Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Extension of the Exchange's Penny Pilot Program, 77152-77154 [2012-31411]

Download as PDF 77152 Federal Register / Vol. 77, No. 250 / Monday, December 31, 2012 / Notices publication of the notice of the filing of the proposed rule change in the Federal Register is December 24, 2012. The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised in the comment letters that have been submitted in response to the proposed rule change. The Commission also finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the data that has been provided by the commenters to support their positions. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,8 designates February 22, 2013, as the date by which the Commission should either approve or disapprove the proposed rule change (SR–NYSEArca2012–66). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–31223 Filed 12–28–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Kevin M. O’Neill, Deputy Secretary. [Release No. 34–68521; File No. SR– NYSEMKT–2012–58] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Designation of a Longer Period for Commission Action on Proposed Rule Change Deleting NYSE MKT Rules 95(c) and (d)— Equities and Related Supplementary Material December 21, 2012. On October 26, 2012, NYSE MKT LLC (the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to delete NYSE MKT Rules 95(c) and (d)— Equities and related Supplementary Material. The proposed rule change was published for comment in the Federal Register on November 15, 2012.3 The mstockstill on DSK4VPTVN1PROD with Commission received no comment letters on the proposal. Section 19(b)(2) of the Act 4 provides that within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or as to which the self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved. The 45th day for this filing is December 30, 2012. The Commission is extending this 45-day time period. The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider this proposed rule change, which would delete NYSE MKT Rules 95(c) and (d)—Equities and related Supplementary Material, and the potential issues raised by this proposal. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,5 designates February 13, 2013 as the date by which the Commission should either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SR–NYSEMKT–2012–58). U.S.C. 78s(b)(2). CFR 200.30–3(a)(57). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 68186 (November 8, 2012), 77 FR 68191. [FR Doc. 2012–31239 Filed 12–28–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–68518; File No. SR–BX– 2012–076] Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Extension of the Exchange’s Penny Pilot Program December 21, 2012. 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 December 20, 2012, NASDAQ OMX BX, Inc. 8 15 9 17 VerDate Mar<15>2010 21:28 Dec 28, 2012 Jkt 229001 4 15 U.S.C. 78s(b)(2). U.S.C. 78s(b)(2). 6 17 CFR 200.30–3(a)(31). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 5 15 PO 00000 Frm 00150 Fmt 4703 Sfmt 4703 (‘‘Exchange’’ or ‘‘BX’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘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 BX is filing with the Commission a proposal to: extend through June 30, 2013, the Penny Pilot Program in options classes in certain issues (‘‘Penny Pilot’’ or ‘‘Pilot’’) and provide a procedure for replacement of any Penny Pilot issues that have been delisted.3 The Exchange requests that the Commission waive the 30-day operative delay period contained in Exchange Act Rule 19b–4(f)(6)(iii) 4 to the extent needed for timely industry-wide implementation of the proposal. Proposed new language is italicized and proposed deleted language is [bracketed].5 NASDAQ OMX BX Rules Options Rules * * * * * Chapter VI Trading Systems * * * * * Sec. 5 Minimum Increments (a) The Board may establish minimum quoting increments for options contracts traded on BX Options. Such minimum increments established by the Board will be designated as a stated policy, practice, or interpretation with respect to the administration of this Section within the meaning of Section 19 of the Exchange Act and will be filed with the SEC as a rule change for effectiveness upon filing. Until such time as the Board makes a change in the increments, the following principles shall apply: (1) If the options series is trading at less than $3.00, five (5) cents; (2) If the options series is trading at $3.00 or higher, ten (10) cents; and 3 The Penny Pilot was established in June 2012 and extended in July 2012. See Securities Exchange Act Release Nos. 67256 (June 26, 2012), 77 FR 39277 (July 2, 2012) (SR–BX–2012–030) (order approving BX option rules and establishing Penny Pilot); and 67342 (July 3, 2012), 77 FR 40666 (July 10, 2012) (SR–BX–2012–046) (notice of filing and immediate effectiveness extending the Penny Pilot through December 31, 2012). 4 17 CFR 240.19b–4(f)(6)(iii). 5 The text of the proposed rule change is available at https://nasdaqomxbx.cchwallstreet.com/, at BX’s principal office, and at the Commission’s Public Reference Room. E:\FR\FM\31DEN1.SGM 31DEN1 Federal Register / Vol. 77, No. 250 / Monday, December 31, 2012 / Notices (3) For a pilot period scheduled to expire on [December 31, 2012]June 30, 2013, if the options series is trading pursuant to the Penny Pilot program one (1) cent if the options series is trading at less than $3.00, five (5) cents if the options series is trading at $3.00 or higher, unless for QQQQs, SPY and IWM where the minimum quoting increment will be one cent for all series regardless of price. A list of such options shall be communicated to membership via an Options Trader Alert (‘‘OTA’’) posted on the Exchange’s web site. The Exchange may replace any pilot issues that have been delisted with the next most actively traded multiply listed options classes that are not yet included in the pilot, based on trading activity for the six month period beginning June 1, 2012, and ending November 30, 2012. The replacement issues may be added to the pilot on the second trading day following January 1, 2013. (b) No Change. * * * * * options series. The Penny Pilot is currently scheduled to expire on December 31, 2012. The Exchange proposes to extend the time period of the Penny Pilot through June 30, 2013, and to provide a procedure for adding classes that have been delisted from the Penny Pilot. The Exchange proposes that any Penny Pilot Program issues that have been delisted may be replaced on the second trading day following January 1, 2013.6 The replacement issues will be selected based on trading activity for the six month period beginning June 1, 2012, and ending November 30, 2012.7 All classes currently participating in the Penny Pilot will remain the same and all minimum increments will remain unchanged. The Exchange believes the benefits to public customers and other market participants who will be able to express their true prices to buy and sell options have been demonstrated to outweigh the potential increase in quote traffic. 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. 2. Statutory Basis mstockstill on DSK4VPTVN1PROD with A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this filing is to amend Chapter VI, Section 5 to: extend the Penny Pilot through June 30, 2013, and add a procedure for replacing any Penny Pilot issues that have been delisted. Under the Penny Pilot, the minimum price variation for all participating options classes, except for the Nasdaq100 Index Tracking Stock (‘‘QQQQ’’), the SPDR S&P 500 Exchange Traded Fund (‘‘SPY’’) and the iShares Russell 2000 Index Fund (‘‘IWM’’), is $0.01 for all quotations in options series that are quoted at less than $3 per contract and $0.05 for all quotations in options series that are quoted at $3 per contract or greater. QQQQ, SPY and IWM are quoted in $0.01 increments for all VerDate Mar<15>2010 21:28 Dec 28, 2012 Jkt 229001 The Exchange believes that its proposal is consistent with Section 6(b) of the 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 facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. In particular, the proposed rule change, which extends the Penny Pilot for an additional six months through June 30, 2013, and provides a procedure for adding classes that have been delisted from the Penny Pilot will enable public customers and other market participants to express their true prices to buy and sell options for the benefit of all market participants. 6 The Exchange is making a conforming change in Chapter VI, Section 5 to add language regarding delisted issues that was not inserted when the Penny Pilot was instituted on the Exchange earlier this year. As a result, the Exchange will have exactly the same language as used in the Penny Pilot Programs of NASDAQ Options Market (‘‘NOM’’) and NASDAQ OMX PHLX LLC (‘‘Phlx’’), see NOM Chapter VI, Section 5 and Phlx Rule 1034; and will have a penny pilot delisted issues replacement procedure that is available on all other options exchanges. 7 The replacement issues will be announced to the Exchange’s membership via an Options Trader Alert (OTA) posted on the Exchange’s Web site. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). PO 00000 Frm 00151 Fmt 4703 Sfmt 4703 77153 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. To the contrary, this proposal is procompetitive because it allows Penny Pilot issues to be traded on the Exchange. 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 The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 10 and Rule 19b–4(f)(6) thereunder.11 Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 12 and Rule 19b–4(f)(6)(iii) thereunder.13 A proposed rule change filed under Rule 19b–4(f)(6) normally does not become operative prior to 30 days after the date of the filing.14 However, pursuant to Rule 19b–4(f)(6)(iii),15 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because doing so will allow the Pilot 10 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 12 15 U.S.C. 78s(b)(3)(A). 13 17 CFR 240.19b–4(f)(6)(iii). 14 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 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. The Exchange has satisfied this pre-filing requirement. 15 17 CFR 240.19b-4(f)(6)(iii). 11 17 E:\FR\FM\31DEN1.SGM 31DEN1 77154 Federal Register / Vol. 77, No. 250 / Monday, December 31, 2012 / Notices Program to continue without interruption in a manner that is consistent with the Commission’s prior approval of the extension and expansion of the Pilot Program and will allow the Exchange and the Commission additional time to analyze the impact of the Pilot Program.16 Accordingly, the Commission designates the proposed rule change as operative upon filing with the Commission.17 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 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 10:00 a.m. and 3:00 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– 2012–076 and should be submitted on or before January 22, 2013. 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Kevin M. O’Neill, Deputy Secretary. Electronic Comments [FR Doc. 2012–31411 Filed 12–28–12; 8:45 am] • 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–2012–076 on the subject line. BILLING CODE 8011–01–P Paper Comments Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Exchange Rule 953NY—Trading Halts and Suspensions mstockstill on DSK4VPTVN1PROD with • 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–2012–076. 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 16 See Securities Exchange Act Release No. 61061 (November 24, 2009), 74 FR 62857 (December 1, 2009) (SR–NYSEArca–2009–44). See also See 15 U.S.C. 78c(f). 17 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Mar<15>2010 21:28 Dec 28, 2012 Jkt 229001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–68520; File No. SR– NYSEMKT–2012–80] December 21, 2012. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 10, 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 and II below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder.4 The Commission is 18 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 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 Exchange Rule 953NY—Trading Halts and Suspensions. 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 Exchange proposes to amend Exchange Rule 953NY by adopting a provision governing the nullification of trades that occur while the options class is subject to a trading halt. This proposal is based on and substantially similar to Rule 1092(c)(iv)(A) of NASDAQ OMX PHLX, LLC (‘‘PHLX’’).5 Specifically, the Exchange proposes to adopt Commentary .04 to Rule 953NY, which provides that any trade that occurs during a trading halt on the Exchange in a given option shall be nullified. Rule 953NY sets forth the circumstances when the Exchange may halt trading in an options contract or options series. Such trading halts are applicable to both electronic and openoutcry trading. Pursuant to Rule 953NY(a), NYSE Amex shall halt or suspend the trading of options whenever the Exchange deems such action appropriate in the interests of a fair and orderly market and to protect investors. Among the factors that may be considered are: (i) The trading in the 1 15 PO 00000 Frm 00152 Fmt 4703 Sfmt 4703 5 See Securities Exchange Act Release No. 57712 (April 24, 2008) 73 FR 24100 (May 1, 2008). Approval Order for SR–Phlx–2007–69, as amended. E:\FR\FM\31DEN1.SGM 31DEN1

Agencies

[Federal Register Volume 77, Number 250 (Monday, December 31, 2012)]
[Notices]
[Pages 77152-77154]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-31411]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68518; File No. SR-BX-2012-076]


Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Relating 
to Extension of the Exchange's Penny Pilot Program

December 21, 2012.
    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 December 20, 2012, NASDAQ OMX BX, Inc. (``Exchange'' or ``BX'') 
filed with the Securities and Exchange Commission (``SEC'' or 
``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

    BX is filing with the Commission a proposal to: extend through June 
30, 2013, the Penny Pilot Program in options classes in certain issues 
(``Penny Pilot'' or ``Pilot'') and provide a procedure for replacement 
of any Penny Pilot issues that have been delisted.\3\
---------------------------------------------------------------------------

    \3\ The Penny Pilot was established in June 2012 and extended in 
July 2012. See Securities Exchange Act Release Nos. 67256 (June 26, 
2012), 77 FR 39277 (July 2, 2012) (SR-BX-2012-030) (order approving 
BX option rules and establishing Penny Pilot); and 67342 (July 3, 
2012), 77 FR 40666 (July 10, 2012) (SR-BX-2012-046) (notice of 
filing and immediate effectiveness extending the Penny Pilot through 
December 31, 2012).
---------------------------------------------------------------------------

    The Exchange requests that the Commission waive the 30-day 
operative delay period contained in Exchange Act Rule 19b-4(f)(6)(iii) 
\4\ to the extent needed for timely industry-wide implementation of the 
proposal.
---------------------------------------------------------------------------

    \4\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    Proposed new language is italicized and proposed deleted language 
is [bracketed].\5\
---------------------------------------------------------------------------

    \5\ The text of the proposed rule change is available at https://nasdaqomxbx.cchwallstreet.com/, at BX's principal office, and at the 
Commission's Public Reference Room.
---------------------------------------------------------------------------

NASDAQ OMX BX Rules

Options Rules

* * * * *

Chapter VI Trading Systems

* * * * *

Sec. 5 Minimum Increments

    (a) The Board may establish minimum quoting increments for options 
contracts traded on BX Options. Such minimum increments established by 
the Board will be designated as a stated policy, practice, or 
interpretation with respect to the administration of this Section 
within the meaning of Section 19 of the Exchange Act and will be filed 
with the SEC as a rule change for effectiveness upon filing. Until such 
time as the Board makes a change in the increments, the following 
principles shall apply:
    (1) If the options series is trading at less than $3.00, five (5) 
cents;
    (2) If the options series is trading at $3.00 or higher, ten (10) 
cents; and

[[Page 77153]]

    (3) For a pilot period scheduled to expire on [December 31, 
2012]June 30, 2013, if the options series is trading pursuant to the 
Penny Pilot program one (1) cent if the options series is trading at 
less than $3.00, five (5) cents if the options series is trading at 
$3.00 or higher, unless for QQQQs, SPY and IWM where the minimum 
quoting increment will be one cent for all series regardless of price. 
A list of such options shall be communicated to membership via an 
Options Trader Alert (``OTA'') posted on the Exchange's web site.
    The Exchange may replace any pilot issues that have been delisted 
with the next most actively traded multiply listed options classes that 
are not yet included in the pilot, based on trading activity for the 
six month period beginning June 1, 2012, and ending November 30, 2012. 
The replacement issues may be added to the pilot on the second trading 
day following January 1, 2013.
    (b) No Change.
* * * * *

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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this filing is to amend Chapter VI, Section 5 to: 
extend the Penny Pilot through June 30, 2013, and add a procedure for 
replacing any Penny Pilot issues that have been delisted.
    Under the Penny Pilot, the minimum price variation for all 
participating options classes, except for the Nasdaq-100 Index Tracking 
Stock (``QQQQ''), the SPDR S&P 500 Exchange Traded Fund (``SPY'') and 
the iShares Russell 2000 Index Fund (``IWM''), is $0.01 for all 
quotations in options series that are quoted at less than $3 per 
contract and $0.05 for all quotations in options series that are quoted 
at $3 per contract or greater. QQQQ, SPY and IWM are quoted in $0.01 
increments for all options series. The Penny Pilot is currently 
scheduled to expire on December 31, 2012.
    The Exchange proposes to extend the time period of the Penny Pilot 
through June 30, 2013, and to provide a procedure for adding classes 
that have been delisted from the Penny Pilot. The Exchange proposes 
that any Penny Pilot Program issues that have been delisted may be 
replaced on the second trading day following January 1, 2013.\6\ The 
replacement issues will be selected based on trading activity for the 
six month period beginning June 1, 2012, and ending November 30, 
2012.\7\
---------------------------------------------------------------------------

    \6\ The Exchange is making a conforming change in Chapter VI, 
Section 5 to add language regarding delisted issues that was not 
inserted when the Penny Pilot was instituted on the Exchange earlier 
this year. As a result, the Exchange will have exactly the same 
language as used in the Penny Pilot Programs of NASDAQ Options 
Market (``NOM'') and NASDAQ OMX PHLX LLC (``Phlx''), see NOM Chapter 
VI, Section 5 and Phlx Rule 1034; and will have a penny pilot 
delisted issues replacement procedure that is available on all other 
options exchanges.
    \7\ The replacement issues will be announced to the Exchange's 
membership via an Options Trader Alert (OTA) posted on the 
Exchange's Web site.
---------------------------------------------------------------------------

    All classes currently participating in the Penny Pilot will remain 
the same and all minimum increments will remain unchanged. The Exchange 
believes the benefits to public customers and other market participants 
who will be able to express their true prices to buy and sell options 
have been demonstrated to outweigh the potential increase in quote 
traffic.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the 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 facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. In particular, the proposed rule 
change, which extends the Penny Pilot for an additional six months 
through June 30, 2013, and provides a procedure for adding classes that 
have been delisted from the Penny Pilot will enable public customers 
and other market participants to express their true prices to buy and 
sell options for the benefit of all market participants.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 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. To the contrary, this 
proposal is pro-competitive because it allows Penny Pilot issues to be 
traded on the Exchange.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6)(iii) thereunder.\13\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of the filing.\14\ 
However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest because doing so will 
allow the Pilot

[[Page 77154]]

Program to continue without interruption in a manner that is consistent 
with the Commission's prior approval of the extension and expansion of 
the Pilot Program and will allow the Exchange and the Commission 
additional time to analyze the impact of the Pilot Program.\16\ 
Accordingly, the Commission designates the proposed rule change as 
operative upon filing with the Commission.\17\
---------------------------------------------------------------------------

    \14\ 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 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. The 
Exchange has satisfied this pre-filing requirement.
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ See Securities Exchange Act Release No. 61061 (November 24, 
2009), 74 FR 62857 (December 1, 2009) (SR-NYSEArca-2009-44). See 
also See 15 U.S.C. 78c(f).
    \17\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

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-2012-076 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-2012-076. 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 
10:00 a.m. and 3:00 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-2012-076 and should be 
submitted on or before January 22, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-31411 Filed 12-28-12; 8:45 am]
BILLING CODE 8011-01-P
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