Federal Register / Vol. 77, No. 67 / Friday, April 6, 2012 / Notices 20867 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4 In addition to FLEX Options, FLEX currency 

options are also traded on the Exchange. These 

flexible index, equity, and currency options provide 

investors the ability to customize basic option 

features including size, expiration date, exercise 

style, and certain exercise prices; and may have 

expiration dates within five years. See Rule 1079. 

FLEX currency options traded on the Exchange are 

also known as FLEX World Currency Options 

(‘‘WCO’’) or Foreign Currency Options (‘‘FCO’’). 

The pilot program discussed herein does not 

encompass FLEX currency options. 

5 17 CFR 240.19b–4(f)(6)(iii). 

6Market index options and industry index 

options are broad-based index options and narrowbased index options, respectively. See Rule 

1000A(b)(11) and (12). 

7Subsection (a)(8)(A) also provides a third 

alternative: (iii) 50 contracts in the case of FLEX 

currency options. However, this alternative is not 

part of the Pilot Program. 

8See Securities Exchange Act Release No. 64108 

(March 22, 2011), 76 FR 17174 (March 28, 2011) 

(SR–Phlx–2011–35) (notice of filing and immediate 

effectiveness of proposal to extend Pilot Program). 

The Pilot Program was instituted in 2010. See 

Securities Exchange Act Release No. 62900 

(September 13, 2010), 75 FR 57098 (September 17, 

2010) (SR–Phlx–2010–123)(notice of filing and 

immediate effectiveness of proposal to institute 

Pilot Program). 

9The Exchange notes that any positions 

established under this Pilot would not be impacted 

by the expiration of the Pilot. For example, a 10- 

contract FLEX equity option opening position that 

overlies less than $1 million in the underlying 

security and expires in January 2015 could be 

established during the Pilot. If the Pilot Program 

were not extended, the position would continue to 

exist and any further trading in the series would be 

subject to the minimum value size requirements for 

continued trading in that series. 

10The Exchange has not experienced any adverse 

market effects with respect to the Pilot Program. 

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–EDGA– 

2012–09 and should be submitted on or 

before April 27, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority. 17

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2012–8269 Filed 4–5–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66711; File No. SR–PHLX– 

2012–44] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Extend the 

FLEX No Minimum Value Pilot Program 

April 2, 2012. 

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 March 30, 

2012, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘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 Exchange has 

designated the proposed rule change as 

constituting a rule change under Rule 

19b–4(f)(6) under the Act,3 which 

renders the proposal effective upon 

filing with the Commission. 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 is filing with the 

Commission a proposal to amend Phlx 

Rule 1079 (FLEX Index, Equity and 

Currency Options) to extend a pilot 

program that eliminates minimum value 

sizes for FLEX index options and FLEX 

equity options (together known as 

‘‘FLEX Options’’).4

The Exchange requests that the 

Commission waive the 30-day operative 

delay period contained in Exchange Act 

Rule 19b–4(f)(6)(iii).5

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 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this proposed rule 

change is to amend Phlx Rule 1079 

(FLEX Index, Equity and Currency 

Options) to extend a pilot program that 

eliminates minimum value sizes for 

FLEX Options (the ‘‘Pilot Program’’ or 

‘‘Pilot’’). 

Rule 1079 deals with the process of 

listing and trading FLEX equity, index, 

and currency options on the Exchange. 

Rule 1079(a)(8)(A) currently sets the 

minimum opening transaction value 

size in the case of a FLEX Option in a 

newly established (opening) series if 

there is no open interest in the 

particular series when a Request-forQuote (‘‘RFQ’’) is submitted (except as 

provided in Commentary .01 to Rule 

1079): (i) $10 million underlying 

equivalent value, respecting FLEX 

market index options, and $5 million 

underlying equivalent value respecting 

FLEX industry index options; 6 (ii) the 

lesser of 250 contracts or the number of 

contracts overlying $1 million in the 

underlying securities, with respect to 

FLEX equity options (together the 

‘‘minimum value size’’).7

Presently, Commentary .01 to Rule 

1079 states that by virtue of the Pilot 

Program ending March 30, 2012, there 

shall be no minimum value size 

requirements for FLEX Options as noted 

in subsections (a)(8)(A)(i) and 

(a)(8)(A)(ii) above.8

The Exchange now proposes to extend 

the Pilot Program for a period ending 

May 31, 2012.9

The Exchange believes that there is 

sufficient investor interest and demand 

in the Pilot Program to warrant an 

extension. The Exchange believes that 

the Pilot Program has provided 

investors with additional means of 

managing their risk exposures and 

carrying out their investment objectives. 

Extension of the Pilot Program would 

continue to provide greater 

opportunities for traders and investors 

to manage risk through the use of FLEX 

Options, including investors that may 

otherwise trade in the unregulated over 

the counter (‘‘OTC’’) market where 

similar size restrictions do not apply.10

In support of the proposed extension 

of the Pilot Program, the Exchange has 

under separate cover submitted to the 

Commission a Pilot Program Report 

mstockstill on DSK4VPTVN1PROD with NOTICES

20868 Federal Register / Vol. 77, No. 67 / Friday, April 6, 2012 / Notices 

11 15 U.S.C. 78f(b). 

12 15 U.S.C. 78f(b)(5). 

13 15 U.S.C. 78s(b)(3)(A). 

14 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

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. 

15 17 CFR 240.19b–4(f)(6). 

16 17 CFR 240.19b–4(f)(6). 

17For 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). 

(‘‘Report’’) that provides an analysis of 

the Pilot Program covering the period 

during which the Pilot has been in 

effect. This Report includes: (i) Data and 

analysis on the open interest and 

trading volume in (a) FLEX equity 

options that have an opening 

transaction with a minimum size of 0 to 

249 contracts and less than $1 million 

in underlying value; (b) FLEX index 

options that have an opening 

transaction with a minimum opening 

size of less than $10 million in 

underlying equivalent value; and (ii) 

analysis of the types of investors that 

initiated opening FLEX Options 

transactions (i.e., institutional, high net 

worth, or retail). The Report has been 

submitted to the Commission on a 

confidential basis. 

If, in the future, the Exchange 

proposes an additional extension of the 

Pilot Program, or should the Exchange 

propose to make the Pilot Program 

permanent, the Exchange will submit, 

along with any filing proposing such 

amendments to the Pilot Program, an 

additional Pilot Program Report 

covering the period during which the 

Pilot Program was in effect and 

including the details referenced in the 

prior paragraph. The Exchange will also 

provide the nominal dollar value of 

each trade. The Pilot Program Report 

would be submitted to the Commission 

at least one month prior to the 

expiration date of the Pilot Program 

unless the Commission agrees 

otherwise, and would be provided on a 

confidential basis. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 11 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 12

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 

mechanisms of a free and open market 

and a national market system. 

Specifically, the Exchange believes that 

the proposed extension of the Pilot 

Program, which eliminates the 

minimum value size applicable to FLEX 

Options, would provide greater 

opportunities for investors to manage 

risk through the use of FLEX Options. 

The Exchange notes that it has not 

experienced any adverse market effects 

with respect to the Pilot Program. 

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 

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 either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

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, 

the proposed rule change has become 

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

of the Act 13 and Rule 19b–4(f)(6) 

thereunder.14

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 15 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6) 16

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. The Exchange has asked 

the Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Commission notes that 

waiving the 30-day operative delay 

would allow trading under the Pilot 

Program to continue on an 

uninterrupted basis, and believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest.17

Therefore, the Commission designates 

the proposal operative upon filing. 

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–PHLX–2012–44 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–2012–44. 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 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 77, No. 67 / Friday, April 6, 2012 / Notices 20869 

18 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a et seq. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 66463 

(February 24, 2012), 77 FR 12637 (March 1, 2012) 

(‘‘Notice’’). 

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

6 15 U.S.C. 78f(b)(5). 

7Notice, 77 FR at 12639. 

8 Id. 

9 15 U.S.C. 78c(f). 

information that you wish to make 

available publicly. 

All submissions should refer to File 

Number SR–PHLX–2012–44 and should 

be submitted on or before April 27, 

2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2012–8261 Filed 4–5–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66710; File No. SR– 

NYSEAMEX–2012–12] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Order Approving a 

Proposed Rule Change Amending the 

NYSE Amex Equities Definition of 

Approved Person To Exclude Foreign 

Affiliates, Eliminating the Application 

Process for Approved Persons, and 

Making Related Technical and 

Conforming Changes 

April 2, 2012. 

I. Introduction 

On February 14, 2012, NYSE Amex 

LLC (the ‘‘Exchange’’ or ‘‘NYSE Amex’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 2 and Rule 

19b–4 thereunder,3 a proposed rule 

change to amend the NYSE Amex 

Equities definition of approved person 

to exclude foreign affiliates, eliminate 

the application process for approved 

persons, and make related technical and 

conforming changes. The proposed rule 

change was published for comment in 

the Federal Register on March 1, 2012.4

The Commission received no comments 

on the proposal. This order approves the 

proposed rule change. 

II. Description of the Proposed Rule 

Change 

The Exchange proposed to amend the 

NYSE Amex Equities definition of 

‘‘approved person’’ to exclude foreign 

affiliates, eliminate the application 

process for approved persons, and make 

related technical and conforming 

changes. 

The Exchange proposed to amend the 

definition of approved person in NYSE 

Amex Equities Rule 2 to revise the 

definition of which entities are deemed 

to be under ‘‘common control’’ with a 

member organization. The Exchange 

proposed to amend the definition of 

approved person so that it would 

include any person, other than a 

member, principal executive or 

employee of a member organization, 

who controls a member organization, is 

engaged in a securities or kindred 

business that is controlled by a member 

or member organization, or is a U.S. 

registered broker-dealer under common 

control with a member organization. 

The Exchange proposed several 

additional amendments to its Rules. The 

Exchange proposed to amend NYSE 

Amex Equities Rule 22 to provide that 

a member of certain NYSE boards and 

committees may not participate in the 

consideration of any matter if there are 

certain types of indebtedness between 

the board or committee member and a 

member organization’s affiliate or other 

related parties. The Exchange proposed 

to amend NYSE Amex Equities Rule 

98A, which provides that no issuer, or 

partner or subsidiary thereof, may 

become an approved person of a 

Designated Market Maker (‘‘DMM’’) unit 

that is registered in the stock of that 

issuer, to provide instead that a DMM 

unit may not be registered in a stock of 

an issuer, or a partner or subsidiary 

thereof, if such entity is either an 

approved person or an affiliate of the 

DMM unit’s member organization. The 

Exchange proposed to amend 

Supplementary Material .30(c) of Rule 

402 to provide that when securities are 

callable in part under the Rule, a 

member organization may not allocate 

any called securities to the account of 

an affiliate until all customer positions 

have been satisfied. 

The Exchange also proposed to amend 

its rules to remove the requirement that 

the Exchange affirmatively approve each 

application to become an approved 

person, and accordingly, to remove all 

references to an approval process and 

the submission of an application for 

such approval from NYSE Amex 

Equities Rules 304, 308, and 311. The 

Exchange also proposed to eliminate use 

of the Forms AP–1 and AD–G. 

The Exchange proposed to amend 

NYSE Amex Equities Rule 304 to 

provide specifically that a member 

organization would be required to 

identify all of its approved persons to 

the Exchange and each such approved 

person would continue to be required to 

consent to the Exchange’s jurisdiction. 

The Exchange also proposed to make 

technical and conforming changes to 

other rules that reference the approved 

person application process. 

III. Discussion and Commission 

Findings 

After careful review, 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. In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b) 5 of the Act, in general, and furthers 

the objectives of Section 6(b)(5) 6 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 noted that 

the proposed approved person 

definition and consent to jurisdiction 

process would remove unnecessary 

complexities and excessive 

informational requirements and create a 

more efficient and less burdensome 

process for membership applicants and 

member organizations while 

maintaining appropriate regulatory 

standards.7 As such, the Exchange 

believes that the proposed rule change 

would contribute to removing 

impediments to and perfecting the 

mechanism of a free and open market 

and a national market system.8 The 

Commission believes that the proposed 

rule change is consistent with the 

Exchange Act and should reduce the 

burdens on Exchange members while 

preserving the Exchange’s jurisdiction 

over approved persons and maintaining 

appropriate controls over approved 

persons. 

The Commission has reviewed the 

record for the proposed rule change and 

believes that the record does not contain 

any information to indicate that the 

proposed rule would have a significant 

effect on efficiency, competition, or 

capital formation. In light of the record, 

the Commission has considered the 

proposed rule’s impact on efficiency, 

competition, and capital formation and 

has concluded that the proposed rule is 

unlikely to have any significant effect.9

mstockstill on DSK4VPTVN1PROD with NOTICES