[Federal Register Volume 77, Number 140 (Friday, July 20, 2012)]
[Notices]
[Pages 42780-42784]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-17713]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67446; File No. SR-Phlx-2012-78]


Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing of Proposed Rule Change Regarding Strike Price Intervals in the 
Short Term Option Program

July 16, 2012.
    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 July 2, 2012, NASDAQ OMX PHLX LLC (the ``Exchange'' or ``Phlx'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Item II below, which Item has been 
prepared by the self-regulatory organization. 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.

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[[Page 42781]]

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

    The Exchange is filing with the Commission a proposal to indicate 
that the interval between strike prices on STOs \3\ shall be $0.50 or 
greater where the strike price is less than $75 and $1 or greater where 
the strike price is between $75 and $150; indicate that during the 
expiration week of a non-STO \4\ that is selected for the STO Program, 
the strike price intervals for the non-STO and the STO shall be the 
same; and indicate that during the week before the expiration week of 
the non-STO, the non-STO shall be opened for trading in STO intervals 
in the same manner as the STO.
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    \3\ Short term options are generally known as ``STOs,'' 
``weeklies,'' or ``weekly options.'' STOs are series in an options 
class that are approved for listing and trading on the Exchange in 
which the series are opened for trading on any Thursday or Friday 
that is a business day and that expire on the Friday of the next 
business week. If a Thursday or Friday is not a business day, the 
series may be opened (or shall expire) on the first business day 
immediately prior to that Thursday or Friday, respectively. See 
Rules 1000(b)(44), 1000A(b)(16), Commentary .11 to Rule 1012 and 
Rule 1101A(b)(vi).
    \4\ A non-STO is an option that is in the same option class as 
the STO but has a longer expiration cycle (e.g. a SLV monthly option 
as compared to a SLV weekly option).
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    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaqomxphlx.cchwallstreet.com/NASDAQOMXPHLX/Filings/, 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 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 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 purpose of this proposed rule change is to indicate in Rule 
1012 and Rule 1101A that the interval between strike prices on STOs 
shall be $0.50 or greater where the strike price is less than $75 and 
$1 or greater where the strike price is between $75 and $150 (``STO 
intervals''). The purpose is also to indicate that during the 
expiration week of a non-STO that is selected for the STO Program, the 
strike price intervals for the non-STO and the STO shall be the same; 
and that during the week before the expiration week of the non-STO, the 
non-STO shall be opened for trading in STO intervals in the same manner 
as the STO.
    The STO Program is codified in Commentary .11 to Rule 1012 and Rule 
1101A(b)(vi).\5\ These provisions state that after an option class has 
been approved for listing and trading on the Exchange, the Exchange may 
open for trading on any Thursday or Friday that is a business day 
series of options on that class that expire on the Friday of the 
following business week that is a business day. The Exchange may select 
up to thirty currently listed option classes on which Short Term Option 
Series may be opened. In addition to the thirty-option class 
limitation, there is also a limitation that no more than twenty series 
for each expiration date in those classes may be opened for trading.\6\ 
Furthermore, the strike price of each STO has to be fixed with 
approximately the same number of strike prices being opened above and 
below the value of the underlying security at about the time that the 
short term options are initially opened for trading on the Exchange, 
and with strike prices being within thirty percent (30%) above or below 
the closing price of the underlying security from the preceding day. In 
respect of the STO Program, the Exchange does not propose any changes 
to these additional program limitations; the Exchange proposes only to 
specify that STOs can have interval prices of $0.50 and $1.\7\
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    \5\ See Securities Exchange Act Release No. 62296 (June 15, 
2010), 75 FR 35115 (June 21, 2010) (SR-Phlx-2010-84) (notice of 
filing and immediate effectiveness permanently establishing STO 
Program on the Exchange). The STO Program was last expanded in 2011. 
See Securities Exchange Act Release No. 65776 (November 17, 2011), 
76 FR 72482 (November 23, 2011) (SR-Phlx-2011-131) (order approving 
expansion of STO Program). Like Phlx, other options exchanges have 
STO programs. See Securities Exchange Act Release Nos. 59824 (April 
27, 2009), 74 FR 20518 (May 4, 2009) (SR-CBOE-2009-018) (approval 
order); 62444 (July 2, 2010), 75 FR 39595 (July 9, 2010) (SR-ISE-
2010-72) (notice of filing and immediate effectiveness); 62297 (June 
15, 2010), 75 FR 35111 (June 21, 2010) (SR-NASDAQ-2010-073) (notice 
of filing and immediate effectiveness); 62369 (June 23, 2010), 75 FR 
37868 (June 30, 2010) (SR-NYSEArca-2010-059) (notice of filing and 
immediate effectiveness); 62370 (June 23, 2010), 75 FR 37870 (June 
30, 2010) (SR-Amex-2010-062) (notice of filing and immediate 
effectiveness); 62505 (July 15, 2010), 75 FR 42792 (July 22, 2010) 
(SR-BX-2010-047) (notice of filing and immediate effectiveness); and 
62597 (July 29, 2010), 75 FR 47335 (August 5, 2010) (SR-BATS-2010-
020) (notice of filing and immediate effectiveness).
    \6\ However, if the Exchange opens less than twenty (20) short 
term options for a Short Term Option Expiration Date, additional 
series may be opened for trading on the Exchange when the Exchange 
deems it necessary to maintain an orderly market, to meet customer 
demand or when the market price of the underlying security moves 
substantially from the exercise price or prices of the series 
already opened. Any additional strike prices listed by the Exchange 
shall be within thirty percent (30%) above or below the current 
price of the underlying security. The Exchange may also open 
additional strike prices of Short Term Option Series that are more 
than 30% above or below the current price of the underlying security 
provided that demonstrated customer interest exists for such series, 
as expressed by institutional, corporate or individual customers or 
their brokers (market-makers trading for their own account shall not 
be considered when determining customer interest under this 
provision). See Commentary .11(d) to Rule 1012 and Rule 
1101A(b)(vi)(D).
    \7\ Currently, STOs have the same interval prices as the 
relevant non-STOs. For example, RUT STOs and RUT non-STOs (that is, 
monthly expiration RUT options), which are trading at more than $750 
per contract, have strike price intervals that are $2.50 or higher. 
This proposal would not impact any high valuation STO products such 
as RUT (barring a truly catastrophic market-wide price de-
valuation).
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    The principal reason for the proposed interval pricing structure is 
market demand for weekly options. There is continuing strong customer 
demand for having the ability to execute hedging and trading strategies 
effectively via STOs,\8\ particularly in the current fast and volatile 
multi-faceted trading and investing environment that extends across 
numerous markets and platforms.\9\ The Exchange has observed increased 
demand for STO classes and/or series, particularly when market moving 
events such as significant market volatility, corporate events, or 
large market, sector, or individual issue price swings have occurred. 
The STO Program is one of the most popular and quickly-expanding 
options expiration programs.
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    \8\ In the last STO Program filing, the Exchange noted that it 
was seeking an expansion in the number of STO classes to greatly 
minimize the fragmented nature of the STO Program and, like the 
current proposal, to allow execution of more effective trading and 
hedging strategies on the Exchange. See Securities Exchange Act 
Release No. 65776 (November 17, 2011), 76 FR 72482 (November 23, 
2011) (SR-Phlx-2011-131) (order approving expansion of STO Program).
    \9\ These include, without limitation, options, equities, 
futures, derivatives, indexes, exchange traded funds (``ETFs''), 
exchange traded notes (``ETNs''), currencies, and over-the-counter 
instruments.
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    In the almost two years since the inception of the STO Program, it 
has steadily expanded to the point that as of March 20, 2012, STOs 
represent 5.5% of the total options volume on the Exchange and 9.2% of 
the total options

[[Page 42782]]

volume in the United States.\10\ The STO volumes become even more 
significant when the volumes of an STO class are compared to the 
volumes of the related non-STO options class. As an example, in the 
first two months of 2012, on the Exchange there were 3,115,538 
contracts of SPY STOs traded and 9,139,908 contracts of SPY monthly 
options traded; and 650,997 contracts of AAPL STOs traded and 1,584,184 
contracts of AAPL monthly options traded. From the 4th quarter of 2010 
to the 4th quarter of 2011, STO volume expanded more than 90%,\11\ and 
the Exchange believes that STO volumes will continue to expand in 2012. 
The Exchange believes that, as such, while STOs are currently one of 
most popular (high volume) expiration lengths of options traded on Phlx 
and other options exchanges, the weekly options will only become more 
popular as market participants continue to gain knowledge about more 
effective uses of these products for trading and hedging purposes.
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    \10\ The Exchange notes that, in fact, the volume increase in 
STOs since their inception less than two years ago greatly exceeds 
the volume increase of any other length option (e.g. monthly, 
quarterly, or long term) over the same equivalent time period.
    \11\ During the same time period, monthly options volume 
decreased by 8%.
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    Moreover, the Commission has approved the use of $0.50 and $1 
strike price intervals on the Exchange as well as in the options 
industry, particularly at lower price levels (e.g. below $150). 
Numerous options products are listed (and traded) on the Exchange at 
$0.50 and $1 strike price intervals. For example, there are two 
individual ETF options listed on the Exchange at $0.50 strike price 
intervals.\12\ There are approximately 53 options listed on the 
Exchange at $0.50 strike price intervals pursuant to the $0.50 Strike 
Program.\13\ There are more than 1,000 options listed on the Exchange 
with $1 strike price intervals: Approximately 272 ETF/ETN options, 7 
currency options (FCOs or WCOs), and 812 options pursuant to the $1 
Strike Program.\14\ Moreover, the Commission has recently approved 
certain products to trade at $0.50 and $1 strike price intervals on the 
Chicago Board Options Exchange Incorporated (``CBOE'') within exactly 
the same strike price points that are proposed by the Exchange in this 
filing, namely $75 and $150.\15\
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    \12\ See Securities Exchange Act Release No. 66285 (February 1, 
2012), 77 FR 6160 (February 7, 2012) (SR-Phlx-2011-175) (order 
granting approval of $0.50 strike price intervals for SLV and USO 
options).
    \13\ The Exchange notes, however, that the $0.50 Strike Program 
has inherent price limitations that make it unsuitable for STO 
options.
    \14\ Like the $0.50 Strike Program, the $1 Strike Program has 
inherent limitations that make it unsuitable for STO options. The 
Exchange is not aware of any material market surveillance issues 
arising because of the $0.50 or $1 strike price intervals.
    \15\ See Securities Exchange Act Release No. 64189 (April 5, 
2011), 76 FR 20066 (April 11, 2011) (SR-CBOE-2011-008) (order 
granting approval of $0.50 and $1 strike price intervals for certain 
volatility options where the strike prices are less than $75 and 
between $75 and $150, respectively). In approving the CBOE interval 
proposal, the Commission stated that the proposal appears to strike 
a reasonable balance between the Exchange's desire to offer a wider 
array of investment opportunities and the need to avoid unnecessary 
proliferation of options series and the corresponding increase in 
quotes and market fragmentation. The Exchange notes that other 
options exchanges including NYSE Amex, NYSE Arca, ISE, NOM, and Phlx 
have made similar rule changes. See Phlx Commentary .12 to Rule 
1012.
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    The Exchange believes that the benefits of the ability to trade 
STOs at $0.50 and $1 intervals at lower price levels cannot be 
underestimated. The proposed intervals would clearly allow traders and 
investors, and in particular public (retail) investors to more 
effectively and with greater precision consummate trading and hedging 
strategies on the Exchange. The Exchange believes that this precision 
is increasingly necessary, and in fact crucial, as traders and 
investors engage in trading and hedging strategies across various 
investment platforms (e.g. equity and ETF, index, derivatives, futures, 
foreign currency, and even commodities products); particularly when 
many of these platforms enjoy substantially smaller strike price 
differentiations (e.g. as low as $.05).\16\
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    \16\ As an example, per the CME Web site, strike prices for 
options on futures may be at an interval of $.05, $.10, and $.25 per 
specified parameters. See http://www.cmegroup.com/trading/equity-index/files/EQUITY_FLEX_Options.pdf (options on S&P 500 and 
NASDAQ-100 contracts) and http://www.cmegroup.com/rulebook/files/S_5734_x11-05-18x_Change_in_Listing_Rules_for_Goldx_Silverx_Copper_Options.pdf (options on metals contracts).
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    Weekly options have characteristics that are attractive for certain 
trading and hedging strategies. Thus, weeklies may be attractive for 
retail trading strategies that could benefit from the inherent 
accelerated time decay of weekly options, such as selling (buying) 
vertical or calendar spreads. And weeklies may be particularly 
attractive instruments for short-term institutional hedging needs (e.g. 
sudden price movements against large option positions during expiration 
week; maintenance or adjustment of complex option positions) as well as 
for retail hedging needs (e.g. preceding large earnings plays). In 
every case, trading and hedging is more effective when it can be 
closely tailored.
    The current wider STO price intervals have negatively impacted 
investors and traders, particularly retail public customers, who have 
on several occasions requested the Exchange for finer, narrower STO 
intervals. The proposal would fix this.
    Following are examples of how inadequately narrow STO intervals 
negatively impact trading and hedging opportunities.
    If an investor needs to purchase an STO call option in CSCO (03/26/
12 closing price $20.84), the current $1 strike interval would offer 
less opportunity and choice for an investor seeking to keep cash 
expenditures low. For example, an investor wishing to buy an in-the-
money call option for less than a $2.50 investment per call purchase 
has only two strike prices that meet his criteria from which to choose: 
The 19 strike and the 20 strike. Such call options with five days until 
expiration might offer ``ask prices'' (option premiums) of $1.75 and 
$.75. However, if CSCO had $0.50 strike prices as proposed, the same 
investor would have a selection of March 18.50, 19.00, 19.50, 20.00, 
and the 20.50 strike call options that may have options premiums from 
approximately $2.25 down to approximately $.25. This expanded range of 
strikes, and commensurate option premiums, offers far more choice and a 
considerably lower cost of entry to the investor, thereby garnering the 
investor more than a 66% options premium savings. Lower intervals 
increase effective liquidity by offering investors and traders more 
price points at which they may execute trading and hedging 
strategies.\17\ This allows investors and traders the ability to more 
effectively execute their strategies at lower cost. Clearly, more 
efficient pricing is advantageous to all market participants, from 
retail to institutional investors.
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    \17\ Moreover, lower strike intervals provide additional price 
points for liquidity providers. This allows the liquidity providers 
to improve theoretical pricing as well as hedging capabilities, 
thereby enabling them to increase the size and quality of their 
markets.
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    If, on the put side, an investor is interested in purchasing an STO 
option in LNKD (03/26/12 closing price $101.38), the current strike 
interval rules similarly offer less opportunity and less choice for the 
investor seeking to keep cash expenditures low. For example, an 
investor wishing to buy an in-the-money put option for less than a 
$5.00 investment per put purchase has only one strike price that meets 
his criteria from which to choose: The 105 strike. This put option with 
five days until expiration may have an option premium of $5.00. 
However, if LNKD had $1 strike intervals as proposed, the investor 
would have a selection of March 105, 104, 103, 102, and 101 strike

[[Page 42783]]

put options that may have options premiums from approximately $5 down 
to $2. This greatly expanded range of strikes allows the investor more 
choice and lower cost of entry, and may save the investor as much as 
60% in options premium payout.\18\
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    \18\ This premium savings may be very significant for an 
investor that is buying a large number of option contracts. See 
supra note 17 and related text.
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    And as yet another example, if an investor is interested in 
purchasing a complex option spread, narrow strike intervals would offer 
additional cost savings and choice. With the 105 LNKD puts trading at 
$5.00, as stated in the example above, the next strike available to 
offset the cost of the 105 strike would be the 100 puts trading at an 
approximately $1.50 premium. With the current intervals, this would 
result in a 105-100 put spread costing approximately $3.50. However, if 
strike prices were available in $1 increments, various cheaper spreads 
could be obtained within the same 105-100 range of strikes. In that 
each $1 incremented put spread might trade at approximately $.30 to 
$.80 within this strike range, it is easy to see that $1 strikes as 
proposed may result in significant savings for investors trying to 
execute complex strategies.
    Furthermore, the inadequate price intervals for STOs, particularly 
at the lower price levels proposed by the Exchange, may discourage 
retail and other customers from executing STO orders when they could be 
the most advantageous for effective execution of trading and hedging 
strategies on regulated and transparent exchanges. The Exchange feels 
that it is essential that such negative, potentially costly and time-
consuming impacts on retail investors are eliminated by offering 
tighter intervals within the STO Program. The changes proposed by the 
Exchange should allow execution of more trading and hedging strategies 
on the Exchange.\19\
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    \19\ In addition, there is a competitive impact. First, the 
proposal would enable the Exchange to provide market participants 
with an opportunity to execute their strategies (e.g. complex option 
spreads) wholly on their preferred market, namely the Exchange. 
Second, the proposal would diminish the potential for foregone 
market opportunities on the Exchange caused by the need to use a 
more advantageous (that is, interval-precise) platform than STOs 
currently allow.
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    With regard to the impact of this proposal on system capacity, the 
Exchange has analyzed its capacity and represents that it and the 
Options Price Reporting Authority (``OPRA'') have the necessary systems 
capacity to handle the potential additional traffic associated with 
trading in the Program at $0.50 or greater where the strike price is 
less than $75 and $1 or greater where the strike price is between $75 
and $150. The Exchange believes that its members will not have a 
capacity issue as a result of this proposal.
    The Exchange also proposes language designed to enable a non-STO 
option class (e.g. monthly option) that is selected for the STO to 
behave like the STO during the expiration week of the related non-
STO.\20\
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    \20\ The Exchange notes that STOs are not listed and traded 
during the expiration week of the related non-STOs, which is 
generally the third week in the month. During this week, those that 
want or need weekly options must buy (sell) the related non-STOs. 
The proposal would allow traders and hedgers to have the same 
benefits during each week in a month, including the one week when 
STOs are not listed and traded.
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    Specifically, the Exchange proposes that notwithstanding any other 
provision regarding strike prices in the applicable rule (Rule 1012 for 
non-index options or Rule 1101A for index options), during the 
expiration week of a non-STO that is selected for an STO, the strike 
price intervals for the non-STO shall be the same as the strike price 
intervals permitted for the STO. Thus, during the non-STO expiration 
week, the strike price intervals for the non-STO shall be $0.50 or 
greater where the strike price is less than $75 and $1 or greater where 
the strike price is between $75 and $150. The Exchange also proposes 
that notwithstanding any other provision regarding strike prices in the 
applicable rule (Rule 1012 or Rule 1101A), during the week before the 
expiration week of a non-STO that is selected for an STO, the Exchange 
shall open the non-STO for trading in $0.50 and $1 strike price 
intervals in the same manner as permitted for STOs. Thus, a non-STO may 
be opened in STO intervals on a Thursday or Friday that is a business 
day before the STO expiration week.\21\ If the Exchange is not open for 
business on the respective Thursday or Friday, however, the non-STO may 
be opened in STO intervals on the first business day immediately prior 
to that respective Thursday or Friday.\22\
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    \21\ The proposed opening timing is consistent with the 
principle that the Exchange may add a new series of options until 
five business days prior to expiration. See Rule 1012 and Rule 
1101A.
    \22\ The STO opening process is set forth in Commentary 11 to 
Rule 1012 and Rule 1101A(b)(vi):
    After an option class has been approved for listing and trading 
on the Exchange, the Exchange may open for trading on any Thursday 
or Friday that is a business day (``Short Term Option Opening 
Date'') series of options in that class that expire on the Friday of 
the following business week that is a business day (``Short Term 
Option Expiration Date''). If the Exchange is not open for business 
on the respective Thursday or Friday, the Short Term Option Opening 
Date will be the first business day immediately prior to that 
respective Thursday or Friday.
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    These changes are proposed to ensure conformity between STOs and 
non-STOs that are in the same options class (e.g. weekly SLV options 
and monthly SLV options). The Exchange believes that, as discussed, 
these changes are necessary to give investors and traders the ability 
to maximize trading and hedging opportunities while minimizing costs; 
and that a lack of such conforming changes would be counter-productive 
for market participants.
    The Exchange believes that the STO 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. Furthermore, the Exchange has had to reject trading requests 
because of the limitations imposed by the Program. For these reasons, 
the Exchange requests an expansion of the strike price intervals in the 
Program, as well as conformity of the relevant non-STO process, to 
provide investors with better weekly option choices for investment, 
trading, and risk management purposes.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \23\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \24\ in particular, in that it is designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general to protect investors and the public 
interest. This will be effectuated by the following rule changes: STO 
strike price intervals of $0.50 or greater where the strike price is 
less than $75 and $1 or greater where the strike price is between $75 
and $150; during the expiration week of the non-STO, the strike price 
intervals for the non-STO will be the same as for the STO; and during 
the week before the non-STO expiration week, the timing for opening the 
non-STO in STO strike price intervals will be the same as for the STO. 
The Exchange believes that the proposed changes will result in a 
continuing benefit to investors by giving them more flexibility to 
closely tailor their investment and hedging decisions, while ensuring 
conformity between STOs and related non-STOs.
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    \23\ 15 U.S.C. 78f(b).
    \24\ 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

[[Page 42784]]

necessary or appropriate in furtherance of the purposes of the Act. To 
the contrary, the Exchange believes the proposal is pro-competitive. 
First, the proposal would enable the Exchange to provide market 
participants with an opportunity to execute their strategies wholly on 
their preferred market, namely the Exchange. And second, the proposal 
would diminish the potential for foregone market opportunities on the 
Exchange caused by the need to use a more advantageous (that is, 
interval-precise) platform than STOs currently allow.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the publication date of this notice in the 
Federal Register or within such longer period (1) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (2) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change; or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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. In addition, the Commission 
specifically requests comment on the following:
     As outlined in detail above in Item II.A.1, Phlx has 
proposed that the interval between strike prices on STOs shall be $0.50 
or greater where the strike price is less than $75 and $1 or greater 
where the strike price is between $75 and $150. The International 
Securities Exchange, LLC (``ISE'') has proposed a similar rule change 
to its short term option series program (the ``ISE STOS Program'') that 
would allow trading at $0.50 strike price intervals for option classes 
that trade in $1 increments and are in the ISE STOS Program.\25\ Do 
commenters have any views regarding implementation of both the ISE 
Proposal and the instant proposal, if approved, that the Commission 
should take into consideration? If so, please provide detail.
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    \25\ See Securities Release No. 67083 (May 31, 2012), 77 FR 
33543 (June 6, 2012) (SR-ISE-2012-33) (the ``ISE Proposal'').
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     Both Phlx and ISE included within their respective filings 
a discussion of the anticipated impact of its proposal on capacity and 
liquidity.\26\ Do commenters have views on whether, and if so how, 
implementation of both the ISE Proposal and the instant proposal, if 
approved, would impact liquidity or capacity that the Commission should 
take into consideration? If so, please provide detail.
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    \26\ See ISE Proposal, id., at 33545; supra, pp. 8, 10.
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    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-Phlx-2012-78 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-Phlx-2012-78. 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 Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. The text of the proposed rule change is 
available on the Commission's Web site at http://www.sec.gov. 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 Number SR-Phlx-2012-78 and should be submitted on or before August 
10, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
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    \27\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-17713 Filed 7-19-12; 8:45 am]
BILLING CODE 8011-01-P