Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to SPY Pilot Program, 4021-4023 [2015-01252]
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emcdonald on DSK67QTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 16 / Monday, January 26, 2015 / Notices
The Sub-Adviser will evaluate the
creditworthiness of counterparties on an
ongoing basis. The Fund will segregate
assets determined to be liquid by the
Sub-Adviser in accordance with the
1940 Act to cover its obligations under
derivative instruments. The Fund will
include appropriate risk disclosure in
its offering documents, including
leveraging risk.
(11) The Fund’s portfolio will be
diversified by industry and issuer, with
no individual issuer representing more
than 5% of the portfolio.
(12) Not more than 10% of the net
assets of the Fund in the aggregate
invested in equity securities (other than
non-exchange-traded investment
company securities) shall consist of
equity securities whose principal
market is not a member of the ISG or is
a market with which the Exchange does
not have a comprehensive surveillance
sharing agreement. Not more than 10%
of the net assets of the Fund in the
aggregate invested in exchange-traded
options contracts shall consist of
options contracts whose principal
market is not a member of the ISG or is
a market with which the Exchange does
not have a comprehensive surveillance
sharing agreement. U.S. exchangetraded futures contracts, U.S. exchangetraded options on futures contracts, and
U.S. exchange-traded put and call
options in which the Fund invests will
trade on exchanges that are members of
ISG.
(13) Unsponsored ADRs will not
exceed 10% of the Fund’s net assets.
(14) The Fund may invest up to 5%
of its net assets in non-agency ABS.
(15) The Fund may invest up to 5%
of its net assets in MBS and mortgagerelated securities.
(16) A minimum of 100,000 Shares
will be outstanding at the
commencement of trading on the
Exchange.
This approval order is based on all of
the Exchange’s representations,
including those set forth above and in
the Notice, and the Exchange’s
description of the Fund.
For the foregoing reasons, the
Commission finds that the proposed
rule change, as modified by Amendment
No. 1, is consistent with Section 6(b)(5)
of the Act 45 and the rules and
regulations thereunder applicable to a
national securities exchange.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,46 that the
proposed rule change (SR–NYSEArca–
45 15
46 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(2).
VerDate Sep<11>2014
18:48 Jan 23, 2015
Jkt 235001
2014–126), as modified by Amendment
No. 1, be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.47
Brent J. Fields,
Secretary.
[FR Doc. 2015–01246 Filed 1–23–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74099; File No. SR–Phlx–
2015–07]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
SPY Pilot Program
January 20, 2015.
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 January
13, 2015, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ or ‘‘Exchange’’) 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 the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to extend the
pilot program that eliminates 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://
nasdaqomxphlx.cchwallstreet.com/, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
47 17
CFR 200.30–3(a)(12).
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.
1 15
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4021
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 Rule 1001, entitled
‘‘Position Limits,’’ to extend the current
pilot, which expires on February 4,
2015, 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 January 2, 2015,
which report reflected, during the time
period from December 1, 2013 through
November 30, 2014, the trading of
standardized SPY options with no
position limits consistent with option
exchange provisions.4 The report was
prepared in the manner specified in
Phlx’s filing extending the SPY Pilot
Program.5 The Exchange notes that it is
unaware of any problems created by the
SPY Pilot Program and does not foresee
any as a result of the proposed
extension.
As with the original proposal, related
to the SPY Pilot Program, the Exchange
represents that a Pilot Report will be
submitted at least thirty (30) days before
4 The
report is attached as Exhibit 3.
Securities Exchange Act Release No. 70879
(November 14, 2013), 78 FR 69731 (November 20,
2013) (SR–Phlx–2013–108).
5 See
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4022
Federal Register / Vol. 80, No. 16 / Monday, January 26, 2015 / Notices
emcdonald on DSK67QTVN1PROD with NOTICES
the end 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.
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
6 15
7 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
VerDate Sep<11>2014
18:48 Jan 23, 2015
Jkt 235001
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
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A) of the Act 8 and Rule 19b–
4(f)(6) thereunder.9 Because the
foregoing proposed rule change does
not: (i) Significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act and Rule 19b–
4(f)(6) thereunder.10
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
8 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
10 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) 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 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 requirement.
9 17
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Act 11 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 12
permits the Commission to 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 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 operative delay and
designates the proposed rule change
operative upon filing.13
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is 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–
Phlx–2015–07 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–Phlx–2015–07. This file
number should be included on the
11 17
CFR 240.19b–4(f)(6).
CFR 240.19b–4(f)(6)(iii).
13 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
12 17
E:\FR\FM\26JAN1.SGM
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Federal Register / Vol. 80, No. 16 / Monday, January 26, 2015 / Notices
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
available publicly. All submissions
should refer to File Number SR–Phlx–
2015–07, and should be submitted on or
before February 17, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Brent J. Fields,
Secretary.
[FR Doc. 2015–01252 Filed 1–23–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74097; File No. SR–BX–
2015–004]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Regarding BX
LMM and Penny Pilot Options
emcdonald on DSK67QTVN1PROD with NOTICES
January 20, 2015.
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 January 9,
2015, NASDAQ OMX BX, Inc. (‘‘BX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Sep<11>2014
18:48 Jan 23, 2015
Jkt 235001
4023
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
their specifically allocated options
classes when adding liquidity in Penny
Pilot options; (3) indicate in Section 2
that BAC, IWM, QQQ, SPY, and VXX 3
are priced like all other Penny Pilot
options; and (4) update the numbering
of notes in Section 2.
Lead Market Maker
The Exchange proposes to amend
Chapter XV, entitled ‘‘Options Pricing’’
and Section 2, entitled ‘‘Options
Market—Fees and Rebates’’.
Specifically, the Exchange proposes to:
(1) Add the definition of Lead Market
Maker (‘‘LMM’’) and amend the
definition of Common Ownership in
Chapter XV; (2) adopt three Monthly
Volume Tiers in Section 2 that apply to
LMMs in their specifically allocated
options classes when adding liquidity in
Penny Pilot options; (3) indicate in
Section 2 that BAC, IWM, QQQ, SPY,
and VXX are priced like all other Penny
Pilot options; and (4) update the
numbering of notes in Section 2.
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
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 Chapter XV, entitled
‘‘Options Pricing’’ and Section 2,
entitled ‘‘Options Market—Fees and
Rebates’’. Specifically, the Exchange
proposes to: (1) Add the definition of
Lead Market Maker and amend the
definition of Common Ownership in
Chapter XV; (2) adopt three Monthly
Volume Tiers in Section 2 that apply to
LMMs (also known as ‘‘BX LMMs’’) in
PO 00000
Frm 00084
Fmt 4703
Sfmt 4703
BX introduced LMMs this year on the
Exchange,4 such that with respect to
each class of options in an LMM’s
appointment, an LMM is expected to
engage, to a reasonable degree under the
existing circumstances, in dealings for
his own account when there exists, or
it is reasonably anticipated that there
will exist, a lack of price continuity, a
temporary disparity between the supply
of and demand for a particular option
contract, or a temporary distortion of the
price relationships between option
contracts of the same class.5 Approved
BX Options Market Makers 6 may
become an LMM in one or more listed
options. Initial application(s) to become
an LMM shall be in a form and/or
format prescribed by the Exchange and
shall include the following: (1)
Background information on the LMM
including experience in trading options;
(2) the LMM’s clearing arrangements; (3)
adequacy of capital; and (4) adherence
to Exchange rules and ability to meet
obligations of an LMM.7 Once an
applicant is approved by the Exchange
as an LMM, any material change in
capital shall be reported in writing to
the Exchange within two business days
after the change. The Exchange will not
place any limit on the number of
entities that may become LMMs,
however the Exchange notes that there
will only be one LMM per class.
The Exchange is not, in this proposal,
making any changes, substantive or
otherwise, to how LMMs function.
Rather, in that the proposed new
volume tiers in Chapter XV, Section 2
refer to LMMs, the Exchange is adding
to Chapter XV a definition of LMM that
refers back to Chapter VII, Section 13.
Specifically, the Exchange proposes to
state in Chapter XV: ‘‘The term ‘‘Lead
3 BAC is the symbol for Bank of America
Corporation, IWM is the symbol for iShares Russell
200 ETF, QQQ is the symbol for PowerShares QQQ
Trust Series 1 ETF, SPY is the symbol for SPDR S&P
500 ETF, and VXX is the symbol for iPath S&P 500
VIX Short Term Futures ETN.
4 See Securities Exchange Act Release No. 72883
(August 20, 2014), 79 FR 50971 (August 26, 2014)
(SR–BX–2014–035) (order approving introduction
of LMMs on BX) (the ‘‘LMM approval order’’).
5 LMM obligations and prohibitions are further
described in Chapter VII, Section 14.
6 See BX Chapter VII, Section 2.
7 See BX Chapter VII, Section 13(A)(b).
Subsequent applications are discussed in Section
13(A)(c).
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]]>Agencies
[Federal Register Volume 80, Number 16 (Monday, January 26, 2015)]
[Notices]
[Pages 4021-4023]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-01252]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74099; File No. SR-Phlx-2015-07]
Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
SPY Pilot Program
January 20, 2015.
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 January 13, 2015, NASDAQ OMX PHLX LLC (``Phlx'' or
``Exchange'') 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 the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange proposes to extend the pilot program that eliminates
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://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 the proposed rule change is to amend Rule 1001,
entitled ``Position Limits,'' to extend the current pilot, which
expires on February 4, 2015, 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 January 2,
2015, which report reflected, during the time period from December 1,
2013 through November 30, 2014, the trading of standardized SPY options
with no position limits consistent with option exchange provisions.\4\
The report was prepared in the manner specified in Phlx's filing
extending the SPY Pilot Program.\5\ The Exchange notes that it is
unaware of any problems created by the SPY Pilot Program and does not
foresee any as a result of the proposed extension.
---------------------------------------------------------------------------
\4\ The report is attached as Exhibit 3.
\5\ See Securities Exchange Act Release No. 70879 (November 14,
2013), 78 FR 69731 (November 20, 2013) (SR-Phlx-2013-108).
---------------------------------------------------------------------------
As with the original proposal, related to the SPY Pilot Program,
the Exchange represents that a Pilot Report will be submitted at least
thirty (30) days before
[[Page 4022]]
the end 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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\ Because
the foregoing proposed rule change does not: (i) Significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.\10\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
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 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 requirement.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \11\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \12\ permits the
Commission to 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 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 operative delay and designates the
proposed rule change operative upon filing.\13\
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
\13\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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-Phlx-2015-07 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2015-07. This file
number should be included on the
[[Page 4023]]
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 available publicly. All submissions should refer to
File Number SR-Phlx-2015-07, and should be submitted on or before
February 17, 2015.
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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Brent J. Fields,
Secretary.
[FR Doc. 2015-01252 Filed 1-23-15; 8:45 am]
BILLING CODE 8011-01-P
