Document ID: SEC-2012-0500-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC
Posted Date: 2012-03-29T04:00Z

[Federal Register Volume 77, Number 61 (Thursday, March 29, 2012)]
[Notices]
[Pages 19047-19048]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-7517]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66649; File No. SR-NYSEAMEX-2012-18]

Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending Its Option 
Trading Rules To Extend the Operation of Its Pilot Program Regarding 
Minimum Value Sizes for Flexible Exchange Options Until March 29, 2013

March 23, 2012.
    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 March 12, 2012, NYSE Amex LLC (the ``Exchange'' or ``NYSE Amex'') 
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 Exchange has designated 
the proposed rule change as constituting a 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its option trading rules to extend 
the operation of its pilot program (``Pilot Program'') regarding 
minimum value sizes for flexible exchange options (``FLEX Options''), 
currently scheduled to expire on March 30, 2012, until March 29, 2013. 
The text of the proposed rule change is available at the Exchange, the 
Commission's Public Reference Room, and www.nyse.com.

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 hereby proposes to amend its option trading rules to 
extend the operation of its Pilot Program regarding minimum value sizes 
for FLEX Options, currently scheduled to expire on March 30, 2012,\4\ 
until March 29, 2013. This filing does not propose any substantive 
changes to the Pilot Program and contemplates that all other terms of 
FLEX Options will remain the same. The Exchange believes that extending 
the Pilot Program will benefit public customers and other market 
participants who will be able to use FLEX Options to manage risk for 
smaller portfolios.
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    \4\ See Securities Exchange Act Release No. 64107 (March 22, 
2011), 76 FR 17178 (March 28, 2011) (SR-NYSEAmex-2011-15).
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    In support of the proposed extension of the Pilot Program, and as 
required by the terms of the Pilot Program's implementation,\5\ the 
Exchange has submitted to the Securities and Exchange Commission 
(``SEC'' or ``Commission'') a Pilot Program Report that provides an 
analysis of the Pilot Program covering the period during which the 
Pilot Program has been in effect. This Pilot Program Report includes 
(i) data and analysis on the open interest and trading volume in (a) 
FLEX Equity Options that have opening transactions with a minimum size 
of 0 to 249 contracts and less than $1 million in underlying value; (b) 
FLEX Index Options that have opening transactions with a minimum 
opening size of less than $10 million in underlying equivalent value; 
and (ii) analysis on the types of investors that initiated opening FLEX 
Equity and Index Options transactions (i.e., institutional, high net 
worth, or retail). The report has been submitted to the Commission on a 
confidential basis.
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    \5\ Id.
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    The Exchange believes that there is sufficient investor interest 
and demand in the Pilot Program to warrant extension for an additional 
year. The Exchange believes that the Pilot Program has provided 
investors with additional means of managing their risk exposures and 
carrying out their investment objectives. The Exchange has not 
experienced any adverse market effects with respect to the Pilot 
Program.
    If, in the future, the Exchange proposes an additional extension of 
the Pilot Program, or should the Exchange propose to make the Pilot 
Program permanent, the Exchange will submit, along with any filing 
proposing such amendments to the Pilot Program, an additional Pilot 
Program Report covering the period during which the Pilot Program was 
in effect and including the details referenced above, along with the 
nominal dollar value of the underlying security of each trade. The 
Pilot Program Report would be submitted to the Commission at least two 
months prior to the expiration date of the Pilot Program and would be 
provided on a confidential basis.
    The Exchange notes that any positions established under this Pilot 
Program would not be impacted by the expiration of the Pilot Program. 
For example, a 10-contract FLEX Equity Option opening position that 
overlies less than $1 million in the underlying security and expires in 
January 2015 could be established during the Pilot Program. If the 
Pilot Program were not extended, the position would continue to exist 
and any further trading in the series would be subject to the minimum 
value size requirements for continued trading in that series.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the

[[Page 19048]]

``Act''),\6\ in general, and furthers the objectives of Section 
6(b)(5),\7\ 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. Specifically, the Exchange 
believes that the proposed extension of the Pilot Program, which 
eliminates the minimum value size applicable to FLEX Options, would 
provide greater opportunities for investors to manage risk through the 
use of FLEX Options. Further, the Exchange notes that it has not 
experienced any adverse effects from the operation of the Pilot 
Program.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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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 that is not necessary or appropriate 
in furtherance of the purposes of the Act.

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 prior to 
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 \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give 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. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \10\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6) \11\ 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 Commission notes that 
waiving the 30-day operative delay would prevent the expiration of the 
Pilot Program on March 30, 2012, prior to the extension to March 29, 
2013 taking effect, and believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest.\12\ Therefore, the Commission designates the proposal 
operative upon filing.
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ For 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).
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    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.

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-NYSEAMEX-2012-18 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-NYSEAMEX-2012-18. 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 
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-NYSEAMEX-2012-18 and 
should be submitted on or before April 19, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-7517 Filed 3-28-12; 8:45 am]
BILLING CODE 8011-01-P