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, 37333-37335 [2015-15982]
Download as PDF
Federal Register / Vol. 80, No. 125 / Tuesday, June 30, 2015 / 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–
NYSEArca–2015–51 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.
asabaliauskas on DSK5VPTVN1PROD with NOTICES
All submissions should refer to File
Number SR–NYSEArca–2015–51. 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 Section, 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 will also be available for
inspection and copying at the NYSE’s
principal office and on its Internet Web
site at www.nyse.com. 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–
NYSEArca–2015–51 and should be
submitted on or before July 21,2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–15977 Filed 6–29–15; 8:45 am]
BILLING CODE 8011–01–P
16 17
CFR 200.30–3(a)(12).
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17:34 Jun 29, 2015
Jkt 235001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75286; File No. SR–Phlx–
2015–54]
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
June 24, 2015.
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 June 18,
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 1034 (Minimum Increments) to
extend through June 30, 2016 or the date
of permanent approval, if earlier, 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 text of the amended Exchange
rule is set forth immediately below.
Proposed new language is in italics
and proposed deleted language is
[bracketed].
NASDAQ OMX PHLX Rules
Options Rules
*
*
*
*
*
Rule 1034. Minimum Increments
(a) Except as provided in subparagraphs (i)(B) and (iii) below, all
options on stocks, index options, and
Exchange Traded Fund Shares quoting
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 2014. 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 73688 (November 25,
2014), 79 FR 71484 (December 2, 2014)(SR–Phlx–
2014–77)(notice of filing and immediate
effectiveness extending the Penny Pilot through
June 30, 2015).
2 17
PO 00000
Frm 00115
Fmt 4703
Sfmt 4703
37333
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, [2015]2016 or the date
of permanent approval, if earlier (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 July 1, 2015 and January 1,
[2015]2016.
(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.
E:\FR\FM\30JNN1.SGM
30JNN1
37334
Federal Register / Vol. 80, No. 125 / Tuesday, June 30, 2015 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
demonstrated to outweigh the potential
increase in quote traffic.
1. Purpose
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 and, in
general, to protect investors and the
public interest.
In particular, the proposed rule
change, which extends the Penny Pilot
for an additional twelve months through
June 30, 2016 or the date of permanent
approval, if earlier, and changes the date
for replacing Penny Pilot issues that
were delisted to the second trading day
following July 1, 2015 and January 1,
2016, 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.
2. Statutory Basis
asabaliauskas on DSK5VPTVN1PROD with NOTICES
The purpose of this filing is to amend
Phlx Rule 1034 to extend the Penny
Pilot through June 30, 2016 or the date
of permanent approval, if earlier, and to
change the date when delisted classes
may be replaced in the Penny Pilot. The
Exchange believes that extending the
Penny Pilot will allow for further
analysis of the Penny Pilot and a
determination of how the program
should be structured in the future.
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, 2015.
The Exchange proposes to extend the
time period of the Penny Pilot through
June 30, 2016 or the date of permanent
approval, if earlier, and to provide a
revised date 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, 2015 and January 1,
2016. 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
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 Options Clearing Corporation’s trading volume
data. For example, for the July replacement, trading
volume from December 1, 2014 through May 30,
2015 would be analyzed. 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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17:34 Jun 29, 2015
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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, 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.
5 15
6 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00116
Fmt 4703
Sfmt 4703
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)(iii) of the Act 7 and Rule
19b–4(f)(6) thereunder.8 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 and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 9 normally does not
become operative prior to 30 days after
the date of the filing.10 However,
pursuant to Rule 19b–4(f)(6)(iii),11 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because doing so will allow the Pilot
Program to continue without
interruption in a manner that is
consistent with the Commission’s prior
approval of the extension and expansion
of the Pilot Program and will allow the
Exchange and the Commission
additional time to analyze the impact of
the Pilot Program. Accordingly, the
Commission designates the proposed
7 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
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 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.
11 17 CFR 240.19b–4(f)(6)(iii).
8 17
E:\FR\FM\30JNN1.SGM
30JNN1
Federal Register / Vol. 80, No. 125 / Tuesday, June 30, 2015 / Notices
rule change as operative upon filing
with the Commission.12
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) 13 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:
asabaliauskas on DSK5VPTVN1PROD 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–2015–54 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-2015–54. 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
12 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
13 15 U.S.C. 78s(b)(2)(B).
VerDate Sep<11>2014
17:34 Jun 29, 2015
Jkt 235001
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 will also 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–
2015–54 and should be submitted on or
before July 21, 2015.
37335
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.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Robert W. Errett,
Deputy Secretary.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2015–15982 Filed 6–29–15; 8:45 am]
1. Purpose
BILLING CODE 8011–01–P
The Penny Pilot Program (the ‘‘Pilot
Program’’) is scheduled to expire on
June 30, 2015. C2 proposes to extend the
Pilot Program until June 30, 2016. C2
believes that extending the Pilot
Program will allow for further analysis
of the Pilot Program and a
determination of how the Pilot Program
should be structured in the future.
During this extension of the Pilot
Program, C2 proposes that it may
replace any option class that is currently
included in the Pilot Program and that
has been delisted with the next most
actively traded, multiply listed option
class that is not yet participating in the
Pilot Program (‘‘replacement class’’).
Any replacement class would be
determined based on national average
daily volume in the preceding six
months,3 and would be added on the
second trading day following July 1,
2015 and January 1, 2016. C2 will
announce to its Trading Permit Holders
by circular any replacement classes in
the Pilot Program. The Exchange notes
that it intends to utilize the same
parameters to prospective replacement
classes as was originally approved.
C2 is specifically authorized to act
jointly with the other options exchanges
participating in the Pilot Program in
identifying any replacement class.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75278; File No. SR–C2–
2015–015]
Self-Regulatory Organizations; C2
Options Exchange, Incorporated;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change Relating to Amending Rule 6.4
To Extend the Penny Pilot through
June 30, 2016
June 24, 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 June 17,
2015, C2 Options Exchange,
Incorporated (the ‘‘Exchange’’ or ‘‘C2’’)
filed with the Securities and Exchange
Commission (the ‘‘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 text of the proposed rule change
is available on the Exchange’s Web site
(https://www.cboe.com/AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00117
Fmt 4703
Sfmt 4703
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
3 The month immediately preceding a
replacement class’s addition to the Pilot Program
(i.e., June) would not be used for purposes of the
six-month analysis. Thus, a replacement class to be
added on the second trading day following July 1,
2015 would be identified based on The Option
Clearing Corporation’s trading volume data from
December 1, 2014 through May 31, 2015.
E:\FR\FM\30JNN1.SGM
30JNN1
Agencies
[Federal Register Volume 80, Number 125 (Tuesday, June 30, 2015)]
[Notices]
[Pages 37333-37335]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-15982]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-75286; File No. SR-Phlx-2015-54]
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
June 24, 2015.
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 June 18, 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.
---------------------------------------------------------------------------
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 June 30, 2016 or the
date of permanent approval, if earlier, 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 2014. 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 73688 (November 25, 2014), 79 FR 71484 (December 2, 2014)(SR-
Phlx-2014-77)(notice of filing and immediate effectiveness extending
the Penny Pilot through June 30, 2015).
---------------------------------------------------------------------------
The text of the amended Exchange rule is set forth immediately
below.
Proposed new language is in italics and proposed deleted language
is [bracketed].
NASDAQ OMX PHLX Rules
Options Rules
* * * * *
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, [2015]2016 or
the date of permanent approval, if earlier (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 July 1, 2015 and January 1,
[2015]2016.
(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.
[[Page 37334]]
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 June 30, 2016 or the date of permanent approval, if
earlier, and to change the date when delisted classes may be replaced
in the Penny Pilot. The Exchange believes that extending the Penny
Pilot will allow for further analysis of the Penny Pilot and a
determination of how the program should be structured in the future.
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, 2015.
The Exchange proposes to extend the time period of the Penny Pilot
through June 30, 2016 or the date of permanent approval, if earlier,
and to provide a revised date 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, 2015 and January 1, 2016. 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 Options Clearing Corporation's trading
volume data. For example, for the July replacement, trading volume
from December 1, 2014 through May 30, 2015 would be analyzed. 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.
---------------------------------------------------------------------------
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 and, in general, to protect
investors and the public interest.
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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 twelve months through June 30, 2016 or the date
of permanent approval, if earlier, and changes the date for replacing
Penny Pilot issues that were delisted to the second trading day
following July 1, 2015 and January 1, 2016, 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
The Exchange has filed the proposed rule change pursuant to section
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\
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 and Rule 19b-
4(f)(6)(iii) thereunder.
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\7\ 15 U.S.C. 78s(b)(3)(A)(iii).
\8\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally
does not become operative prior to 30 days after the date of the
filing.\10\ However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the
Commission may designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because doing so will allow the Pilot Program to continue without
interruption in a manner that is consistent with the Commission's prior
approval of the extension and expansion of the Pilot Program and will
allow the Exchange and the Commission additional time to analyze the
impact of the Pilot Program. Accordingly, the Commission designates the
proposed
[[Page 37335]]
rule change as operative upon filing with the Commission.\12\
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\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 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.
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ For purposes only of waiving the operative delay for this
proposal, 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 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) \13\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\13\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-Phlx-2015-54 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-2015-54. 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 will also 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-2015-54 and should be
submitted on or before July 21, 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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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-15982 Filed 6-29-15; 8:45 am]
BILLING CODE 8011-01-P