Document ID: SEC-2012-0867-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX PHLX LLC
Posted Date: 2012-06-04T04:00Z

[Federal Register Volume 77, Number 107 (Monday, June 4, 2012)]
[Notices]
[Pages 33013-33014]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-13406]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67071; File No. SR-Phlx-2012-67]

Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
the MSCI EAFE Index

May 29, 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 May 16, 2012, NASDAQ OMX PHLX LLC (``Phlx'' or ``Exchange'') 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 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.
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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 the trading hours for options on the 
MSCI EAFE Index.\3\
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    \3\ The Exchange has entered into a license agreement with MSCI 
Inc. (``MSCI'') to list this product.
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    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings, 
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 Exchange proposes to amend Exchange Rule 1101A entitled ``Terms 
of Option Contracts'' to change the trading hours for options on the 
MSCI EAFE Index on the last trading day prior to expiration. 
Specifically, the Exchange proposes to amend Commentary .01 of Exchange 
Rule 1101A to note that ``Transactions in options on the Full Value 
MSCI EAFE Index may be effected on the Exchange until 4:15 p.m. each 
business day, except that on the last trading day prior to expiration 
transactions may be effected on the Exchange until 11:00 a.m.'' For 
example, for the month of May 2012, options on the MSCI EAFE Index 
would trade until 4:15 each day except for May 18, 2012. Because May 
19, 2012 is an expiration day, the Exchange would trade options on the 
MSCI EAFE Index until 11:00 a.m. on May 18, 2012, the last trading day 
prior to expiration.\4\
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    \4\ The expiration date for options on the MSCI EAFE index is 
the Saturday following the third Friday of the expiration month. 
These options expire each month of the calendar year.
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    Futures on the MSCI EAFE Index currently trade at NYSE Liffe and 
these futures cease trading at 11:00 a.m. on the third Friday of the 
month.\5\ The Exchange proposes to similarly cease trading options on 
the MSCI EAFE Index at 11:00 a.m. on the trading day

[[Page 33014]]

preceding expiration.\6\ At the time that the Exchange filed to list 
options on the MSCI EAFE Index,\7\ it inadvertently did not amend the 
trading hours to reflect similar hours as that of the futures products. 
The Exchange believes that closing the trading of options on the MSCI 
EAFE Index early on the last trading day prior to expiration would 
align the trading of options with that of futures on the MSCI EAFE 
Index, which today closes at 11:00 a.m. on the trading day preceding 
expiration in each cycle month.\8\
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    \5\ NYSE Liffe futures based on the MSCI EAFE Mini Index 
utilizes p.m. closing prices for settlement. Futures for the MSCI 
EAFE Index were listed for trading on September 8, 2009. See http://www.nyse.com/pdfs/19-2009.pdf. On June 20, 2011, NYSE Liffe became 
the sole Designated Contract Market to list futures on the MSCI EAFE 
Index. See http://www.nyse.com/pdfs/15-2011.pdf. Futures on the MSCI 
EAFE Index expire on a quarterly cycle.
    \6\ The settlement value for expiring options on the MSCI EAFE 
Index would be based on the closing prices of the component stocks 
on the last trading day prior to expiration, usually a Friday. 
Specifically, the MSCI EAFE Index components open with the start of 
trading in Asia at 6:00 p.m. E.T. (prior day) and closes with the 
end of trading in Europe at 12:30 p.m. E.T. (the next day) as 
closing prices from Ireland are accounted for in the closing 
calculation. The closing index level value is distributed by MSCI 
between 2:00 and 2:30 p.m. e.t. each trading day.
    \7\ See Securities Exchange Act Release No. 66861 (April 26, 
2012), 77 FR 26056 (May 2, 2012) (SR-Phlx-2012-28).
    \8\ The Exchange would issue an Options Trader Alert when this 
filing becomes effective to notify its members when the close of 
trading hours will change to 11:00 a.m.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \9\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \10\ in particular, in that it is designed to 
promote just and equitable principles of trade, 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, by amending the trading hours to coincide with the trading 
hours of futures on the MSCI EAFE Index.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes closing the trading of options on the MSCI 
EAFE Index early on the last trading day prior to expiration, similar 
to MSCI EAFE futures products would align both options and futures on 
the MSCI EAFE Index. The Exchange also believes that aligning the 
trading hours for products which trade on the MSCI EAFE Index would 
provide investors and market makers a greater ability to hedge.

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.

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: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms does not become operative for 30 days after the 
date of this filing, or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest, the proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) 
thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to provide the Commission 
with written notice of its intent to file the proposed rule change, 
along with a brief description and text of 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 fulfilled this requirement.
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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-Phlx-2012-67 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-Phlx-2012-67. 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-Phlx-2012-67 and should be 
submitted on or before June 25, 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. 2012-13406 Filed 6-1-12; 8:45 am]
BILLING CODE 8011-01-P