Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending Its Program That Allows Transactions To Take Place At A Price That Is Below $1 per Option Contract Until January 5, 2014, 34679-34681 [2013-13652]
Download as PDF
<![CDATA[
Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Notices
This information is available from no
other source.
SSA will also receive daily from RRB
earnings information on selected
individuals. The transfer of information
may be initiated either by RRB or by
SSA. SSA needs this information to
determine eligibility to Social Security
benefits and, if eligibility is met, to
determine the benefit amount payable.
Section 18 of the Railroad Retirement
Act (45 U.S.C. 231q(2)) requires that
earnings considered as compensation
under the Railroad Retirement Act be
considered as wages under the Social
Security Act for the purposes of
determining entitlement under the
Social Security Act if the person has
less than 10 years of railroad service or
has 10 or more years of service but does
not have a current connection with the
railroad industry at the time of his/her
death.
C. Authority for Conducting the Match
Section 7(b)(7) of the Railroad
Retirement Act (45 U.S.C. 231f(b)(7))
provides that the Social Security
Administration shall supply
information necessary to administer the
Railroad Retirement Act. Sections 202,
205(o) and 215(f) of the Social Security
Act (42 U.S.C. 402, 405(o) and 415(f))
relate to benefit provisions, inclusion of
railroad compensation together with
wages for payment of benefits under
certain circumstances, and the recomputation of benefits.
mstockstill on DSK4VPTVN1PROD with NOTICES
D. Categories of Records and
Individuals Covered
16:56 Jun 07, 2013
Jkt 229001
E. Inclusive Dates of the Matching
Program
This matching program will become
effective July 7, 2013 or 40 days after a
copy of the agreement, as approved by
the Data Integrity Board of each agency,
is sent to Congress and the Office of
Management and Budget, or 30 days
after publication of this notice in the
Federal Register, whichever date is
latest. The matching program will
continue for 18 months after the
effective date and may be extended for
an additional 12 months, if the
conditions specified in 5 U.S.C.
552a(o)(2)(D) have been met.
Dated: June 3, 2013.
By authority of the Board.
Martha P. Rico,
Secretary to the Board.
[FR Doc. 2013–13614 Filed 6–7–13; 8:45 am]
BILLING CODE 7905–01–P
All applicants for benefits under the
Railroad Retirement Act and current
beneficiaries will have a record of any
social security wages and the amount of
any social security benefits furnished to
the RRB by SSA. In addition, all persons
who ever worked in the railroad
industry after 1936 will have a record of
their service and compensation
furnished to SSA by RRB.
The applicable RRB Privacy Act
Systems of Records and their Federal
Register citation used in the matching
program are:
1. RRB–5, Master File of Railroad
Employees’ Creditable Compensation;
FR 75 43715 (July 26, 2010);
2. RRB–22, Railroad Retirement,
Survivor, Pensioner Benefit System; FR
75 43727 (July 26, 2010).
The applicable SSA Privacy Act
Systems of Records used and their
Federal Register citation used in the
matching program are:
1. SSA 60–0058, Master Files of
Social Security Number (SSN) Holders
and SSN Applications (the Enumeration
VerDate Mar<15>2010
System); 75 FR 82121 (December 29,
2010);
2. SSA/OS, 60–0059, Earnings
Recording and Self-Employment Income
System (MEF); 71 FR 1819 (January 11,
2006);
3. SSA/ORSIS 60–0090, Master
Beneficiary Record (MBR); 71 FR 1826
(January 11, 2006);
4. SSA/ODISSIS 60–103,
Supplemental Security Income Record
and Special Veteran Benefits; 71 FR
1830 (January 11, 2006);
5. SSA/OPB 60–0269, Prisoner
Update Processing System (PUPS); 64
FR 11076 (March 8, 1999).
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69691; File No. SR–
NYSEArca–2013–57]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Extending Its Program
That Allows Transactions To Take
Place At A Price That Is Below $1 per
Option Contract Until January 5, 2014
June 4, 2013.
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 May 24,
2013, NYSE Arca, Inc. (the ‘‘Exchange’’
or ‘‘NYSE Arca’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
Frm 00045
Fmt 4703
III below, which Items have been
prepared by the self-regulatory
organization. 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 extend its
program that allows transactions to take
place at a price that is below $1 per
option contract until January 5, 2014.
The text of the proposed rule change is
available on the Exchange’s website at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to extend
the Pilot Program 4 under Rule 6.80 to
allow accommodation transactions
(‘‘Cabinet Trades’’) to take place at a
price that is below $1 per option
contract to January 5, 2014. The
Exchange proposes to extend the
program for 7 months.
An ‘‘accommodation’’ or ‘‘cabinet’’
trade refers to trades in listed options on
the Exchange that are worthless or not
actively traded. Cabinet trading is
generally conducted in accordance with
the Exchange Rules, except as provided
in Exchange Rule 6.80 Accommodation
Transactions (Cabinet Trades), which
sets forth specific procedures for
engaging in cabinet trades. Rule 6.80
currently provides for cabinet
transactions to occur via open outcry at
a cabinet price of a $1 per option
contract in any options series open for
trading in the Exchange, except that the
4 See Securities Exchange Act Release No. 63476
(December 8, 2010), 75 FR 77930 (December 14,
2010)(SR–NYSE Arca–2010–109).
2 15
PO 00000
34679
Sfmt 4703
E:\FR\FM\10JNN1.SGM
10JNN1
34680
Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Notices
Rule is not applicable to trading in
option classes participating in the
Penny Pilot Program. Under the
procedures, bids and offers (whether
opening or closing a position) at a price
of $1 per option contract may be
represented in the trading crowd by a
Floor Broker or by a Market-Maker or
provided in response to a request by a
Trading Official, a Floor Broker or a
Market-Maker, but must yield priority to
all resting orders in the Cabinet (those
orders held by the Trading Official, and
which resting cabinet orders may be
closing only). So long as both the buyer
and the seller yield to orders resting in
the cabinet book, opening cabinet bids
can trade with opening cabinet offers at
$1 per option contract.
The Exchange has temporarily
amended the procedures through May
31, 2013 to allow transactions to take
place in open outcry at a price of at least
$0 but less than $1 per option contract.
These lower priced transactions are
permitted to be traded pursuant to the
same procedures applicable to $1
cabinet trades, except that (i) bids and
offers for opening transactions are only
permitted to accommodate closing
transactions in order to limit use of the
procedure to liquidations of existing
positions, and (ii) the procedures are
also made available for trading in option
classes participating in the Penny Pilot
Program.5 The Exchange believes that
allowing a price of at least $0 but less
than $1 better accommodates the closing
of options positions in series that are
worthless or not actively traded,
particularly due to recent market
conditions which have resulted in a
significant number of series being outof-the-money. For example, a market
participant might have a long position
in a call series with a strike price of
$100 and the underlying stock might be
trading at $30. In such an instance, there
might not otherwise be a market for that
person to close-out the position even at
the $1 cabinet price (e.g., the series
might be quoted no bid).
As with other accommodation
liquidations under Rule 6.80,
transactions that occur for less than $1
will not be disseminated to the public
on the consolidated tape. In addition, as
mstockstill on DSK4VPTVN1PROD with NOTICES
5 Currently
the $1 cabinet trading procedures are
limited to options classes traded in $0.05 or $0.10
standard increment. The $1 cabinet trading
procedures are not available in Penny Pilot Program
classes because in those classes an option series can
trade in a standard increment as low as $0.01 per
share (or $1.00 per option contract with a 100 share
multiplier). Because the temporary procedures
allow trading below $0.01 per share (or $1.00 per
option contract with a 100 share multiplier), the
procedures are available for all classes, including
those classes participating in the Penny Pilot
Program.
VerDate Mar<15>2010
16:56 Jun 07, 2013
Jkt 229001
with other accommodation liquidations
under Rule 6.80, the transactions will be
exempt from the Consolidated Options
Audit Trail (‘‘COATS’’) requirements of
Exchange Rule 6.67 Order Format and
System Entry Requirements. However,
the Exchange will maintain quotation,
order and transaction information for
the transactions in the same format as
the COATS data is maintained. In this
regard, all transactions for less than $1
must be reported to the Exchange
following the close of each business
day.
2. Statutory Basis
The Exchange believes that this
proposed rule change is consistent with
Section 6(b) of the Securities Exchange
Act of 1934 (‘‘Act’’) 6, in general, and
furthers the objectives of Section 6(b)(5)
of the Act 7 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices,
promote just and equitable principles of
trade, remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest. The
Exchange believes that allowing for
liquidations at a price less than $1 per
option contract will better facilitate the
closing of options positions that are
worthless or not actively trading,
especially in Penny Pilot issues where
Cabinet Trades are not otherwise
permitted.
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. The
proposed rule change is to extend an
established pilot program for 7 months
and continue to facilitate OTP Holders
ability to close positions in worthless or
not actively traded series.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
6 15
7 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00046
Fmt 4703
Sfmt 4703
19(b)(3)(A)(iii) of the Act 8 and Rule
19b–4(f)(6) thereunder.9 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 and Rule 19b–4(f)(6)(iii)
thereunder.10
A proposed rule change filed under
Rule 19b–4(f)(6) 11 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),12 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
that the Commission waive the
operative delay so that the pilot program
can continue without interruption. The
Commission notes that the proposed
rule change does not present any new,
unique or substantive issues, but rather
is merely extending an existing pilot
program and that waiver of the 30-day
operative delay will prevent confusion
about whether the pilot program
continues to be available. Therefore, the
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest and designates the
proposed rule change as operative
effective June 1, 2013.13
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
8 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
10 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 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 the prefiling requirement.
11 17 CFR 240.19b–4(f)(6).
12 17 CFR 240.19b–4(f)(6)(iii).
13 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
9 17
E:\FR\FM\10JNN1.SGM
10JNN1
Federal Register / Vol. 78, No. 111 / Monday, June 10, 2013 / Notices
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
mstockstill on DSK4VPTVN1PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–NYSEArca-2013–57 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-NYSEArca-2013–57. This
file number should be included on the
subject line if e-mail 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 website (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 Section, 100 F Street NE.,
Washington, DC 20549–1090, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing will also be available for
inspection and copying at the NYSE’s
principal office and on its Internet Web
site at www.nyse.com. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEArca–2013–57 and should be
submitted on or before July 1, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. ONeill,
Deputy Secretary.
[FR Doc. 2013–13652 Filed 6–7–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69690; File No. SR–
NYSEArca–2013–55]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending the NYSE Arca
Options Fee Schedule to Change the
Monthly Fees for Option Trading
Permits and Raise the Fee Cap that
Applies to Certain Firm and Broker
Dealer Open Outcry Executions
June 4, 2013.
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 May 21,
2013, NYSE Arca, Inc. (the ‘‘Exchange’’
or ‘‘NYSE Arca’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the self-regulatory
organization. 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 amending
[sic] the NYSE Arca Options Fee
Schedule (‘‘Fee Schedule’’) to change
the monthly fees for Option Trading
Permits (‘‘OTPs’’) and raise the fee cap
that applies to certain Firm and Broker
Dealer open outcry executions. The
Exchange proposes to make the fee
changes operative on June 1, 2013 [sic]
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
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
14 17
CFR 200.30–3(a)(12).
VerDate Mar<15>2010
16:56 Jun 07, 2013
Jkt 229001
PO 00000
Frm 00047
Fmt 4703
Sfmt 4703
34681
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 its
Fee Schedule to change the monthly
fees for OTPs and raise the fee cap that
applies to certain Firm and Broker
Dealer open outcry executions. The
Exchange proposes to make the fee
changes operative on June 1, 2013.
The Exchange requires that a Market
Maker have an OTP in order to operate
on the Exchange. For electronic Market
Making, a Market Maker must have four
OTPs in order to submit electronic
quotations in every class on the
Exchange. These four Market Maker
OTPs also permit the firm to have at
least one trader on the Floor of the
Exchange as a Floor-based open outcry
Market Maker. However, the manner in
which those OTPs are assigned to
individual traders may reduce the
permissible number of issues in which
electronic quotes are assigned. For
instance, two associated Market Makers
may assign OTP 1, 2, and 3 to trader A,
while the fourth is assigned to trader B.
Trader A may now only stream quotes
electronically in 750 issues, while trader
B may submit quotes electronically in
100 issues. To retain the appointment in
more than 750 issues, all four OTPs
must be in the same name, and to have
an additional individual Market Maker
on the Floor, a fifth OTP must be
acquired.
To tailor the recovery of costs more
closely to the basic costs for
administration of an OTP Holder or OTP
Firm, the Exchange is proposing to
introduce a new tiered pricing model for
Market Maker OTPs. The Exchange
currently charges $4,000 per OTP per
month for a Market Maker firm that has
between one and four Market Maker
OTPs and $1,000 per month for each
additional Market Maker OTP. The
Exchange proposes to charge $6,000 per
month for the first Market Maker OTP,
$5,000 per month for the second Market
Maker OTP, $4,000 per month for the
third Market Maker OTP, and $3,000 per
month for the fourth Market Maker OTP.
The Exchange would continue to charge
E:\FR\FM\10JNN1.SGM
10JNN1
]]>Agencies
[Federal Register Volume 78, Number 111 (Monday, June 10, 2013)]
[Notices]
[Pages 34679-34681]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-13652]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69691; File No. SR-NYSEArca-2013-57]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Extending Its
Program That Allows Transactions To Take Place At A Price That Is Below
$1 per Option Contract Until January 5, 2014
June 4, 2013.
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 May 24, 2013, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. 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 proposes to extend its program that allows
transactions to take place at a price that is below $1 per option
contract until January 5, 2014. The text of the proposed rule change is
available on the Exchange's website at www.nyse.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to extend the Pilot Program \4\ under
Rule 6.80 to allow accommodation transactions (``Cabinet Trades'') to
take place at a price that is below $1 per option contract to January
5, 2014. The Exchange proposes to extend the program for 7 months.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 63476 (December 8,
2010), 75 FR 77930 (December 14, 2010)(SR-NYSE Arca-2010-109).
---------------------------------------------------------------------------
An ``accommodation'' or ``cabinet'' trade refers to trades in
listed options on the Exchange that are worthless or not actively
traded. Cabinet trading is generally conducted in accordance with the
Exchange Rules, except as provided in Exchange Rule 6.80 Accommodation
Transactions (Cabinet Trades), which sets forth specific procedures for
engaging in cabinet trades. Rule 6.80 currently provides for cabinet
transactions to occur via open outcry at a cabinet price of a $1 per
option contract in any options series open for trading in the Exchange,
except that the
[[Page 34680]]
Rule is not applicable to trading in option classes participating in
the Penny Pilot Program. Under the procedures, bids and offers (whether
opening or closing a position) at a price of $1 per option contract may
be represented in the trading crowd by a Floor Broker or by a Market-
Maker or provided in response to a request by a Trading Official, a
Floor Broker or a Market-Maker, but must yield priority to all resting
orders in the Cabinet (those orders held by the Trading Official, and
which resting cabinet orders may be closing only). So long as both the
buyer and the seller yield to orders resting in the cabinet book,
opening cabinet bids can trade with opening cabinet offers at $1 per
option contract.
The Exchange has temporarily amended the procedures through May 31,
2013 to allow transactions to take place in open outcry at a price of
at least $0 but less than $1 per option contract. These lower priced
transactions are permitted to be traded pursuant to the same procedures
applicable to $1 cabinet trades, except that (i) bids and offers for
opening transactions are only permitted to accommodate closing
transactions in order to limit use of the procedure to liquidations of
existing positions, and (ii) the procedures are also made available for
trading in option classes participating in the Penny Pilot Program.\5\
The Exchange believes that allowing a price of at least $0 but less
than $1 better accommodates the closing of options positions in series
that are worthless or not actively traded, particularly due to recent
market conditions which have resulted in a significant number of series
being out-of-the-money. For example, a market participant might have a
long position in a call series with a strike price of $100 and the
underlying stock might be trading at $30. In such an instance, there
might not otherwise be a market for that person to close-out the
position even at the $1 cabinet price (e.g., the series might be quoted
no bid).
---------------------------------------------------------------------------
\5\ Currently the $1 cabinet trading procedures are limited to
options classes traded in $0.05 or $0.10 standard increment. The $1
cabinet trading procedures are not available in Penny Pilot Program
classes because in those classes an option series can trade in a
standard increment as low as $0.01 per share (or $1.00 per option
contract with a 100 share multiplier). Because the temporary
procedures allow trading below $0.01 per share (or $1.00 per option
contract with a 100 share multiplier), the procedures are available
for all classes, including those classes participating in the Penny
Pilot Program.
---------------------------------------------------------------------------
As with other accommodation liquidations under Rule 6.80,
transactions that occur for less than $1 will not be disseminated to
the public on the consolidated tape. In addition, as with other
accommodation liquidations under Rule 6.80, the transactions will be
exempt from the Consolidated Options Audit Trail (``COATS'')
requirements of Exchange Rule 6.67 Order Format and System Entry
Requirements. However, the Exchange will maintain quotation, order and
transaction information for the transactions in the same format as the
COATS data is maintained. In this regard, all transactions for less
than $1 must be reported to the Exchange following the close of each
business day.
2. Statutory Basis
The Exchange believes that this proposed rule change is consistent
with Section 6(b) of the Securities Exchange Act of 1934 (``Act'') \6\,
in general, and furthers the objectives of Section 6(b)(5) of the Act
\7\ in particular, in that it is designed to prevent fraudulent and
manipulative acts and practices, promote just and equitable principles
of trade, remove impediments to and perfect the mechanism of a free and
open market and a national market system, and, in general, to protect
investors and the public interest. The Exchange believes that allowing
for liquidations at a price less than $1 per option contract will
better facilitate the closing of options positions that are worthless
or not actively trading, especially in Penny Pilot issues where Cabinet
Trades are not otherwise permitted.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 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. The proposed rule change is
to extend an established pilot program for 7 months and continue to
facilitate OTP Holders ability to close positions in worthless or not
actively traded series.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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 and Rule 19b-
4(f)(6)(iii) thereunder.\10\
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
\10\ 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 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 the pre-
filing requirement.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ 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 that the Commission waive the operative delay so that the
pilot program can continue without interruption. The Commission notes
that the proposed rule change does not present any new, unique or
substantive issues, but rather is merely extending an existing pilot
program and that waiver of the 30-day operative delay will prevent
confusion about whether the pilot program continues to be available.
Therefore, the Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest and designates the proposed rule change as operative effective
June 1, 2013.\13\
---------------------------------------------------------------------------
\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
\13\ For purposes only of waiving the 30-day operative delay,
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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings
[[Page 34681]]
to determine whether the proposed rule should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
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-NYSEArca-2013-57 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-NYSEArca-2013-57. This
file number should be included on the subject line if e-mail 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 website (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 Section, 100
F Street NE., Washington, DC 20549-1090, on official business days
between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing will
also be available for inspection and copying at the NYSE's principal
office and on its Internet Web site at www.nyse.com. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2013-57 and should
be submitted on or before July 1, 2013.
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
Kevin M. ONeill,
Deputy Secretary.
[FR Doc. 2013-13652 Filed 6-7-13; 8:45 am]
BILLING CODE 8011-01-P
