Federal Register / Vol. 75, No. 170 / Thursday, September 2, 2010 / Notices 53991 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–21929 Filed 9–1–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62772; File No. SR–ISE– 

2010–91] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing of Proposed Rule 

Change To Adopt a Pilot Program To 

List Additional Expiration Months for 

Each Class of Options Opened for 

Trading on the Exchange 

August 26, 2010. 

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 August 

25, 2010, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or ‘‘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 ISE is proposing to amend its 

rules to adopt a pilot program to list 

additional expiration months for each 

class of options opened for trading on 

the Exchange. The text of the proposed 

rule change is provided below (italics 

indicate additions; [brackets] indicate 

deletions): 

Rule 504. Series of Options Contracts 

Open for Trading 

* * * * * 

Supplementary Material to Rule 504 

.01–.07 No Change 

.08 Additional Expiration Months 

Pilot Program (‘‘Pilot Program’’). For a 

Pilot Program expiring on [insert date 12 

months from the next full month from 

approval], the Exchange may select up 

to 20 options classes for which it may 

list up to two (2) additional expiration 

months in addition to the expiration 

months the Exchange currently lists 

pursuant to Rule 504(e). Additional 

expiration months listed pursuant to 

this Supplementary Material .08 will be 

the nearest months that were not 

previously listed. The Exchange may 

also list additional expiration months 

for option classes that are selected by 

other securities exchanges that employ 

a similar program under their respective 

rules. 

* * * * * 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

rules to adopt a pilot program to list 

additional expiration months for each 

class of options opened for trading on 

the Exchange. 

Pursuant to ISE Rule 504(e), the 

Exchange currently opens four 

expiration months for each class of 

options open for trading on the 

Exchange: the first two being the two 

nearest months, regardless of the 

quarterly cycle on which that class 

trades; the third and fourth being the 

next two months of the quarterly cycle 

previously designated by the Exchange 

for that specific class. For example, if 

the Exchange listed in late May a new 

equity option on a January-April-JulyOctober quarterly cycle, the Exchange 

would list the two nearest term months 

(June and July) and the next two 

expiration months of the cycle (October 

and January). When the June series 

expires, the Exchange would add the 

August series as the next nearest month. 

And when the July series expire, the 

Exchange would add the September 

series as the next month of the cycle. 

The Exchange believes that there is 

market demand for a greater number of 

expiration months. The Exchange 

therefore proposes to adopt a pilot 

program pursuant to which it will list 

up to an additional two expiration 

months, for a total of six expiration 

months for each class of options open 

for trading on the Exchange. The 

proposal will become effective on a 

pilot basis for a period twelve months 

to commence on the next full month 

after approval is received to establish 

the pilot program. Under the proposal, 

the additional months listed pursuant to 

the pilot program will result in four 

consecutive expiration months plus two 

months from the quarterly cycle. For 

example, for option classes in the 

January cycle that have expiration 

months of June, July, October, and 

January, the Exchange would 

additionally list the August and 

September series. For option classes in 

the February quarterly cycle that have 

expiration months of October, 

November, February and May, the 

Exchange would additionally list the 

December and January series. Under the 

proposal, no additional LEAP series will 

be created. 

The Exchange seeks to limit the 

proposed rule change to the 20 most 

actively traded options classes. By 

limiting the pilot to a small number of 

classes, the Exchange will be able to 

gauge interest in the pilot while limiting 

any additional demands on system 

resources. ISE estimates that this pilot 

could add up to six or seven percent to 

current quote traffic, although changes 

in market maker quoting behavior will 

likely reduce that increase by up to half. 

The Exchange believes that a limited 

pilot is a prudent step to determine 

actual market demand for additional 

expiration months. 

If the Exchange were to propose an 

extension or an expansion of the pilot 

program, or should the Exchange 

propose to make the pilot program 

permanent, ISE will submit, along with 

any filing proposing such amendments 

to the pilot program, a pilot program 

report (‘‘Report’’) that will provide an 

analysis of the pilot program covering 

the first nine months of the pilot 

program and shall submit the Report to 

the Commission at least sixty (60) days 

prior to the expiration date of the pilot 

program. The Report will include, at a 

minimum: (1) Data and written analysis 

on the open interest and trading volume 

in the classes for which additional 

expiration months were opened; (2) an 

assessment of the appropriateness of the 

option classes selected for the pilot 

program; (3) an assessment of the 

impact of the pilot program on the 

capacity on ISE, OPRA and on market 

data vendors (to the extent data from 

market data vendors is available); (4) 

any capacity problems or other 

problems that arose during the 

operation of the pilot program and how 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
53992 Federal Register / Vol. 75, No. 170 / Thursday, September 2, 2010 / Notices 

3 15 U.S.C. 78f(b). 

4 15 U.S.C. 78f(b)(5). 

5 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). 

ISE addressed such problems; (5) any 

complaints that ISE received during the 

operation of the pilot program and how 

ISE addressed them; and (6) any 

additional information that would assist 

the Commission in assessing the 

operation of the pilot program. 

Finally, the Exchange represents that 

it has the necessary systems capacity to 

support new options series that will 

result from the introduction of 

additional expiration months listed 

pursuant to this proposed rule change. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 3 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’), in general, and furthers the 

objectives of Section 6(b)(5) 4 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 in a 

manner consistent with the protection 

of investors and the public interest. In 

particular, the Exchange believes listing 

additional near-term expiration months 

will offer investors more variety in 

trading options series that were 

previously not available. The Exchange 

believes this proposed rule change will 

also generate additional volume in these 

option classes without significantly 

taxing system resources. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

impose any burden on competition. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be 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 e-mail to rulecomments@sec.gov. Please include File 

Number SR–ISE–2010–91 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–2010–91. This file 

number should be included on the 

subject line if e-mail 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– 

2010–91 and should be submitted on or 

before September 23, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.5

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–21930 Filed 9–1–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62774; File No. SR–BX– 

2010–058] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Amend Rule 

2260 To Reflect Changes to 

Corresponding FINRA Rule 

August 26, 2010. 

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 August 

17, 2010, NASDAQ OMX BX, Inc. (the 

‘‘Exchange’’ or ‘‘BX’’) 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 Exchange. The Exchange has 

designated the proposed rule change as 

constituting a non-controversial 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 proposes to amend BX 

Rule 2260 and IM–2260 to reflect recent 

changes to a corresponding rule of the 

Financial Industry Regulatory Authority 

(‘‘FINRA’’). The text of the proposed rule 

change is available at http:// 

nasdaq.cchwallstreet.com, at the 

Exchange’s principal office, at the 

Commission’s Public Reference Room, 

and on the Commission’s Web site at 

http://www.sec.gov. 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1