[Federal Register Volume 75, Number 133 (Tuesday, July 13, 2010)]
[Notices]
[Pages 40007-40010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-16995]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62464; File No. SR-BX-2010-045]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Enable
the Listing and Trading on BOX of Options on the ETFS Gold Trust, the
ETFS Silver Trust, the ETFS Palladium Trust and the ETFS Platinum Trust
July 7, 2010.
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 June 30, 2010, NASDAQ OMX BX, Inc. (the ``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 self-regulatory organization. The Exchange filed the
proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and
Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal effective
upon filing with the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASDAQ OMX BX, Inc. (the ``Exchange'') proposes to amend the Rules
of the Boston Options Exchange Group, LLC (``BOX'') to enable the
listing and trading on BOX of options on the ETFS Gold Trust, the ETFS
Silver Trust, the ETFS Palladium Trust and the ETFS Platinum Trust. The
text of the proposed rule change is available from the principal office
of the Exchange, at the Commission's Public Reference Room and also on
the Exchange's Internet Web site at http://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/.
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 self-regulatory organization
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
[[Page 40008]]
of these statements may be examined at the places specified in Item IV
below. The self-regulatory organization 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
Recently, the U.S. Securities and Exchange Commission (``SEC'' or
``Commission'') authorized the listing and trading on BOX of options on
the SPDR Gold Trust \5\ and the iShares COMEX Gold Trust and the
iShares Silver Trust.\6\ Now, the Exchange proposes for BOX to list and
trade options on the ETFS Gold Trust, the ETFS Silver Trust, the ETFS
Palladium Trust and the ETFS Platinum Trust.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 58136 (July 10,
2008), 73 FR 40884 (July 16, 2008) (SR-BSE-2008-41) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating
to Options on Shares of the SPDR Gold Trust).
\6\ See Securities Exchange Act Release No. 59055 (December 4,
2008), 73 FR 75148 (December 10, 2008) (SR-BSE-2008-51) (Notice of
Filing and Order Granting Accelerated Approval of Proposed Rule
Changes Relating to the Listing and Trading Options on Shares of the
iShares COMEX Gold Trust and the iShares Silver Trust).
---------------------------------------------------------------------------
Under current Chapter IV, Section 3(i) of the BOX Rules, only
Exchange-Traded Fund Shares, or ETFs, that are traded on a national
securities exchange and are defined as an ``NMS'' stock under Rule 600
of Regulation NMS, and that (i) represent interests in registered
investment companies (or series thereof) organized as open-end
management investment companies, unit investment trusts or similar
entities that hold portfolios of securities and/or financial
instruments, including, but not limited to, stock index futures
contracts, options on futures, options on securities and indices,
equity caps, collars and floors, swap agreements, forward contracts,
repurchase agreements and reverse repurchase agreements (the
``Financial Instruments''), and money market instruments, including,
but not limited to, U.S. government securities and repurchase
agreements (the ``Money Market Instruments'') comprising or otherwise
based on or representing investments in broad based indexes or
portfolios of securities and/or Financial Instruments and Money Market
Instruments (or that hold securities in one or more other registered
investment companies that themselves hold such portfolios of securities
and/or Financial Instruments and Money Market Instruments) or (ii)
represent interests in a trust that holds a specified non-U.S. currency
or currencies deposited with the trust or similar entity when
aggregated in some specified minimum number may be surrendered to the
trust by the beneficial owner to receive the specified non-U.S.
currency or currencies and pays the beneficial owner interest and other
distributions on the deposited non-U.S. currency or currencies, if any,
declared and paid by the trust (``Currency Trust Shares'') or (iii)
represent commodity pool interests principally engaged, directly or
indirectly, in holding and/or managing portfolios or baskets of
securities, commodity futures contracts, options on commodity futures
contracts, swaps, forward contracts and/or options on physical
commodities and/or non-U.S. currency (``Commodity Pool ETFs'') or (iv)
are issued by the SPDR[reg] Gold Trust or the iShares COMEX Gold Trust
or the iShares Silver Trust are eligible as underlying securities for
options traded on BOX.\7\ This rule change proposes to expand the types
of ETFs that may be approved for options trading on BOX to include the
ETFS Gold Trust, the ETFS Silver Trust, the ETFS Palladium Trust and
the ETFS Platinum Trust.
---------------------------------------------------------------------------
\7\ See Chapter IV, Section 3(i) of the BOX Rules.
---------------------------------------------------------------------------
Apart from allowing the ETFS Gold Trust, the ETFS Silver Trust, the
ETFS Palladium Trust and the ETFS Platinum Trust to be underlying
securities for options traded on BOX, as described above, the listing
standards for ETFs will remain unchanged from those that apply under
current BOX rules. ETFs on which options may be listed and traded must
still be listed and traded on a national securities exchange and must
satisfy the other listing standards set forth in Chapter IV, Section
3(i) of the BOX Rules.
Specifically, in addition to satisfying the aforementioned listing
requirements, ETFs must either (1) meet the criteria and guidelines set
forth in paragraphs (a) and (b) of Chapter IV, Section 3 or (2) be
available for creation or redemption each business day from or through
the issuing trust, investment company, commodity pool or other entity
in cash or in kind at a price related to net asset value, and the
issuer must be obligated to issue Exchange-Traded Fund Shares in a
specified aggregate number even if some or all of the investment assets
and/or cash required to be deposited have not been received by the
issuer, subject to the condition that the person obligated to deposit
the investment assets has undertaken to deliver them as soon as
possible and such undertaking is secured by the delivery and
maintenance of collateral consisting of cash or cash equivalents
satisfactory to the issuer of the Exchange-Traded Fund Shares, all as
provided in the Exchange-Traded Fund Shares' prospectus.
The Exchange states that the current continued listing standards
for options on ETFs will apply to options on the ETFS Gold Trust, the
ETFS Silver Trust, the ETFS Palladium Trust and the ETFS Platinum
Trust. Specifically, under Chapter IV, Section 4(h) of the BOX Rules,
options on Exchange-Traded Fund Shares may be subject to the suspension
of opening transactions as follows: (1) Following the initial twelve-
month period beginning upon the commencement of trading of the
Exchange-Traded Fund Shares, there are fewer than 50 record and/or
beneficial holders of the Exchange-Traded Fund Shares for 30 or more
consecutive trading days; (2) the value of the underlying silver, gold,
palladium or platinum, respectively, is no longer calculated or
available; or (3) such other event occurs or condition exists that in
the opinion of the Exchange makes further dealing in such options on
BOX inadvisable. Additionally, the ETFS Gold Trust, the ETFS Silver
Trust, the ETFS Palladium Trust and the ETFS Platinum Trust shall not
be deemed to meet the requirements for continued approval, and BOX
shall not open for trading any additional series of option contracts of
the class covering the ETFS Gold Trust, the ETFS Silver Trust, the ETFS
Palladium Trust and the ETFS Platinum Trust, respectively, if the ETFS
Gold Trust, the ETFS Silver Trust, the ETFS Palladium Trust and the
ETFS Platinum Trust ceases to be an ``NMS stock'' as provided for in
Chapter IV, Section 4(b)(vi) of the BOX Rules or the ETFS Gold Trust,
the ETFS Silver Trust, the ETFS Palladium Trust and the ETFS Platinum
Trust is halted from trading on its primary market. The addition of the
ETFS Gold Trust, the ETFS Silver Trust, the ETFS Palladium Trust and
the ETFS Platinum Trust to Chapter IV, Section 3(i) of the BOX Rules
will not have any effect on the rules pertaining to position and
exercise limits \8\ or margin.\9\
---------------------------------------------------------------------------
\8\ See Chapter III, Sections 7 and 9 of the BOX Rules.
\9\ See Chapter XIII of the BOX Rules.
---------------------------------------------------------------------------
The Exchange represents that its surveillance procedures applicable
to trading in options on the ETFS Gold Trust, the ETFS Silver Trust,
the ETFS Palladium Trust and the ETFS Platinum Trust will be similar to
those applicable to all other options on other ETFs currently traded on
BOX. Also, the Exchange may obtain information from the New York
Mercantile Exchange, Inc.
[[Page 40009]]
(``NYMEX'') (a member of the Intermarket Surveillance Group) related to
any financial instrument that is based, in whole or in part, upon an
interest in or performance of gold, silver, palladium and/or platinum.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\10\ in general, and Section
6(b)(5) of the Act,\11\ in particular, in that it is designed to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism for a free and open market and a national market
system and, in general, to protect investors and the public interest.
In particular, the Exchange believes that amending the BOX Rules to
accommodate the listing and trading of options on the ETFS Gold Trust,
the ETFS Silver Trust, the ETFS Palladium Trust and the ETFS Platinum
Trust will benefit investors by providing them with valuable risk
management tools.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms does not become operative for 30 days after the
date of this filing, 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 \12\ and Rule 19b-4(f)(6)
thereunder.\13\
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to provide the Commission
with 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 fulfilled this requirement.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange requests that the Commission waive
the 30-day operative delay so that the Exchange can list and trade
options on the ETFS Gold Trust, the ETFS Silver Trust, the ETFS
Palladium Trust, and the ETFS Platinum Trust immediately. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest to
permit the Exchange to list and trade options on the ETFS Gold Trust,
the ETFS Silver Trust, the ETFS Palladium Trust, and the ETFS Platinum
Trust without delay.\14\ The Commission notes the proposal is
substantively identical to proposals that were recently approved by the
Commission, and does not raise any new regulatory issues.\15\ For these
reasons, the Commission designates the proposed rule change as
operative upon filing.
---------------------------------------------------------------------------
\14\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
\15\ See Securities Exchange Act Release No. 61483 (February 3,
2010), 75 FR 6773 (February 10, 2010) (Order Granting Approval of
Proposed Rule Changes and Notice of Filings and Order Granting
Accelerated Approval of a Proposed Rule Change Relating to Listing
and Trading of the ETFS Gold Trust and the ETFS Silver Trust) (SR-
CBOE-2010-007; SR-ISE-2009-106; SR-NYSEAmex-2009-86; and SR-
NYSEArca-2009-110). See also Securities Exchange Act Release Nos.
61892 (April 13, 2010), 75 FR 20649 (April 20, 2010) (SR-CBOE-2010-
015); 61983 (April 26, 2010), 75 FR 23314 (May 3, 2010) (SR-ISE-
2010-19); and 62250 (June 9, 2010), 75 FR 33882 (June 15, 2010) (SR-
NYSEArca-2010-25) (SR-NYSEAmex-2010-37) (Orders Granting Approval of
Proposed Rule Changes to Enable the Listing and Trading of Options
on the ETFS Palladium Trust and the ETFS Platinum Trust on CBOE,
ISE, NYSEArca and NYSEAmex, respectively).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate 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.
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 (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-BX-2010-045 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-BX-2010-045. This file
number should be included on the subject line if e-mail 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 (http://www.sec.gov/rules/sro.shtml). Copies of the submission,\16\ 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 a.m. and 3 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-BX-
[[Page 40010]]
2010-045 and should be submitted on or before August 3, 2010.
---------------------------------------------------------------------------
\16\ The text of the proposed rule change is available on the
Commission's Web site at http://www.sec.gov.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
Florence E. Harmon,
Deputy Secretary.
---------------------------------------------------------------------------
\17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
[FR Doc. 2010-16995 Filed 7-12-10; 8:45 am]
BILLING CODE 8010-01-P