Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Extension of the Exchange's Penny Pilot Program and Replacement of Penny Pilot Issues That Have Been Delisted, 31164-31166 [2014-12525]
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31164
Federal Register / Vol. 79, No. 104 / Friday, May 30, 2014 / Notices
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
MIAX–2014–21 on the subject line.
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 5 and Rule
19b–4(f)(6) thereunder.6 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 7 and
Rule 19b–4(f)(6)(iii) 8 thereunder.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 9 of the Act 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
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
[Release No. 34–72245; File No. SR–Phlx–
2014–37]
• 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–MIAX–2014–21. 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 20549–1090, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–MIAX–
2014–21 and should be submitted on or
before June 20, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–12523 Filed 5–29–14; 8:45 am]
mstockstill on DSK4VPTVN1PROD with NOTICES
5 15
U.S.C. 78s(b)(3)(A)(iii).
6 17 CFR 240.19b–4(f)(6).
7 15 U.S.C. 78s(b)(3)(A).
8 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change along with a brief
description and the text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission. The
Exchange has satisfied this pre-filing requirement.
9 15 U.S.C. 78s(b)(2)(B).
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18:23 May 29, 2014
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Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Relating to
Extension of the Exchange’s Penny
Pilot Program and Replacement of
Penny Pilot Issues That Have Been
Delisted
May 23, 2014.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 2 thereunder,
notice is hereby given that on May 20,
2014, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, 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 is filing with the
Commission a proposal to amend Phlx
Rule 1034 (Minimum Increments) to
extend through December 31, 2014, the
Penny Pilot Program in options classes
in certain issues (‘‘Penny Pilot’’ or
‘‘Pilot’’), and to change the date when
delisted classes may be replaced in the
Penny Pilot.3
The Exchange requests that the
Commission waive the 30-day operative
delay period to the extent needed for
timely industry-wide implementation of
the proposal.
The text of the amended Exchange
rule is set forth immediately below.
Proposed new language is underlined
and proposed deleted language is
[bracketed].
NASDAQ OMX PHLX Rules
Options Rules
*
*
*
*
*
BILLING CODE 8011–01–P
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 The Penny Pilot was established in January 2007
and was last extended in December 2013. See
Securities Exchange Act Release Nos. 55153
(January 23, 2007), 72 FR 4553 (January 31, 2007)
(SR–Phlx–2006–74) (notice of filing and approval
order establishing Penny Pilot); and 71106
(December 17, 2013), 78 FR 77509 (December 23,
2013) (SR–Phlx–2013–123) (notice of filing and
immediate effectiveness extending the Penny Pilot
through June 30, 2014).
2 17
10 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00087
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E:\FR\FM\30MYN1.SGM
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Federal Register / Vol. 79, No. 104 / Friday, May 30, 2014 / Notices
Rule 1034. Minimum Increments
(a) Except as provided in sub-paragraphs
(i)(B) and (iii) below, all options on stocks,
index options, and Exchange Traded Fund
Shares quoting in decimals at $3.00 or higher
shall have a minimum increment of $.10, and
all options on stocks and index options
quoting in decimals under $3.00 shall have
a minimum increment of $.05.
(i)(A) No Change.
(B) For a pilot period scheduled to expire
[June 30, 2014]December 31, 2014 (the
‘‘pilot’’), certain options shall be quoted and
traded on the Exchange in minimum
increments of $0.01 for all series in such
options with a price of less than $3.00, and
in minimum increments of $0.05 for all series
in such options with a price of $3.00 or
higher, except that options overlying the
PowerShares QQQ Trust (‘‘QQQQ’’)®, SPDR
S&P 500 Exchange Traded Funds (‘‘SPY’’),
and iShares Russell 2000 Index Funds
(‘‘IWM’’) shall be quoted and traded in
minimum increments of $0.01 for all series
regardless of the price. A list of such options
shall be communicated to membership via an
Options Trader Alert (‘‘OTA’’) posted on the
Exchange’s Web site.
The Exchange may replace any pilot issues
that have been delisted with the next most
actively traded multiply listed options
classes that are not yet included in the pilot,
based on trading activity in the previous six
months. The replacement issues may be
added to the pilot on the second trading day
following [January 1, 2014]July 1, 2014.
(C) No Change.
(ii)–(v) No Change.
*
*
*
*
*
The text of the proposed rule change
is available on the Exchange’s Web site
at https://nasdaqomxphlx.cchwallstreet.
com, at the principal office of the
Exchange, and at the Commission’s
Public Reference Room.
mstockstill on DSK4VPTVN1PROD 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.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to amend
Phlx Rule 1034 to extend the Penny
Pilot through December 31, 2014, and to
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18:23 May 29, 2014
Jkt 232001
change the date when delisted classes
may be replaced in the Penny Pilot.
Under the Penny Pilot, the minimum
price variation for all participating
options classes, except for the Nasdaq100 Index Tracking Stock (‘‘QQQQ’’),
the SPDR S&P 500 Exchange Traded
Fund (‘‘SPY’’) and the iShares Russell
2000 Index Fund (‘‘IWM’’), is $0.01 for
all quotations in options series that are
quoted at less than $3 per contract and
$0.05 for all quotations in options series
that are quoted at $3 per contract or
greater. QQQQ, SPY and IWM are
quoted in $0.01 increments for all
options series. The Penny Pilot is
currently scheduled to expire on June
30, 2014.
The Exchange proposes to extend the
time period of the Penny Pilot through
December 31, 2014, and to provide
revised dates for adding replacement
issues to the Penny Pilot. The Exchange
proposes that any Penny Pilot Program
issues that have been delisted may be
replaced on the second trading day
following July 1, 2014. The replacement
issues will be selected based on trading
activity in the previous six months.4
This filing does not propose any
substantive changes to the Penny Pilot
Program; all classes currently
participating in the Penny Pilot will
remain the same and all minimum
increments will remain unchanged. The
Exchange believes the benefits to public
customers and other market participants
who will be able to express their true
prices to buy and sell options have been
demonstrated to outweigh the potential
increase in quote traffic.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 5 in general, and furthers the
objectives of Section 6(b)(5) of the Act 6
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, and to remove
impediments to and perfect the
4 The
replacement issues will be announced to
the Exchange’s membership via an Options Trader
Alert (OTA) posted on the Exchange’s Web site. The
Exchange proposes in its Penny Pilot rule that
replacement issues will be selected based on
trading activity in the previous six months. The
replacement issues would be identified based on
The Option Clearing Corporation’s trading volume
data from December 1, 2013 through May 31, 2014.
The month immediately preceding the replacement
issues’ addition to the Pilot Program (i.e. June)
would not be used for purposes of the six-month
analysis.
5 15 U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00088
Fmt 4703
Sfmt 4703
31165
mechanism of a free and open market
and a national market system.
In particular, the proposed rule
change, which extends the Penny Pilot
for an additional six months through
December 31, 2014 and changes the date
for replacing Penny Pilot issues that
were delisted to the second trading day
following July 1, 2014, will enable
public customers and other market
participants to express their true prices
to buy and sell options for the benefit
of all market participants. This is
consistent with the Act.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. To the
contrary, this proposal is procompetitive because it allows Penny
Pilot issues to continue trading on the
Exchange. Moreover, the Exchange
believes that the proposed rule change
will allow for further analysis of the
Pilot and a determination of how the
Pilot should be structured in the future;
and will serve to promote regulatory
clarity and consistency, thereby
reducing burdens on the marketplace
and facilitating investor protection. The
Pilot is an industry wide initiative
supported by all other option
exchanges. The Exchange believes that
extending the Pilot will allow for
continued competition between market
participants on the Exchange trading
similar products as their counterparts
on other exchanges, while at the same
time allowing the Exchange to continue
to compete for order flow with other
exchanges in option issues trading as
part of the Pilot.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
E:\FR\FM\30MYN1.SGM
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31166
Federal Register / Vol. 79, No. 104 / Friday, May 30, 2014 / Notices
19(b)(3)(A) 7 of the Act and
subparagraph (f)(6) of Rule 19b–4
thereunder.8
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
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 rule-comments@
sec.gov. Please include File Number SR–
Phlx–2014–37 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, Station Place, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–Phlx–2014–37. 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
7 15
8 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
VerDate Mar<15>2010
18:23 May 29, 2014
Jkt 232001
filing also will be available for
inspection and copying at the principal
office of Phlx. All comments received
will be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly.
All submissions should refer to File
Number SR–Phlx–2014–37 and should
be submitted on or before June 20, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–12525 Filed 5–29–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72242; File No. SR–OCC–
2014–09]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing of Proposed Rule Change
Concerning the Consolidation of the
Governance Committee and
Nominating Committee into a Single
Committee, Changes to the
Nominating Process for Directors, and
Increasing the Number of Public
Directors on The Options Clearing
Corporation’s Board of Directors
May 23, 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 13,
2014, The Options Clearing Corporation
(‘‘OCC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I and II below, which Items
have been prepared by OCC.3 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
This proposed rule change would
amend OCC’s By-Laws regarding its
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 OCC also filed the proposed change as an
advance notice under Section 806(e)(1) of Title VIII
of the Dodd-Frank Wall Street Reform and
Consumer Protection Act titled the Payment,
Clearing, and Settlement Supervision Act of 2010
(‘‘Payment, Clearing and Settlement Supervision
Act’’). 12 U.S.C. 5465(e)(1). See AN–OCC–2014–
802.
1 15
PO 00000
Frm 00089
Fmt 4703
Sfmt 4703
Nominating Committee (‘‘NC’’) and the
Charter for OCC’s Governance
Committee (‘‘GC’’) to consolidate the
two Committees into a single
Governance and Nominating Committee
(‘‘GNC’’), make changes to OCC’s
nomination process for Directors and
increase the number of Public Directors
on OCC’s Board of Directors.
Conforming amendments to these
changes are also proposed to OCC’s
Stockholders Agreement, Board of
Directors Charter and Fitness Standards
for Directors.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission,
OCC 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. OCC has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of these statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
1. Purpose
OCC is proposing to amend its ByLaws and Governance Committee
Charter to combine the current NC and
GC to establish a single GNC, make
changes concerning OCC’s nomination
process for Directors and to increase the
number of Public Directors on OCC’s
Board of Directors (‘‘Board’’). The
proposed modifications are based on
recommendations from the GC in the
course of carrying out its mandate of
reviewing the overall corporate
governance of OCC and recommending
improvements to the structure of OCC’s
Board. In part, the GC’s
recommendations stem from suggestions
of an outside consultant that was
retained to review and report on OCC’s
governance structure in relationship to
industry governance practices. To
conform to these proposed changes OCC
is also proposing to make certain edits
to its Stockholders Agreement, Board of
Directors Charter and Fitness Standards
for Directors.
Currently, the GC operates pursuant
to its own Charter.4 The NC is not a
Board level Committee and does not
operate pursuant to a charter, however,
provisions in Article III of OCC’s By4 Securities Exchange Act Release Nos. 71030
(Dec. 11, 2013), 78 FR 7612 (Dec. 16, 2013) (SR–
OCC–2013–18); 71083 (Dec. 16, 2013), 78 FR 77182
(Dec. 20, 2013) (SR–OCC–2013–807).
E:\FR\FM\30MYN1.SGM
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Agencies
[Federal Register Volume 79, Number 104 (Friday, May 30, 2014)]
[Notices]
[Pages 31164-31166]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-12525]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72245; File No. SR-Phlx-2014-37]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
to Extension of the Exchange's Penny Pilot Program and Replacement of
Penny Pilot Issues That Have Been Delisted
May 23, 2014.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on May 20, 2014, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I, 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing with the Commission a proposal to amend Phlx
Rule 1034 (Minimum Increments) to extend through December 31, 2014, the
Penny Pilot Program in options classes in certain issues (``Penny
Pilot'' or ``Pilot''), and to change the date when delisted classes may
be replaced in the Penny Pilot.\3\
---------------------------------------------------------------------------
\3\ The Penny Pilot was established in January 2007 and was last
extended in December 2013. See Securities Exchange Act Release Nos.
55153 (January 23, 2007), 72 FR 4553 (January 31, 2007) (SR-Phlx-
2006-74) (notice of filing and approval order establishing Penny
Pilot); and 71106 (December 17, 2013), 78 FR 77509 (December 23,
2013) (SR-Phlx-2013-123) (notice of filing and immediate
effectiveness extending the Penny Pilot through June 30, 2014).
---------------------------------------------------------------------------
The Exchange requests that the Commission waive the 30-day
operative delay period to the extent needed for timely industry-wide
implementation of the proposal.
The text of the amended Exchange rule is set forth immediately
below.
Proposed new language is underlined and proposed deleted language
is [bracketed].
NASDAQ OMX PHLX Rules
Options Rules
* * * * *
[[Page 31165]]
Rule 1034. Minimum Increments
(a) Except as provided in sub-paragraphs (i)(B) and (iii) below,
all options on stocks, index options, and Exchange Traded Fund
Shares quoting in decimals at $3.00 or higher shall have a minimum
increment of $.10, and all options on stocks and index options
quoting in decimals under $3.00 shall have a minimum increment of
$.05.
(i)(A) No Change.
(B) For a pilot period scheduled to expire [June 30,
2014]December 31, 2014 (the ``pilot''), certain options shall be
quoted and traded on the Exchange in minimum increments of $0.01 for
all series in such options with a price of less than $3.00, and in
minimum increments of $0.05 for all series in such options with a
price of $3.00 or higher, except that options overlying the
PowerShares QQQ Trust (``QQQQ'')[supreg], SPDR S&P 500 Exchange
Traded Funds (``SPY''), and iShares Russell 2000 Index Funds
(``IWM'') shall be quoted and traded in minimum increments of $0.01
for all series regardless of the price. A list of such options shall
be communicated to membership via an Options Trader Alert (``OTA'')
posted on the Exchange's Web site.
The Exchange may replace any pilot issues that have been
delisted with the next most actively traded multiply listed options
classes that are not yet included in the pilot, based on trading
activity in the previous six months. The replacement issues may be
added to the pilot on the second trading day following [January 1,
2014]July 1, 2014.
(C) No Change.
(ii)-(v) No Change.
* * * * *
The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaqomxphlx.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 this filing is to amend Phlx Rule 1034 to extend the
Penny Pilot through December 31, 2014, and to change the date when
delisted classes may be replaced in the Penny Pilot.
Under the Penny Pilot, the minimum price variation for all
participating options classes, except for the Nasdaq-100 Index Tracking
Stock (``QQQQ''), the SPDR S&P 500 Exchange Traded Fund (``SPY'') and
the iShares Russell 2000 Index Fund (``IWM''), is $0.01 for all
quotations in options series that are quoted at less than $3 per
contract and $0.05 for all quotations in options series that are quoted
at $3 per contract or greater. QQQQ, SPY and IWM are quoted in $0.01
increments for all options series. The Penny Pilot is currently
scheduled to expire on June 30, 2014.
The Exchange proposes to extend the time period of the Penny Pilot
through December 31, 2014, and to provide revised dates for adding
replacement issues to the Penny Pilot. The Exchange proposes that any
Penny Pilot Program issues that have been delisted may be replaced on
the second trading day following July 1, 2014. The replacement issues
will be selected based on trading activity in the previous six
months.\4\
---------------------------------------------------------------------------
\4\ The replacement issues will be announced to the Exchange's
membership via an Options Trader Alert (OTA) posted on the
Exchange's Web site. The Exchange proposes in its Penny Pilot rule
that replacement issues will be selected based on trading activity
in the previous six months. The replacement issues would be
identified based on The Option Clearing Corporation's trading volume
data from December 1, 2013 through May 31, 2014. The month
immediately preceding the replacement issues' addition to the Pilot
Program (i.e. June) would not be used for purposes of the six-month
analysis.
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This filing does not propose any substantive changes to the Penny
Pilot Program; all classes currently participating in the Penny Pilot
will remain the same and all minimum increments will remain unchanged.
The Exchange believes the benefits to public customers and other market
participants who will be able to express their true prices to buy and
sell options have been demonstrated to outweigh the potential increase
in quote traffic.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \5\ in general, and furthers the objectives of Section
6(b)(5) of the Act \6\ 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, and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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In particular, the proposed rule change, which extends the Penny
Pilot for an additional six months through December 31, 2014 and
changes the date for replacing Penny Pilot issues that were delisted to
the second trading day following July 1, 2014, will enable public
customers and other market participants to express their true prices to
buy and sell options for the benefit of all market participants. This
is consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. To the contrary, this proposal
is pro-competitive because it allows Penny Pilot issues to continue
trading on the Exchange. Moreover, the Exchange believes that the
proposed rule change will allow for further analysis of the Pilot and a
determination of how the Pilot should be structured in the future; and
will serve to promote regulatory clarity and consistency, thereby
reducing burdens on the marketplace and facilitating investor
protection. The Pilot is an industry wide initiative supported by all
other option exchanges. The Exchange believes that extending the Pilot
will allow for continued competition between market participants on the
Exchange trading similar products as their counterparts on other
exchanges, while at the same time allowing the Exchange to continue to
compete for order flow with other exchanges in option issues trading as
part of the Pilot.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section
[[Page 31166]]
19(b)(3)(A) \7\ of the Act and subparagraph (f)(6) of Rule 19b-4
thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6).
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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: (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 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-Phlx-2014-37 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, Station Place, 100 F Street NE., Washington,
DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2014-37. 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 Phlx. All comments received will
be posted without change; the Commission does not edit personal
identifying information from submissions. You should submit only
information that you wish to make available publicly.
All submissions should refer to File Number SR-Phlx-2014-37 and
should be submitted on or before June 20, 2014.
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\9\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-12525 Filed 5-29-14; 8:45 am]
BILLING CODE 8011-01-P