[Federal Register Volume 75, Number 66 (Wednesday, April 7, 2010)]
[Notices]
[Pages 17802-17803]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-7839]
[[Page 17802]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61811; File No. SR-BX-2010-025]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc., Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Permitting Concurrent Listing of $3.50 and $4 Strikes for Classes in
the $0.50 Strike and $1 Strike Programs
March 31, 2010.
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 March 30, 2010, NASDAQ OMX BX, Inc. (the ``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 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.
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\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).
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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 Supplementary Material .02 to
Section 6 of Chapter IV (Series of Options Open for Trading) of the
Rules of the Boston Options Exchange Group, LLC (``BOX'') to permit the
concurrent listing of $3.50 and $4 strikes for classes that participate
in both the $0.50 Strike and $1 Strike Price Programs. 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 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 parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
BOX recently implemented a rule change that permits strike price
intervals of $0.50 for options on stocks trading at or below $3.00
(``$0.50 Strike Price Program'').\5\ As part of the filing to establish
the $0.50 Strike Price Program, BOX contemplated that a class may be
selected to participate in both the $0.50 Strike Price Program and the
$1 Strike Price Program. Under the $1 Strike Price Program, new series
with $1 intervals are not permitted to be listed within $0.50 of an
existing $2.50 strike price in the same series, except that strike
prices of $2 and $3 are permitted to be listed within $0.50 of a $2.50
strike price for classes also selected to participate in the $0.50
Strike Price Program.\6\ Under BOX's existing rule, for classes
selected to participate in both the $0.50 Strike Price Program and the
$1 Strike Price Program, BOX may either: (a) List a $3.50 strike but
not list a $4 strike; or (b) list a $4 strike but not list a $3.50
strike. For example, under the BOX's current rules, if a $3.50 strike
for an option class in both the $0.50 and $1 Strike Price Programs was
listed, the next highest permissible strike price would be $5.00.
Alternatively, if a $4 strike was listed, the next lowest permissible
strike price would be $3.00. The intent of the $.50 Strike Price
Program was to expand the ability of investors to hedge risks
associated with stocks trading at or under $3 and to provide finer
intervals of $0.50, beginning at $1 up to $3.50. As a result, BOX
believes that the current filing is consistent with the purpose of the
$0.50 Strike Price Program and will permit BOX to fill in any existing
gaps resulting from having to choose whether to list a $3.50 or $4
strike for options classes in both the $0.50 and $1 Strike Price
Programs.
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\5\ See Securities Exchange Act Release No. 60814 (October 13,
2009), 74 FR 53535 (October 19, 2009) (SR-BX-2009-063).
\6\ See Supplementary Material .02(b) to Section 6 of Chapter IV
of the BOX Rules.
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Therefore, the Exchange is submitting the current filing to permit
the listing of concurrent $3.50 and $4 strikes for classes that are
selected to participate in both the $0.50 Strike Price Program and the
$1 Strike Price Program. To effect this change, the Exchange is
proposing to amend Supplementary Material .02(b) to Section 6 of
Chapter IV of the BOX Rules by adding $4 to the strike prices of $2 and
$3 currently permitted if a class participates in both the $0.50 Strike
Price Program and the $1 Strike Price Program.
The Exchange is also proposing to amend the current rule text to
delete references to ``$2.50 strike prices'' (and the example utilizing
$2.50 strike prices) and to replace those references with broader
language, e.g., ``existing strike prices''.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\7\ in general, and Section
6(b)(5) of the Act,\8\ 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 permitting the listing of
more granular strikes on options overlying lower priced securities will
provide investors with greater flexibility by allowing them to
establish positions that are better tailored to meet their investment
objectives.
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\7\ 15 U.S.C. 78f(b).
\8\ 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.
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
[[Page 17803]]
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) \9\ of the Act and
Rule 19b-4(f)(6) \10\ thereunder. The Exchange provided 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 the proposed rule
change.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
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The Exchange has requested that the Commission waive the 30-day
operative delay to permit the Exchange to compete with other exchanges
whose rules permit concurrent listing of $3.50 and $4 strikes for
classes similarly participating in both a $0.50 strike program and a $1
strike program. The Commission finds that waiver of the operative delay
is consistent with the protection of investors and the public interest
because such waiver will encourage fair competition among the
exchanges. Therefore, the Commission designates the proposal operative
upon filing.\11\
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\11\ 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 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-2010-025 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-2010-025. 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,\12\ 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-
2010-025 and should be submitted on or before April 28, 2010.
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\12\ 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.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-7839 Filed 4-6-10; 8:45 am]
BILLING CODE 8011-01-P