[Federal Register Volume 70, Number 162 (Tuesday, August 23, 2005)]
[Notices]
[Pages 49344-49345]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4585]
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SECURTITES AND EXCHANGE COMMISSION
[Release No. 34-52271; File No. SR-NASD-2005-097]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Extend a Pilot Program That Increases Position and
Exercise Limits for Equity Options
August 16, 2005.
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 August 10, 2005, the National Association of Securities Dealers,
Inc. (``NASD'') 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 NASD. NASD has filed the
proposal as a ``non-controversial'' rule change pursuant to Section
19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which
renders it 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
NASD proposes to amend NASD Rule 2860 to extend a pilot program
increasing certain options position and exercise limits for a pilot
period. The text of the proposed rule change is available on NASD's Web
site (http://www.nasd.com), at NASD's principal office, 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, NASD included statements
concerning
[[Page 49345]]
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.
NASD 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
NASD is proposing to amend NASD Rule 2860 to extend a pilot program
until March 3, 2006 (unless extended) increasing position and exercise
limits for both standardized and conventional options (``Pilot
Program'').\5\ Unless extended, the Pilot Program will expire on
September 2, 2005.\6\ NASD believes that the Pilot Program should be
extended so that it may continue without interruption for the same
reasons that are discussed in the Pilot Program Notice.
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\5\ See Securities Exchange Act Release No. 51520 (April 11,
2005), 70 FR 19977 (April 15, 2005) (notice of filing and immediate
effectiveness of File No. SR-NASD-2005-040) (``Pilot Program
Notice''). Under the Pilot Program as set forth in NASD Rule
2860(b)(3), standardized and conventional options subject to a
position limit of 13,500 contracts were increased during the pilot
period to 25,000 contracts; those subject to a position limit of
22,500 contracts were increased to 50,000 contracts; those subject
to a position limit of 31,500 contracts were increased to 75,000
contracts; those subject to a position limit of 60,000 contracts
were increased to 200,000 contracts; and those subject to a position
limit of 75,000 contracts were increased to 250,000 contracts.
Options exercise limits, which are set forth in NASD Rule
2860(b)(4), and which incorporate by reference the position limits
in NASD Rule 2860(b)(3), were also increased during the Pilot
Period.
\6\ See NASD Rule 2860(b)(3)(A)(i).
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2. Statutory Basis
NASD believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\7\ which requires, among
other things, that NASD's rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. The proposed rule change is being made so that the
Pilot Program, which achieves these goals as discussed in the Pilot
Program Notice, may continue without interruption.
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\7\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition
NASD does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the forgoing rule change does not: (1) Significantly affect
the protection of investors or the public interest; (2) impose any
significant burden on competition; and (3) become operative for 30 days
after the date of this filing, or such shorter time as the Commission
may designate, it has become effective pursuant to Section 19(b)(3)(A)
of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under 19b-4(f)(6) normally may not
become operative prior to 30 days after the date of filing.\10\
However, Rule 19b-4(f)(6)(iii)\11\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. NASD has requested that the
Commission waive the five-day pre-filing notice requirement and the 30-
day pre-operative delay. The Commission is exercising its authority to
waive the five-day pre-filing requirement and believes that waiver of
the 30-day pre-operative delay is consistent with the protection of
investors and in the public interest. Waiving the five-day pre-filing
requirement and 30-day pre-operative delay will allow the Pilot Program
to continue uninterrupted.\12\
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\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ Id.
\12\ For the purposes only of waiving the operative date of this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. 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 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 No. SR-NASD-2005-097 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-9303.
All submissions should refer to File No. SR-NASD-2005-097. 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 inspection
and copying in the Commission's Public Reference Room, 100 F Street,
NE., Washington, DC 20549. Copies of such filing will also be available
for inspection and copying at the principal office of NASD. 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 No. SR-NASD-2005-097 and should be
submitted on or before September 13, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4585 Filed 8-22-05; 8:45 am]
BILLING CODE 8010-01-P