[Federal Register Volume 75, Number 239 (Tuesday, December 14, 2010)]
[Notices]
[Pages 77925-77926]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-31230]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63461; File No. SR-BX-2010-085]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Establish
Strike Price Intervals and Trading Hours for Options on Index-Linked
Securities
December 8, 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 December 2, 2010, NASDAQ OMX BX, Inc. (the ``Exchange'') 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.
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\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 proposes to amend the Supplementary Material to
Chapter IV, Section 6 (Series of Options Contracts Open for Trading)
and Chapter V, Section 3 (Days and Hours of Business) of the Rules of
the Boston Options Exchange Group, LLC (``BOX'') to establish strike
price intervals and trading hours for options on Index-Linked
Securities. The text of the proposed rule change is available from the
principal office of the Exchange, on the Commission's Web site at
http://www.sec.gov, at the Commission's Public Reference Room, and on
the Exchange's 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 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
Prior to the commencement of trading options on Index-Linked
Securities on BOX, the Exchange is proposing to establish strike price
intervals and trading hours for these products.
The Securities and Exchange Commission (the ``Commission'') has
approved BOX's and other option exchanges' proposals to enable the
listing and trading of options on Index-Linked Securities.\3\ BOX has
not commenced trading options on Index-Linked Securities to date.
Trading in options on Index-Linked Securities has commenced on other
exchanges following the Commission's approval of The Options Clearing
Corporation's (``OCC'') May 2010 supplement to the Options Disclosure
Document (``ODD'') that provides disclosure regarding options on Index-
Linked Securities.\4\
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\3\ See Securities Exchange Act Release Nos. 58941 (Nov. 13,
2008), 73 FR 70392 (Nov. 20, 2008) (SR-BSE-2008-50); 58985 (Nov. 10,
2008), 73 FR 72538 (Nov. 28, 2008) (SR-ISE-2008-86); 58204 (July 22,
2008), 73 FR 43807 (July 28, 2008) (SR-CBOE-2008-64); and 58203
(July 22, 2008), 73 FR 43812 (July 28, 2008) (SR-NYSEArca-2008-57).
\4\ OCC previously received Commission approval to clear options
based on Index-Linked Securities. See Securities Exchange Act
Release No. 60872 (Oct. 23, 2009), 74 FR 55878 (Oct. 29, 2009) (SR-
OCC-2009-14).
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$1 Strikes for Options on Index-Linked Securities
Prior to the commencement of trading on BOX of options on Index-
Linked Securities that satisfy the criteria set forth in Chapter IV,
Section 3(k) of the BOX Rules, the Exchange is proposing to establish
that strike price intervals of $1 will be permitted where the strike
price is less than $200. Where the strike price is greater than $200,
$5 strikes will be permitted. These proposed changes are reflected by
the proposed addition of Supplementary Material .01(c) to Chapter IV,
Section 6 of the BOX Rules.
Without discounting the differences between exchange-traded funds
(``ETFs'') and Index-Linked Securities, BOX seeks to extend the trading
conventions applicable to options on ETFs to options on Index-Linked
Securities. BOX contends that the proposed strike price intervals for
options on Index-Linked Securities are consistent with the strike price
intervals currently permitted for options on ETFs. BOX believes that $1
strike price intervals for options on Index-Linked Securities will
provide investors with greater flexibility by allowing them to
establish positions that are better tailored to meet their investment
objectives. BOX has analyzed its capacity and represents that it and
the Options Price Reporting Authority have the necessary systems
capacity to handle the additional traffic associated with the listing
and trading of an expanded number of series as proposed by this filing.
Trading Hours for Options on Index-Linked Securities
Similar to the trading hours for ETF options, the Exchange proposes
to amend Chapter V, Section 3(b) of the BOX Rules to provide that
options on Index-Linked Securities may be traded on BOX until 4:15 p.m.
each business day.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of the Securities and Exchange Act of 1934 (``Exchange
Act''), in general, and Section 6(b)(5) of the Exchange Act,\5\ in
particular, that an exchange has rules that are designed to promote
just and equitable principles of trade, and 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 the proposal will lessen
investor confusion by having strike price intervals and trading hours
established prior to the commencement of trading on BOX of options on
Index-Linked Securities.
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\5\ 15 U.S.C. 78f(b)(5).
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[[Page 77926]]
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 does not significantly
affect the protection of investors or the public interest, does not
impose any significant burden on competition, and, by its terms, does
not become operative for 30 days from the date on which it was filed,
or such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-
4(f)(6) thereunder.\7\
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 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 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 the five-day pre-filing requirement.
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The Exchange has requested that the Commission waive the 30-day
operative delay. The Commission believes that waiver of the operative
delay is consistent with the protection of investors and the public
interest because the proposal is substantially similar to that of
another exchange that has been approved by the Commission.\8\
Therefore, the Commission designates the proposal operative upon
filing.\9\
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\8\ See Securities and Exchange Act Release No. 61696 (March 12,
2010), 75 FR 13174 (March 18, 2010) (SR-CBOE-2010-005).
\9\ For purposes only of waiving the 30-day operative delay, the
Commission has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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-2010-085 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-BX-2010-085. 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, 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-2010-085 and should be
submitted on or before January 4, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31230 Filed 12-13-10; 8:45 am]
BILLING CODE 8011-01-P