1688 Federal Register / Vol. 80, No. 8 / Tuesday, January 13, 2015 / Notices 

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

2 17 CFR 240.19b–4. 

3Cabinet or accommodation trading of option 

contracts is intended to accommodate persons 

wishing to effect closing transactions in those series 

of options dealt in on the Exchange for which there 

is no auction market. 

4Specialists and ROTs are not subject to the 

requirements of Rule 1014 in respect of orders 

placed pursuant to this Rule. Also, the provisions 

of Rule 1033(b) and (c), Rule 1034 and Rule 1038 

do not apply to orders placed in the cabinet. 

Cabinet transactions are not reported on the ticker. 

5See Exchange Rule 1059. 

6Phlx Rule 1059, Commentary .02; See Securities 

Exchange Act Release No. 63626 (December 30, 

2010), 76 FR 812 (January 6, 2011) (SR–Phlx–2010– 

185). 

7Prior to the pilot, the $1 cabinet trading 

procedures were limited to options classes traded 

in $0.05 or $0.10 standard increments. The $1 

cabinet trading procedures were not available in 

Penny Pilot Program classes because in those 

classes, an option series could trade in a standard 

increment as low as $0.01 per share (or $1.00 per 

option contract with a 100 share multiplier). The 

pilot allows trading below $0.01 per share (or $1.00 

per option contract with a 100 share multiplier) in 

all classes, including those classes participating in 

the Penny Pilot Program. 

8See Securities Exchange Act Release No. 64571 

(May 31, 2011), 76 FR 32385 (June 6, 2011) (SR– 

Phlx–2011–72). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 74012; File No. SR–Phlx–2015– 

03] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Extend the 

Pilot Program in Rule 1059, 

Accommodation Transactions 

January 7, 2015. 

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 January 2, 

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 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 Exchange proposes to extend the 

pilot program in Rule 1059, 

Accommodation Transactions, to allow 

cabinet trading to take place below $1 

per option contract under specified 

circumstances (the ‘‘pilot program’’). 

The text of the proposed rule change 

is set forth below. Proposed new 

language is in italics; proposed 

deletions are in brackets. 

* * * * * 

NASDAQ OMX PHLX Rules 

* * * * * 

Options Rules 

* * * * * 

Rule 1059. Accommodation 

Transactions 

(a)–(b) No change. 

••• Commentary: 

.01 No change. 

.02 Limit Orders Priced Below $1: 

Limit orders with a price of at least $0 

but less than $1 per option contract may 

trade under the terms and conditions in 

Rule 1059 above in each series of option 

contracts open for trading on the 

Exchange, except that: 

(a)–(c) No change. 

(d) Unless otherwise extended, the 

effectiveness of the Commentary .02 

terminates January 5, [2015] 2016 or, 

upon permanent approval of these 

procedures by the Securities and 

Exchange Commission, whichever 

occurs first. 

* * * * * 

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 Exchange proposes to extend the 

pilot program in Commentary .02 of 

Exchange Rule 1059, Accommodation 

Transactions, which sets forth specific 

procedures for engaging in cabinet 

trades, to allow the Commission 

adequate time to consider permanently 

allowing transactions to take place on 

the Exchange in open outcry at a price 

of at least $0 but less than $1 per option 

contract.3 Prior to the pilot program, 

Rule 1059 required that all orders 

placed in the cabinet were assigned 

priority based upon the sequence in 

which such orders were received by the 

specialist. All closing bids and offers 

would be submitted to the specialist in 

writing, and the specialist effected all 

closing cabinet transactions by matching 

such orders placed with him. Bids or 

offers on orders to open for the accounts 

of customer, firm, specialists and 

Registered Options Traders (‘‘ROTs’’) 

could be made at $1 per option contract, 

but such orders could not be placed in 

and must yield to all orders in the 

cabinet. Specialists effected all cabinet 

transactions by matching closing 

purchase or sale orders which were 

placed in the cabinet or, provided there 

was no matching closing purchase or 

sale order in the cabinet, by matching a 

closing purchase or sale order in the 

cabinet with an opening purchase or 

sale order.4 All cabinet transactions 

were reported to the Exchange following 

the close of each business day.5 Any (i) 

member, (ii) member organization, or 

(iii) other person who was a nonmember broker or dealer and who 

directly or indirectly controlled, was 

controlled by, or was under common 

control with, a member or member 

organization (any such other person 

being referred to as an affiliated person) 

could effect any transaction as principal 

in the over-the-counter market in any 

class of option contracts listed on the 

Exchange for a premium not in excess 

of $1.00 per contract. 

On December 30, 2010, the Exchange 

filed an immediately effective proposal 

that established the pilot program being 

extended by this filing. The pilot 

program allowed transactions to take 

place in open outcry at a price of at least 

$0 but less than $1 per option contract 

until June 1, 2011.6 These lower priced 

transactions are traded pursuant to the 

same procedures applicable to $1 

cabinet trades, except that pursuant to 

the pilot program (i) bids and offers for 

opening transactions are only permitted 

to accommodate closing transactions in 

order to limit use of the procedure to 

liquidations of existing positions, and 

(ii) the procedures are also made 

available for trading in options 

participating in the Penny Pilot 

Program.7 On May 31, 2011, the 

Exchange filed an immediately effective 

proposal that extended the pilot 

program until December 1, 2011 to 

consider whether to seek permanent 

approval of the temporary procedure.8

On November 30, 2011, the Exchange 

filed an immediately effective proposal 

that extended the pilot program until 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 8 / Tuesday, January 13, 2015 / Notices 1689 

9See Securities Exchange Act Release No. 65852 

(November 30, 2011), 76 FR 76212 (December 6, 

2011) (SR–Phlx–2011–156). 

10See Securities Exchange Act Release No. 67106 

(June 4, 2012), 77 FR 34108 (June 8, 2012) (SR– 

Phlx–2012–74). 

11See Securities Exchange Act Release No. 68201 

(November 9, 2012), 77 FR 68871 (November 16, 

2012) (SR–Phlx–2012–131). 

12See Securities Exchange Act Release No. 69583 

(May 15, 2013), 78 FR 30380 (May 22, 2013) (SR– 

Phlx–2013–53). 

13See Securities Exchange Act Release No. 71096 

(December 17, 2013), 78 FR 77538 (December 23, 

2013) (SR–Phlx–2013–120). 

14 15 U.S.C. 78f. 

15 15 U.S.C. 78f(b)(5). 16The Exchange has satisfied this requirement. 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f)(6). 

19 Id. 

20For purposes only of waiving the operative 

delay, the Commission has considered the proposed 

rule’s impact on efficiency, competition, and capital 

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

June 1, 2012.9 On May 29, 2012, the 

Exchange filed an immediately effective 

proposal that extended the pilot 

program until December 1, 2012.10 On 

November 1, 2012, the Exchange filed 

an immediately effective proposal that 

extended the pilot program until June 1, 

2013.11 On May 8, 2013, the Exchange 

filed an immediately effective proposal 

that extended the pilot program until 

January 5, 2014.12 On December 4, 2013, 

the Exchange filed an immediately 

effective proposal that extended the 

pilot program until January 5, 2015.13

The Exchange now proposes an 

extension of the pilot program to allow 

additional time to consider its effects 

while the pilot program continues 

uninterrupted. 

The Exchange believes that allowing a 

price of at least $0 but less than $1 will 

continue to better accommodate the 

closing of options positions in series 

that are worthless or not actively traded, 

particularly due to recent market 

conditions which have resulted in a 

significant number of series being outof-the-money. For example, a market 

participant might have a long position 

in a call series with a strike price of 

$100 and the underlying stock might 

now be trading at $30. In such an 

instance, there might not otherwise be a 

market for that person to close-out its 

position even at the $1 cabinet price 

(e.g., the series might be quoted no bid). 

The Exchange hereby seeks to extend 

the pilot period for such $1 cabinet 

trading until January 5, 2016. The 

Exchange seeks this extension to allow 

the procedures to continue without 

interruption. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,14

in general, and with Section 6(b)(5) of 

the Act,15 in particular, in that the 

proposal 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 regulating, clearing, settling, 

processing information with respect to, 

and 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. 

Specifically, the Exchange believes that 

allowing for liquidations at a price less 

than $1 per option contract pursuant to 

the pilot program will better facilitate 

the closing of options positions that are 

worthless or not actively trading, 

especially in Penny Pilot issues where 

cabinet trades are not otherwise 

permitted. The Exchange believes the 

extension is of sufficient length to allow 

the Commission to assess the impact of 

the Exchange’s authority to allow 

transactions to take place in open outcry 

at a price of at least $0 but less than $1 

per option in accordance with its 

attendant obligations and conditions. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

The proposal does not raise any issues 

of intra-market competition because it 

applies to all options participants in the 

same manner. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing rule 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 if consistent 

with the protection of investors and the 

public interest, provided that the selfregulatory organization has given 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,16 the proposed rule 

change has become effective pursuant to 

Section 19(b)(3)(A) of the Act 17 and 

Rule 19b–4(f)(6) thereunder.18

Under Rule 19b–4(f)(6) of the Act,19

the proposal does not become operative 

for 30 days after the date of its filing, or 

such shorter time as the Commission 

may designate if consistent with the 

protection of investors and the public 

interest. The Exchange has requested 

that the Commission waive the 30-day 

operative delay period after which a 

proposed rule change under Rule 19b– 

4(f)(6) becomes operative so that the 

pilot may continue without 

interruption. The Commission believes 

that waiver of the 30-day operative 

delay is consistent with the protection 

of investors and the public interest 

because it will allow the pilot to 

continue uninterrupted, thereby 

avoiding any potential investor 

confusion that could result from a 

temporary interruption in the pilot and 

allowing members to continue to benefit 

from the program. Based on the 

foregoing, the Commission hereby 

waives the 30-day operative delay and 

designates the proposal operative upon 

filing.20

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 will 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 rule-comments@

sec.gov. Please include File Number SR– 

Phlx–2015–03 on the subject line. 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
1690 Federal Register / Vol. 80, No. 8 / Tuesday, January 13, 2015 / Notices 

21 17 CFR 200.30–3(a)(12). 

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–Phlx–2015–03. 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–Phlx–2015–03 and should 

be submitted on or before February 3, 

2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00298 Filed 1–12–15; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice 8999] 

Culturally Significant Objects Imported 

for Exhibition Determinations: ‘‘J.M.W. 

Turner: Painting Set Free’’ 

SUMMARY: Notice is hereby given of the 

following determinations: Pursuant to 

the authority vested in me by the Act of 

October 19, 1965 (79 Stat. 985; 22 U.S.C. 

2459), Executive Order 12047 of March 

27, 1978, the Foreign Affairs Reform and 

Restructuring Act of 1998 (112 Stat. 

2681, et seq.; 22 U.S.C. 6501 note, et 

seq.), Delegation of Authority No. 234 of 

October 1, 1999, and Delegation of 

Authority No. 236–3 of August 28, 2000 

(and, as appropriate, Delegation of 

Authority No. 257 of April 15, 2003), I 

hereby determine that the objects to be 

included in the exhibition ‘‘J.M.W. 

Turner: Painting Set Free,’’ imported 

from abroad for temporary exhibition 

within the United States, are of cultural 

significance. The objects are imported 

pursuant to loan agreements with the 

foreign owners or custodians. I also 

determine that the exhibition or display 

of the exhibit objects at the J. Paul Getty 

Museum, Los Angeles, California, from 

on or about February 24, 2015, until on 

or about May 24, 2015, the Fine Arts 

Museums of San Francisco, San 

Francisco, California, from on or about 

June 20, 2015, until on or about 

September 20, 2015, and at possible 

additional exhibitions or venues yet to 

be determined, is in the national 

interest. I have ordered that Public 

Notice of these Determinations be 

published in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: For 

further information, including a list of 

the imported objects, contact Paul W. 

Manning, Attorney-Adviser, Office of 

the Legal Adviser, U.S. Department of 

State (telephone: 202–632–6469). The 

mailing address is U.S. Department of 

State, SA–5, L/PD, Fifth Floor (Suite 

5H03), Washington, DC 20522–0505. 

Dated: January 7, 2015. 

Kelly Keiderling, 

Principal Deputy Assistant Secretary, Bureau 

of Educational and Cultural Affairs, 

Department of State. 

[FR Doc. 2015–00471 Filed 1–12–15; 8:45 am] 

BILLING CODE 4710–05–P 

DEPARTMENT OF STATE 

[Delegation of Authority: 380] 

Delegation by the Secretary of State to 

the Under Secretary for Arms Control 

and International Security of Authority 

To Make Findings and Submit Reports 

Regarding Compliance With the Treaty 

on Conventional Armed Forces in 

Europe 

By virtue of the authority vested in 

me as Secretary of State, including 

Section 1 of the State Department Basic 

Authorities Act, as amended (22 U.S.C. 

2651a), and Executive Order 13313, 

dated July 31, 2003, and to the extent 

authorized by law, I hereby delegate to 

the Under Secretary for Arms Control 

and International Security the authority 

to make findings, including 

certifications, determinations, and 

assessments, and to submit the Report 

on Compliance With the Treaty on 

Conventional Armed Forces in Europe, 

consistent with Condition 5(C) of the 

Resolution of Advice and Consent to 

Ratification of the Document Agreed 

Among the States Parties to the Treaty 

on Conventional Armed Forces in 

Europe of November 19, 1990 (the 

‘‘Flank Document’’). 

Any act, executive order, regulation or 

procedure subject to, or affected by, this 

delegation shall be deemed to be such 

act, executive order, regulation or 

procedure as amended from time to 

time. 

Notwithstanding this delegation of 

authority, the Secretary, the Deputy 

Secretary, or the Deputy Secretary for 

Management and Resources may at any 

time exercise any authority or function 

delegated by this delegation of 

authority. 

This delegation of authority shall be 

published in the Federal Register. 

Dated: December 30, 2014. 

John F. Kerry, 

Secretary of State. 

[FR Doc. 2015–00359 Filed 1–12–15; 8:45 am] 

BILLING CODE 4710–27–P 

DEPARTMENT OF STATE 

[Public Notice 8998] 

Shipping Coordinating Committee; 

Notice of Committee Meeting 

The Shipping Coordinating 

Committee (SHC) will conduct an open 

meeting at 9:00 a.m. on Wednesday, 

February 4, 2015, in the Alexander 

Hamilton Room on the 9th floor of the 

Ballston Common Plaza, 4200 Wilson 

Blvd., Arlington, VA 20598–7200. The 

USCG Offices in the Ballston Commons 

Plaza are located above the Ballston 

Common Mall. The primary purpose of 

the meeting is to prepare for the second 

Session of the International Maritime 

Organization’s (IMO) Sub-Committee on 

Ship Design and Construction to be held 

at the IMO Headquarters, United 

Kingdom, February 16–20, 2015. 

The agenda items to be considered 

include: 

—Amendments to SOLAS chapter II–1 

subdivision and damage stability 

regulations 

—Guidelines on safe return to port for 

passenger ships 

—Second-generation intact stability 

criteria 


asabaliauskas on DSK5VPTVN1PROD with NOTICES