Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Mini Options, 17725-17727 [2013-06608]
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Federal Register / Vol. 78, No. 56 / Friday, March 22, 2013 / Notices
srobinson on DSK4SPTVN1PROD with NOTICES
instruments that may not be securities
within the meaning of section 2(a)(36) of
the Act (‘‘Other Investments’’).2
Applicants also request that the order
exempt W&R and any entity, including
any entity controlled by or under
common control with an Adviser, that
in the future acts as principal
underwriter, or broker or dealer (if
registered under the 1934 Act) with
respect to the transactions described in
the application.
3. Consistent with its fiduciary
obligations under the Act, the Trust’s
board of trustees will review the
advisory fees charged by the Fund of
Funds’ Adviser to ensure that they are
based on services provided that are in
addition to, rather than duplicative of,
services provided pursuant to the
advisory agreement of any investment
company in which the Fund of Funds
may invest.
Applicants’ Legal Analysis
1. Section 12(d)(1)(A) of the Act
provides that no registered investment
company (‘‘acquiring company’’) may
acquire securities of another investment
company (‘‘acquired company’’) if such
securities represent more than 3% of the
acquired company’s outstanding voting
stock or more than 5% of the acquiring
company’s total assets, or if such
securities, together with the securities of
other investment companies, represent
more than 10% of the acquiring
company’s total assets. Section
12(d)(1)(B) of the Act provides that no
registered open-end investment
company may sell its securities to
another investment company if the sale
will cause the acquiring company to
own more than 3% of the acquired
company’s voting stock, or cause more
than 10% of the acquired company’s
voting stock to be owned by investment
companies and companies controlled by
them.
2. Section 12(d)(1)(G) of the Act
provides, in part, that section 12(d)(1)
will not apply to securities of an
acquired company purchased by an
acquiring company if: (i) The acquired
company and acquiring company are
part of the same group of investment
companies; (ii) the acquiring company
holds only securities of acquired
companies that are part of the same
group of investment companies,
government securities, and short-term
paper; (iii) the aggregate sales loads and
distribution-related fees of the acquiring
2 Every existing entity that currently intends to
rely on the requested order is named as an
applicant. Any existing or future entity that relies
on the order in the future will do so only in
accordance with the terms and condition in the
application.
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18:27 Mar 21, 2013
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company and the acquired company are
not excessive under rules adopted
pursuant to section 22(b) or section
22(c) of the Act by a securities
association registered under section 15A
of the 1934 Act, or by the Commission;
and (iv) the acquired company has a
policy that prohibits it from acquiring
securities of registered open-end
investment companies or registered unit
investment trusts in reliance on section
12(d)(1)(F) or (G) of the Act.
3. Rule 12d1–2 under the Act permits
a registered open-end investment
company or a registered unit investment
trust that relies on section 12(d)(1)(G) of
the Act to acquire, in addition to
securities issued by another registered
investment company in the same group
of investment companies, government
securities, and short-term paper: (i)
Securities issued by an investment
company that is not in the same group
of investment companies, when the
acquisition is in reliance on section
12(d)(1)(A) or 12(d)(1)(F) of the Act; (ii)
securities (other than securities issued
by an investment company); and (iii)
securities issued by a money market
fund, when the investment is in reliance
on rule 12d1–1 under the Act. For the
purposes of rule 12d1–2, ‘‘securities’’
means any security as defined in section
2(a)(36) of the Act.
4. Section 6(c) of the Act provides that
the Commission may exempt any
person, security, or transaction from any
provision of the Act, or from any rule
under the Act, if such exemption is
necessary or appropriate in the public
interest and consistent with the
protection of investors and the purposes
fairly intended by the policies and
provisions of the Act.
5. Applicants state that each Funds of
Funds will comply with rule 12d1–2
under the Act, except to the extent it
may invest a portion of its assets in
Other Investments. Applicants request
an order under section 6(c) of the Act
for an exemption from rule 12d1–2(a) to
allow the Funds of Funds to invest in
Other Investments while investing in
Underlying Funds. Applicants assert
that permitting the Funds of Funds to
invest in Other Investments as described
in the application would not raise any
of the concerns that the requirements of
section 12(d)(1) were designed to
address.
Applicants’ Condition
Applicants agree that any order
granting the requested relief will be
subject to the following condition:
Applicants will comply with all
provisions of rule 12d1–2 under the Act,
except for paragraph (a)(2) to the extent
that it restricts any Fund of Funds from
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17725
investing in Other Investments as
described in the application.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–06639 Filed 3–21–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69162; File No. SR–Phlx–
2013–34]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Mini Options
March 18, 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 March 18,
2013, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ or ‘‘Exchange’’) 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 the Substance
of the Proposed Rule Change
The Exchange proposes to address the
manner in which options contracts
overlying 10 shares of a security (‘‘Mini
Options’’) will trade as a Complex
Order.3
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.nasdaqtrader.com/
micro.aspx?id=PHLXRulefilings, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 A Complex Order is any order involving the
simultaneous purchase and/or sale of two or more
different options series in the same underlying
security, priced at a net debit or credit based on the
relative prices of the individual components, for the
same account, for the purpose of executing a
particular investment strategy. Furthermore, a
Complex Order can also be a stock-option order,
which is an order to buy or sell a stated number
of units of an underlying stock or exchange-traded
fund (‘‘ETF’’) coupled with the purchase or sale of
options contract(s). See Exchange Rule 1080,
Commentary .08(a)(i).
2 17
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Federal Register / Vol. 78, No. 56 / Friday, March 22, 2013 / Notices
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
srobinson on DSK4SPTVN1PROD with NOTICES
1. Purpose
The purpose of the proposed rule
change is to provide for the manner in
which Mini Options will trade as a
Complex Order pursuant to Exchange
Rule 1080. The Exchange previously
filed to list and trade Mini Options.4
Exchange Rule 1080 entitled ‘‘Phlx XL
and Phlx XL II’’ describes the manner in
which Complex Orders,5 trade on the
Exchange. The Exchange will describe
below the manner in which Rule 1080
operates with respect to Mini Options.
With respect to Complex Orders, the
Exchange states in Rule 1080 that
Complex Orders involve the
simultaneous purchase and/or sale of
two or more different options series in
the same underlying security, priced as
a net debit or credit based on relative
prices of the individual components.
The Exchange would permit Mini
Options to trade as Complex Orders
provided that the order involves the
simultaneous purchase and/or sale of
two or more different Mini Options
series in the same underlying security,
priced as a net debit or credit based on
relative prices of the individual
components and Mini Options are only
part of a Complex Order strategy that
4 See Securities Exchange Act Release No. 68132
(November 1, 2012), 77 FR 66904 (November 7,
2012) (SR–Phlx–2012–126). The Exchange amended
amend Rules 1001 (Position Limits), 1012 (Series of
Options Open for Trading) and 1033 (Bids and
Offers—Premium) to list and trade Mini Options
overlying five (5) high-priced securities for which
the standard contract overlying the same security
exhibits significant liquidity. Specifically, the
Exchange filed to list Mini Options on SPDR S&P
500 (‘‘SPY’’), Apple, Inc. (‘‘AAPL’’), SPDR Gold
Trust (‘‘GLD’’), Google Inc. (‘‘GOOG’’) and
Amazon.com Inc. (‘‘AMZN’’). The Exchange filed a
separate proposal to specify the application of Mini
Options to Qualified Contingent Cross and PIXL
transactions. See SR–Phlx–2013–32 (not yet
published).
5 See Commentary .08 to Exchange Rule 1080.
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includes other Mini Options. For
example, a Complex Order strategy
cannot be comprised of standard
options in AAPL and Mini Options in
AAPL7. Also, with respect to Complex
Orders, the Exchange will not permit
Mini Options to trade as a stock-option
order. The Exchange proposes to add
rule text with respect to Mini Options
trading as Complex Orders to
Commentary .08 of Rule 1080.
The Exchange proposes to commence
trading Mini Options on March 22,
2013.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6 of the
Securities and Exchange Act of 1934
(‘‘Exchange Act’’),6 in general, and with
Section 6(b)(5) of the Exchange Act,7 in
particular, in that the proposal is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, 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.
Specifically, the Exchange believes
that investors and other market
participants would benefit from the
current rule proposal because it would
allow market participants to take
advantage of legitimate investment
strategies and execute Complex Orders
in Mini Options. Additionally, the
Exchange believes the proposed rule
change will avoid investor confusion by
providing how Mini Options will trade
the same or different as compared to
standard options with respect to
Complex Orders.
The Exchange’s proposal to permit
Mini Options to trade as Complex
Orders provided the strategy does not
combine Mini Options and standard
options serves to maintain the
permissible ratios that are applicable to
Complex Orders by separating the
trading of standard Complex Orders and
Mini Options Complex Orders. Also, the
Exchange has determined to not permit
Mini Option Complex Orders to trade as
a stock-option order because as Mini
Options are a new product, the
Exchange would like to consider the
impact in this area and file to amend the
rule at a later date.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
6 15
7 15
PO 00000
U.S.C. 78f.
U.S.C. 78f(b)(5).
Frm 00100
Fmt 4703
Sfmt 4703
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. All members
may transact Complex Orders on Phlx.
The rule change does not permit unfair
discrimination and does not impose a
burden on Members with respect to
trading Mini Options.
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
Because the foregoing 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 for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate, it has become effective
pursuant to Section 19(b)(3)(A) 8 of the
Act and Rule 19b–4(f)(6) 9 thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) of the Act 10 normally
does not become operative prior to 30
days after the date of the filing.
However, pursuant to Rule 19b–
4(f)(6)(iii) of the Act,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 requested the Commission
to waive the 30-day operative delay so
that the proposal may become operative
immediately upon filing. In November
2012, the Exchange filed a proposed
rule change to amend its rules to list
and trade certain mini-options contracts
on the Exchange, and represented in
that filing that the Exchange’s rules that
apply to the trading of standard options
contracts would apply to mini-options
contracts.12 The Exchange has
represented that it intends to launch
trading in mini-options contracts on
March 22, 2013. The Exchange believes
that waiver of the 30-day operative
8 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of the filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
10 17 CFR 240.19b–4(f)(6).
11 17 CFR 240.19b–4(f)(6)(iii).
12 See Securities Exchange Act Release No. 68132
(November 1, 2012), 77 FR 66904 (November 7,
2012) (SR–Phlx–2012–126).
9 17
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Federal Register / Vol. 78, No. 56 / Friday, March 22, 2013 / Notices
delay is consistent with the protection
of investors and the public interest
because such waiver would minimize
confusion among market participants
about how complex orders and stockoptions orders involving mini-options
contracts will trade.13
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest. Such
waiver would allow the Exchange to
implement the proposed rule change
prior to its launch of mini-options
contracts trading on March 22, 2013,
thereby mitigating potential investor
confusion as to how complex orders and
stock options orders involving minioptions contracts will trade. For this
reason, the Commission hereby waives
the 30-day operative delay and
designates the proposed rule change to
be operative upon filing with the
Commission.14
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
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–
Phlx–2013–34 on the subject line.
srobinson on DSK4SPTVN1PROD with NOTICES
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
13 See
id.
purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
14 For
VerDate Mar<15>2010
18:27 Mar 21, 2013
Jkt 229001
All submissions should refer to File
Number SR–Phlx–2013–34. 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 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 offices of the
Exchange. All comments received will
be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–Phlx–
2013–34, and should be submitted on or
before April 12, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–06608 Filed 3–21–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69164; File No. SR–ISE–
2013–07]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Order Approving Proposed Rule
Change To Amend International
Securities Exchange, LLC Amended
and Restated Constitution
March 18, 2013.
I. Introduction
On January 13, 2013, the International
Securities Exchange, LLC (‘‘Exchange’’
or ‘‘ISE’’) filed with the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to Section 19(b)(1) of the
15 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00101
Fmt 4703
Sfmt 4703
17727
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule change to amend its
Amended and Restated Constitution 3
(the ‘‘ISE Constitution’’) to declassify
the Non-Industry Directors of the board
of directors, change the term of the NonIndustry Directors and the Former
Employee Director to a one-year term,
and eliminate the three-term limit for
the Former Employee Director. The
proposed rule change was published for
comment in the Federal Register on
February 1, 2013.4 The Commission
received no comments on the proposal.
This order approves the proposed rule
change.
II. Description of the Proposal
As described more fully in the Notice,
the Exchange’s proposal would amend
the ISE Constitution to: (i) Declassify the
Non-Industry Directors (including the
Public Directors) of the Board; (ii)
change the term of the Non-Industry
Directors (including the Public
Directors) and the Former Employee
Director to a one-year term, subject to
re-election; and (iii) eliminate the threeterm limit for the Former Employee
Director.
Currently, Section 3.2(c) of the ISE
Constitution requires, in part, that both
Non-Industry Directors (including the
Public Directors) 5 and Exchange
Directors 6 be classified into two classes
designated as Class I and Class II
directors, and that all Directors
(including the Former Employee
Director) 7 serve two-year terms, subject
to re-election.
ISE has proposed to amend Section
3.2(c) of the ISE Constitution to: (i)
Remove any reference to Class I
directors or Class II directors for NonIndustry Directors (including Public
Directors); and (ii) state that the NonIndustry Directors (including the Public
Directors) would hold office for a one1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Amended and Restated Constitution of
International Securities Exchange, LLC (last
amended December 28, 2007).
4 See Securities Exchange Act Release No. 68740
(January 28, 2013), 78 FR 7470 (‘‘Notice’’).
5 Section 3.2(b)(iv) of the ISE Constitution
requires that the Board be composed of eight NonIndustry Directors (at least two of which are Public
Directors) elected by the Sole LLC Member.
6 Section 3.2(b)(i)–(iii) of the ISE Constitution
requires that the Board be composed of six
Exchange Directors elected by the holders of
Exchange Rights.
7 Section 3.2(b)(vi) of the ISE Constitution allows
the Sole LLC Member, in its sole and absolute
discretion, elect one additional director who shall
meet the requirements of ‘‘Non- Industry Directors,’’
except that such person was employed by the
Exchange at any time during the three-year period
prior to his or her initial election.
2 17
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]]>Agencies
[Federal Register Volume 78, Number 56 (Friday, March 22, 2013)]
[Notices]
[Pages 17725-17727]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-06608]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69162; File No. SR-Phlx-2013-34]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Mini Options
March 18, 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 March 18, 2013, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'') 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 the
Substance of the Proposed Rule Change
The Exchange proposes to address the manner in which options
contracts overlying 10 shares of a security (``Mini Options'') will
trade as a Complex Order.\3\
---------------------------------------------------------------------------
\3\ A Complex Order is any order involving the simultaneous
purchase and/or sale of two or more different options series in the
same underlying security, priced at a net debit or credit based on
the relative prices of the individual components, for the same
account, for the purpose of executing a particular investment
strategy. Furthermore, a Complex Order can also be a stock-option
order, which is an order to buy or sell a stated number of units of
an underlying stock or exchange-traded fund (``ETF'') coupled with
the purchase or sale of options contract(s). See Exchange Rule 1080,
Commentary .08(a)(i).
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
Web site at https://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings,
at the principal office of the Exchange, and at the Commission's Public
Reference Room.
[[Page 17726]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to provide for the
manner in which Mini Options will trade as a Complex Order pursuant to
Exchange Rule 1080. The Exchange previously filed to list and trade
Mini Options.\4\ Exchange Rule 1080 entitled ``Phlx XL and Phlx XL II''
describes the manner in which Complex Orders,\5\ trade on the Exchange.
The Exchange will describe below the manner in which Rule 1080 operates
with respect to Mini Options.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 68132 (November 1,
2012), 77 FR 66904 (November 7, 2012) (SR-Phlx-2012-126). The
Exchange amended amend Rules 1001 (Position Limits), 1012 (Series of
Options Open for Trading) and 1033 (Bids and Offers--Premium) to
list and trade Mini Options overlying five (5) high-priced
securities for which the standard contract overlying the same
security exhibits significant liquidity. Specifically, the Exchange
filed to list Mini Options on SPDR S&P 500 (``SPY''), Apple, Inc.
(``AAPL''), SPDR Gold Trust (``GLD''), Google Inc. (``GOOG'') and
Amazon.com Inc. (``AMZN''). The Exchange filed a separate proposal
to specify the application of Mini Options to Qualified Contingent
Cross and PIXL transactions. See SR-Phlx-2013-32 (not yet
published).
\5\ See Commentary .08 to Exchange Rule 1080.
---------------------------------------------------------------------------
With respect to Complex Orders, the Exchange states in Rule 1080
that Complex Orders involve the simultaneous purchase and/or sale of
two or more different options series in the same underlying security,
priced as a net debit or credit based on relative prices of the
individual components. The Exchange would permit Mini Options to trade
as Complex Orders provided that the order involves the simultaneous
purchase and/or sale of two or more different Mini Options series in
the same underlying security, priced as a net debit or credit based on
relative prices of the individual components and Mini Options are only
part of a Complex Order strategy that includes other Mini Options. For
example, a Complex Order strategy cannot be comprised of standard
options in AAPL and Mini Options in AAPL7. Also, with respect to
Complex Orders, the Exchange will not permit Mini Options to trade as a
stock-option order. The Exchange proposes to add rule text with respect
to Mini Options trading as Complex Orders to Commentary .08 of Rule
1080.
The Exchange proposes to commence trading Mini Options on March 22,
2013.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Securities and Exchange Act of
1934 (``Exchange Act''),\6\ in general, and with Section 6(b)(5) of the
Exchange Act,\7\ in particular, in that the proposal is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, 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.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
Specifically, the Exchange believes that investors and other market
participants would benefit from the current rule proposal because it
would allow market participants to take advantage of legitimate
investment strategies and execute Complex Orders in Mini Options.
Additionally, the Exchange believes the proposed rule change will avoid
investor confusion by providing how Mini Options will trade the same or
different as compared to standard options with respect to Complex
Orders.
The Exchange's proposal to permit Mini Options to trade as Complex
Orders provided the strategy does not combine Mini Options and standard
options serves to maintain the permissible ratios that are applicable
to Complex Orders by separating the trading of standard Complex Orders
and Mini Options Complex Orders. Also, the Exchange has determined to
not permit Mini Option Complex Orders to trade as a stock-option order
because as Mini Options are a new product, the Exchange would like to
consider the impact in this area and file to amend the rule at a later
date.
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. All members may transact
Complex Orders on Phlx. The rule change does not permit unfair
discrimination and does not impose a burden on Members with respect to
trading Mini Options.
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
Because the foregoing 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 for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) \8\ of the Act and
Rule 19b-4(f)(6) \9\ thereunder.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of the filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) of the Act \10\
normally does not become operative prior to 30 days after the date of
the filing. However, pursuant to Rule 19b-4(f)(6)(iii) of the Act,\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 requested the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. In November 2012, the Exchange filed a proposed rule change to
amend its rules to list and trade certain mini-options contracts on the
Exchange, and represented in that filing that the Exchange's rules that
apply to the trading of standard options contracts would apply to mini-
options contracts.\12\ The Exchange has represented that it intends to
launch trading in mini-options contracts on March 22, 2013. The
Exchange believes that waiver of the 30-day operative
[[Page 17727]]
delay is consistent with the protection of investors and the public
interest because such waiver would minimize confusion among market
participants about how complex orders and stock-options orders
involving mini-options contracts will trade.\13\
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\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ See Securities Exchange Act Release No. 68132 (November 1,
2012), 77 FR 66904 (November 7, 2012) (SR-Phlx-2012-126).
\13\ See id.
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
Such waiver would allow the Exchange to implement the proposed rule
change prior to its launch of mini-options contracts trading on March
22, 2013, thereby mitigating potential investor confusion as to how
complex orders and stock options orders involving mini-options
contracts will trade. For this reason, the Commission hereby waives the
30-day operative delay and designates the proposed rule change to be
operative upon filing with the Commission.\14\
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\14\ For purposes only of waiving the 30-day operative delay,
the Commission has also 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 such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
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-Phlx-2013-34 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-Phlx-2013-34. 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 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 offices of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-Phlx-2013-34, and should be submitted on or before April
12, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-06608 Filed 3-21-13; 8:45 am]
BILLING CODE 8011-01-P
