[Federal Register Volume 74, Number 130 (Thursday, July 9, 2009)]
[Notices]
[Pages 32998-33000]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-16181]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-60213; File No. SR-BX-2009-032]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Extend
the Penny Pilot Program on the Boston Options Exchange Facility
July 1, 2009.
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 25, 2009, 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.
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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 Chapter V, Section 33 (Penny Pilot
Program) of the Rules of the Boston Options Exchange Group, LLC
(``BOX'') to extend, through October 31, 2009, the pilot program that
permits certain classes to be quoted in penny increments on BOX
(``Penny Pilot Program''). 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/.
[[Page 32999]]
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
The proposed rule change seeks to extend the effective date of the
Penny Pilot Program on BOX for approximately four additional months,
through October 31, 2009.\5\ The Penny Pilot Program permits certain
classes to be quoted in penny increments on BOX. The minimum price
variation for all classes included in the Penny Pilot Program, except
for the QQQQs, will continue to be $0.01 for all quotations in option
series that are quoted at less than $3 per contract and $0.05 for all
quotations in option series that are quoted at $3 per contract or
greater. The QQQQs will continue to be quoted in $0.01 increments for
all options series. The Exchange is not currently proposing any changes
to the classes included within the Penny Pilot Program.
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\5\ The Penny Pilot Program has been in effect on BOX since
January 26, 2007. See Securities Exchange Act Release No. 55155
(January 23, 2007), 72 FR 4741 (February 1, 2007) (SR-BSE-2006-49).
The Penny Pilot Program was later extended through September 27,
2007. See Securities Exchange Act Release No. 56149 (July 26, 2007),
72 FR 42450 (August 2, 2007) (SR-BSE-2007-38). A subsequent rule
filing by the Exchange on September 27, 2007 initiated a two-phased
expansion of the Penny Pilot Program. See Securities Exchange Act
Release No. 56566 (September 27, 2007), 72 FR 56400 (October 3,
2007) (SR-BSE-2007-40). See also Securities Exchange Act Release No.
57566 (March 26, 2008), 73 FR 18013 (April 2, 2008) (SR-BSE-2008-
20). The Penny Pilot Program was later extended and is currently set
to expire on July 3, 2009. See Securities Exchange Act Release No.
59629 (March 26, 2009), 74 FR 15021 (April 2, 2009) (SR-BX-2009-
017). The extension of the effective date is the only change to the
Penny Pilot Program being proposed at this time.
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BOX will deliver a report (``Penny Pilot Report'') to the
Commission which will be composed of data from approximately three
months of trading, from May 1, 2009 through July 31, 2009. This Penny
Pilot Report will be delivered to the Commission during the month of
August 2009. The Penny Pilot Report will analyze the impact of penny
pricing on market quality and options system capacity.\6\
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\6\ BOX has previously delivered several Penny Pilot Reports to
the Commission composed of data from preceding time periods during
which the Penny Pilot Program has been in effect on BOX.
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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.
Specifically, the proposed extension will allow the Penny Pilot Program
to remain in effect on BOX without interruption.
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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: (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) \9\ of the Act and subparagraph (f)(6) of Rule 19b-
4 thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 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 satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally
does not become operative for 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) \12\ 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 proposal may
become operative immediately upon filing. The Exchange states that such
waiver will permit the Exchange to immediately implement the proposed
rule change without interruption of the Penny Pilot Program and allow
BOX to remain competitive with other exchanges.
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because such waiver will allow the Penny Pilot Program to continue
without interruption through October 31, 2009.\13\ Accordingly, the
Commission designates the proposed rule change operative upon filing
with the Commission.
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\13\ For the 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.
78(c)(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-2009-032 on the subject line.
[[Page 33000]]
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-2009-032. 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, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such 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 No. SR-BX-2009-032 and should be
submitted on or before July 30, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-16181 Filed 7-8-09; 8:45 am]
BILLING CODE 8010-01-P