Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Penny Pilot Program, 973-974 [2012-31749]
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Federal Register / Vol. 78, No. 4 / Monday, January 7, 2013 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68551; File No. SR–MIAX–
2012–04]
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change To Extend the Penny Pilot
Program
December 31, 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 December
21, 2012, Miami International Securities
Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend Rule 510, Interpretations and
Policies .01 to extend the pilot program
for the quoting and trading of certain
options in pennies (the ‘‘Penny Pilot
Program’’) and to adopt a procedure for
replacing in the Penny Pilot Program
option classes that have been delisted.
The text of the proposed rule change
is available on the Exchange’s Web site
at http://www.miaxoptions.com/filter/
wotitle/rule_filing, at MIAX’s principal
office, and at the Commission’s Public
Reference Room.
wreier-aviles on DSK7SPTVN1PROD with
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 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.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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15:16 Jan 04, 2013
Jkt 229001
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange is a participant in an
industry-wide pilot program that
provides for the quoting and trading of
certain option classes in penny
increments (the ‘‘Penny Pilot Program’’
or ‘‘Program’’). Specifically, the Penny
Pilot Program allows the quoting and
trading of certain option classes in
minimum increments of $0.01 for all
series in such option classes with a
price of less than $3.00; and in
minimum increments of $0.05 for all
series in such option classes with a
price of $3.00 or higher. Options
overlying the PowerShares QQQ Trust
(‘‘QQQQ’’)®, SPDR S&P 500 Exchange
Traded Funds (‘‘SPY’’), and iShares
Russell 2000 Index Funds (‘‘IWM’’),
however, are quoted and traded in
minimum increments of $0.01 for all
series regardless of the price. The Penny
Pilot Program was initiated at the then
existing option exchanges in January
2007 and currently includes more than
300 of the most active option classes.
The Penny Pilot Program is currently
scheduled to expire on December 31,
2012. The purpose of the proposed rule
change is to extend the Penny Pilot
Program in its current format through
June 30, 2013.
In addition, the Exchange proposes to
amend Rule 510, Interpretations and
Policies .01 to describe the process by
which Penny Pilot Program option
classes that have been delisted can be
replaced. The process, which is
currently in place at other option
exchanges participating in the Penny
Pilot Program, provides a date on which
an option class in the Penny Pilot
Program that has been delisted will be
replaced by the next most actively
traded, multiply-listed option class that
is not yet in the Penny Pilot Program.
The replacement classes will be added
to the Penny Pilot Program on the
second trading day following January 1,
2013. Determination of the next most
actively traded option class will be
based on trading activity in the previous
six months excluding the month
immediately prior to the replacement
date. Thus, replacement issues will be
selected based on trading activity for the
six month period beginning June 1,
2012, and ending November 30, 2012.
All classes currently participating in the
Penny Pilot Program will remain the
same and all minimum increments will
remain unchanged. The Exchange
believes its participation in the Penny
Pilot Program will benefit public
PO 00000
Frm 00046
Fmt 4703
Sfmt 4703
973
customers and other market participants
in that they will be able to express their
true prices to buy and sell options in
those classes that are part of the
Program.
2. Statutory Basis
MIAX believes that its proposed rule
change is consistent with Section 6(b) of
the Act 4 in general, and furthers the
objectives of Section 6(b)(5) of the Act 5
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, to 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, and it is not designed to
permit unfair discrimination among
customers, brokers, or dealers. In
particular, the proposed rule change,
which extends the Penny Pilot Program
for six months, allows the Exchange to
participate in a program that has been
viewed as beneficial to traders, investors
and public customers and viewed as
successful by the other options
exchanges participating in it. In
addition, the adoption of a process by
which Penny Pilot Program option
classes that have been delisted can be
replaced, allows the Program to
continue to provide for the quoting and
trading of the most active option classes
in pennies. It also provides an organized
process, which is uniform across the
options exchanges, for the introduction
of new option classes into the Program.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. Further, by
extending the Penny Pilot Program for
six months, MIAX, as a new entrant to
the market, is able to participate in the
Penny Pilot Program as it begins to rollout trading in those active option
classes that are part of the Program.
MIAX’s overall participation in the
Penny Pilot Program enhances
competition in that it provides another
venue for trading active option classes
expressed by market participants at
their true prices.
4 15
5 15
E:\FR\FM\07JAN1.SGM
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
07JAN1
974
Federal Register / Vol. 78, No. 4 / Monday, January 7, 2013 / 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 Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 6 and Rule
19b–4(f)(6) thereunder.7 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 8 and Rule
19b–4(f)(6)(iii) thereunder.9
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.10 However,
pursuant to Rule 19b–4(f)(6)(iii),11 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
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.12 Accordingly, the
Commission designates the proposed
6 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
8 15 U.S.C. 78s(b)(3)(A).
9 17 CFR 240.19b–4(f)(6)(iii).
10 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.
11 17 CFR 240.19b–4(f)(6)(iii).
12 See Securities Exchange Act Release No. 61061
(November 24, 2009), 74 FR 62857 (December 1,
2009) (SR–NYSEArca–2009–44).
wreier-aviles on DSK7SPTVN1PROD with
7 17
VerDate Mar<15>2010
15:16 Jan 04, 2013
Jkt 229001
rule change as operative upon filing
with the Commission.13
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.
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–MIAX–
2012–04 and should be submitted on or
before January 28, 2013.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Elizabeth M. Murphy,
Secretary.
Electronic Comments
• Use the Commission’s Internet
comment form (http://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–MIAX–2012–04 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
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–MIAX–2012–04. 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 (http://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
13 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).
PO 00000
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[FR Doc. 2012–31749 Filed 1–4–13; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–68552; File No. SR–C2–
2012–045]
Self-Regulatory Organizations; C2
Options Exchange, Incorporated;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to the Exchange
Penny Pilot Program
December 31, 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 December
21, 2012, C2 Options Exchange,
Incorporated (the ‘‘Exchange’’ or ‘‘C2’’)
filed with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
rules relating to the Penny Pilot
Program. The text of the proposed rule
change is provided below.
[(additions are italicized; deletions are
[bracketed])
*
*
*
*
*
C2 Options Exchange, Incorporated
Rules
*
*
*
14 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\07JAN1.SGM
07JAN1
*
Agencies
[Federal Register Volume 78, Number 4 (Monday, January 7, 2013)]
[Notices]
[Pages 973-974]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-31749]
[[Page 973]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68551; File No. SR-MIAX-2012-04]
Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Extend the Penny Pilot Program
December 31, 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 December 21, 2012, Miami International Securities
Exchange LLC (``MIAX'' or ``Exchange'') filed with the Securities and
Exchange Commission (``Commission'') a 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\ 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 is filing a proposal to amend Rule 510,
Interpretations and Policies .01 to extend the pilot program for the
quoting and trading of certain options in pennies (the ``Penny Pilot
Program'') and to adopt a procedure for replacing in the Penny Pilot
Program option classes that have been delisted.
The text of the proposed rule change is available on the Exchange's
Web site at http://www.miaxoptions.com/filter/wotitle/rule_filing, at
MIAX's principal office, 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 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 Exchange is a participant in an industry-wide pilot program
that provides for the quoting and trading of certain option classes in
penny increments (the ``Penny Pilot Program'' or ``Program'').
Specifically, the Penny Pilot Program allows the quoting and trading of
certain option classes in minimum increments of $0.01 for all series in
such option classes with a price of less than $3.00; and in minimum
increments of $0.05 for all series in such option classes with a price
of $3.00 or higher. Options overlying the PowerShares QQQ Trust
(``QQQQ'')[supreg], SPDR S&P 500 Exchange Traded Funds (``SPY''), and
iShares Russell 2000 Index Funds (``IWM''), however, are quoted and
traded in minimum increments of $0.01 for all series regardless of the
price. The Penny Pilot Program was initiated at the then existing
option exchanges in January 2007 and currently includes more than 300
of the most active option classes. The Penny Pilot Program is currently
scheduled to expire on December 31, 2012. The purpose of the proposed
rule change is to extend the Penny Pilot Program in its current format
through June 30, 2013.
In addition, the Exchange proposes to amend Rule 510,
Interpretations and Policies .01 to describe the process by which Penny
Pilot Program option classes that have been delisted can be replaced.
The process, which is currently in place at other option exchanges
participating in the Penny Pilot Program, provides a date on which an
option class in the Penny Pilot Program that has been delisted will be
replaced by the next most actively traded, multiply-listed option class
that is not yet in the Penny Pilot Program. The replacement classes
will be added to the Penny Pilot Program on the second trading day
following January 1, 2013. Determination of the next most actively
traded option class will be based on trading activity in the previous
six months excluding the month immediately prior to the replacement
date. Thus, replacement issues will be selected based on trading
activity for the six month period beginning June 1, 2012, and ending
November 30, 2012. All classes currently participating in the Penny
Pilot Program will remain the same and all minimum increments will
remain unchanged. The Exchange believes its participation in the Penny
Pilot Program will benefit public customers and other market
participants in that they will be able to express their true prices to
buy and sell options in those classes that are part of the Program.
2. Statutory Basis
MIAX believes that its proposed rule change is consistent with
Section 6(b) of the Act \4\ in general, and furthers the objectives of
Section 6(b)(5) of the Act \5\ 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, to 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, and it is not designed to
permit unfair discrimination among customers, brokers, or dealers. In
particular, the proposed rule change, which extends the Penny Pilot
Program for six months, allows the Exchange to participate in a program
that has been viewed as beneficial to traders, investors and public
customers and viewed as successful by the other options exchanges
participating in it. In addition, the adoption of a process by which
Penny Pilot Program option classes that have been delisted can be
replaced, allows the Program to continue to provide for the quoting and
trading of the most active option classes in pennies. It also provides
an organized process, which is uniform across the options exchanges,
for the introduction of new option classes into the Program.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b).
\5\ 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 not necessary or appropriate in
furtherance of the purposes of the Act. Further, by extending the Penny
Pilot Program for six months, MIAX, as a new entrant to the market, is
able to participate in the Penny Pilot Program as it begins to roll-out
trading in those active option classes that are part of the Program.
MIAX's overall participation in the Penny Pilot Program enhances
competition in that it provides another venue for trading active option
classes expressed by market participants at their true prices.
[[Page 974]]
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 Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \6\ and Rule 19b-4(f)(6) thereunder.\7\
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 \8\ and Rule 19b-
4(f)(6)(iii) thereunder.\9\
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78s(b)(3)(A)(iii).
\7\ 17 CFR 240.19b-4(f)(6).
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 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.\10\
However, pursuant to Rule 19b-4(f)(6)(iii),\11\ 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 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.\12\ Accordingly, the Commission designates the
proposed rule change as operative upon filing with the Commission.\13\
---------------------------------------------------------------------------
\10\ 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.
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ See Securities Exchange Act Release No. 61061 (November 24,
2009), 74 FR 62857 (December 1, 2009) (SR-NYSEArca-2009-44).
\13\ 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).
---------------------------------------------------------------------------
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 (http://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-MIAX-2012-04 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-MIAX-2012-04. 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 (http://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-MIAX-2012-04 and should be
submitted on or before January 28, 2013.
For the Commission, by the Division of Trading and Markets, pursuant
to delegated authority.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2012-31749 Filed 1-4-13; 8:45 am]
BILLING CODE 8011-01-P