Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot Program Relating to the Elimination of SPY Position Limits, 27961-27963 [2014-11159]
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TKELLEY on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 94 / Thursday, May 15, 2014 / Notices
(5) Prior to the commencement of
trading, the Exchange will inform its
Equity Trading Permit Holders (‘‘ETP
Holders’’) in an Information Bulletin of
the special characteristics and risks
associated with trading the Shares.
Specifically, the Information Bulletin
will discuss the following: (a) The
procedures for purchases and
redemptions of Shares in Creation Unit
Aggregations and that Shares are not
individually redeemable; (b) NYSE Arca
Equities Rule 9.2(a), which imposes a
duty of due diligence on its ETP Holders
to learn the essential facts relating to
every customer prior to trading the
Shares; (c) the risks involved in trading
the Shares during the Opening and Late
Trading Sessions when an updated
IOPV will not be calculated or publicly
disseminated; (d) how information
regarding the IOPV is disseminated; (e)
the requirement that ETP Holders
deliver a prospectus to investors
purchasing newly issued Shares prior to
or concurrently with the confirmation of
a transaction; and (f) trading
information.
(6) For initial and continued listing,
the Funds will be in compliance with
Rule 10A–3 under the Exchange Act,31
as provided by NYSE Arca Equities Rule
5.3.32
(7) Each Fund’s investments will be
consistent with its investment objective.
(8) Each Fund may hold up to an
aggregate amount of 15% of its net
assets in illiquid assets (calculated at
the time of investment), including Rule
144A securities deemed illiquid by the
Adviser. Each Fund will monitor its
portfolio liquidity on an ongoing basis
to determine whether, in light of current
circumstances, an adequate level of
liquidity is being maintained, and will
consider taking appropriate steps in
order to maintain adequate liquidity if,
through a change in values, net assets,
or other circumstances, more than 15%
of the Fund’s net assets are held in
illiquid assets.
(9) A minimum of 100,000 Shares for
each Fund will be outstanding at the
commencement of trading on the
Exchange.
This order is based on all of the
Exchange’s representations, including
those set forth above and in the Notice.
For the foregoing reasons, the
Commission finds that the proposed
rule change is consistent with the
Exchange Act.
31 17
CFR 240.10A–3.
Notice, supra note 4, 79 FR at 17588.
32 See
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IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Exchange Act,33
that the proposed rule change (SR–
NYSEArca–2014–23), be, and it hereby
is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.34
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–11156 Filed 5–14–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72142; File No. SR–
NASDAQ–2014–052]
27961
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.
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Extend the
Pilot Program Relating to the
Elimination of SPY Position Limits
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
May 9, 2014.
The purpose of the proposed rule
change is to amend the Supplementary
Material at the end of Chapter III,
Section 7 (Position Limits) to extend the
current pilot which expires on May 12,
2014 for an additional fourteen (14)
month time period to July 12, 2015
(‘‘Extended Pilot’’). This filing does not
propose any substantive changes to the
SPY Pilot Program. In proposing to
extend the SPY Pilot Program, the
Exchange reaffirms its consideration of
several factors that supported the
original proposal of the SPY Pilot
Program, including (1) the availability of
economically equivalent products and
their respective position limits; (2) the
liquidity of the option and the
underlying security; (3) the market
capitalization of the underlying security
and the related index; (4) the reporting
of large positions and requirements
surrounding margin; and (5) the
potential for market on close volatility.
The Exchange submitted a report to
the Commission on May 8, 2014, which
report reflects, during the time period
from January 2014 through April 2014,
the trading of standardized SPY options
with no position limits consistent with
option exchange provisions.4 The report
is being prepared in the manner
specified in NASDAQ’s initial rule
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 May 8,
2014, The NASDAQ Stock Market LLC
(‘‘NASDAQ’’ 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 NASDAQ. 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 extend for
another fourteen (14) month time period
the pilot program to eliminate position
limits for options on the SPDR® S&P
500® exchange-traded fund (‘‘SPY ETF’’
or ‘‘SPY’’),3 which list and trade under
the symbol SPY (‘‘SPY Pilot Program’’).
The text of the proposed rule change
is available on the Exchange’s Web site
at https://
www.nasdaq.cchwallstreet.com, at the
principal office of the Exchange, and at
33 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 ‘‘SPDR®,’’ ‘‘Standard & Poor’s®,’’ ‘‘S&P®,’’ ‘‘S&P
500®,’’ and ‘‘Standard & Poor’s 500’’ are registered
trademarks of Standard & Poor’s Financial Services
LLC. The SPY ETF represents ownership in the
SPDR S&P 500 Trust, a unit investment trust that
generally corresponds to the price and yield
performance of the SPDR S&P 500 Index.
34 17
PO 00000
Frm 00125
Fmt 4703
Sfmt 4703
1. Purpose
4 See Securities Exchange Act Release No. 71231
(January 2, 2014), 79 FR 1402 (January 8, 2014) (SR–
FINRA–2013–55) (notice of filing and immediate
effectiveness of proposed rule change having the
effect of eliminating position limits on standardized
options on SPY).
E:\FR\FM\15MYN1.SGM
15MYN1
27962
Federal Register / Vol. 79, No. 94 / Thursday, May 15, 2014 / Notices
filing establishing the SPY Pilot
Program.5
As with the original proposal to
establish the SPY Pilot Program, the
Exchange represents that a Pilot Report
will be submitted within thirty (30) days
of the end of the first twelve (12) month
time period of the Extended Pilot and
would analyze that period. The Pilot
Report will detail the size and different
types of strategies employed with
respect to positions established as a
result of the elimination of position
limits in SPY. In addition, the report
will note whether any problems resulted
due to the no limit approach and any
other information that may be useful in
evaluating the effectiveness of the
Extended Pilot. The Pilot Report will
compare the impact of the SPY Pilot
Program, if any, on the volumes of SPY
options and the volatility in the price of
the underlying SPY shares, particularly
at expiration during the Extended Pilot.
In preparing the report the Exchange
will utilize various data elements such
as volume and open interest. In addition
the Exchange will make available to
Commission staff data elements relating
to the effectiveness of the SPY Pilot
Program.
Conditional on the findings in the
Pilot Report, the Exchange will file with
the Commission a proposal to extend
the pilot program, adopt the pilot
program on a permanent basis or
terminate the pilot. If the SPY Pilot
Program is not extended or adopted on
a permanent basis by the expiration of
the Extended Pilot, the position limits
for SPY would revert to limits in effect
at the commencement of the SPY Pilot
Program.
TKELLEY on DSK3SPTVN1PROD with NOTICES
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the 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, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, to remove
impediments to and perfect the
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 the
proposed rule change would be
5 See
Securities Exchange Act Release No. 69180
(March 19, 2013), 78 FR 17962 (March 25, 2013)
(SR–NASDAQ–2013–046).
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
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18:18 May 14, 2014
Jkt 232001
beneficial to market participants,
including market makers, institutional
investors and retail investors, by
permitting them to establish greater
positions when pursuing their
investment goals and needs. The
Exchange also believes that
economically equivalent products
should be treated in an equivalent
manner so as to avoid regulatory
arbitrage, especially with respect to
position limits. Treating SPY and SPX
options differently by virtue of imposing
different position limits is inconsistent
with the notion of promoting just and
equitable principles of trade and
removing impediments to perfect the
mechanisms of a free and open market.
At the same time, the Exchange believes
that the elimination of position limits
for SPY options would not increase
market volatility or facilitate the ability
to manipulate the market.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
In this regard and as indicated below,
the Exchange notes that the rule change
is being proposed as a competitive
response to similar filings by other
options exchanges. The Exchange
believes this proposed rule change is
necessary to permit fair competition
among the options exchanges and to
establish uniform position limits for a
multiply listed options class.
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 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,
it has become effective pursuant to
Section 19(b)(3)(A) of the Act 8 and Rule
19b–4(f)(6) thereunder.9
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, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
9 17
PO 00000
Frm 00126
Fmt 4703
Sfmt 4703
A proposed rule change filed under
Rule 19b–4(f)(6) 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),11 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Exchange believes that
waiver of the 30-day operative delay is
consistent with the protection of
investors and the public interest
because it will permit the SPY Pilot
Program to continue without
interruption. The Commission believes
that waiving the 30-day operative delay
is consistent with the protection of
investors and the public interest.
Therefore, the Commission hereby
waives the 30-day operative delay and
designates the proposal operative upon
filing.12
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
under Section 19(b)(2)(B) of the Act 13 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 rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2014–052 on the
subject line.
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 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).
13 15 U.S.C. 78s(b)(2)(B).
E:\FR\FM\15MYN1.SGM
15MYN1
Federal Register / Vol. 79, No. 94 / Thursday, May 15, 2014 / Notices
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2014–052. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NASDAQ–2014–052 and should be
submitted on or before June 5, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–11159 Filed 5–14–14; 8:45 am]
TKELLEY on DSK3SPTVN1PROD with NOTICES
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
the most significant aspects of such
statements.
[Release No. 34–72143; File No. SR–BX–
2014–025]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Extend the
Pilot Program Relating to the
Elimination of SPY Position Limits
May 9, 2014.
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 May 8,
2014, NASDAQ OMX BX, Inc. (‘‘BX’’ 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 Substance of
the Proposed Rule Change
The Exchange proposes to extend for
another fourteen (14) month time period
the pilot program to eliminate position
limits for options on the SPDR® S&P
500® exchange-traded fund (‘‘SPY ETF’’
or ‘‘SPY’’),3 which list and trade under
the symbol SPY (‘‘SPY Pilot Program’’).
The text of the proposed rule change
is available on the Exchange’s Web site
at https://
nasdaqomxbx.cchwallstreet.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
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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 ‘‘SPDR®,’’ ‘‘Standard & Poor’s®,’’ ‘‘S&P®,’’ ‘‘S&P
500®,’’ and ‘‘Standard & Poor’s 500’’ are registered
trademarks of Standard & Poor’s Financial Services
LLC. The SPY ETF represents ownership in the
SPDR S&P 500 Trust, a unit investment trust that
generally corresponds to the price and yield
performance of the SPDR S&P 500 Index.
2 17
14 17
CFR 200.30–3(a)(12).
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18:18 May 14, 2014
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27963
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Sfmt 4703
1. Purpose
The purpose of the proposed rule
change is to amend the Supplementary
Material at the end of Chapter III,
Section 7 (Position Limits) to extend the
current pilot which expires on May 12,
2014 for an additional fourteen (14)
month time period to July 12, 2015
(‘‘Extended Pilot’’). This filing does not
propose any substantive changes to the
SPY Pilot Program. In proposing to
extend the SPY Pilot Program, the
Exchange reaffirms its consideration of
several factors that supported the
original proposal of the SPY Pilot
Program, including (1) the availability of
economically equivalent products and
their respective position limits; (2) the
liquidity of the option and the
underlying security; (3) the market
capitalization of the underlying security
and the related index; (4) the reporting
of large positions and requirements
surrounding margin; and (5) the
potential for market on close volatility.
The Exchange submitted a report to
the Commission on May 8, 2014, which
report reflects, during the time period
from January 2014 through April 2014,
the trading of standardized SPY options
with no position limits for [sic]
consistent with option exchange
provisions.4 The report is being
prepared in the manner specified in
BX’s initial rule filing establishing the
SPY Pilot Program.5
As with the original proposal to
establish the SPY Pilot Program, the
Exchange represents that a SPY Pilot
Report will be submitted within thirty
(30) days of the end of the first twelve
(12) month time period of the Extended
Pilot and would analyze that period.
The SPY Pilot Report will detail the size
and different types of strategies
employed with respect to positions
established as a result of the elimination
of position limits in SPY. In addition,
the report will note whether any
problems resulted due to the no limit
approach and any other information that
may be useful in evaluating the
effectiveness of the Extended Pilot. The
4 See Securities Exchange Act Release No. 71231
(January 2, 2014), 79 FR 1402 (January 8, 2014) (SR–
FINRA–2013–55) (notice of filing and immediate
effectiveness of proposed rule change having the
effect of eliminating position limits on standardized
options on SPY).
5 See Securities Exchange Act Release No. 69179
(March 19, 2013), 78 FR 17952 (March 25, 2013)
(SR–BX–2013–024).
E:\FR\FM\15MYN1.SGM
15MYN1
]]>Agencies
[Federal Register Volume 79, Number 94 (Thursday, May 15, 2014)]
[Notices]
[Pages 27961-27963]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-11159]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72142; File No. SR-NASDAQ-2014-052]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Extend the Pilot Program Relating to the Elimination of SPY Position
Limits
May 9, 2014.
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 May 8, 2014, The NASDAQ Stock Market LLC (``NASDAQ'' 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 NASDAQ. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASDAQ proposes to extend for another fourteen (14) month time
period the pilot program to eliminate position limits for options on
the SPDR[supreg] S&P 500[supreg] exchange-traded fund (``SPY ETF'' or
``SPY''),\3\ which list and trade under the symbol SPY (``SPY Pilot
Program'').
---------------------------------------------------------------------------
\3\ ``SPDR[supreg],'' ``Standard & Poor's[supreg],''
``S&P[supreg],'' ``S&P 500[supreg],'' and ``Standard & Poor's 500''
are registered trademarks of Standard & Poor's Financial Services
LLC. The SPY ETF represents ownership in the SPDR S&P 500 Trust, a
unit investment trust that generally corresponds to the price and
yield performance of the SPDR S&P 500 Index.
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
Web site at https://www.nasdaq.cchwallstreet.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 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 amend the
Supplementary Material at the end of Chapter III, Section 7 (Position
Limits) to extend the current pilot which expires on May 12, 2014 for
an additional fourteen (14) month time period to July 12, 2015
(``Extended Pilot''). This filing does not propose any substantive
changes to the SPY Pilot Program. In proposing to extend the SPY Pilot
Program, the Exchange reaffirms its consideration of several factors
that supported the original proposal of the SPY Pilot Program,
including (1) the availability of economically equivalent products and
their respective position limits; (2) the liquidity of the option and
the underlying security; (3) the market capitalization of the
underlying security and the related index; (4) the reporting of large
positions and requirements surrounding margin; and (5) the potential
for market on close volatility.
The Exchange submitted a report to the Commission on May 8, 2014,
which report reflects, during the time period from January 2014 through
April 2014, the trading of standardized SPY options with no position
limits consistent with option exchange provisions.\4\ The report is
being prepared in the manner specified in NASDAQ's initial rule
[[Page 27962]]
filing establishing the SPY Pilot Program.\5\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 71231 (January 2,
2014), 79 FR 1402 (January 8, 2014) (SR-FINRA-2013-55) (notice of
filing and immediate effectiveness of proposed rule change having
the effect of eliminating position limits on standardized options on
SPY).
\5\ See Securities Exchange Act Release No. 69180 (March 19,
2013), 78 FR 17962 (March 25, 2013) (SR-NASDAQ-2013-046).
---------------------------------------------------------------------------
As with the original proposal to establish the SPY Pilot Program,
the Exchange represents that a Pilot Report will be submitted within
thirty (30) days of the end of the first twelve (12) month time period
of the Extended Pilot and would analyze that period. The Pilot Report
will detail the size and different types of strategies employed with
respect to positions established as a result of the elimination of
position limits in SPY. In addition, the report will note whether any
problems resulted due to the no limit approach and any other
information that may be useful in evaluating the effectiveness of the
Extended Pilot. The Pilot Report will compare the impact of the SPY
Pilot Program, if any, on the volumes of SPY options and the volatility
in the price of the underlying SPY shares, particularly at expiration
during the Extended Pilot. In preparing the report the Exchange will
utilize various data elements such as volume and open interest. In
addition the Exchange will make available to Commission staff data
elements relating to the effectiveness of the SPY Pilot Program.
Conditional on the findings in the Pilot Report, the Exchange will
file with the Commission a proposal to extend the pilot program, adopt
the pilot program on a permanent basis or terminate the pilot. If the
SPY Pilot Program is not extended or adopted on a permanent basis by
the expiration of the Extended Pilot, the position limits for SPY would
revert to limits in effect at the commencement of the SPY Pilot
Program.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the 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, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, to
remove impediments to and perfect the 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(b).
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change would be
beneficial to market participants, including market makers,
institutional investors and retail investors, by permitting them to
establish greater positions when pursuing their investment goals and
needs. The Exchange also believes that economically equivalent products
should be treated in an equivalent manner so as to avoid regulatory
arbitrage, especially with respect to position limits. Treating SPY and
SPX options differently by virtue of imposing different position limits
is inconsistent with the notion of promoting just and equitable
principles of trade and removing impediments to perfect the mechanisms
of a free and open market. At the same time, the Exchange believes that
the elimination of position limits for SPY options would not increase
market volatility or facilitate the ability to manipulate the market.
B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. In this regard and as indicated below, the Exchange notes that
the rule change is being proposed as a competitive response to similar
filings by other options exchanges. The Exchange believes this proposed
rule change is necessary to permit fair competition among the options
exchanges and to establish uniform position limits for a multiply
listed options class.
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 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, it has become effective pursuant to
Section 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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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, 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 this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \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),\11\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Exchange believes
that waiver of the 30-day operative delay is consistent with the
protection of investors and the public interest because it will permit
the SPY Pilot Program to continue without interruption. The Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. Therefore, the
Commission hereby waives the 30-day operative delay and designates the
proposal operative upon filing.\12\
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\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ 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).
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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 under
Section 19(b)(2)(B) of the Act \13\ to determine whether the proposed
rule change should be approved or disapproved.
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\13\ 15 U.S.C. 78s(b)(2)(B).
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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-NASDAQ-2014-052 on the subject line.
[[Page 27963]]
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2014-052. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2014-052 and should
be submitted on or before June 5, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-11159 Filed 5-14-14; 8:45 am]
BILLING CODE 8011-01-P
