7892 Federal Register / Vol. 80, No. 29 / Thursday, February 12, 2015 / Notices 

22 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 Nos. 73846 

(December 16, 2014), 79 FR 76415 (December 22, 

2014) (SR–MIAX–2014–64); 73847 (December 16, 

2014), 79 FR 76426 (December 22, 2014) (SR– 

NYSEMKT–2014–106); 72142 (May 9, 2014), 79 FR 

27961 (May 15, 2014) (SR–NASDAQ–2014–052); 

and 72143 (May 9, 2014), 79 FR 27963 (May 15, 

2014) (SR–BX–2014–025). 

4 15 U.S.C. 78f(b). 

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

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. 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– 

2015–05, and should be submitted on or 

before March 5, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–02895 Filed 2–11–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74224; File No. SR–ISE– 

2015–05] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Extend the SPY Pilot 

Program 

February 6, 2015. 

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 

4, 2015, 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 the Substance 

of the Proposed Rule Change 

The ISE proposes to amend its rules 

to extend the pilot program that 

eliminated position and exercise limits 

for physically-settled options on the 

SPDR S&P ETF Trust (‘‘SPY’’) (‘‘SPY 

Pilot Program’’). 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, 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 Exchange proposes to amend 

Supplementary Material .01 to Rule 412 

and Supplementary Material .01 to Rule 

414 to extend the duration of the SPY 

Pilot Program through July 12, 2015, 

consistent with proposed rule changes 

filed by other options exchanges.3 This 

filing does not propose any substantive 

changes to the SPY Pilot Program. In 

proposing to extend the SPY Pilot 

Program, the Exchange reaffirms its 

consideration of several factors that 

supported the original proposal of the 

SPY Pilot Program, including (1) the 

liquidity of the option and the 

underlying security, (2) the market 

capitalization of the underlying security 

and the related index, (3) the reporting 

of large positions and requirements 

surrounding margin, and (4) financial 

requirements imposed by ISE and the 

Commission. 

With this proposed extension to the 

SPY Pilot Program, the Exchange has 

submitted a report to the Commission 

reflecting the trading of standardized 

SPY options without position limits 

from January through December, 2014. 

The report was prepared in the manner 

specified in the filing extending the SPY 

Pilot Program to the current pilot end 

date of February 5, 2015. The Exchange 

notes that it is unaware of any problems 

created by the SPY Pilot Program and 

does not foresee any as a result of the 

proposed extension. 

The Exchange represents that it will 

submit a new pilot report at least thirty 

(30) days before the end of the extended 

SPY Pilot Program, which will cover the 

extended pilot period. The Pilot Report 

will detail the size and different types 

of strategies employed with respect to 

positions established as a result of the 

elimination of position limits in SPY. In 

addition, the Pilot Report will note 

whether any problems resulted due to 

the no limit approach and any other 

information that may be useful in 

evaluating the effectiveness of the SPY 

Pilot Program. The Pilot Report will 

compare the impact of the SPY Pilot 

Program, if any, on the volumes of SPY 

options and the volatility in the price of 

the underlying SPY shares, particularly 

at expiration. In preparing the report the 

Exchange will utilize various data 

elements such as volume and open 

interest. In addition the Exchange will 

make available to Commission staff data 

elements relating to the effectiveness of 

the SPY Pilot Program. 

Conditional on the findings in the 

Pilot Report, the Exchange will file with 

the Commission a proposal to extend 

the pilot program, adopt the pilot 

program on a permanent basis or 

terminate the pilot. If the SPY Pilot 

Program is not extended or adopted on 

a permanent basis by the expiration of 

the extended pilot, the position limits 

for SPY would revert to limits in effect 

at the commencement of the SPY Pilot 

Program. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder that 

are applicable to a national securities 

exchange, and, in particular, with the 

requirements of Section 6(b) of the Act.4

In particular, the proposal is consistent 

with Section 6(b)(5) of the Act,5 because 

it is designed to promote just and 

equitable principles of trade, to remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system and, in 


Rmajette on DSK2VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 29 / Thursday, February 12, 2015 / Notices 7893 

6 15 U.S.C. 78f(b)(8). 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

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

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and the 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. 

9 17 CFR 240.19b–4(f)(6). 

10 17 CFR 240.19b–4(f)(6)(iii). 

11For 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). 12 17 CFR 200.30–3(a)(12). 

general, to protect investors and the 

public interest. 

The Exchange believes that extending 

the SPY Pilot Program promotes just 

and equitable principles of trade by 

permitting market participants, 

including market makers, institutional 

investors and retail investors, to 

establish greater positions when 

pursuing their investment goals and 

needs. The Exchange also believes that 

economically equivalent products 

should be treated in an equivalent 

manner so as to avoid regulatory 

arbitrage, especially with respect to 

position limits. Treating SPY and SPX 

options differently by virtue of imposing 

different position limits is inconsistent 

with the notion of promoting just and 

equitable principles of trade and 

removing impediments to perfect the 

mechanisms of a free and open market. 

At the same time, the Exchange believes 

that the elimination of position limits 

for SPY options would not increase 

market volatility or facilitate the ability 

to manipulate the market. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange believes the proposal is 

consistent with Section 6(b)(8) of the 

Act 6 in that it does not impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed rule change is not designed to 

address any aspect of competition, 

whether between the Exchange and its 

competitors, or among market 

participants. Instead the proposed rule 

change is designed to allow the SPY 

Pilot Program to continue as other SROs 

have adopted similar provisions. 

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: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) 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 7 and Rule 19b– 

4(f)(6) thereunder.8

A proposed rule change filed 

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

Act 9 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 10

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 Exchange believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest 

because it would allow the SPY Pilot 

Program to continue uninterrupted. The 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest. Therefore, the 

Commission hereby waives the 

operative delay and designates the 

proposed rule change operative upon 

filing.11

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. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

change should be approved or 

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: 

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–2015–05 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–ISE–2015–05. 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. 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–ISE– 

2015–05, and should be submitted on or 

before March 5, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–02896 Filed 2–11–15; 8:45 am] 

BILLING CODE 8011–01–P 


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