[Federal Register Volume 77, Number 240 (Thursday, December 13, 2012)]
[Notices]
[Pages 74263-74265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-30045]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68380; File No. SR-NYSEMKT-2012-76]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Amending Exchange Rule
903 To Provide That the Exchange May Not List Short Term Option Series
Expirations That Coincide With the Expiration of Quarterly Option
Series on the Same Class
December 7, 2012.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on November 30, 2012, NYSE MKT LLC (the ``Exchange'' or
``NYSE MKT'') 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 self-regulatory
organization. The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \4\ and Rule 19b-4(f)(6) thereunder,\5\
which renders the proposal effective upon receipt of this filing by 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\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
\4\ 15 U.S.C. 78s(b)(3)(A)(iii).
\5\ 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 Exchange Rule 903 to provide that
the Exchange may not list Short Term Option Series (``STOS'')
expirations that coincide with the expiration of Quarterly Option
Series on the same class. The text of the proposed rule change is
available on the Exchange's Web site at www.nyse.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 self-regulatory organization
included statements concerning the purpose of,
[[Page 74264]]
and basis for, the proposed rule change and discussed any comments it
received on the proposed rule change. The text of those 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Exchange Rule 903 to provide that
the Exchange may not list Short Term Option Series (``STOS'')
expirations that coincide with the expiration of Quarterly option
series on the same class.
Exchange Rule 903(h) currently provides that no STOS may expire in
the same week in which monthly or Quarterly option series on the same
class expire. When the STOS Program was originally established in 2006,
the Exchange could not list expirations in the same week as the monthly
expiration.\6\ Quarterly options series on the Exchange were
subsequently added in 2006.\7\ The Exchange, as part of the Quarterly
options series Rules, adopted a provision in Commentary .09 of 903 that
provided that the ``Exchange will not list a Short Term Options Series
on an options class whose expiration coincides with that of a Quarterly
Options Series on that same options class.'' \8\ In 2010, the Exchange
added to the Rule 903(h) that no STOS expirations could be added in the
same week as the Quarterly options series expiration.\9\
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\6\ See Securities Exchange Act Release No. 52014 (July 12,
2005), 70 FR 41244 (July 18, 2005) (SR-Amex-2005-035).
\7\ See Securities Exchange Act Release No. 54137 (July 12,
2006), 71 FR 41283 (July 20, 2006) (SR-Amex-2006-67).
\8\ See id.
\9\ See Securities Exchange Act Release No.62370 (June 23,
2010), 75 FR 37870 (June 30, 2010) (SR-NYSEAmex-2010-62).
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NYSE Arca Options Rule 6.4, Commentary .07, provides that no STOS
may expire in the same week in which monthly option series on the same
class expire or, in the case of Quarterly options series, on an
expiration that coincides with an expiration of Quarterly option series
on the same class.\10\ For example, if the Quarterly options series
would expire on a Monday, since Monday does not coincide (not the same
day) as Friday when STOS would normally expire, NYSE Arca Options and
other options exchanges could list a STOS expiration for that week. In
contrast, pursuant to current Exchange Rule 903(h), the Exchange could
not list STOS that expire on that Friday in the same week that
Quarterly options series expires on Monday.
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\10\ Other options exchanges have similar rules. See Chicago
Board Options Exchange, Incorporated Rule 5.5(d)(2); NASDAQ OMX PHLX
LLC Rule 1012, Commentary .11(b).
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The Exchange proposes to adopt the same language that is used for
NYSE Arca Options to ensure conformity between the options exchanges.
The proposed change would allow the Exchange to list STOS expirations
the same week as Quarterly option series, but not on a day that
coincides or is the same as the expiration of Quarterly option series
on the same class. The Exchange believes that the STOS Program has
provided investors with greater trading opportunities and flexibility
and the ability to more closely tailor their investment and risk
management strategies and decisions. The Exchange believes that this
proposal would eliminate inconsistencies in expirations between the
STOS Programs of two exchanges and help provide the investing public
and other market participants with additional opportunities to hedge
their investment, thus allowing these investors to better manage their
risk exposure.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the ``Act''),\11\ in general, and
furthers the objectives of Section 6(b)(5),\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 mechanism of a free and open market and a national market system.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
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The proposal is designed 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 by ensuring conformity between STOS Programs on competing
options exchanges.
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 that is 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
No written comments were solicited or received with respect to 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 \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)(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 this 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 waiver of the operative delay will allow the Exchange
to clarify its own rules as well as list STOs on the same dates as
other exchanges without undue delay. Therefore, the Commission
designates the proposal operative upon filing.\15\
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\15\ 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 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.
[[Page 74265]]
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 email to [email protected]. Please include
File Number SR-NYSEMKT-2012-76 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-NYSEMKT-2012-76. 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 (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 Section, 100 F Street
NE., Washington, DC 20549. 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-NYSEMKT-2012-76 and should be submitted on or before
January 3, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-30045 Filed 12-12-12; 8:45 am]
BILLING CODE 8011-01-P