Federal Register / Vol. 76, No. 45 / Tuesday, March 8, 2011 / Notices 12775 

7 15 U.S.C. 78f(b). 

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

9The Exchange is currently analyzing the 

condition regarding non-public information and 

system changes in order to better reflect the 

operation of Arca Securities. 

10 15 U.S.C. 78s(b)(3)(A)(iii). 

11 17 CFR 240.19b–4(f)(6). 

12 17 CFR 240.19b–4(f)(6). 

13 17 CFR 240.19b–4(f)(6)(iii). 

14 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

hereby seeks to extend the previously 

approved pilot period (with the 

attendant obligations and conditions) 

for an additional six months, through 

September 30, 2011. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),7 in general, and furthers the 

objectives of Section 6(b)(5),8 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. 

Specifically, the proposed rule change 

will allow the Exchange to continue 

receiving inbound routes of equities 

orders from Arca Securities acting in its 

capacity as a facility of the NYSE Arca 

and NYSE Amex, in a manner 

consistent with prior approvals and 

established protections. The Exchange 

believes that extending the previously 

approved pilot period for six months 

will permit both the Exchange and the 

Commission to further assess the impact 

of the Exchange’s authority to receive 

direct inbound routes of equities orders 

via Arca Securities (including the 

attendant obligations and conditions).9

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 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 10 and Rule 

19b–4(f)(6) thereunder.11 Because the 

proposed rule change does not: (i) 

Significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

prior to 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, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 12 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),13 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. 

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. 

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 rulecomments@sec.gov. Please include File 

Number SR–NYSE–2011–08 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–NYSE–2011–08. 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 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 a.m. and 3 p.m. Copies of the 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–NYSE– 

2011–08 and should be submitted on or 

before March 29, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–5191 Filed 3–7–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64011; File No. SR–C2– 

2011–008] 

Self-Regulatory Organizations; C2 

Options Exchange, Incorporated; 

Notice of Filing of a Proposed Rule 

Change To Allow the Listing and 

Trading of a P.M.-Settled S&P 500 

Index Option Product 

March 2, 2011. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

28, 2011, C2 Options Exchange, 

Incorporated (the ‘‘Exchange’’ or ‘‘C2’’) 

filed with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the Exchange. 


srobinson on DSKHWCL6B1PROD with NOTICES
12776 Federal Register / Vol. 76, No. 45 / Tuesday, March 8, 2011 / Notices 

3Pursuant to CBOE Rule 24.9(b), index LEAPS 

may expire from 12–60 months from the date of 

issuance. 

4There would be reporting requirements 

pursuant to Rule 4.13, Reports Related to Position 

Limits, and Interpretation and Policy .03 to Rule 

24.4, Position Limits for Broad-Based Index 

Options, which sets forth the reporting 

requirements for certain broad-based indexes that 

do not have position limits. 

5The Exchange notes that there are no futures or 

options on futures traded on the S&P 100 at this 

time. 

6See Securities Exchange Act Release No. 61439 

(January 28, 2010), 75 FR 5831 (February 4, 2010) 

(SR–CBOE–2009–087) (order approving rule change 

to establish a pilot program to modify FLEX option 

exercise settlement values and minimum value 

sizes). This pilot expires on March 28, 2011. 

7See Rule 24.9(e) and Securities Exchange Act 

Release No. 62911 (September 14, 2010), 75 FR 

57539 (September 21, 2010) (SR–CBOE–2009–075). 

8See Rules 5.5(e) and 24.9(a)(2)(B). 

9See Rule 24.9(c). 

10For example, see Nasdaq Rule 4754 (Nasdaq 

Closing Cross). 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to permit the 

listing and trading of P.M.-settled S&P 

500 Index options on C2. The text of the 

proposed rule change is available on the 

Exchange’s Web site (http:// 

www.c2exchange.com), at the 

Exchange’s Office of the Secretary, and 

at the Commission. 

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 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 purpose of this rule filing is to 

permit the listing and trading on C2 of 

Standard & Poor’s 500 Index (‘‘S&P 500’’) 

options with third-Friday-of-the-month 

(‘‘Expiration Friday’’) expiration dates 

for which the exercise settlement value 

will be based on the index value derived 

from the closing prices of component 

securities (‘‘P.M.-settled’’). 

To effect the above described change, 

the Exchange is proposing to add new 

supplemental provision (a) to C2 

Chapter 24 to expressly provide that 

P.M.-settled S&P 500 options may be 

listed for trading on C2. Existing C2 

rules governing the trading of index 

options would apply to this new 

product (e.g. trading rules, sales practice 

rules, margin requirements, and strike 

price interval requirements). 

The S&P 500 is a capitalizationweighted index of 500 stocks from a 

broad range of industries. The 

component stocks are weighted 

according to the total market value of 

their outstanding shares. The impact of 

a component’s price change is 

proportional to the issue’s total market 

share value, which is the share price 

times the number of shares outstanding. 

These are summed for all 500 stocks and 

divided by a predetermined base value. 

The base value for the S&P 500 is 

adjusted to reflect changes in 

capitalization resulting from, among 

other things, mergers, acquisitions, 

stock rights, and substitutions. 

The proposed contract would use a 

$100 multiplier, and the minimum 

trading increment would be $0.05 for 

options trading below $3.00 and $0.10 

for all other series. Strike price intervals 

would be set no less than 5 points apart. 

Consistent with existing rules for index 

options, the Exchange would allow up 

to twelve near-term expiration months, 

as well as LEAPS.3 Expiration 

processing would occur on Saturday 

following the Expiration Friday. The 

product would have European-style 

exercise, and because it is based on the 

S&P 500 index, there would be no 

position limits.4

C2 notes that ample precedent exists 

for P.M. settlement of broad-based index 

options. For example, OEX (an index 

option contract based on the Standard & 

Poor’s 100 index) has been P.M.-settled 

since 1983.5 Also, FLEX Options have 

P.M. settlements on any expiration day 

(pursuant to a pilot program).6

Similarly, CBOE recently established a 

pilot program that permits P.M.-settled 

options on broad-based indexes expiring 

on any Friday of the month, other than 

the third Friday of the month, as well 

as the last trading day of the month.7

CBOE also trades Quarterly Option 

Series 8 that overlie exchange traded 

funds or indexes, and Quarterly Index 

Expirations 9 that are cash-settled 

options on certain broad-based indexes, 

both of which expire at the close of 

business on the last business day of a 

calendar quarter and are P.M.-settled. 

CBOE has experience with these special 

dated options and has not observed any 

market disruptions resulting from the 

P.M.-settlement feature of these options. 

In addition, the Exchange believes 

that the reasons supporting the 

preponderance of A.M.-settlement index 

options, which date back to the late 

1980s/early 1990s for Non-FLEX 

Options and revolve around a concern 

about expiration pressure on stock 

exchanges (more specifically on 

specialists) at the close, are no longer 

relevant in today’s market. For one, 

there are multiple primary listing and 

unlisted trading privilege (UTP) markets 

for the stocks underlying the index, and 

trading is widely dispersed among 

several stock exchanges and alternative 

trading systems. Many of these markets 

use closing cross procedures and 

employ closing order types to facilitate 

orderly closings.10 Moreover, today 

stock order flow is predominantly 

electronic and the ability to smooth out 

openings and closings is greatly 

enhanced and market-on-close 

procedures work just as well as opening 

procedures. Thus, the Exchange does 

not believe that any market disruptions 

will be encountered with the 

introduction of P.M.-settled S&P 500 

index options. 

The Exchange also notes that P.M.- 

settled options predominate in the OTC 

market, and C2 is not aware of any 

adverse effects in the stock market 

attributable to the P.M.-settlement 

feature. C2 is merely proposing to offer 

a P.M.-settled product in an exchange 

environment which offers the benefit of 

added transparency, price discovery, 

and stability. 

In response to any potential concerns 

that disruptive trading conduct could 

occur as a result of the concurrent 

listing and trading of two index option 

products based on the same index but 

for which different settlement 

methodologies exist (i.e., one is A.M.- 

settled and one is P.M.-settled), the 

Exchange notes that for roughly five 

years (1987 to 1992) CBOE listed and 

traded an A.M.-settled S&P 500 index 

option called NSX at the same time it 

listed and traded a P.M.-settled S&P 500 

index option called SPX and CBOE did 

not observe any market disruptions as a 

result of offering both products. 

As proposed, the proposal would 

become effective on a pilot program 

basis for a period of fourteen months. If 

the Exchange were to propose an 

extension of the program or should the 

Exchange propose to make the program 

permanent, then the Exchange would 

submit a filing proposing such 

amendments to the program. The 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 76, No. 45 / Tuesday, March 8, 2011 / Notices 12777 

11 15 U.S.C. 78a et seq. 

12 15 U.S.C. 78f(b). 

13 15 U.S.C. 78f(b)(5). 

Exchange notes that any positions 

established under the pilot would not be 

impacted by the expiration of the pilot. 

For example, a position in a P.M.-settled 

series that expires beyond the 

conclusion of the pilot period could be 

established during the 14-month pilot. If 

the pilot program were not extended, 

then the position could continue to 

exist. However, the Exchange notes that 

any further trading in the series would 

be restricted to transactions where at 

least one side of the trade is a closing 

transaction. 

As part of the pilot program, the 

Exchange would also submit a pilot 

program report to the Commission at 

least two months prior to the expiration 

date of the program (the ‘‘annual 

report’’). As described below, the annual 

report would contain an analysis of 

volume, open interest and trading 

patterns. The analysis would examine 

trading in the proposed option product 

as well as trading in the securities that 

comprise the S&P 500 index. In 

addition, for series that exceed certain 

minimum open interest parameters, the 

annual report would provide analysis of 

index price volatility and share trading 

activity. The annual report would be 

provided to the Commission on a 

confidential basis. 

The annual report would contain the 

following volume and open interest 

data: 

(1) Monthly volume aggregated for all 

trades; 

(2) Monthly volume aggregated by 

expiration date; 

(3) Monthly volume for each 

individual series; 

(4) Month-end open interest 

aggregated for all series; 

(5) Month-end open interest for all 

series aggregated by expiration date; and 

(6) Month-end open interest for each 

individual series. 

In addition to the annual report, the 

Exchange would provide the 

Commission with interim reports of the 

information listed in Items (1) through 

(6) above periodically as required by the 

Commission while the pilot is in effect. 

These interim reports would also be 

provided on a confidential basis. The 

annual report would also contain the 

information noted in Items (1) through 

(6) above for Expiration Friday, A.M.- 

settled S&P 500 index options traded on 

CBOE. 

In addition, the annual report would 

contain the following analysis of trading 

patterns in Expiration Friday, P.M.- 

settled S&P 500 Index option series in 

the pilot: 

(1) A time series analysis of open 

interest; and 

(2) An analysis of the distribution of 

trade sizes. 

Also, for series that exceed certain 

minimum parameters, the annual report 

would contain the following analysis 

related to index price changes and 

underlying share trading volume at the 

close on Expiration Fridays: 

(1) A comparison of index price 

changes at the close of trading on a 

given Expiration Friday with 

comparable price changes from a control 

sample. The data would include a 

calculation of percentage price changes 

for various time intervals and compare 

that information to the respective 

control sample. Raw percentage price 

change data as well as percentage price 

change data normalized for prevailing 

market volatility, as measured by the 

CBOE Volatility Index (VIX), would be 

provided; and 

(2) A calculation of share volume for 

a sample set of the component securities 

representing an upper limit on share 

trading that could be attributable to 

expiring in-the-money series. The data 

would include a comparison of the 

calculated share volume for securities in 

the sample set to the average daily 

trading volumes of those securities over 

a sample period. The minimum open 

interest parameters, control sample, 

time intervals, method for randomly 

selecting the component securities, and 

sample periods would be determined by 

the Exchange and the Commission. 

The Exchange represents that it has 

sufficient capacity to handle additional 

traffic associated with this new listing, 

and that it has in place adequate 

surveillance procedures to monitor 

trading in these options thereby helping 

to ensure the maintenance of a fair and 

orderly market. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 11

and the rules and regulations 

thereunder and, in particular, the 

requirements of Section 6(b) of the 

Act.12 Specifically, the Exchange 

believes the proposed rule change is 

consistent with the Section 6(b)(5) 13

requirements that the rules of an 

exchange be designed to promote just 

and equitable principles of trade, to 

remove impediments to and to perfect 

the mechanism for a free and open 

market and a national market system, 

and, in general, to protect investors and 

the public interest. The Exchange 

believes that the introduction of P.M. 

settlement for the subject index option 

in the manner proposed does not raise 

any meaningful regulatory concerns. 

Further, the Exchange believes that the 

proposal will not adversely impact fair 

and orderly markets on expiration 

Fridays for the underlying stocks 

comprising the S&P 500 index. As 

discussed in section (a) of Item 2 of this 

filing (the purpose section), the 

handling of orders at the close on the 

stock markets has matured considerably 

since concerns were initially raised in 

the late 1980s. Additionally, the 

proposed rule change would provide 

permit holders and investors with 

additional opportunities to trade S&P 

500 options with a P.M. settlement 

feature in an exchange environment and 

subject to transparent exchange-based 

rules, and that investors would also 

benefit from the opportunity to trade in 

association with this product on 

Expiration Fridays thereby removing 

impediments to a free and open market 

consistent with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

C2 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 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

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 

(ii) 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. 

Comments may be submitted by any of 

the following methods: 


srobinson on DSKHWCL6B1PROD with NOTICES
12778 Federal Register / Vol. 76, No. 45 / Tuesday, March 8, 2011 / Notices 

14 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 60536 

(August 19, 2009) [sic], 74 FR 43204 (August 26, 

2009) (SR–ISE–2009–59). 

4See Securities Exchange Act Release No. 61459 

(January 19, 2010), 75 FR 6248 (February 8, 2010) 

(SR–ISE–2010–07). 

5The Commission previously approved the 

trading of options on AUX, BPX, CDD, EUI, YUK 

and SFC. See Securities Exchange Act Release No. 

55575 (April 3, 2007), 72 FR 17963 (April 10, 2007) 

(SR–ISE–2006–59). 

6See Securities Exchange Act Release No. 63639 

(January 4, 2011), 76 FR 1488 (January 10, 2011) 

(SR–ISE–2010–121). 

7A FXPMM is a primary market maker selected 

by the Exchange that trades and quotes in FX 

Options only. See ISE Rule 2213. 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–C2–2011–008 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–C2–2011–008. 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 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 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of C2. 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–C2–2011–008 and should 

be submitted on or before March 29, 

2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–5190 Filed 3–7–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64012; File No. SR–ISE– 

2011–11] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to a Market Maker 

Incentive Plan for Foreign Currency 

Options 

March 2, 2011. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

22, 2011, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) 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 selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The ISE is proposing to amend its 

incentive plan for market makers in 

foreign currency (‘‘FX’’) options. 

Specifically, ISE proposes to add six 

currently listed FX options to the 

incentive plan. The text of the proposed 

rule change is available on the 

Exchange’s Web site (http:// 

www.ise.com), at the principal office of 

the Exchange, on the Commission’s Web 

site at http://www.sec.gov, 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, 

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 purpose of this proposed rule 

change is to amend the Exchange’s 

incentive plan for market makers in FX 

options. The Exchange currently has an 

incentive plan for FX options that was 

initially adopted on August 3, 2009 for 

the following three FX options: the New 

Zealand dollar (‘‘NZD’’), the Mexican 

peso (‘‘PZO’’), the Swedish krona 

(‘‘SKA’’).3 The Exchange subsequently 

added the Brazilian real (‘‘BRB’’) to the 

incentive plan.4 The Exchange now 

proposes to add the following FX 

options to the incentive plan: the 

Australian dollar (‘‘AUX’’), the British 

pound (‘‘BPX’’), the Canadian dollar 

(‘‘CDD’’), the euro (‘‘EUI’’), the Japanese 

yen (‘‘YUK’’) and the Swiss franc 

(‘‘SFC’’).5 Market makers will be able to 

enter into the incentive plan until 

March 31, 2011.6

Options on AUX, BPX, CDD, EUI, 

YUK and SFC began trading on the 

Exchange on April 17, 2007. Until now, 

the market maker currently appointed to 

these FX options has been trading these 

products without the benefit of the 

privileges afforded by the incentive 

plan. The Exchange notes that 

competition between exchanges that 

trade like products, in this case, the 

World Currency Options traded on 

NASDAQ OMX PHLX, Inc., [sic] has 

intensified. In order to promote the 

continued growth and trading in these 

products, the Exchange now proposes to 

add AUX, BPX, CDD, EUI, YUK and 

SFC to the incentive plan, effective 

March 1, 2011. 

Participants in the incentive plan are 

known on the Exchange’s Schedule of 

Fees as Early Adopter Market Makers. 

Under the incentive plan, the Exchange 

waives the applicable transaction fees 

for both the Early Adopter FXPMM 7


srobinson on DSKHWCL6B1PROD with NOTICES