[Federal Register Volume 75, Number 5 (Friday, January 8, 2010)]
[Notices]
[Pages 1101-1102]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-71]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61261; File No. SR-BX-2009-086]


Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
the Minimum Trading Increments on the Boston Options Exchange Facility

December 30, 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 December 24, 2009, NASDAQ OMX BX, Inc. (the ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I, II, and III 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 from interested 
persons.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Chapter V, Section 6 (Minimum 
Trading Increments) of the Rules of the Boston Options Exchange Group, 
LLC (``BOX''). The text of the proposed rule change is available from 
the principal office of the Exchange, on the Exchange's Internet Web 
site at http://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/, at 
the Commission's Public Reference Room, and also on the Commission's 
Web site at http://www.sec.gov.

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
    On October 19, 2009 the Exchange submitted a proposed rule change 
to amend Chapter V, Section 33 (Penny Pilot Program) of the BOX Rules 
to (i) extend the Penny Pilot Program in options classes (``Penny Pilot 
Program'' or ``Pilot'') previously approved by the Securities and 
Exchange Commission (``Commission'') through December 31, 2010; (ii) 
expand the number of classes included in the Pilot; and (iii) replace 
on a semi-annual basis any Pilot Program classes that have been 
delisted.\5\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 60886 (October 27, 
2009), 74 FR 56897 (November 3, 2009) (SR-BX-2009-067).
---------------------------------------------------------------------------

    The Exchange now proposes to designate two Penny Pilot Program 
classes as eligible to quote and trade all options contracts in one 
cent increments, regardless of premium value. Specifically, the 
Exchange proposes to so designate SPY (SPDR S&P 500 ETF) and IWM 
(iShares Russell 2000 Index Fund). In selecting these classes the 
Exchange considered, among other things, that these symbols are (a)

[[Page 1102]]

among the most actively traded classes nationally, with a wide array of 
investor interest, (b) have more series trading at a premium between $3 
and $10, and (c) are trading at prices that are neither extremely low 
nor high, but are generally trading between $15-$50. The Exchange 
believes that classes that meet these criteria benefit the most from 
the ability to quote and trade all options series in penny increments.
    This proposal is based on a recent Commission-approved proposal of 
the NYSEArca exchange.\6\ The Exchange proposes to designate SPY and 
IWM as eligible to quote and trade all options contracts in one cent 
increments as of February 1, 2010. This date corresponds with the 
second phase-in date for additional classes in the Penny Pilot Program.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 61061 (November 24, 
2009), 74 FR 62857 (December 1, 2009) (SR-NYSEArca-2009-44).
---------------------------------------------------------------------------

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 allowing market participants 
to quote in smaller increments reduces spreads, thereby lowering costs 
to investors.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    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

    This proposed rule change is filed pursuant to paragraph (A) of 
section 19(b)(3) of the Exchange Act \9\ and Rule 19b-4(f)(6) 
thereunder \10\ and does not: (i) Significantly affect the protection 
of investors or the public interest; (ii) impose any significant burden 
on competition and; (iii) become operative for 30 days from the date on 
which it was filed, or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, as required by Rule 
19b-4(f)(6)(iii), the Exchange has submitted to the Commission 
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 Commission recently granted approval for a similar filing 
proposed by the NYSEArca.\11\ The Exchange believes that this proposed 
rule change, which is essential for competitive purposes and to promote 
a free and open market for the benefit of investors, does not raise any 
new, unique or substantive issues from those raised in the approved 
NYSEArca proposal.
---------------------------------------------------------------------------

    \11\ See supra note 6.
---------------------------------------------------------------------------

    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-2009-086 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-2009-086. 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-2009-086 and should be 
submitted on or before January 29, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-71 Filed 1-7-10; 8:45 am]
BILLING CODE 8011-01-P