Document ID: SEC-2011-1818-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2011-11-23T05:00Z

[Federal Register Volume 76, Number 226 (Wednesday, November 23, 2011)]
[Notices]
[Pages 72473-72474]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-30199]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65775; File No. SR-NASDAQ-2011-138]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order 
Granting Approval of Proposed Rule Change Expanding the Short Term 
Option Series Program

November 17, 2011.

I. Introduction

    On September 28, 2011, The NASDAQ Stock Market LLC (``NASDAQ'') 
filed with the Securities and Exchange Commission (``Commission''), 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to 
expand the Short Term Option Program (``Program'') to allow the NASDAQ 
Options Market (``NOM'' or ``Exchange'') to: (1) Select up to 30 option 
classes on which Short Term Option Series (``STO Series'') may be 
listed; and (2) allow the Exchange to open Short Term Option Series 
that are opened by other securities exchanges in option classes 
selected by such exchanges under their respective short term option 
rules. The proposed rule change was published for comment in the 
Federal Register on October 17, 2011.\3\ The Commission received no 
comment letters on the proposal. This order approves the proposed rule 
change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 65528 (October 11, 
2011), 76 FR 64142 (``Notice'').
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II. Description of the Proposal

    NASDAQ proposed to amend Chapter IV, Section 6 and Chapter XIV, 
Section 11 of the Short Term Option Series Program (``STO Program'' or 
``Program'') to: (1) Increase from 15 to 30 the number of option 
classes on which STO Series may be opened; and (2) allow the Exchange 
to open STO Series that are opened by other securities exchanges (the 
``STO Exchanges'') in option classes selected by such exchanges under 
their respective short term option rules.
    In the Notice, the Exchange stated that the principal reason for 
the proposed expansion is market demand for additional STO classes and 
series. NASDAQ stated that the Exchange has had to turn away STO 
customers because it could not list, or had to delist, STO Series or 
could not open adequate STO Series because of restrictions in the STO 
Program.

[[Page 72474]]

    The Exchange also stated that it has analyzed its capacity, and 
represented that it and the Options Price Reporting Authority 
(``OPRA'') have the necessary systems capacity to handle the potential 
additional traffic associated with trading of an expanded number of 
classes in the Program.

III. Discussion

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\4\ 
Specifically, the Commission finds that the proposal is consistent with 
Section 6(b)(5) of the Act,\5\ which requires, among other things, that 
the rules of a national securities exchange be designed to promote just 
and equitable principles of trade, to prevent fraudulent and 
manipulative acts, 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. The Commission 
believes that the proposal strikes a reasonable balance between the 
Exchange's desire to offer a wider array of investment opportunities 
and the need to avoid unnecessary proliferation of options series.
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    \4\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(5).
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    In approving this proposal, the Commission notes that the Exchange 
has represented that it and OPRA have the necessary systems capacity to 
handle the potential additional traffic associated with trading of an 
expanded number of classes in the Program. The Commission expects the 
Exchange to monitor the trading volume associated with the additional 
options series listed as a result of this proposal and the effect of 
these additional series on market fragmentation and on the capacity of 
the Exchange's, OPRA's, and vendors' automated systems.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\6\ that the proposed rule change (SR-NASDAQ-2011-138) be, and it 
hereby is, approved.
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    \6\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-30199 Filed 11-22-11; 8:45 am]
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