). Authors were
E:\FR\FM\26SEN1.SGM
26SEN1
]]>Agencies
[Federal Register Volume 77, Number 187 (Wednesday, September 26, 2012)]
[Notices]
[Pages 59236-59238]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-23636]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67897; File No. SR-NYSEMKT-2012-42]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of
Proposed Rule Change and Amendment No. 1, Amending Rule 903(h) and
Related Commentary .10 To Expand the Number of Expirations Available
Under the Short Term Option Series Program (``STOS Program''), To Allow
for the Exchange To Delist Any Series in the STOS That Do Not Have Open
Interest and To Expand the Number of Series in STOS Under Limited
Circumstances
September 20, 2012.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on September 6, 2012, NYSE MKT LLC (the ``Exchange'' or
``NYSE MKT'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. On September 18, 2012, the Exchange filed Amendment No.
1. The Commission is
[[Page 59237]]
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 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 Rule 903(h) and related Commentary
.10 to expand the number of expirations available under the Short Term
Option Series Program (``STOS Program''), to allow for the Exchange to
delist any series in the STOS that do not have open interest and to
expand the number of series in STOS under limited circumstances. The
text of the proposed rule change is available on the Exchange's Web
site at www.nyse.com, at the principal office of the Exchange, 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposal is to amend Rule 903(h) to provide for
the ability to open up to five consecutive expirations under the Short
Term Option Series Program (``STOS Program'') for trading on the
Exchange, to allow for the Exchange to delist any series in the STOS
that do not have open interest and to expand the number of series in
STOS under limited circumstances when there are no series at least 10%
but not more than 30% away from the current price of the underlying
security.\4\
---------------------------------------------------------------------------
\4\ On July 12, 2005, the Commission approved the Weeklies
Program on a pilot basis. See Securities Exchange Act Release No.
52014 (July 12, 2005), 70 FR 41244 (July 18, 2005) (Amex-2005-035).
The Weeklies Program was made permanent on June 23, 2010. See
Securities Exchange Act Release No. 62370 (June 23, 2010), 75 FR
37870 (June 30, 2010) (SR-NYSEAmex-2010-62).
---------------------------------------------------------------------------
Currently, the Exchange may select up to 5 currently listed option
classes on which STOS options may be opened in the STOS Program and the
Exchange may also match any option classes that are selected by other
securities exchanges that employ a similar program under their
respective rules.\5\ For each option class eligible for participation
in the STOS Program, the Exchange may open up to 30 Short Term Option
Series for each expiration date in that class.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release Nos. 65805 (November 22,
2011), 76 FR 73750 (SR-NYSEAmex-2011-89); 67194 (June 13, 2012), 77
FR 36579 (June 19, 2012) (SR-NYSEMKT-2012-08).
---------------------------------------------------------------------------
This proposal seeks to allow the Exchange to open STOS option
series for up to five consecutive week expirations. The Exchange
intends to add a maximum of five consecutive week expirations under the
STOS Program, however it will not add a STOS expiration in the same
week that a monthly options series expires or, in the case of Quarterly
Option Series, on an expiration that coincides with an expiration of
Quarterly Option Series on the same class. In other words, the total
number of consecutive expirations will be five, including any existing
monthly or quarterly expirations.\6\ This change is being proposed
notwithstanding the current cap of 30 series per class under the STOS
Program.
---------------------------------------------------------------------------
\6\ For example, if quarterly options expire week 1 and monthly
options expire week 3 from now, the proposal would allow the
following expirations: week 1 quarterly, week 2 STOS, week 3
monthly, week 4 STOS, and week 5 STOS. If quarterly options expire
week 3 and monthly options expire week 5, the following expirations
would be allowed: week 1 STOS, week 2 STOS, week 3 monthly, week 4
STOS, and week 5 quarterly.
---------------------------------------------------------------------------
The Exchange notes that the STOS Program has been well-received by
market participants, in particular by retail investors.\7\ The Exchange
believes that the current proposed revision to the STOS Program will
permit the Exchange to meet increased customer demand and provide
market participants with the ability to hedge in a greater number of
option classes and series.
---------------------------------------------------------------------------
\7\ Since the STOS Program [sic] been adopted, it has seen rapid
acceptance among industry participants as evidenced by the expansion
of the number of classes eligible for the STOS Program by various
Exchanges. See Securities Exchange Act Release Nos. 65775 (November
17, 2011), 76 FR 72473 (November 23, 2011) (SR-NASDAQ-2011-138);
65776 (November 17, 2011), 76 FR 72482 (November 23, 2011) (SR-PHLX-
2011-131); 66563 (March 9, 2012), 77 FR 15426 (March 15, 2012);
67194 (June 13, 2012), 77 FR 36597 (June 19, 2012) (SR-NYSEMKT-2012-
08); and 67178 (June 11, 2012), 77 FR 36305 (June 18, 2012) (SR-
NYSEArca-2012-60).
---------------------------------------------------------------------------
With regard to the impact of this proposal on system capacity, the
Exchange has analyzed its capacity and represents that it and the
Options Price Reporting Authority have the necessary systems capacity
to handle the potential additional traffic associated with trading of
an expanded number of expirations that participate in the STOS Program.
In addition, to provide for circumstances where the underlying
security has moved such that there are no series that are at least 10%
above or below the current price of the underlying security, the
Exchange is proposing to add new language to Commentary .10 to provide
that the Exchange would delist series with no open interest in both the
call and the put series having a: (i) Strike higher than the highest
price with open interest in the put and/or call series for a given
expiration month; and (ii) strike lower than the lowest strike price
with open interest in the put and/or the call series for a given
expiration month, so as to list series that are at least 10% but not
more than 30% above or below the current price of the underlying
security. Further, in the event that all existing series have open
interest and there are no series at least 10% above or below the
current price of the underlying security, the Exchange may list
additional series, in excess of the 30 allowed currently under
Commentary .10, that are at least 10% and not more than 30% above or
below the current price of the underlying security.
The Exchange believes that it is important to allow investors to
roll existing option positions and ensuring that there are always
series at least 10% but not more than 30% above or below the current
price of the underlying security will allow investors the flexibility
they need to roll existing positions.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Act \8\ in general, and furthers the objectives of
Section 6(b)(5),\9\ in particular, in that it is designed to promote
just and equitable principles of trade, remove impediments to and
perfect the mechanisms of a free and open market and a national market
system and, in general, to protect investors and the public interest.
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\8\ 15 U.S.C. 78f (b).
\9\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that expanding the STOS Program will result
in a continuing benefit to investors by giving them more flexibility to
closely tailor their investment decisions and hedging decisions in a
greater number of securities.
The Exchange also believes that expanding the STOS Program will
provide the investing public and other market participants with
additional
[[Page 59238]]
opportunities to hedge their investment thus allowing these investors
to better manage their risk exposure. While the expansion of the STOS
Program will generate additional quote traffic, the Exchange does not
believe that this increased traffic will become unmanageable since the
proposal remains limited to a fixed number of expirations.
The Exchange believes that the ability to delist series with no
open interest in both the call and the put series will benefit
investors by devoting the current cap in the number of series to those
series that are more closely tailored to the investment decisions and
hedging decisions of investors.
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
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
designate 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 the proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be 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 email to rule-comments@sec.gov. Please include
File Number SR-NYSEMKT-2012-42 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-NYSEMKT-2012-42. 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, on business days
between the hours of 10 a.m. and 3 p.m., located at 100 F Street NE.,
Washington, DC 20549-1090. Copies of the filing will also be available
for inspection and copying at the NYSE's principal office and on its
Internet Web site at www.nyse.com. 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-NYSEMKT-2012-42 and should be submitted on or before
October 17, 2012.
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\10\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-23636 Filed 9-25-12; 8:45 am]
BILLING CODE 8011-01-P
