Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Change the Expiration Date For Most Option Contracts to the Third Friday of the Expiration Month Instead of the Saturday Following the Third Friday, 53797-53799 [2013-21230]

Download as PDF Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70258; File No. SR–BX– 2013–050] Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Change the Expiration Date For Most Option Contracts to the Third Friday of the Expiration Month Instead of the Saturday Following the Third Friday August 26, 2013. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on August 21, 2013, NASDAQ OMX PHLX LLC (‘‘BX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III 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 Exchange rules to change the expiration date for most option contracts to the third Friday of the expiration month instead of the Saturday following the third Friday. The text of the proposed rule change is available at https:// nasdaqomxbx.cchwallstreet.com/, at the Exchange’s principal office, and at the Commission’s Public Reference Room. tkelley on DSK3SPTVN1PROD with 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. 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Mar<15>2010 18:00 Aug 29, 2013 Jkt 229001 1. Purpose The Exchange is proposing to change the expiration date for most option contracts to the third Friday of the expiration month instead of the Saturday following the third Friday. More specifically, the Exchange is proposing to amend rule text referencing Saturday expirations. The Exchange notes, however, that this change will apply to all standard expiration contracts including those in which the rules are silent on the expiration date. The Exchange is making this filing to harmonize its rules in connection with a recently approved rule filing made by The Options Clearing Corporation (‘‘OCC’’) which made substantially similar changes.3 The Exchange believes that the industry must remain consistent in expiration dates, and, thus, is proposing to update its rules to remain consistent with those of OCC. In addition, the Exchange understands that other exchanges have and will be filing similar rules to effect this industry-wide initiative.4 Most option contracts (‘‘standard expiration contracts’’) currently expire at the ‘‘expiration time’’ (11:59 p.m. Eastern Time) on the Saturday following the third Friday of the specified expiration month (the ‘‘expiration date’’).5 With this filing, the Exchange is proposing to give advance notice to its members and member organizations that the expiration date for standard expiration contracts is changing to the third Friday of the expiration month.6 (The expiration time would continue to be 11:59 p.m. Eastern Time on the expiration date.) The change would apply only to standard expiration contracts expiring after February 1, 2015, and the Exchange, similar to OCC, does not propose to change the expiration date for any outstanding 3 See Securities Exchange Act Release No. 34– 69772 (June 17, 2013), 78 FR 37645 (June 21, 2013) (order approving SR–OCC–2013–004). 4 See Securities Exchange Act Release Nos. 70091 (August 1, 2013), 78 FR 48212 (August 7, 2013) (SR–CBOE–2013–073) and 69996 (July 17, 2013), 78 FR 44183 (July 23, 2013) (SR–MIAX–2013–32). 5 Examples of options with non-standard expiration contracts include: Quarterly Equity and Exchange-Traded Fund Shares (‘‘ETFs’’) Option Series (Chapter IV, Section 6, Commentary .04), Quarterly Options Series for indexes (Chapter XIV, Section 11(g)), Short Term Option Series (Chapter IV, Section 6, Commentary .07) and Short Term Option Series for indexes (Chapter XIV, Section 11(h)). 6 The Exchange will provide notice to members and member organizations regarding the anticipated change by issuing an Options Trader Alert. PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 53797 option contracts. The change will apply only to series of option contracts opened for trading after the effective date of the OCC rule change and having expiration dates later than February 1, 2015. Option contracts having non-standard expiration dates (‘‘non-standard expiration contracts’’) will be unaffected by this proposed rule change, except that FLEX options having expiration dates later than February 1, 2015 cannot expire on a Saturday unless they are specified by OCC as grandfathered.7 In order to provide a smooth transition to the Friday expiration OCC has begun to move the expiration exercise procedures to Friday for all standard expiration contracts even though the contracts would continue to expire on Saturday.8 After February 1, 2015, virtually all standard expiration contracts will actually expire on Friday. The only standard expiration contracts that will expire on a Saturday after February 1, 2015 are certain options that were listed prior to the effectiveness of the OCC rule change, and a limited number of options that may be listed prior to necessary systems changes of the options exchanges, which are expected to be completed in August 2013. After these systems changes are made, BX will not list any additional options with Saturday expiration dates falling after February 1, 2015. BX understands that the other exchanges are committed to the same listing schedule.9 The Exchange notes that OCC, industry groups, clearing members and the other exchanges have been active participants in planning for the transition to the Friday expiration.10 In March 2012, OCC began to discuss moving standard contract expirations to Friday expiration dates with industry groups, including two Securities Industry and Financial Markets Association (‘‘SIFMA’’) committees, the Operations and Technology Steering Committee and the Options Committee, and at two major industry conferences, the SIFMA Operations Conference and the Options Industry Conference.11 OCC also discussed the project with the Intermarket Surveillance Group and at an OCC Operations Roundtable. In each case, there was broad support for the initiative.12 Certain option contracts have already been listed with Saturday expiration dates as distant as December 2015 7 See note 5 supra. SR–OCC–2013–04. 9 See note 4 supra. 10 See note 8 supra. 11 Id. 12 Id. 8 See E:\FR\FM\30AUN1.SGM 30AUN1 tkelley on DSK3SPTVN1PROD with NOTICES 53798 Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Notices (which is the furthest out expiration as of the date of this filing). Additionally, until BX completes certain systems enhancements in August 2013, it remains possible that additional option contracts may be listed with Saturday expiration dates beyond February 1, 2015. For these contracts, transitioning to a Friday expiration for newly listed option contracts expiring after February 1, 2015 would create a situation under which certain options with open interest would expire on a Saturday while other options with open interest would expire on a Friday in the same expiration month. Clearing members have expressed a clear preference to not have a mix of options with open interest that expire on different days in a single month.13 Accordingly, OCC represented in its recently approved filing that it will not issue and clear any new option contract with a Friday expiration if existing option contracts of the same options class expire on the Saturday following the third Friday of the same month. However, Friday expiration processing will be in effect for these Saturday expiration contracts. As with standard expiration options during the transition period, exercise requests received after Friday expiration processing is complete but before the Saturday contract expiration time will continue to be processed without fines or penalties. Thus, the Exchange is proposing to update its rules to reflect the above discussed change. More specifically, the Exchange is proposing to add Section 2(p) to Chapter XIV, Index Rules to define ‘‘expiration date’’ to be consistent with the revised OCC definition.14 Thus, consistent with the OCC filing, the Exchange is proposing to add language to these rules stating that any series expiring prior to February 1, 2015 will have a Saturday expiration date while any series expiring on or after February 1, 2015 will have a Friday expiration date.15 The Exchange also is proposing to adopt changes to Chapter XIV, Index Rules, Sections 11(a)(5) and 11(d) for consistency to reflect the change in the expiration date definition. To the extent applicable to the timeframes herein, the Exchange is also proposing, with this filing, to replace any reference in the purpose section of any past Exchange rule filings or alerts to any expiration date other than Friday for a standard options contract with the new Friday standard. Essentially, the Exchange is now proposing to replace any relevant historic references to expiration dates to be replaced with the proposed Friday expiration. As stated above, the Exchange believes the proposed change will keep the Exchange consistent with the processing at OCC and will enable the Exchange to give effect to the industry-wide initiative. In addition, the Exchange understands that other exchanges will be filing similar rules, thus creating a uniform expiration date for standard options on listed classes.16 The Exchange plans to release an Options Trader Alert to its members and member organizations to inform them of this change prior to the implementation of the rule. information with respect to, and facilitating transactions in securities by aligning a pivotal part of the options processing to be consistent industry wide. If the industry were to differ, investors would suffer from confusion and be more vulnerable to violate different exchange rules. The proposed changes do not permit unfair discrimination between any members because they are applied to all members equally. In the alternative, the Exchange believes that it helps all members by keeping the Exchange consistent with OCC practices and those of other Exchanges. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ‘‘Act’’) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.17 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 18 requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 19 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. In particular, the Exchange believes that keeping its rules consistent with those of the industry will protect all participants in the market by eliminating confusion. The proposed changes thus allow for a more orderly market by allowing all options markets, including the clearing agencies, to have the same expiration date for standard options. In addition, the proposed changes will foster cooperation and coordination with persons engaged in regulating clearing, settling, processing BX does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. Specifically, the Exchange does not believe the proposed rule change will impose a burden on intramarket competition because it will be applied to all members equally. In addition, the Exchange does not believe the proposed rule change will impose any burden to intermarket competition because it will be applied industry wide and apply to all market participants. The proposed rule change is structured to enhance competition because the shift from an expiration date of the Saturday following the third Friday to the third Friday is anticipated to be adopted industry-wide and will apply to all multiply listed classes. This in turn will allow BX to compete more effectively with other exchanges making similar rule changes. 13 Id. 14 Id. 16 See 15 With 17 15 the exception of expirations that were listed prior to the effective date of the OCC filing and have open interest. VerDate Mar<15>2010 18:00 Aug 29, 2013 Jkt 229001 note 4 supra. U.S.C. 78f(b). 18 15 U.S.C. 78f(b)(5). 19 Id. PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 B. Self-Regulatory Organization’s Statement on Burden on Competition 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. The Exchange notes, however, that a favorable comment was submitted to the OCC filing. 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 after the date of the filing, or such shorter time as the Commission may designate, it has become effective pursuant to 19(b)(3)(A) E:\FR\FM\30AUN1.SGM 30AUN1 Federal Register / Vol. 78, No. 169 / Friday, August 30, 2013 / Notices of the Act 20 and Rule 19b–4(f)(6) 21 thereunder. 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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make publicly available. All submissions should refer to File Number SR–BX– 2013–050 and should be submitted on or before September 20, 2013. 53799 (‘‘Managed Fund Shares’’). The shares of the Fund are collectively referred to herein as the ‘‘Shares.’’ The text of the proposed rule change is available at https:// nasdaq.cchwallstreet.com/, at Nasdaq’s principal office, and at the Commission’s Public Reference Room. 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.22 Kevin M. O’Neill, Deputy Secretary. Electronic Comments BILLING CODE 8011–01–P II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NASDAQ 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. NASDAQ has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. SECURITIES AND EXCHANGE COMMISSION A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change IV. Solicitation of Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– BX–2013–050 on the subject line. Paper Comments tkelley on DSK3SPTVN1PROD with NOTICES • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–BX–2013–050. 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 20 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 filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 21 17 VerDate Mar<15>2010 18:00 Aug 29, 2013 Jkt 229001 [FR Doc. 2013–21230 Filed 8–29–13; 8:45 am] [Release No. 34–70253; File No. SR– NASDAQ–2013–107] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change Relating to the Listing and Trading of the Shares of the First Trust Global Tactical Commodity Strategy Fund of First Trust Exchange-Traded Fund VII August 26, 2013. 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 August 16, 2013, The NASDAQ Stock Market LLC (‘‘Exchange’’ or ‘‘Nasdaq’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the selfregulatory 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 Nasdaq proposes to list and trade the shares of the First Trust Global Tactical Commodity Strategy Fund (the ‘‘Fund’’) of First Trust Exchange-Traded Fund VII (the ‘‘Trust’’) under Nasdaq Rule 5735 22 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 1. Purpose The Exchange proposes to list and trade the Shares of the Fund under Nasdaq Rule 5735, which governs the listing and trading of Managed Fund Shares 3 on the Exchange.4 The Fund will be an actively managed exchangetraded fund (‘‘ETF’’). The Shares will be 3 A Managed Fund Share is a security that represents an interest in an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a–1) (the ‘‘1940 Act’’) organized as an open-end investment company or similar entity that invests in a portfolio of securities selected by its investment adviser consistent with its investment objectives and policies. In contrast, an open-end investment company that issues Index Fund Shares, listed and traded on the Exchange under Nasdaq Rule 5705, seeks to provide investment results that correspond generally to the price and yield performance of a specific foreign or domestic stock index, fixed income securities index or combination thereof. 4 The Commission approved Nasdaq Rule 5735 in Securities Exchange Act Release No. 57962 (June 13, 2008), 73 FR 35175 (June 20, 2008) (SR– NASDAQ–2008–039). The Fund would not be the first actively-managed fund listed on the Exchange; see Securities Exchange Act Release No. 66489 (February 29, 2012), 77 FR 13379 (March 6, 2012) (SR–NASDAQ–2012–004) (order approving listing and trading of WisdomTree Emerging Markets Corporate Bond Fund). Additionally, the Commission has previously approved the listing and trading of a number of actively managed WisdomTree funds on NYSE Arca, Inc. pursuant to Rule 8.600 of that exchange. See, e.g., Securities Exchange Act Release No. 64643 (June 10, 2011), 76 FR 35062 (June 15, 2011) (SR–NYSEArca–2011–21) (order approving listing and trading of WisdomTree Global Real Return Fund). The Exchange believes the proposed rule change raises no significant issues not previously addressed in those prior Commission orders. E:\FR\FM\30AUN1.SGM 30AUN1

Agencies

[Federal Register Volume 78, Number 169 (Friday, August 30, 2013)]
[Notices]
[Pages 53797-53799]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-21230]



[[Page 53797]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70258; File No. SR-BX-2013-050]


Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Change 
the Expiration Date For Most Option Contracts to the Third Friday of 
the Expiration Month Instead of the Saturday Following the Third Friday

August 26, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on August 21, 2013, NASDAQ OMX PHLX LLC (``BX'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II, and III 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Exchange rules to change the 
expiration date for most option contracts to the third Friday of the 
expiration month instead of the Saturday following the third Friday. 
The text of the proposed rule change is available at https://nasdaqomxbx.cchwallstreet.com/, at the Exchange'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 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 Exchange is proposing to change the expiration date for most 
option contracts to the third Friday of the expiration month instead of 
the Saturday following the third Friday. More specifically, the 
Exchange is proposing to amend rule text referencing Saturday 
expirations. The Exchange notes, however, that this change will apply 
to all standard expiration contracts including those in which the rules 
are silent on the expiration date. The Exchange is making this filing 
to harmonize its rules in connection with a recently approved rule 
filing made by The Options Clearing Corporation (``OCC'') which made 
substantially similar changes.\3\ The Exchange believes that the 
industry must remain consistent in expiration dates, and, thus, is 
proposing to update its rules to remain consistent with those of OCC. 
In addition, the Exchange understands that other exchanges have and 
will be filing similar rules to effect this industry-wide 
initiative.\4\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 34-69772 (June 17, 
2013), 78 FR 37645 (June 21, 2013) (order approving SR-OCC-2013-
004).
    \4\ See Securities Exchange Act Release Nos. 70091 (August 1, 
2013), 78 FR 48212 (August 7, 2013) (SR-CBOE-2013-073) and 69996 
(July 17, 2013), 78 FR 44183 (July 23, 2013) (SR-MIAX-2013-32).
---------------------------------------------------------------------------

    Most option contracts (``standard expiration contracts'') currently 
expire at the ``expiration time'' (11:59 p.m. Eastern Time) on the 
Saturday following the third Friday of the specified expiration month 
(the ``expiration date'').\5\ With this filing, the Exchange is 
proposing to give advance notice to its members and member 
organizations that the expiration date for standard expiration 
contracts is changing to the third Friday of the expiration month.\6\ 
(The expiration time would continue to be 11:59 p.m. Eastern Time on 
the expiration date.) The change would apply only to standard 
expiration contracts expiring after February 1, 2015, and the Exchange, 
similar to OCC, does not propose to change the expiration date for any 
outstanding option contracts. The change will apply only to series of 
option contracts opened for trading after the effective date of the OCC 
rule change and having expiration dates later than February 1, 2015. 
Option contracts having non-standard expiration dates (``non-standard 
expiration contracts'') will be unaffected by this proposed rule 
change, except that FLEX options having expiration dates later than 
February 1, 2015 cannot expire on a Saturday unless they are specified 
by OCC as grandfathered.\7\
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    \5\ Examples of options with non-standard expiration contracts 
include: Quarterly Equity and Exchange-Traded Fund Shares (``ETFs'') 
Option Series (Chapter IV, Section 6, Commentary .04), Quarterly 
Options Series for indexes (Chapter XIV, Section 11(g)), Short Term 
Option Series (Chapter IV, Section 6, Commentary .07) and Short Term 
Option Series for indexes (Chapter XIV, Section 11(h)).
    \6\ The Exchange will provide notice to members and member 
organizations regarding the anticipated change by issuing an Options 
Trader Alert.
    \7\ See note 5 supra.
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    In order to provide a smooth transition to the Friday expiration 
OCC has begun to move the expiration exercise procedures to Friday for 
all standard expiration contracts even though the contracts would 
continue to expire on Saturday.\8\ After February 1, 2015, virtually 
all standard expiration contracts will actually expire on Friday. The 
only standard expiration contracts that will expire on a Saturday after 
February 1, 2015 are certain options that were listed prior to the 
effectiveness of the OCC rule change, and a limited number of options 
that may be listed prior to necessary systems changes of the options 
exchanges, which are expected to be completed in August 2013. After 
these systems changes are made, BX will not list any additional options 
with Saturday expiration dates falling after February 1, 2015. BX 
understands that the other exchanges are committed to the same listing 
schedule.\9\
---------------------------------------------------------------------------

    \8\ See SR-OCC-2013-04.
    \9\ See note 4 supra.
---------------------------------------------------------------------------

    The Exchange notes that OCC, industry groups, clearing members and 
the other exchanges have been active participants in planning for the 
transition to the Friday expiration.\10\ In March 2012, OCC began to 
discuss moving standard contract expirations to Friday expiration dates 
with industry groups, including two Securities Industry and Financial 
Markets Association (``SIFMA'') committees, the Operations and 
Technology Steering Committee and the Options Committee, and at two 
major industry conferences, the SIFMA Operations Conference and the 
Options Industry Conference.\11\ OCC also discussed the project with 
the Intermarket Surveillance Group and at an OCC Operations Roundtable. 
In each case, there was broad support for the initiative.\12\
---------------------------------------------------------------------------

    \10\ See note 8 supra.
    \11\ Id.
    \12\ Id.
---------------------------------------------------------------------------

    Certain option contracts have already been listed with Saturday 
expiration dates as distant as December 2015

[[Page 53798]]

(which is the furthest out expiration as of the date of this filing). 
Additionally, until BX completes certain systems enhancements in August 
2013, it remains possible that additional option contracts may be 
listed with Saturday expiration dates beyond February 1, 2015. For 
these contracts, transitioning to a Friday expiration for newly listed 
option contracts expiring after February 1, 2015 would create a 
situation under which certain options with open interest would expire 
on a Saturday while other options with open interest would expire on a 
Friday in the same expiration month.
    Clearing members have expressed a clear preference to not have a 
mix of options with open interest that expire on different days in a 
single month.\13\ Accordingly, OCC represented in its recently approved 
filing that it will not issue and clear any new option contract with a 
Friday expiration if existing option contracts of the same options 
class expire on the Saturday following the third Friday of the same 
month. However, Friday expiration processing will be in effect for 
these Saturday expiration contracts. As with standard expiration 
options during the transition period, exercise requests received after 
Friday expiration processing is complete but before the Saturday 
contract expiration time will continue to be processed without fines or 
penalties.
---------------------------------------------------------------------------

    \13\ Id.
---------------------------------------------------------------------------

    Thus, the Exchange is proposing to update its rules to reflect the 
above discussed change. More specifically, the Exchange is proposing to 
add Section 2(p) to Chapter XIV, Index Rules to define ``expiration 
date'' to be consistent with the revised OCC definition.\14\ Thus, 
consistent with the OCC filing, the Exchange is proposing to add 
language to these rules stating that any series expiring prior to 
February 1, 2015 will have a Saturday expiration date while any series 
expiring on or after February 1, 2015 will have a Friday expiration 
date.\15\
---------------------------------------------------------------------------

    \14\ Id.
    \15\ With the exception of expirations that were listed prior to 
the effective date of the OCC filing and have open interest.
---------------------------------------------------------------------------

    The Exchange also is proposing to adopt changes to Chapter XIV, 
Index Rules, Sections 11(a)(5) and 11(d) for consistency to reflect the 
change in the expiration date definition. To the extent applicable to 
the timeframes herein, the Exchange is also proposing, with this 
filing, to replace any reference in the purpose section of any past 
Exchange rule filings or alerts to any expiration date other than 
Friday for a standard options contract with the new Friday standard. 
Essentially, the Exchange is now proposing to replace any relevant 
historic references to expiration dates to be replaced with the 
proposed Friday expiration. As stated above, the Exchange believes the 
proposed change will keep the Exchange consistent with the processing 
at OCC and will enable the Exchange to give effect to the industry-wide 
initiative. In addition, the Exchange understands that other exchanges 
will be filing similar rules, thus creating a uniform expiration date 
for standard options on listed classes.\16\
---------------------------------------------------------------------------

    \16\ See note 4 supra.
---------------------------------------------------------------------------

    The Exchange plans to release an Options Trader Alert to its 
members and member organizations to inform them of this change prior to 
the implementation of the rule.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\17\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \18\ requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest. Additionally, 
the Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \19\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(5).
    \19\ Id.
---------------------------------------------------------------------------

    In particular, the Exchange believes that keeping its rules 
consistent with those of the industry will protect all participants in 
the market by eliminating confusion. The proposed changes thus allow 
for a more orderly market by allowing all options markets, including 
the clearing agencies, to have the same expiration date for standard 
options.
    In addition, the proposed changes will foster cooperation and 
coordination with persons engaged in regulating clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities by aligning a pivotal part of the options processing to 
be consistent industry wide. If the industry were to differ, investors 
would suffer from confusion and be more vulnerable to violate different 
exchange rules. The proposed changes do not permit unfair 
discrimination between any members because they are applied to all 
members equally. In the alternative, the Exchange believes that it 
helps all members by keeping the Exchange consistent with OCC practices 
and those of other Exchanges.

B. Self-Regulatory Organization's Statement on Burden on Competition

    BX does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended. Specifically, the 
Exchange does not believe the proposed rule change will impose a burden 
on intramarket competition because it will be applied to all members 
equally. In addition, the Exchange does not believe the proposed rule 
change will impose any burden to intermarket competition because it 
will be applied industry wide and apply to all market participants. The 
proposed rule change is structured to enhance competition because the 
shift from an expiration date of the Saturday following the third 
Friday to the third Friday is anticipated to be adopted industry-wide 
and will apply to all multiply listed classes. This in turn will allow 
BX to compete more effectively with other exchanges making similar rule 
changes.

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. The Exchange 
notes, however, that a favorable comment was submitted to the OCC 
filing.

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 after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to 19(b)(3)(A)

[[Page 53799]]

of the Act \20\ and Rule 19b-4(f)(6) \21\ thereunder.
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    \20\ 15 U.S.C. 78s(b)(3)(A).
    \21\ 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 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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    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. If the Commission 
takes such action, the Commission shall institute proceedings 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-BX-2013-050 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

    All submissions should refer to File Number SR-BX-2013-050. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make publicly available. All 
submissions should refer to File Number SR-BX-2013-050 and should be 
submitted on or before September 20, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-21230 Filed 8-29-13; 8:45 am]
BILLING CODE 8011-01-P
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