15848 Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities and Exchange Act Release No. 

73999 (January 6, 2015), 80 FR 1599 [sic] (January 

12, 2015) (SR–ISE–2014–52) (order granting 

approval of proposed rule change regarding short 

term option series program). Following approval of 

filing by the International Securities Exchange, LLC, 

several other option exchanges submitted ‘‘copycat’’ 

filings for immediate effectiveness. See, e.g., 

Securities and Exchange Act Release Nos. 74016 

(January 8, 2015), 80 FR 1976 (January 14, 2015) 

(SR–BOX–2015–01); 74144 (January 27, 2015), 80 

FR 5602 (February 2, 2015) (SR–CBOE–2015–09 

[sic]); 74145 (January 27, 2015), 80 FR 5600 

(February 2, 2015) (SR–Phlx–2015–09); 74146 

(January 27, 2015), 80 FR 5595 (February 2, 2015) 

(SR–NASDAQ–2015–005); 74147 (January 27, 

2015), 80 FR 5604 (February 2, 2015) (SR–BX– 

2015–006). 

5The Exchange notes that the number of option 

classes that may participate in the STOS Program 

is aggregated between equity options and index 

options and is not apportioned between equity 

options and index options. For STOS Program rules 

regarding index options, see Rule 903C; Rule 

900C(b)(27). 

6See Rule 903(h). 7 Id. 

8See Commentary .10(d) to Rule 903. 9See Commentary .06 to Rule 903 (allows the 

Exchange to designate up to 150 options classes on 

individual stocks to be traded in $1 strike price 

intervals where the strike price is between $50 and 

$1). 10See Commentary .10(d) to Rule 903. 11See Commentary .07(a) to Rule 903. 12 Id. The term ‘‘primary market’’ is defined in 

Rule 900.2NY(62) as the principal market in which 

an underlying security is traded. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74540; File No. SR– 

NYSEMKT–2015–16] 

Self-Regulatory Organizations; NYSE 

MKT LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending Its Rules 

Governing the Short Term Option 

Series Program To Extend Current 

$0.50 Strike Price Intervals in NonIndex Options to Short Term Options 

With Strike Prices Less Than $100 

March 19, 2015. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on March 

12, 2015, NYSE MKT LLC (the 

‘‘Exchange’’ or ‘‘NYSE MKT’’) 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 self-regulatory 

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 Exchange proposes to amend its 

rules governing the Short Term Option 

Series program to extend current $0.50 

strike price intervals in non-index 

options to Short Term Options with 

strike prices less than $100. The text of 

the proposed rule change is available on 

the Exchange’s Web site at 

www.nyse.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 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 Exchange proposes to amend its 

rules governing the Short Term Option 

Series program (‘‘STOS Program’’) to 

introduce finer strike price intervals for 

certain short term options. In particular, 

the Exchange proposes to amend 

Commentary .10(d) to Rule 903 to 

extend current $0.50 strike price 

intervals in non-index options to short 

term options with strike prices less than 

$100 instead of the current $75. This 

proposed change is intended to 

eliminate gapped strikes between $75 

and $100 that result from conflicting 

strike price parameters under the STOS 

and $2.50 Strike Price Programs as 

described in more detail below. The 

Exchange believes that the proposed 

rule change would increase market 

efficiency as it would align the 

Exchange’s rules with recently approved 

changes to the rules governing short 

term options series programs of other 

options exchanges,4 which would 

enable the Exchange to compete equally 

and fairly with other options exchanges 

in satisfying strong customer demand to 

have the ability to execute hedging and 

trading strategies in finer strike price 

intervals. 

Pursuant to Commentary .10(a) to 

Rule 903, the Exchange may list short 

term options in up to fifty option 

classes, in addition to option classes 

that are selected by other securities 

exchanges that employ a similar 

program under their respective rules.5

For each of these option classes, the 

Exchange may list five short term option 

expiration dates at any given time, not 

counting monthly or quarterly 

expirations.6 Specifically, on any 

Thursday or Friday that is a business 

day, the Exchange currently may list 

short term options that expire at the 

close of business on each of the next 

five Fridays that are business days and 

are not Fridays in which monthly or 

quarterly options expire.7 These short 

term option series may be listed in 

strike price intervals of $0.50, $1, or 

$2.50, with the finer strike price 

intervals being offered for lower priced 

securities 8, and for options that trade in 

dollar increments in the related monthly 

expiration.9 More specifically, per 

current Commentary .10(d) to Rule 903, 

the strike price interval for STOS may 

be $0.50 or greater for option classes 

that both trade in $1 strike price 

intervals and are in the STOS Program. 

If the class does not trade in $1 strike 

price intervals, the Exchange may list 

STOS in $0.50 intervals for strike prices 

less than $75; in $1 intervals for strike 

prices that are between $75 and $150; 

and in $2.50 intervals for strike prices 

greater than $150.10

The Exchange also operates a $2.50 

Strike Price Program that permits the 

Exchange to select up to sixty options 

classes on individual stocks to trade in 

$2.50 strike price intervals, in addition 

to option classes selected by other 

securities exchanges that employ a 

similar program under their respective 

rules.11 Monthly expiration options in 

classes admitted to the $2.50 Strike 

Price Program trade in $2.50 intervals 

where the strike price is (1) greater than 

$25 but less than $50; or (2) between 

$50 and $100 if the strikes are no more 

than $10 from the closing price of the 

underlying stock in its primary market 

on the preceding day.12 In certain 

instances, these strike price parameters 

conflict with strike prices allowed for 

short term options as dollar strikes 

between $75 and $100 otherwise 

allowed under the STOS Program may 

be within $0.50 of strikes listed 

pursuant to the $2.50 Strike Price 

Program. 

To remedy this conflict, the Exchange 

proposes to extend the $0.50 strike price 

intervals, currently allowed for short 

term options with strike prices less than 

$75, to short term options with strike 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices 15849 

13See proposed Commentary .10(d) to Rule 903. 

14See supra n. 4. 

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

16 15 U.S.C. 78f(b)(5). 

17See Commentary .10(d) to Rule 903 (regarding 

Related Non-Short Term option series). 

18See supra n. 4. 

19 15 U.S.C. 78s(b)(3)(A). 

20 17 CFR 240.19b–4(f)(6). As required under Rule 

19b–4(f)(6)(iii), the Exchange provided the 

Commission with 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. 

prices less than $100. With this 

proposed change, short term options in 

non-index option classes would trade 

in: (1) $0.50 or greater intervals for 

strike prices less than $100, or for 

option classes that trade in one dollar 

increments in the related monthly 

expiration option; (2) $1 or greater 

intervals for strike prices that are 

between $100 and $150; and (3) $2.50 

or greater intervals for strike prices 

above $150.13 The Exchange believes 

that this proposed change would 

eliminate gapped strikes between $75 

and $100. The Exchange also believes 

that the proposed rule change would 

provide the investing public and other 

markets with additional opportunities to 

hedge their investments, thus allowing 

these investors to better manage their 

risk exposure. In addition, as noted 

above, the Exchange believes the 

proposed rule change would harmonize 

the Exchange’s rules with recently 

approved rules on competing options 

exchanges, which consistency across 

markets would benefit investors.14

With regard to the impact of this 

proposal on system capacity, the 

Exchange has analyzed its capacity and 

represents that it and the Options Price 

Reporting Authority (‘‘OPRA’’) have the 

necessary systems capacity to handle 

any potential additional traffic 

associated with this proposed rule 

change. The Exchange believes that its 

ATP Holders would not have a capacity 

issue as a result of this proposal. The 

Exchange also represents that it does not 

believe this expansion would cause 

fragmentation of liquidity. 

2. Statutory Basis 

The Exchange believes that the 

proposed change is consistent with 

Section 6(b) of the Act,15 in general, and 

furthers the objectives of Section 

6(b)(5),16 in particular, in that it is 

designed to promote just and equitable 

principles of trade, to remove 

impediments to, and perfect the 

mechanism of a free and open market 

and, in general, to protect investors and 

the public interest. 

The Exchange believes that the 

proposed change would result in a 

continuing benefit to investors by giving 

them more flexibility to closely tailor 

their investment and hedging decisions, 

thus allowing them to better manage 

their risk exposure. Under the 

Exchange’s current rules, during the 

month prior to expiration, the Exchange 

is permitted to list related monthly 

option contracts in the narrower strike 

price intervals available for short term 

option series.17 After transitioning to 

short term strike price intervals, 

however, monthly options that trade in 

$2.50 intervals between $50 and $100 

under the $2.50 Strike Price Program, 

trade with dollar strikes between $75 

and $150. Due [sic] the overlap of $1 

and $2.50 intervals, the Exchange 

cannot list certain dollar strikes between 

$75 and $100 that conflict with the prior 

$2.50 strikes. For example, if the 

Exchange initially listed monthly 

options on ABC with $75, $77.50, and 

$80 strikes, the Exchange could list the 

$76 and $79 strikes when these monthly 

options transition to short term 

intervals. The Exchange would not be 

permitted to list the $77 and $78 strikes, 

however, as these are $0.50 away from 

the $77.50 strike already listed on the 

Exchange. This creates gapped strikes 

between $75 and $100, where investors 

are not able to trade otherwise allowable 

dollar strikes on the Exchange. 

Similarly, these conflicting strike 

price parameters create issues for 

investors who want to roll their 

positions from monthly to weekly 

expirations. In the example above, for 

instance, an investor that purchased a 

monthly ABC option with a $77.50 

strike price would not be able to roll 

that position into a later short term 

expiration with the same strike price as 

that strike is unavailable under current 

STOS Program rules. Thus, the 

Exchange believes that permitting $0.50 

intervals for short term options up to 

$100 would remedy both of these issues 

as strikes allowed under the $2.50 Strike 

Price Program would not conflict with 

the finer $0.50 strike price interval. The 

STOS Program has been well-received 

by market participants and the 

Exchange believes that introducing finer 

strike price intervals for short term 

options with strike prices between $75 

and $100, and thereby eliminating the 

gapped strikes described above, would 

benefit these market participants by 

giving them more flexibility to closely 

tailor their investment and hedging 

decisions. 

With regard to the impact of this 

proposal on system capacity, the 

Exchange has analyzed its capacity and 

represents that it and the OPRA have 

the necessary systems capacity to 

handle any potential additional traffic 

associated with this proposed rule 

change. The Exchange believes that its 

ATP Holders would not have a capacity 

issue as a result of this proposal. The 

Exchange also represents that it does not 

believe this expansion would cause 

fragmentation of liquidity. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

this proposed rule change would 

impose any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. To the 

contrary, the Exchange believes that the 

proposed rule change would result in 

additional investment options and 

opportunities to achieve the investment 

objectives of market participants seeking 

efficient trading and hedging vehicles, 

to the benefit of investors, market 

participants, and the marketplace in 

general. In addition, as noted above, the 

Exchange believes the proposed rule 

change is pro-competitive and would 

allow the Exchange to compete more 

effectively with other options exchanges 

that have already adopted changes to 

their short term option series programs 

that are substantially identical to the 

changes proposed by this filing.18

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 

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 for 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 19 and Rule 19b–4(f)(6) 

thereunder.20

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 stated that waiver 

of this requirement will enable the 

Exchange to, as soon as possible, have 

the ability to compete with option 

exchanges that have incorporated the 


rljohnson on DSK3VPTVN1PROD with NOTICES
15850 Federal Register / Vol. 80, No. 57 / Wednesday, March 25, 2015 / Notices 

21For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The term ‘‘Customer’’ applies to any transaction 

that is identified by a member or member 

organization for clearing in the Customer range at 

The Options Clearing Corporation (‘‘OCC’’) which 

is not for the account of broker or dealer or for the 

account of a ‘‘professional’’ (as that term is defined 

in Rule 1000(b)(14)). 

4PIXLSM is the Exchange’s price improvement 

mechanism known as Price Improvement XL or 

PIXL. See Rule 1080(n). 

5Options overlying Standard and Poor’s 

Depositary Receipts/SPDRs (‘‘SPY’’) are based on 

the SPDR exchange-traded fund, which is designed 

to track the performance of the S&P 500 Index. 

6The term ‘‘Firm’’ applies to any transaction that 

is identified by a member or member organization 

for clearing in the Firm range at OCC. 

7This includes options overlying equities, 

exchange traded funds (‘‘ETFs’’), exchange traded 

notes (‘‘ETNs’’) and indexes which are Multiply 

Listed. 

8A Specialist is an Exchange member who is 

registered as an options specialist pursuant to Rule 

1020(a). 

9A ‘‘Market Maker’’ includes Registered Options 

Traders (Rule 1014(b)(i) and (ii)), which includes 

Streaming Quote Traders (see Rule 1014(b)(ii)(A)) 

and Remote Streaming Quote Traders (see Rule 

1014(b)(ii)(B)). Directed Participants are also market 

makers. 

proposed rule change to their short term 

option series programs. For this reason, 

the Commission believes that the 

proposed rule change presents no novel 

issues and that waiver of the 30-day 

operative delay is consistent with the 

protection of investors and the public 

interest. Therefore, the Commission 

designates the proposed rule change to 

be operative upon filing.21

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 

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 rule-comments@

sec.gov. Please include File Number SR– 

NYSEMKT–2015–16 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–NYSEMKT–2015–16. 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 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– 

NYSEMKT–2015–16 and should be 

submitted on or before April 15, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–06717 Filed 3–24–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74531; File No. SR–Phlx– 

2015–25] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to the 

Pricing Schedule’s Preface and 

Sections I, II and IV 

March 19, 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 March 11, 

2015, 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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to modify the 

Phlx Pricing Schedule (‘‘Pricing 

Schedule’’). Specifically, the Exchange 

proposes to amend: (1) The Preface to 

the Pricing Schedule to include a 

reference to a Non-Customer; (2) amend 

the Customer 3 Simple Order Fee for 

Removing Liquidity in Section I, 

entitled ‘‘Rebates and Fees for Adding 

and Removing Liquidity in SPY’’ as well 

as certain PIXL 4 executions in options 

overlying SPY; 5 (3) amend a Firm 6 fee 

in Section II, entitled ‘‘Multiply Listed 

Options Fees,’’ 7 as well as certain 

pricing applicable to Specialists 8 and 

Market Makers; 9 (4) amend PIXL 

pricing in Section IV, Part A entitled 

‘‘PIXL Pricing,’’ and FLEX pricing in 

Section IV, Part B, entitled ‘‘FLEX 

Transaction Fees’’ of the Pricing 

Schedule. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://

nasdaqomxphlx.cchwallstreet.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 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 


rljohnson on DSK3VPTVN1PROD with NOTICES