Document ID: SEC-2010-1060-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2010-07-13T04:00Z

[Federal Register: July 13, 2010 (Volume 75, Number 133)]
[Notices]               
[Page 40007-40010]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13jy10-127]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62464; File No. SR-BX-2010-045]

 
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Enable 
the Listing and Trading on BOX of Options on the ETFS Gold Trust, the 
ETFS Silver Trust, the ETFS Palladium Trust and the ETFS Platinum Trust

July 7, 2010.
    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 June 30, 2010, 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 change 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

    NASDAQ OMX BX, Inc. (the ``Exchange'') proposes to amend the Rules 
of the Boston Options Exchange Group, LLC (``BOX'') to enable the 
listing and trading on BOX of options on the ETFS Gold Trust, the ETFS 
Silver Trust, the ETFS Palladium Trust and the ETFS Platinum Trust. 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

[[Page 40008]]

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
    Recently, the U.S. Securities and Exchange Commission (``SEC'' or 
``Commission'') authorized the listing and trading on BOX of options on 
the SPDR Gold Trust \5\ and the iShares COMEX Gold Trust and the 
iShares Silver Trust.\6\ Now, the Exchange proposes for BOX to list and 
trade options on the ETFS Gold Trust, the ETFS Silver Trust, the ETFS 
Palladium Trust and the ETFS Platinum Trust.
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    \5\ See Securities Exchange Act Release No. 58136 (July 10, 
2008), 73 FR 40884 (July 16, 2008) (SR-BSE-2008-41) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to Options on Shares of the SPDR Gold Trust).
    \6\ See Securities Exchange Act Release No. 59055 (December 4, 
2008), 73 FR 75148 (December 10, 2008) (SR-BSE-2008-51) (Notice of 
Filing and Order Granting Accelerated Approval of Proposed Rule 
Changes Relating to the Listing and Trading Options on Shares of the 
iShares COMEX Gold Trust and the iShares Silver Trust).
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    Under current Chapter IV, Section 3(i) of the BOX Rules, only 
Exchange-Traded Fund Shares, or ETFs, that are traded on a national 
securities exchange and are defined as an ``NMS'' stock under Rule 600 
of Regulation NMS, and that (i) represent interests in registered 
investment companies (or series thereof) organized as open-end 
management investment companies, unit investment trusts or similar 
entities that hold portfolios of securities and/or financial 
instruments, including, but not limited to, stock index futures 
contracts, options on futures, options on securities and indices, 
equity caps, collars and floors, swap agreements, forward contracts, 
repurchase agreements and reverse repurchase agreements (the 
``Financial Instruments''), and money market instruments, including, 
but not limited to, U.S. government securities and repurchase 
agreements (the ``Money Market Instruments'') comprising or otherwise 
based on or representing investments in broad based indexes or 
portfolios of securities and/or Financial Instruments and Money Market 
Instruments (or that hold securities in one or more other registered 
investment companies that themselves hold such portfolios of securities 
and/or Financial Instruments and Money Market Instruments) or (ii) 
represent interests in a trust that holds a specified non-U.S. currency 
or currencies deposited with the trust or similar entity when 
aggregated in some specified minimum number may be surrendered to the 
trust by the beneficial owner to receive the specified non-U.S. 
currency or currencies and pays the beneficial owner interest and other 
distributions on the deposited non-U.S. currency or currencies, if any, 
declared and paid by the trust (``Currency Trust Shares'') or (iii) 
represent commodity pool interests principally engaged, directly or 
indirectly, in holding and/or managing portfolios or baskets of 
securities, commodity futures contracts, options on commodity futures 
contracts, swaps, forward contracts and/or options on physical 
commodities and/or non-U.S. currency (``Commodity Pool ETFs'') or (iv) 
are issued by the SPDR[reg] Gold Trust or the iShares COMEX Gold Trust 
or the iShares Silver Trust are eligible as underlying securities for 
options traded on BOX.\7\ This rule change proposes to expand the types 
of ETFs that may be approved for options trading on BOX to include the 
ETFS Gold Trust, the ETFS Silver Trust, the ETFS Palladium Trust and 
the ETFS Platinum Trust.
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    \7\ See Chapter IV, Section 3(i) of the BOX Rules.
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    Apart from allowing the ETFS Gold Trust, the ETFS Silver Trust, the 
ETFS Palladium Trust and the ETFS Platinum Trust to be underlying 
securities for options traded on BOX, as described above, the listing 
standards for ETFs will remain unchanged from those that apply under 
current BOX rules. ETFs on which options may be listed and traded must 
still be listed and traded on a national securities exchange and must 
satisfy the other listing standards set forth in Chapter IV, Section 
3(i) of the BOX Rules.
    Specifically, in addition to satisfying the aforementioned listing 
requirements, ETFs must either (1) meet the criteria and guidelines set 
forth in paragraphs (a) and (b) of Chapter IV, Section 3 or (2) be 
available for creation or redemption each business day from or through 
the issuing trust, investment company, commodity pool or other entity 
in cash or in kind at a price related to net asset value, and the 
issuer must be obligated to issue Exchange-Traded Fund Shares in a 
specified aggregate number even if some or all of the investment assets 
and/or cash required to be deposited have not been received by the 
issuer, subject to the condition that the person obligated to deposit 
the investment assets has undertaken to deliver them as soon as 
possible and such undertaking is secured by the delivery and 
maintenance of collateral consisting of cash or cash equivalents 
satisfactory to the issuer of the Exchange-Traded Fund Shares, all as 
provided in the Exchange-Traded Fund Shares' prospectus.
    The Exchange states that the current continued listing standards 
for options on ETFs will apply to options on the ETFS Gold Trust, the 
ETFS Silver Trust, the ETFS Palladium Trust and the ETFS Platinum 
Trust. Specifically, under Chapter IV, Section 4(h) of the BOX Rules, 
options on Exchange-Traded Fund Shares may be subject to the suspension 
of opening transactions as follows: (1) Following the initial twelve-
month period beginning upon the commencement of trading of the 
Exchange-Traded Fund Shares, there are fewer than 50 record and/or 
beneficial holders of the Exchange-Traded Fund Shares for 30 or more 
consecutive trading days; (2) the value of the underlying silver, gold, 
palladium or platinum, respectively, is no longer calculated or 
available; or (3) such other event occurs or condition exists that in 
the opinion of the Exchange makes further dealing in such options on 
BOX inadvisable. Additionally, the ETFS Gold Trust, the ETFS Silver 
Trust, the ETFS Palladium Trust and the ETFS Platinum Trust shall not 
be deemed to meet the requirements for continued approval, and BOX 
shall not open for trading any additional series of option contracts of 
the class covering the ETFS Gold Trust, the ETFS Silver Trust, the ETFS 
Palladium Trust and the ETFS Platinum Trust, respectively, if the ETFS 
Gold Trust, the ETFS Silver Trust, the ETFS Palladium Trust and the 
ETFS Platinum Trust ceases to be an ``NMS stock'' as provided for in 
Chapter IV, Section 4(b)(vi) of the BOX Rules or the ETFS Gold Trust, 
the ETFS Silver Trust, the ETFS Palladium Trust and the ETFS Platinum 
Trust is halted from trading on its primary market. The addition of the 
ETFS Gold Trust, the ETFS Silver Trust, the ETFS Palladium Trust and 
the ETFS Platinum Trust to Chapter IV, Section 3(i) of the BOX Rules 
will not have any effect on the rules pertaining to position and 
exercise limits \8\ or margin.\9\
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    \8\ See Chapter III, Sections 7 and 9 of the BOX Rules.
    \9\ See Chapter XIII of the BOX Rules.
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    The Exchange represents that its surveillance procedures applicable 
to trading in options on the ETFS Gold Trust, the ETFS Silver Trust, 
the ETFS Palladium Trust and the ETFS Platinum Trust will be similar to 
those applicable to all other options on other ETFs currently traded on 
BOX. Also, the Exchange may obtain information from the New York 
Mercantile Exchange, Inc.

[[Page 40009]]

(``NYMEX'') (a member of the Intermarket Surveillance Group) related to 
any financial instrument that is based, in whole or in part, upon an 
interest in or performance of gold, silver, palladium and/or platinum.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\10\ in general, and Section 
6(b)(5) of the Act,\11\ 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 amending the BOX Rules to 
accommodate the listing and trading of options on the ETFS Gold Trust, 
the ETFS Silver Trust, the ETFS Palladium Trust and the ETFS Platinum 
Trust will benefit investors by providing them with valuable risk 
management tools.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 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: (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 \12\ and Rule 19b-4(f)(6) 
thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
Rule 19b-4(f)(6)(iii) 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 so that the Exchange can list and trade 
options on the ETFS Gold Trust, the ETFS Silver Trust, the ETFS 
Palladium Trust, and the ETFS Platinum Trust immediately. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest to 
permit the Exchange to list and trade options on the ETFS Gold Trust, 
the ETFS Silver Trust, the ETFS Palladium Trust, and the ETFS Platinum 
Trust without delay.\14\ The Commission notes the proposal is 
substantively identical to proposals that were recently approved by the 
Commission, and does not raise any new regulatory issues.\15\ For these 
reasons, the Commission designates the proposed rule change as 
operative upon filing.
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    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \15\ See Securities Exchange Act Release No. 61483 (February 3, 
2010), 75 FR 6773 (February 10, 2010) (Order Granting Approval of 
Proposed Rule Changes and Notice of Filings and Order Granting 
Accelerated Approval of a Proposed Rule Change Relating to Listing 
and Trading of the ETFS Gold Trust and the ETFS Silver Trust) (SR-
CBOE-2010-007; SR-ISE-2009-106; SR-NYSEAmex-2009-86; and SR-
NYSEArca-2009-110). See also Securities Exchange Act Release Nos. 
61892 (April 13, 2010), 75 FR 20649 (April 20, 2010) (SR-CBOE-2010-
015); 61983 (April 26, 2010), 75 FR 23314 (May 3, 2010) (SR-ISE-
2010-19); and 62250 (June 9, 2010), 75 FR 33882 (June 15, 2010) (SR-
NYSEArca-2010-25) (SR-NYSEAmex-2010-37) (Orders Granting Approval of 
Proposed Rule Changes to Enable the Listing and Trading of Options 
on the ETFS Palladium Trust and the ETFS Platinum Trust on CBOE, 
ISE, NYSEArca and NYSEAmex, respectively).
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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-2010-045 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BX-2010-045. 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,\16\ 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-BX-

[[Page 40010]]

2010-045 and should be submitted on or before August 3, 2010.
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    \16\ The text of the proposed rule change is available on the 
Commission's Web site at http://www.sec.gov.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Florence E. Harmon,
Deputy Secretary.
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    \17\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2010-16995 Filed 7-12-10; 8:45 am]
BILLING CODE 8010-01-P