Document ID: SEC-2012-0535-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2012-04-05T04:00Z

[Federal Register Volume 77, Number 66 (Thursday, April 5, 2012)]
[Notices]
[Pages 20684-20686]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-8173]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66705; File No. SR-BX-2012-024]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
the BOX Trading Rules Regarding the Short Term Option Series Program

March 30, 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 March 29, 2012, NASDAQ OMX BX, Inc. (the ``Exchange'') filed 
with the Securities and Exchange Commission (the ``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 Rules of the Boston 
Options Exchange Group, LLC (``BOX'') regarding the Short Term Option 
Series Program. The text of the proposed rule change is available from 
the principal office of the Exchange, on the Exchange's Internet Web 
site at http://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/, 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 purpose of this proposed rule change is to amend Supplementary 
Material .07 to Chapter IV, Section 6 (Series of Options Open for 
Trading) and Supplementary Material .02 to Chapter XIV, Section 10 
(Terms of Index Options Contracts) to expand the Short Term Option 
Series Program (``Weeklys Program'').\3\ Specifically, the Exchange 
proposes to amend the BOX Rules to allow BOX to open short term option 
series that are opened by other securities exchanges in option classes 
selected by other exchanges under their respective short term option 
rules.
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    \3\ The Exchange adopted the Weeklys Program on July 15, 2010. 
See Securities Exchange Act Release No. 62505 (July 15, 2010), 75 FR 
42792 (July 22, 2010) (SR-BX-2010-047).
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    Currently, BOX may select up to 30 currently listed option classes 
on which short term option series may be opened

[[Page 20685]]

in the Weeklys Program. BOX may also match any option classes that are 
selected by other securities exchanges that employ a similar program 
under their respective rules. For each option class eligible for 
participation in the Weeklys Program, BOX may open up to 30 short term 
option series for each expiration date in that class.
    This proposal seeks to allow BOX to open short term option series 
that are opened by other securities exchanges in option classes 
selected by other exchanges under their respective short term option 
rules. This change is being proposed notwithstanding the current cap of 
30 series per class under the Weeklys Program. This is a competitive 
filing and is based on approved filings and existing rules of The 
NASDAQ Stock Market LLC for the NASDAQ Options Market (``NOM'') and 
NASDAQ OMX PHLX, Inc. (``PHLX'').\4\
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    \4\ See Securities Exchange Act Release Nos. 65775 (November 17, 
2011), 76 FR 72473 (November 23, 2011) (SR-NASDAQ-2011-138) and 
65776 (November 17, 2011), 76 FR 72482 (November 23, 2011) (SR-PHLX-
2011-131).
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    BOX is competitively disadvantaged since it operates a 
substantially similar Weeklys Program as NOM and PHLX but is limited to 
listing a maximum of 30 series per options class that participates in 
its Weeklys Program (whereas PHLX and NOM are not similarly 
restricted).
    The Exchange is not proposing any changes to the Weeklys Program 
other than the ability to open short term option series that are opened 
by other securities exchanges in option classes selected by other 
exchanges under their respective short term option rules.
    BOX notes that the Weeklys Program has been well-received by market 
participants, in particular by retail investors. BOX believes that the 
current proposed revision to the Weeklys Program will permit BOX to 
meet increased customer demand and provide market participants with the 
ability to hedge in a greater number of option classes and series.
    With regard to the impact of this proposal on system capacity, BOX 
has analyzed its capacity and represents 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 series for the classes that participate in the 
Weeklys Program.
    The proposed increase to the number of series per classes eligible 
to participate in the Weeklys Program is required for competitive 
purposes as well as to ensure consistency and uniformity among the 
competing options exchanges that have adopted similar Weeklys Programs.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Securities Exchange Act of 1934 \5\ (the 
``Act'') in general, and furthers the objectives of Section 6(b)(5) of 
the Act \6\ in particular, in that it is designed to prevent fraudulent 
and manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, 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 Exchange believes that expanding the current short 
term options program will result in a continuing benefit to investors 
by giving them more flexibility to closely tailor their investment 
decisions and hedging decisions in greater number of securities. The 
Exchange believes that expanding the current program would provide the 
investing public and other market participants increased opportunities 
because an expanded program would provide market participants 
additional opportunities to hedge their investment thus allowing these 
investors to better manage their risk exposure. While the expansion of 
the Weeklys Program will generate additional quote traffic, the 
Exchange does not believe that this increased traffic will become 
unmanageable since the proposal remains limited to a fixed number of 
classes.
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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. In this regard and as indicated 
above, the Exchange notes that the rule change is being proposed as a 
competitive response to existing NOM and PHLX rules. The Exchange 
believes this proposed rule change is necessary to permit fair 
competition among the options exchanges with respect to their short 
term options programs.

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 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 \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)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's 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 satisfied this requirement.
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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 those of 
other exchanges that have been approved by the Commission that permit 
an exchange to open short term option series that are opened by other 
securities exchanges to participate in such exchange's respective short 
term option series program.\9\ Therefore, the Commission designates the 
proposal operative upon filing.\10\
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    \9\ See supra note 4.
    \10\ 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.

[[Page 20686]]

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-BX-2012-024 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-2012-024. 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-BX-2012-024 and should be 
submitted on or before April 26, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Kevin M. O'Neill,
Deputy Secretary.
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    \11\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2012-8173 Filed 4-4-12; 8:45 am]
BILLING CODE 8011-01-P