Federal Register / Vol. 76, No. 21 / Tuesday, February 1, 2011 / Notices 5627 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 63462 

(December 8, 2010), 75 FR 77689 (‘‘Notice’’). 

4Rule 6.4 Commentary .04(a). 

5See id. 

6See id. The standard strike interval for LongTerm Equity Option Series (LEAPs) is $2.50 where 

the strike price is $25 or less. See Rule 6.4(f). 

However, under a separate provision of the rules, 

the Exchange may list $1 strike prices up to $5 in 

LEAPS in up to 200 option classes on individual 

Continued 

Certification is available via the Edgar 

database on the Commission’s Web site 

at http://www.sec.gov or at the offices of 

the Commission in the 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. 

Pursuant to Rule 12g–4 of the 

Exchange Act, termination of the 

registration of a class of securities under 

Section 12(g) of the Exchange Act shall 

take place 90 days, or such shorter 

period as the Commission may 

determine, after the Applicant certifies 

to the Commission on Form 15 that the 

class of securities is held of record by 

less than 300 persons or less than 500 

persons where the total assets of the 

issuer have not exceeded $10 million on 

the last day of each of the Applicant’s 

most recent three fiscal years. The 

Applicant’s Certification declares that 

the Applicant has approximately 692 

holders of record as of October 29, 2010. 

Based on the fact that the Applicant’s 

Certification does not comply with the 

record holder requirements of Rule 12g– 

4 of the Exchange Act, the Applicant’s 

request for termination should be 

denied. 

Notice is further given that any 

interested person not later than 

February 16, 2011 may submit to the 

Commission in writing views on any 

substantial facts bearing on the 

certification or the utility of a hearing 

thereon. Submissions should state 

briefly the nature of the interest of the 

person submitting such information or 

requesting a hearing, the reason for such 

request, and the issues of facts and law 

raised by the certification which he 

desires to contest. Submissions may be 

made by any of the following methods: 

Electronic Submissions 

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

Number 0–49764 on the subject line. 

Paper Submissions 

Send paper submissions to Elizabeth 

M. Murphy, Secretary, Securities and 

Exchange Commission, 100 F Street, 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number 0–49764. To help us process 

and review submissions more 

efficiently, please use only one method. 

The Commission will post all 

submissions on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/other.shtml). Submissions are also 

available for public 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. All submissions 

received will be posted without change; 

we do not edit personal identifying 

information. You should submit only 

information that you wish to make 

available publicly. 

Persons who request a hearing or 

submit views as to whether a hearing 

should be ordered will receive any 

notices and orders issued in this matter, 

including the date of any hearing 

ordered and any postponement thereof. 

If a request for a hearing or other 

submissions are not received, the 

Commission may, at any time after 

February 16, 2011, issue an order 

denying termination of Applicant’s 

registration. If the Commission receives 

information through submission which 

shows that the Applicant has met the 

requirements for filing a Form 15 

certification, the Commission may issue 

either a notice of effectiveness or set this 

matter down for a hearing. Termination 

of registration shall be deferred pending 

final determination on the question of 

denial. 

By the Commission. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–2126 Filed 1–31–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63770; File No. SR– 

NYSEArca–2010–106] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Granting Approval of 

Proposed Rule Change Regarding the 

Listing of Options Series with $1 Strike 

Prices 

January 25, 2011. 

I. Introduction 

On November 24, 2010, NYSE Arca, 

Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to allow the Exchange to modify 

the operation of the $1 Strike Price 

Program. The proposed rule change was 

published for comment in the Federal 

Register on December 13, 2010.3 The 

Commission received no comment 

letters on the proposal. This order 

approves the proposed rule change. 

II. Description of the Proposal 

The Exchange has proposed to amend 

Rule 6.4 Commentary .04 to modify the 

operation of the $1 Strike Price Program. 

Currently, the $1 Strike Price Program 

allows the listing of new series with 

strikes at $1 intervals only if such series 

have strike prices within $5 of the 

previous day’s closing price in the 

primary listing market.4 The proposal 

would allow the Exchange also to: (a) 

List new series with $1 interval strike 

prices within $5 of the official opening 

price in the primary listing market, and 

(b) add $1 interval strike prices between 

the closing price and the opening price, 

regardless of whether such strikes are 

within $5 of the previous day’s closing 

price or the day’s opening price. 

In support of allowing the listing of $1 

interval strike between the closing and 

opening prices, the Exchange stated 

that, on occasion, the price movement 

in an underlying security has been so 

great that listing series with strikes 

within $5 of the previous day’s closing 

price and the day’s opening price would 

leave a gap in the continuity of strike 

prices. Thus, if an issue closes at $14 

one day, and the next day opens above 

$27, the $21 and $22 strikes would be 

more than $5 from either benchmark. 

The Exchange proposed that any such 

discontinuity be avoided by allowing 

the listing of options on all $1 interval 

strike prices that fall between the 

previous day’s closing price and the 

opening price. 

The Exchange also has proposed to 

prohibit the listing of $2.50 interval 

strikes below $50 in all classes chosen 

for the $1 Strike Price Program, and in 

all long-term option series. According to 

the Exchange, this change is designed to 

eliminate discontinuities in strike prices 

and a lack of parallel strikes in different 

expiration months of the same issue. 

Currently, Exchange rules provide that 

the Exchange may not list series within 

$1 strike price intervals within $0.50 of 

an existing strike price in the same 

class, unless the class in question has 

been selected to participate in the $0.50 

Strike Program.5 In addition, Exchange 

rules currently stipulate that the 

Exchange may not list series with $1 

strike price intervals for any long-term 

options (i.e., options having greater than 

nine months to expiration) under the $1 

Strike Price Program.6


srobinson on DSKHWCL6B1PROD with NOTICES
5628 Federal Register / Vol. 76, No. 21 / Tuesday, February 1, 2011 / Notices 

stocks, provided the $1 intervals are not within 

$0.50 of an existing series with a $2.50 strike price. 

See Rule 6.4 Commentary .04(c). This provision 

would not change under the current proposal. 

7Rule 6.4A codifies the limitation on strike price 

ranges outlined in the OLPP, which, except in 

limited circumstances, prohibits options series with 

an exercise price more than 100% above or below 

the price of the underlying security if that price is 

$20 or less. If the price of the underlying security 

is greater than $20, an exchange may not list new 

options series with an exercise price more than 

50% above or below the price of the underlying 

security. 

8 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

9 15 U.S.C. 78f(b)(5). 

10 15 U.S.C. 78s(b)(2). 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

However, as the Exchange noted in its 

proposal, due to the prohibition on $1 

strike price intervals within $0.50 of an 

existing strike price, the existence of 

series with $2.50 interval strikes for 

classes selected for the $1 Strike Price 

Program could lead to discontinuities in 

strike prices and a lack of parallel 

strikes in different expiration months of 

the same issue. For example, if a $12.50 

strike series was open in a class selected 

for the $1 Strike Price Program, the 

Exchange would not be able to list series 

with a $12 or $13 strike, potentially 

resulting in sequence of strike prices at 

irregular intervals (i.e., $10, $11, $12.50, 

$14, and $15). 

To replace these now-forbidden $2.50 

interval strikes, the Exchange proposes 

to allow the listing of one additional 

series within each natural $5 interval, as 

follows. The Exchange proposed to 

permit the listing of a series with a 

strike $2 above the $5-interval strike for 

each such $5-interval strike above the 

price of the underlying security at the 

time of listing. Conversely, the 

Exchange’s proposal would permit the 

listing of a series with a strike $2 below 

the $5-interval strike for each such $5- 

interval strike below the price of the 

underlying security at the time of 

listing. For example, if the underlying 

security was trading at $19, the 

Exchange could list a $27 strike between 

the $25 and the $30 strikes, and a $32 

strike between the $30 and $35 strikes; 

as well as a $13 strike between the $10 

and $15 strikes, and an $8 strike 

between the $10 and $15 strikes. The 

Exchange also notes that each such 

additional series may be listed only if 

such listing is consistent with the 

Options Listing Procedures Plan 

(‘‘OLPP’’) Provisions in Rule 6.4A.7 The 

foregoing provisions would apply to all 

classes selected for the $1 Strike Price 

Program, both with respect to standard 

and long-term options. In addition, 

since series with $1-interval strikes are 

not permitted for most long-term 

options, the proposal would allow the 

Exchange to list the long-term strike that 

is $2 above the $5-interval just below 

the underlying price at the time of 

listing. For example, if the underlying 

security is trading at $21.25, this 

provision would allow the Exchange to 

add a $22 strike ($2 above the $20 

strike) for the long-term option series. 

In support of its proposal, the 

Exchange stated that the proposed rule 

change seeks to reduce investor 

confusion resulting from discontinuous 

strike prices that has arisen in the 

operation of the $1 Strike Price Program, 

by providing a consistent application of 

strike price intervals for issues in the $1 

Strike Price Program. 

The Exchange further represented that 

it has the necessary systems capacity to 

support the potential increase in new 

options series that will result from the 

proposed changes to the $1 Strike Price 

Program. 

III. Discussion 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.8 Specifically, the 

Commission finds that the proposal is 

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

Act,9 which requires, among other 

things, that the rules of a national 

securities exchange be designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts and practices, 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. 

As the Exchange notes, the proposal 

is intended to reduce investor confusion 

resulting from the operation of the $1 

Strike Price Program by reducing the 

occurrences of discontinuities in strike 

prices and non-parallel strikes in 

different expiration months of the same 

issue. The Commission believes that the 

proposal strikes a reasonable balance 

between the Exchange’s desire to 

accommodate market participants and 

the need to avoid unnecessary 

proliferation of options series and the 

corresponding increase in quotes and 

market fragmentation. The Commission 

expects the Exchange to monitor the 

trading and quotation volume associated 

with the additional options series listed 

as a result of this proposal and the effect 

of these additional series on market 

fragmentation and on the capacity of the 

Exchange’s, OPRA’s, and vendors’ 

automated systems. 

In approving this proposal, the 

Commission notes that Exchange has 

represented that it has the necessary 

systems capacity to support the 

potential increase in new options series 

that will result from the proposed 

changes to the $1 Strike Price Program. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,10 that the 

proposed rule change (SR–NYSEArca– 

2010–106) be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–2115 Filed 1–31–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63774; File No. SR–BX– 

2011–006] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change Regarding the 

Listing of $1 Strike Prices on the 

Boston Options Exchange Facility 

January 25, 2011. 

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 January 

21, 2011, NASDAQ OMX BX, Inc. (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. 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 amend the 

Rules of the Boston Options Exchange 

Group, LLC (‘‘BOX’’) regarding the 

listing of $1 strike prices. The text of the 

proposed rule change is available from 

the principal office of the Exchange, on 

the Commission’s Web site at http:// 

www.sec.gov, at the Commission’s 

Public Reference Room, and also on the 

Exchange’s Internet Web site at http:// 


srobinson on DSKHWCL6B1PROD with NOTICES