Document ID: SEC-2010-1377-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2010-09-09T04:00Z

[Federal Register: September 9, 2010 (Volume 75, Number 174)]
[Notices]               
[Page 54933-54935]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09se10-126]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62829; File No. SR-BX-2010-061]

 
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Permit 
Concurrent Listing of $2.50 and $1 Strikes on MNX Options

September 2, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on August 30, 2010, NASDAQ OMX BX, Inc. (the ``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.
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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 Chapter XIV, Section 10 (Terms of 
Index Options Contracts) of the Rules of the Boston Options Exchange 
Group, LLC (``BOX'') to allow the Exchange to concurrently list $2.50 
and $1 strikes on Mini- Nasdaq-100 Index (``MNX'') options, and that 
certain listing parameters only apply to $1 strikes on MNX options. The 
text of the proposed rule change is available from the principal office 
of the Exchange, on the Commission's Web site at http://www.sec.gov, 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.

[[Page 54934]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to allow BOX to 
concurrently list $2.50 and $1 strikes on MNX options, and that certain 
listing parameters only apply to $1 strikes on MNX options. BOX 
believes that the availability of $2.50 and $1 strike price intervals 
in MNX option series will provide investors with greater flexibility by 
allowing them to establish positions that are better tailored to meet 
their investment objectives.
    Since December 2008, BOX has had the ability to list $1 strikes on 
MNX options.\3\ In connection with the proposal to permit $1 strikes 
for MNX options, BOX established parameters subject to which $1 strikes 
may be added and delisted. For example, the number of initial series 
that BOX may add is limited to 11 series.\4\ Also, the total number of 
additional series that may be added for $1 strikes is sixty (60) per 
expiration month for each series in MNX options.\5\
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    \3\ See Securities Exchange Act Release No. 59129 (Dec. 22, 
2008), 73 FR 79945 (Dec. 30, 2008) (SR-BSE-2008-57) (rule change 
permitting $1 strikes for MNX options).
    \4\ See Chapter XIV, Section 10(c)(5)(i) of the BOX Rules.
    \5\ See Chapter XIV, Section 10(c)(5)(ii) of the BOX Rules.
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    Similar parameters do not exist with regard to the listing of $2.50 
strikes, and BOX now seeks to clarify that the parameters adopted with 
the proposal to permit $1 strikes for MNX options do not apply to the 
listing of $2.50 strikes for MNX options.\6\ In addition, BOX is 
proposing to codify a bracketing provision that prohibits the Exchange 
from listing strike prices with $1 intervals within $0.50 of an 
existing strike price in the same series. This bracketing provision is 
identical to an existing provision in effect for the $1 Strike Program, 
which permits the concurrent listing of $2.50 and $1 strikes.\7\
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    \6\ See Chapter XIV, Section 10(c)(1) of the BOX Rules.
    \7\ See Supplementary Material .02(c) to Chapter IV, Section 6 
of the BOX Rules.
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    Finally, the Exchange proposes to change Section 10(c)(5)(iii) 
providing that BOX shall not list LEAPS on Mini-NDX options at 
intervals less than $5.00 to provide that BOX shall not list LEAPS on 
Mini-NDX options at intervals less than $2.50.
    BOX has analyzed its capacity and represents that it believes the 
Exchange and the Options Price Reporting Authority have the necessary 
systems capacity to handle the additional traffic associated with the 
concurrent listing and trading of $1 and $2.50 strikes for MNX options.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\8\ in general, and Section 
6(b)(5) of the Act,\9\ 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 Exchange believes that allowing the concurrent 
listing and trading of $1 and $2.50 strikes for MNX options will result 
in a continuing benefit to investors by giving them more flexibility to 
closely tailor their investment decisions in a greater number of 
securities.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 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 significantly 
affect the protection of investors or the public interest, does not 
impose any significant burden on competition, and, by its terms, does 
not 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 \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the self-regulatory organization to submit to the 
Commission 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 Commission has waived the five-day pre-filing 
requirement in this case.
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    The Exchange has requested that the Commission waive the 30-day 
operative delay. The Commission believes that waiver of the operative 
delay is consistent with the protection of investors and the public 
interest because the proposal is substantially similar to a rule of 
another exchange.\12\ Therefore, the Commission designates the proposal 
operative upon filing.\13\
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    \12\ See CBOE Rules 5.5 and 24.9 and Interpretations and 
Policies .01 (j) to Rule 24.9. See also Securities Exchange Act 
Release No. 34-61270 (Dec. 31, 2009), 75 FR 1444 (Jan. 11, 2010) 
(SR-CBOE-2009-099).
    \13\ 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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-BX-2010-061 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-2010-061. 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

[[Page 54935]]

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-BX-2010-061 and should be submitted on or before 
September 30, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-22449 Filed 9-8-10; 8:45 am]
BILLING CODE 8010-01-P