71488 Federal Register / Vol. 79, No. 231 / Tuesday, December 2, 2014 / Notices 

16 15 U.S.C. 78s(b)(3)(A)(ii). 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Penny Pilot was established in June 2012 

and extended in 2014. See Securities Exchange Act 

Release Nos. 67256 (June 26, 2012), 77 FR 39277 

(July 2, 2012) (SR–BX–2012–030) (order approving 

BX option rules and establishing Penny Pilot); and 

72246 (May 23, 2014), 79 FR 31160 (May 30, 2014) 

(SR–BX–2014–027) (notice of filing and immediate 

effectiveness extending the Penny Pilot through 

December 31, 2014). 

The Exchange believes that increasing 

the Active Port Fee cap from $41,000 to 

$42,000 as of April 1, 2015 is equitable 

and not unfairly discriminatory because 

the Exchange will apply the fee cap to 

all Specialists and Market Makers 

uniformly at that time. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

an undue burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange believes that offering 

Specialists and Market Makers the 

opportunity to utilize certain Active 

SQF ports, during this transition with 

XL, at no cost will ensure the transition 

is done smoothly. Specialists and 

Market Makers will continue to be 

assessed the Active SQF Port Fees for 

current ports at a Fixed Fee that is 

representative of their typical usage. 

The Exchange would allow these market 

participants to utilize new ports at no 

cost without limit. 

Finally, increasing the Active SQF 

Fee cap from $41,000 to $42,000 as of 

April 1, 2015 will not impose an undue 

burden on competition because the cap 

would be applied uniformly to all 

market participants. 

The Exchange operates in a highly 

competitive market, comprised of 

twelve options exchanges, in which 

market participants can easily and 

readily direct order flow to competing 

venues if they deem fee levels at a 

particular venue to be excessive or 

rebates to be inadequate. Accordingly, 

the fees that are assessed and the rebates 

paid by the Exchange described in the 

above proposal are influenced by these 

robust market forces and therefore must 

remain competitive with fees charged 

and rebates paid by other venues and 

therefore must continue to be reasonable 

and equitably allocated to those 

members that opt to direct orders to the 

Exchange rather than competing venues. 

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 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.16 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– 

Phlx–2014–73 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–Phlx–2014–73. 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–Phlx– 

2014–73, and should be submitted on or 

before December 23, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28319 Filed 12–1–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73689; File No. SR–BX– 

2014–057] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change Relating to 

Extension of the Exchange’s Penny 

Pilot Program and Replacement of 

Penny Pilot Issues That Have Been 

Delisted 

November 25, 2014. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 1, and Rule 19b–4 2 thereunder, 

notice is hereby given that on November 

21, 2014, NASDAQ OMX BX, Inc. 

(‘‘Exchange’’ or ‘‘BX’’) 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 

BX is filing with the Commission a 

proposal to amend Chapter VI, Section 

5 (Minimum Increments) to extend 

through June 30, 2015, the Penny Pilot 

Program in options classes in certain 

issues (‘‘Penny Pilot’’ or ‘‘Pilot’’), and to 

change the date when delisted classes 

may be replaced in the Penny Pilot.3

The Exchange requests that the 

Commission waive the 30-day operative 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 231 / Tuesday, December 2, 2014 / Notices 71489 

4The replacement issues will be announced to 

the Exchange’s membership via an Options Trader 

Alert (OTA) posted on the Exchange’s Web site. The 

Exchange proposes in its Penny Pilot rule that 

replacement issues will be selected based on 

trading activity in the previous six months. The 

replacement issues would be identified based on 

The Option Clearing Corporation’s trading volume 

data from June 1, 2014 through November 30, 2014. 

The month immediately preceding the replacement 

issues’ addition to the Pilot Program (i.e. December) 

would not be used for purposes of the six-month 

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

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

delay period to the extent needed for 

timely industry-wide implementation of 

the proposal. 

The text of the amended Exchange 

rule is set forth immediately below. 

Proposed new language is in italics 

and proposed deleted language is 

[bracketed]. 

NASDAQ OMX BX Rules 

Options Rules 

* * * * * 

Chapter VI Trading Systems 

* * * * * 

Sec. 5 Minimum Increments 

(a) The Board may establish minimum 

quoting increments for options contracts 

traded on BX Options. Such minimum 

increments established by the Board 

will be designated as a stated policy, 

practice, or interpretation with respect 

to the administration of this Section 

within the meaning of Section 19 of the 

Exchange Act and will be filed with the 

SEC as a rule change for effectiveness 

upon filing. Until such time as the 

Board makes a change in the 

increments, the following principles 

shall apply: 

(1) If the options series is trading at 

less than $3.00, five (5) cents; 

(2) If the options series is trading at 

$3.00 or higher, ten (10) cents; and 

(3) For a pilot period scheduled to 

expire on [December 31, 2014] June 30, 

2015, if the options series is trading 

pursuant to the Penny Pilot program one 

(1) cent if the options series is trading 

at less than $3.00, five (5) cents if the 

options series is trading at $3.00 or 

higher, unless for QQQQs, SPY and 

IWM where the minimum quoting 

increment will be one cent for all series 

regardless of price. A list of such 

options shall be communicated to 

membership via an Options Trader Alert 

(‘‘OTA’’) posted on the Exchange’s Web 

site. 

The Exchange may replace any pilot 

issues that have been delisted with the 

next most actively traded multiply 

listed options classes that are not yet 

included in the pilot, based on trading 

activity in the previous six months. The 

replacement issues may be added to the 

pilot on the second trading day 

following [July 1, 2014] January 1, 2015. 

(4) No Change. 

* * * * * 

The text of the proposed rule change 

is also available on the Exchange’s Web 

site at http://

nasdaqomxbx.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. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to amend 

Chapter VI, Section 5 to extend the 

Penny Pilot through June 30, 2015, and 

to change the date when delisted classes 

may be replaced in the Penny Pilot. The 

Exchange believes that extending the 

Penny Pilot will allow for further 

analysis of the Penny Pilot and a 

determination of how the program 

should be structured in the future. 

Under the Penny Pilot, the minimum 

price variation for all participating 

options classes, except for the Nasdaq100 Index Tracking Stock (‘‘QQQQ’’), 

the SPDR S&P 500 Exchange Traded 

Fund (‘‘SPY’’) and the iShares Russell 

2000 Index Fund (‘‘IWM’’), is $0.01 for 

all quotations in options series that are 

quoted at less than $3 per contract and 

$0.05 for all quotations in options series 

that are quoted at $3 per contract or 

greater. QQQQ, SPY and IWM are 

quoted in $0.01 increments for all 

options series. The Penny Pilot is 

currently scheduled to expire on 

December 31, 2014. 

The Exchange proposes to extend the 

time period of the Penny Pilot through 

June 30, 2015, and to provide revised 

dates for adding replacement issues to 

the Penny Pilot. The Exchange proposes 

that any Penny Pilot Program issues that 

have been delisted may be replaced on 

the second trading day following 

January 1, 2015. The replacement issues 

will be selected based on trading 

activity in the previous six months.4

This filing does not propose any 

substantive changes to the Penny Pilot 

Program; all classes currently 

participating in the Penny Pilot will 

remain the same and all minimum 

increments will remain unchanged. The 

Exchange believes the benefits to public 

customers and other market participants 

who will be able to express their true 

prices to buy and sell options have been 

demonstrated to outweigh the potential 

increase in quote traffic. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 5 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 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, and 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. 

In particular, the proposed rule 

change, which extends the Penny Pilot 

for an additional six months through 

June 30, 2015, and changes the date for 

replacing Penny Pilot issues that were 

delisted to the second trading day 

following January 1, 2015, will enable 

public customers and other market 

participants to express their true prices 

to buy and sell options for the benefit 

of all market participants. This is 

consistent with the Act. 

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. To the 

contrary, this proposal is procompetitive because it allows Penny 

Pilot issues to continue trading on the 

Exchange. Moreover, the Exchange 

believes that the proposed rule change 

will allow for further analysis of the 

Pilot and a determination of how the 

Pilot should be structured in the future; 

and will serve to promote regulatory 

clarity and consistency, thereby 

reducing burdens on the marketplace 

and facilitating investor protection. The 

Pilot is an industry wide initiative 

supported by all other option 


rljohnson on DSK3VPTVN1PROD with NOTICES
71490 Federal Register / Vol. 79, No. 231 / Tuesday, December 2, 2014 / Notices 

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

8 17 CFR 240.19b–4(f)(6). 9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

exchanges. The Exchange believes that 

extending the Pilot will allow for 

continued competition between market 

participants on the Exchange trading 

similar products as their counterparts 

on other exchanges, while at the same 

time allowing the Exchange to continue 

to compete for order flow with other 

exchanges in option issues trading as 

part of the Pilot. 

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 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) 7 of the Act and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.8

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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) 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– 

BX–2014–057 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, Station 

Place, 100 F Street NE., Washington, DC 

20549–9303. 

* * * * * 

All submissions should refer to File 

Number SR–BX–2014–057. 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 BX. 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–BX–2014–057 and should 

be submitted on or before December 23, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28321 Filed 12–1–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73683; File No. SR– 

NASDAQ–2014–110] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing of a Proposed Rule Change To 

Adopt NASDAQ Rule 7015(i) To Offer 

the New IPO Workstation 

November 25, 2014. 

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 November 

14, 2014 The NASDAQ Stock Market 

LLC (‘‘NASDAQ’’ or the ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) a 

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 

NASDAQ proposes to adopt NASDAQ 

Rule 7015(i) to offer the new IPO 

Workstation. 

The text of the proposed rule change 

is available at http://

nasdaq.cchwallstreet.com/, at 

NASDAQ’s principal office, 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, 

NASDAQ 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 

NASDAQ recently filed a proposed 

rule change to offer the IPO Indicator as 

an enhancement to NASDAQ 

Workstation subscription at no 


rljohnson on DSK3VPTVN1PROD with NOTICES