Document ID: SEC-2009-0253-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2009-02-25T05:00Z

[Federal Register: February 25, 2009 (Volume 74, Number 36)]
[Notices]               
[Page 8596-8597]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25fe09-106]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59419; File No. SR-BX-2009-011]

 
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Eliminate 
the $3 Underlying Price Requirement for Continued Listing and Listing 
of Additional Series on the Boston Options Exchange Facility

February 19, 2009.
    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 February 18, 2009, NASDAQ OMX BX, Inc. (the ``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 self-regulatory organization. The Exchange filed the 
proposed rule change pursuant to Section 19(b)(3)(A) of the Act,\3\ and 
Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal effective 
upon filing with the Commission. The Commission is publishing this 
notice to solicit comments on the proposed rule from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 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 Chapter IV, Section 4 (Withdrawal of 
Approval of Underlying Securities) of the Rules of the Boston Options 
Exchange Group, LLC (``BOX'') to eliminate the $3 market price per 
share requirement from the requirements for continued approval of an 
underlying security and the prohibition against listing additional 
series of options on an underlying security at any time when the price 
per share of such underlying security is less than $3. The text of the 
proposed rule change is available from the principal office of the 
Exchange, at the Commission's Public Reference Room and also on the 
Exchange's Internet Web site at http://nasdaqomxbx.cchwallstreet.com/
NASDAQOMXBX/Filings/.

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 these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
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 proposed rule change is to eliminate the $3 
market price per share requirement from the requirements for continued 
approval for an underlying security from Chapter IV, Section 4(b)(iv) 
of the BOX Rules. This proposed rule change also amends Chapter IV, 
Section 4(c) by eliminating the prohibition against listing additional 
series or options on an underlying security at any time when the price 
per share of such underlying security is less than $3. The Exchange 
also proposes to make technical changes throughout Section 4 to 
eliminate references to Section 4(b)(iv).
    The BOX rules require that the market price for a security be at 
least $3 on the previous trading day for the continued listing of 
options on that underlying security. If the price of an underlying 
security falls below $3, BOX can continue to trade then-listed series 
on that underlying security, but is unable to list new series of 
options. The Exchange believes that the $3 market price per share 
requirement is no longer necessary or appropriate, and that only those 
underlying securities meeting the remaining continued listing criteria 
set forth in Chapter IV, Section 4 will be eligible for continued 
listing and the listing of additional options series. The Exchange 
believes that the current $3 market price per share requirement could 
have a negative effect on investors. For example, in the current 
volatile market environment in which the market price for a large 
number of securities has fallen below $3, BOX is currently unable to 
list new series on underlying securities trading below $3. If there is 
market demand for series below $3, BOX would be unable to accommodate 
such requests and investors would be unable to hedge their positions 
with options series with strikes below $3.
2. Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\5\ in general, and Section 
6(b)(5) of the Act,\6\ in particular, in that it is designed 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 for 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 will permit BOX to make options 
on underlying securities available even if the price of the underlying 
security is less than $3,

[[Page 8597]]

thus providing investors additional opportunities to hedge their 
positions.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 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 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

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

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) of the Act \7\ and Rule 19b-
4(f)(6) thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 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 \9\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6) \10\ permits the Commission to 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange requests 
that the Commission waive the 30-day operative delay. The Commission 
notes that this proposed rule change is substantially identical to a 
proposed rule change that was approved by the Commission after an 
opportunity for public comment,\11\ and does not raise any new 
substantive issues. The Exchange requests the waiver of the 30-day 
operative delay so that the proposed rule change may become effective 
and operative immediately and allow BOX to remain competitive with 
other exchanges. For these reasons, the Commission believes that 
waiving the 30-day operative delay \12\ is consistent with the 
protection of investors and the public interest and designates the 
proposal operative upon filing.
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    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ Id.
    \11\ The Exchange's proposed rule change is substantially 
identical to a proposed rule change by the Chicago Board Options 
Exchange (``CBOE'') recently approved by the Commission. See 
Securities Exchange Act Release No. 59336 (February 2, 2009), 74 FR 
6332 (February 6, 2009) (SR-CBOE-2008-127).
    \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 may summarily abrogate 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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-BX-2009-011 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-BX-2009-011. This file 
number should be included on the subject line if e-mail 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 inspection and 
copying 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 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 publicly available. All 
submissions should refer to File Number SR-BX-2009-011 and should be 
submitted on or before March 18, 2009.
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-3978 Filed 2-24-09; 8:45 am]

BILLING CODE 8011-01-P