Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding FLEX No Minimum Value Size Pilot, 13923-13925 [2015-06011]

Download as PDF mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 80, No. 51 / Tuesday, March 17, 2015 / Notices agencies, and the Municipal Securities Rulemaking Board (‘‘MSRB’’) (collectively, ‘‘SROs’’) to destroy or convert to microfilm or other recording media records maintained under Rule 17a–1, if they have filed a record destruction plan with the Commission and the Commission has declared the plan effective. There are currently 29 SROs: 18 national securities exchanges, 1 national securities association, the MSRB, and 9 registered clearing agencies. Of the 29 SROs, only 2 SRO respondents have filed a record destruction plan with the Commission. The staff calculates that the preparation and filing of a new record destruction plan should take 160 hours. Further, any existing SRO record destruction plans may require revision, over time, in response to, for example, changes in document retention technology, which the Commission estimates will take much less than the 160 hours estimated for a new plan. The Commission estimates that each SRO that has filed a destruction plan will spend approximately 30 hours per year making required revisions. Thus, the total annual compliance burden is estimated to be 60 hours per year based on two respondents. The approximate compliance cost per hour is $380, resulting in a total internal cost of compliance for these respondents of $22,800 per year (60 hours @$380 per hour). Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission’s estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number. Please direct your written comments to: Pamela Dyson, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi PavlikSimon, 100 F Street NE., Washington, DC 20549, or send an email to: PRA_ Mailbox@sec.gov. VerDate Sep<11>2014 18:09 Mar 16, 2015 Jkt 235001 Dated: March 10, 2015. Brent J. Fields, Secretary. [FR Doc. 2015–05986 Filed 3–16–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–74481; File No. SR–Phlx– 2015–22] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding FLEX No Minimum Value Size Pilot March 11, 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 February 27, 2015, 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 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 is filing with the Commission a proposal to amend Phlx Rule 1079 (FLEX Index, Equity and Currency Options) to extend a pilot program that eliminates minimum value sizes for opening transactions in new series of FLEX index options and FLEX equity options (together known as ‘‘FLEX Options’’).3 The text of the amended Exchange rule is set forth immediately below. Additions are in italics and deletions are [bracketed]. Rules of the Exchange Options Rules * * * * * 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 In addition to FLEX Options, FLEX currency options are also traded on the Exchange. These flexible index, equity, and currency options provide investors the ability to customize basic option features including size, expiration date, exercise style, and certain exercise prices; and may have expiration dates within five years. See Rule 1079. FLEX currency options traded on the Exchange are also known as FLEX FX Options. The pilot program discussed herein does not encompass FLEX currency options. PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 13923 Rule 1079. FLEX Index, Equity and Currency Options A Requesting Member shall obtain quotes and execute trades in certain non-listed FLEX options at the specialist post of the non-FLEX option on the Exchange. The term ‘‘FLEX option’’ means a FLEX option contract that is traded subject to this Rule. Although FLEX options are generally subject to the Rules in this section, to the extent that the provisions of this Rule are inconsistent with other applicable Exchange Rules, this Rule takes precedence with respect to FLEX options. (a)–(f) No Change. * * * Commentary: lllllllll .01 Notwithstanding subparagraphs (a)(8)(A)(i) and (a)(8)(A)(ii) above, for a pilot period ending the earlier of [February 28]August 31, 2015, or the date on which the pilot is approved on a permanent basis, there shall be no minimum value size requirements for FLEX options. * * * * * The text of the proposed rule change is available on the Exchange’s Web site at https://nasdaqomxphlx.cchwall street.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 proposed rule change is to amend Phlx Rule 1079 (FLEX Index, Equity and Currency Options) to extend a pilot program that eliminates minimum value sizes for opening transactions in new series of FLEX Options (the ‘‘Pilot Program’’ or ‘‘Pilot’’).4 4 The Exchange is also filing a separate proposal to permanently approve the Pilot Program. E:\FR\FM\17MRN1.SGM 17MRN1 13924 Federal Register / Vol. 80, No. 51 / Tuesday, March 17, 2015 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES Rule 1079 deals with the process of listing and trading FLEX equity, index, and currency options on the Exchange. Rule 1079(a)(8)(A) currently sets the minimum opening transaction value size in the case of a FLEX Option in a newly established (opening) series if there is no open interest in the particular series when a Request-forQuote (‘‘RFQ’’) is submitted (except as provided in Commentary .01 to Rule 1079): (i) $10 million underlying equivalent value, respecting FLEX market index options, and $5 million underlying equivalent value respecting FLEX industry index options; 5 (ii) the lesser of 250 contracts or the number of contracts overlying $1 million in the underlying securities, with respect to FLEX equity options (together the ‘‘minimum value size’’).6 Presently, Commentary .01 to Rule 1079 states that by virtue of the Pilot Program ending February 28, 2015, or the date on which the pilot is approved on a permanent basis, there shall be no minimum value size requirements for FLEX Options as noted in subsections (a)(8)(A)(i) and (a)(8)(A)(ii) of Rule 1079.7 The Exchange now proposes to extend the Pilot Program for a pilot period ending the earlier of August 31, 2015, or the date on which the Pilot is approved on a permanent basis.8 The Exchange believes that there is sufficient investor interest and demand in the Pilot Program to warrant an extension. The Exchange believes that the Pilot Program has provided investors with additional means of managing their risk exposures and carrying out their investment objectives. Extension of the Pilot Program would 5 Market index options and industry index options are broad-based index options and narrowbased index options, respectively. See Rule 1000A(b)(11) and (12). 6 Subsection (a)(8)(A) also provides a third alternative: (iii) 50 contracts in the case of FLEX currency options. However, this alternative is not part of the Pilot Program. 7 See Securities Exchange Act Release No. 73474 (October 30, 2014), 79 FR 65742 (November 5, 2014) (SR–Phlx–2014–69) (notice of filing and immediate effectiveness of proposal to extend Pilot Program). The Pilot Program was instituted in 2010. See Securities Exchange Act Release No. 62900 (September 13, 2010), 75 FR 57098 (September 17, 2010) (SR–Phlx–2010–123) (notice of filing and immediate effectiveness of proposal to institute Pilot Program). 8 The Exchange notes that any positions established under this Pilot would not be impacted by the expiration of the Pilot. For example, a 10contract FLEX equity option opening position that overlies less than $1 million in the underlying security and expires in January 2016 could be established during the Pilot. If the Pilot Program were not extended, the position would continue to exist and any further trading in the series would be subject to the minimum value size requirements for continued trading in that series. VerDate Sep<11>2014 18:09 Mar 16, 2015 Jkt 235001 continue to provide greater opportunities for traders and investors to manage risk through the use of FLEX Options, including investors that may otherwise trade in the unregulated over the counter (‘‘OTC’’) market where similar size restrictions do not apply.9 In support of the proposed extension of the Pilot Program, the Exchange has under separate cover submitted to the Commission a Pilot Program Report (‘‘Report’’) that provides an analysis of the Pilot Program covering the period during which the Pilot has been in effect. This Report includes: (i) Data and analysis on the open interest and trading volume in (a) FLEX equity options that have an opening transaction with a minimum size of 0 to 249 contracts and less than $1 million in underlying value; (b) FLEX index options that have an opening transaction with a minimum opening size of less than $10 million in underlying equivalent value; and (ii) analysis of the types of investors that initiated opening FLEX Options transactions (i.e., institutional, high net worth, or retail). The Report has been submitted to the Commission and the Exchange has requested confidential treatment under the Freedom of Information Act.10 2. Statutory Basis The Exchange’s proposal is consistent with Section 6(b) of the Act 11 in general, and furthers the objectives of Section 6(b)(5) of the Act 12 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 mechanisms of a free and open market and a national market system. Specifically, the Exchange believes that the proposed extension of the Pilot Program, which eliminates the minimum value size applicable to opening transactions in new series of FLEX Options, would provide greater opportunities for investors to manage risk through the use of FLEX Options. The Exchange notes that it has not 9 The Exchange has not experienced any adverse market effects with respect to the Pilot Program. 10 5 U.S.C. 552. The Exchange notes that it expects to file a proposal for permanent approval of the Pilot Program. With this proposal, the Exchange will submit a Report that is publicly available. In the event the Pilot Program is not permanently approved by August 31, 2015, the Exchange will submit an additional Report covering the extended Pilot period. 11 15 U.S.C. 78f(b). 12 15 U.S.C. 78f(b)(5). PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 experienced any adverse market effects with respect to the Pilot Program. 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, the proposal would give traders and investors the opportunity to more effectively tailor their trading, investing and hedging through FLEX options traded on the Exchange. Prior to the Pilot, options that represented opening transactions in new series that could not meet a minimum value size could not trade via FLEX on the Exchange, but rather had to trade OTC. Extension of the Pilot enables such options to continue to trade on the Exchange. 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, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 13 and Rule 19b–4(f)(6) thereunder.14 A proposed rule change filed under Rule 19b–4(f)(6) 15 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),16 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 Exchange may continue its Pilot Program without 13 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 of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 15 17 CFR 240.19b–4(f)(6). 16 17 CFR 240.19b–4(f)(6)(iii). 14 17 E:\FR\FM\17MRN1.SGM 17MRN1 Federal Register / Vol. 80, No. 51 / Tuesday, March 17, 2015 / Notices interruption. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest.17 The Commission notes that waiving the 30day operative delay would prevent the expiration of the Pilot Program prior to the extension of the pilot program becoming operative. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposal operative upon filing. 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–2015–22 on the subject line. mstockstill on DSK4VPTVN1PROD with 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–Phlx–2015–22. 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 17 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). VerDate Sep<11>2014 18:09 Mar 16, 2015 Jkt 235001 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–Phlx– 2015–22 and should be submitted on or before April 7, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Brent J. Fields, Secretary. [FR Doc. 2015–06011 Filed 3–16–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–74472; File No. SR– NASDAQ–2015–017] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Provide a Limited Price Guarantee to Certain Companies That Switch Their Listing to Nasdaq From Another Exchange March 11, 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 February 25, 2015, 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, 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. 18 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 13925 I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change Nasdaq proposes to provide a limited price guarantee to certain companies that switch their listing to Nasdaq from another securities exchange. The text of the proposed rule change is available on the Exchange’s Web site at https:// 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 Nasdaq recently adopted an allinclusive annual listing fee, which simplifies billing and provides transparency and certainty to companies as to the annual cost of listing.3 This new fee structure was designed, primarily, to address customer complaints about the number and in some cases the variable nature of certain of Nasdaq’s listing fees. It also provides benefits to Nasdaq, including eliminating the multiple invoices that were sent to a company each year and providing more certainty as to revenue.4 While this new fee structure will become operative for all listed companies in 2018, currently listed companies were allowed to elect to be subject to the all-inclusive annual listing fee effective January 1, 2015, and were provided certain incentives to do so.5 In addition, because they may have made their listing decision based on Nasdaq’s prior fee schedule, any company that applied to list on Nasdaq prior to January 1, 2015, and lists after that date, is also provided an 3 Securities Exchange Act Release No. 73647 (November 19, 2014), 79 FR 70232 (November 25, 2014) (approving SR–NASDAQ–2014–087). 4 Id. 5 See IM–5910–1(b)(1) and IM–5920–1(b)(1). E:\FR\FM\17MRN1.SGM 17MRN1

Agencies

[Federal Register Volume 80, Number 51 (Tuesday, March 17, 2015)]
[Notices]
[Pages 13923-13925]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-06011]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74481; File No. SR-Phlx-2015-22]


Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Regarding 
FLEX No Minimum Value Size Pilot

March 11, 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 February 27, 2015, 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 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.
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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 1079 (FLEX Index, Equity and Currency Options) to extend a pilot 
program that eliminates minimum value sizes for opening transactions in 
new series of FLEX index options and FLEX equity options (together 
known as ``FLEX Options'').\3\
---------------------------------------------------------------------------

    \3\ In addition to FLEX Options, FLEX currency options are also 
traded on the Exchange. These flexible index, equity, and currency 
options provide investors the ability to customize basic option 
features including size, expiration date, exercise style, and 
certain exercise prices; and may have expiration dates within five 
years. See Rule 1079. FLEX currency options traded on the Exchange 
are also known as FLEX FX Options. The pilot program discussed 
herein does not encompass FLEX currency options.
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    The text of the amended Exchange rule is set forth immediately 
below.
    Additions are in italics and deletions are [bracketed].

Rules of the Exchange

Options Rules

* * * * *

Rule 1079. FLEX Index, Equity and Currency Options

    A Requesting Member shall obtain quotes and execute trades in 
certain non-listed FLEX options at the specialist post of the non-FLEX 
option on the Exchange. The term ``FLEX option'' means a FLEX option 
contract that is traded subject to this Rule. Although FLEX options are 
generally subject to the Rules in this section, to the extent that the 
provisions of this Rule are inconsistent with other applicable Exchange 
Rules, this Rule takes precedence with respect to FLEX options.
    (a)-(f) No Change.
    * * * Commentary: _________
    .01 Notwithstanding subparagraphs (a)(8)(A)(i) and (a)(8)(A)(ii) 
above, for a pilot period ending the earlier of [February 28]August 31, 
2015, or the date on which the pilot is approved on a permanent basis, 
there shall be no minimum value size requirements for FLEX options.
* * * * *
    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 proposed rule change is to amend Phlx Rule 1079 
(FLEX Index, Equity and Currency Options) to extend a pilot program 
that eliminates minimum value sizes for opening transactions in new 
series of FLEX Options (the ``Pilot Program'' or ``Pilot'').\4\
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    \4\ The Exchange is also filing a separate proposal to 
permanently approve the Pilot Program.

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[[Page 13924]]

    Rule 1079 deals with the process of listing and trading FLEX 
equity, index, and currency options on the Exchange. Rule 1079(a)(8)(A) 
currently sets the minimum opening transaction value size in the case 
of a FLEX Option in a newly established (opening) series if there is no 
open interest in the particular series when a Request-for-Quote 
(``RFQ'') is submitted (except as provided in Commentary .01 to Rule 
1079): (i) $10 million underlying equivalent value, respecting FLEX 
market index options, and $5 million underlying equivalent value 
respecting FLEX industry index options; \5\ (ii) the lesser of 250 
contracts or the number of contracts overlying $1 million in the 
underlying securities, with respect to FLEX equity options (together 
the ``minimum value size'').\6\
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    \5\ Market index options and industry index options are broad-
based index options and narrow-based index options, respectively. 
See Rule 1000A(b)(11) and (12).
    \6\ Subsection (a)(8)(A) also provides a third alternative: 
(iii) 50 contracts in the case of FLEX currency options. However, 
this alternative is not part of the Pilot Program.
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    Presently, Commentary .01 to Rule 1079 states that by virtue of the 
Pilot Program ending February 28, 2015, or the date on which the pilot 
is approved on a permanent basis, there shall be no minimum value size 
requirements for FLEX Options as noted in subsections (a)(8)(A)(i) and 
(a)(8)(A)(ii) of Rule 1079.\7\
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    \7\ See Securities Exchange Act Release No. 73474 (October 30, 
2014), 79 FR 65742 (November 5, 2014) (SR-Phlx-2014-69) (notice of 
filing and immediate effectiveness of proposal to extend Pilot 
Program). The Pilot Program was instituted in 2010. See Securities 
Exchange Act Release No. 62900 (September 13, 2010), 75 FR 57098 
(September 17, 2010) (SR-Phlx-2010-123) (notice of filing and 
immediate effectiveness of proposal to institute Pilot Program).
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    The Exchange now proposes to extend the Pilot Program for a pilot 
period ending the earlier of August 31, 2015, or the date on which the 
Pilot is approved on a permanent basis.\8\
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    \8\ The Exchange notes that any positions established under this 
Pilot would not be impacted by the expiration of the Pilot. For 
example, a 10-contract FLEX equity option opening position that 
overlies less than $1 million in the underlying security and expires 
in January 2016 could be established during the Pilot. If the Pilot 
Program were not extended, the position would continue to exist and 
any further trading in the series would be subject to the minimum 
value size requirements for continued trading in that series.
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    The Exchange believes that there is sufficient investor interest 
and demand in the Pilot Program to warrant an extension. The Exchange 
believes that the Pilot Program has provided investors with additional 
means of managing their risk exposures and carrying out their 
investment objectives. Extension of the Pilot Program would continue to 
provide greater opportunities for traders and investors to manage risk 
through the use of FLEX Options, including investors that may otherwise 
trade in the unregulated over the counter (``OTC'') market where 
similar size restrictions do not apply.\9\
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    \9\ The Exchange has not experienced any adverse market effects 
with respect to the Pilot Program.
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    In support of the proposed extension of the Pilot Program, the 
Exchange has under separate cover submitted to the Commission a Pilot 
Program Report (``Report'') that provides an analysis of the Pilot 
Program covering the period during which the Pilot has been in effect. 
This Report includes: (i) Data and analysis on the open interest and 
trading volume in (a) FLEX equity options that have an opening 
transaction with a minimum size of 0 to 249 contracts and less than $1 
million in underlying value; (b) FLEX index options that have an 
opening transaction with a minimum opening size of less than $10 
million in underlying equivalent value; and (ii) analysis of the types 
of investors that initiated opening FLEX Options transactions (i.e., 
institutional, high net worth, or retail). The Report has been 
submitted to the Commission and the Exchange has requested confidential 
treatment under the Freedom of Information Act.\10\
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    \10\ 5 U.S.C. 552. The Exchange notes that it expects to file a 
proposal for permanent approval of the Pilot Program. With this 
proposal, the Exchange will submit a Report that is publicly 
available. In the event the Pilot Program is not permanently 
approved by August 31, 2015, the Exchange will submit an additional 
Report covering the extended Pilot period.
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2. Statutory Basis
    The Exchange's proposal is consistent with Section 6(b) of the Act 
\11\ in general, and furthers the objectives of Section 6(b)(5) of the 
Act \12\ 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 mechanisms of a free and open 
market and a national market system. Specifically, the Exchange 
believes that the proposed extension of the Pilot Program, which 
eliminates the minimum value size applicable to opening transactions in 
new series of FLEX Options, would provide greater opportunities for 
investors to manage risk through the use of FLEX Options. The Exchange 
notes that it has not experienced any adverse market effects with 
respect to the Pilot Program.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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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, the proposal 
would give traders and investors the opportunity to more effectively 
tailor their trading, investing and hedging through FLEX options traded 
on the Exchange. Prior to the Pilot, options that represented opening 
transactions in new series that could not meet a minimum value size 
could not trade via FLEX on the Exchange, but rather had to trade OTC. 
Extension of the Pilot enables such options to continue to trade on the 
Exchange.

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, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 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) \15\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\16\ 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 Exchange 
may continue its Pilot Program without

[[Page 13925]]

interruption. The Commission believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest.\17\ The Commission notes that waiving the 30-day operative 
delay would prevent the expiration of the Pilot Program prior to the 
extension of the pilot program becoming operative. Therefore, the 
Commission hereby waives the 30-day operative delay and designates the 
proposal operative upon filing.
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    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
    \17\ 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: (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-2015-22 on the subject line.

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-Phlx-2015-22. 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-Phlx-2015-22 and should be 
submitted on or before April 7, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-06011 Filed 3-16-15; 8:45 am]
BILLING CODE 8011-01-P
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