11614 Federal Register / Vol. 77, No. 38 / Monday, February 27, 2012 / Notices 

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

2 17 CFR 240.19b–4. 

3The Exchange adopted the STOS Program on a 

pilot basis in 2005. See Securities Exchange Act 

Release No. 52012 (July 12, 2005), 70 FR 41246 

(July 18, 2005) (SR–ISE–2005–17). The STOS 

Program was approved on a permanent basis in 

2010. See Securities Exchange Act Release No. 

62444 (July 2, 2010), 75 FR 39595 (July 9, 2010) 

(SR–ISE–2010–72). 

4See Securities Exchange Act Release Nos. 65775 

(November 17, 2011), 76 FR 72473 (November 23, 

2011) (SR–NASDAQ–2011–138) and 65776 

(November 17, 2011), 76 FR 72482 (November 23, 

2011) (SR–PHLX–2011–131). 

5See Securities Exchange Act Release No. 65771 

(November 17, 2011), 76 FR 72472 (November 23, 

2011) (SR–ISE–2011–60). 

6 ISE is permitted to list short term options ‘‘on 

any option classes that are selected by other 

securities exchanges that employ a similar program 

under their respective rules.’’ See Supplementary 

Material .02 to ISE Rule 504, and Supplementary 

Material .01 to ISE Rule 2009. 

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

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

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66432; File No. SR–ISE– 

2012–08] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Expand the Short Term 

Option Series Program 

February 21, 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 February 

8, 2012, the International Securities 

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

‘‘ISE’’) 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 its 

rules to expand the Short Term Option 

Series Program. The text of the proposed 

rule change is available on the 

Exchange’s Web site www.ise.com, 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 

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 ISE Rules 504 and 

2009 to expand the Short Term Option 

Series Program (‘‘STOS Program’’).3

Currently, ISE may select up to 25 

currently listed option classes on which 

short term option series may be opened 

in the STOS Program. The Exchange 

proposes to increase this to thirty option 

classes to participate in the STOS 

Program. This is a competitive filing 

and is based on recently approved 

filings submitted by The NASDAQ 

Stock Market LLC for the NASDAQ 

Options Market (‘‘NOM’’) and NASDAQ 

OMX PHLX, Inc. (‘‘PHLX’’).4

On November 17, 2011, the Exchange 

amended the STOS Program by 

increasing the number of strikes that 

may be listed per class (from 20 to 30) 

that participates in the STOS Program, 

and by increasing the number of classes 

(from 15 to 25) that are eligible to 

participate in the STOS.5 On that same 

day, NOM and PHLX each increased the 

number of classes that are eligible to 

participate in their STOS Programs from 

15 classes to 30 classes. As a result, ISE 

is competitively disadvantaged since it 

operates a substantially similar STOS 

Program as NOM and PHLX but is 

limited to selecting only 25 classes that 

may participate in its STOS Program 

(whereas PHLX and NOM may each 

select 30 classes).6

The Exchange is not proposing any 

changes to these additional STOS 

Program limitations other than to 

increase from 25 to 30 the number of 

option classes that may participate in 

the STOS Program. 

ISE notes that the STOS Program has 

been well-received by market 

participants, in particular by retail 

investors. ISE believes a modest 

increase to the number of classes that 

may participate in the STOS Program, 

such as the one proposed in this rule 

filing, will permit ISE to meet increased 

customer demand and provide market 

participants with the ability to hedge in 

a greater number of option classes. 

With regard to the impact of this 

proposal on system capacity, ISE 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 

of an expanded number of classes that 

participate in the STOS Program. 

The proposed increase to the number 

of classes eligible to participate in the 

STOS Program is required for 

competitive purposes as well as to 

ensure consistency and uniformity 

among the competing options exchanges 

that have adopted similar STOS 

Programs. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Securities Exchange 

Act of 1934 7 (the ‘‘Act’’) in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act 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, 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. The Exchange believes 

that expanding the current short term 

options program will result in a 

continuing benefit to investors by giving 

them more flexibility to closely tailor 

their investment decisions and hedging 

decisions in greater number of 

securities. The Exchange believes that 

expanding the current program would 

provide the investing public and other 

market participants increased 

opportunities because an expanded 

program would provide market 

participants additional opportunities to 

hedge their investment thus allowing 

these investors to better manage their 

risk exposure. While the expansion of 

the STOS Program will generate 

additional quote traffic, the Exchange 

does not believe that this increased 

traffic will become unmanageable since 

the proposal remains limited to a fixed 

number of classes. Further, the 

Exchange does not believe that the 

proposed rule change will result in a 

material proliferation of additional 

series because the number of series per 

class remains limited, and the Exchange 

does not believe that the additional 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 38 / Monday, February 27, 2012 / Notices 11615 

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 the Exchange to give the 

Commission written notice of the Exchange’s 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. 

11See supra note 4. 

12For 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. 78c(f). 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

price points will result in fractured 

liquidity. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

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 not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not significantly affect the 

protection of investors or the public 

interest, does not impose any significant 

burden on competition, and, by its 

terms, does not become operative for 30 

days from the date on which it was 

filed, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 9 and Rule 19b– 

4(f)(6) thereunder.10

The Exchange has requested that the 

Commission waive the 30-day operative 

delay. The Commission believes that 

waiver of the operative delay is 

consistent with the protection of 

investors and the public interest 

because the proposal is substantially 

similar to those of other exchanges that 

have been approved by the Commission 

that permit such exchanges to select up 

to 30 classes to participate in their 

respective short term option series 

programs.11 Therefore, the Commission 

designates the proposal operative upon 

filing.12

At any time within 60 days of the 

filing of the 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 email to rulecomments@sec.gov. Please include File 

Number SR–ISE–2012–08 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–ISE–2012–08. 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 

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–ISE– 

2012–08 and should be submitted on or 

before March 19, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–4420 Filed 2–24–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66426; File No. SR–Phlx– 

2012–17] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Amending the 

Fee Schedule to Define a Market Maker 

February 21, 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 February 

7, 2012, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III 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 

Preface to its Fee Schedule to add a 

definition for a ‘‘Market Maker.’’ In 

addition, the Exchange proposes to 

delete outdated language in the Preface. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqtrader.com/ 

micro.aspx?id=PHLXfilings, 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 


srobinson on DSK4SPTVN1PROD with NOTICES