Document ID: SEC-2010-0313-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Codify Certain Provisions of the Options Listing Procedures Plan Into the Rules of the Boston Options Exchange Facility
Posted Date: 2010-03-02T05:00Z

[Federal Register Volume 75, Number 40 (Tuesday, March 2, 2010)]
[Notices]
[Pages 9466-9468]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-4234]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61579: File No. SR-BX-2010-015]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Codify 
Certain Provisions of the Options Listing Procedures Plan Into the 
Rules of the Boston Options Exchange Facility

February 24, 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 February 10, 2010, NASDAQ OMX BX, Inc. (the ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I, II, and III 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)(iii) 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Rules of the Boston Options 
Exchange Group, LLC (``BOX'') to codify certain provisions of the 
Options Listing Procedures Plan (``OLPP'') into the BOX Rules. The text 
of the proposed rule change is available from the principal office of 
the Exchange, at the Commission's Public Reference Room, on the 
Exchange's Internet Web site at http://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/, and on the Commission's Web site at http://www.sec.gov.

 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 9467]]

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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The OLPP was approved by the Securities and Exchange Commission 
(the ``Commission'') on July 6, 2001 and has been amended several 
times.\5\ The OLPP provides procedures for: (i) Listing and trading new 
option classes; (ii) selecting new options series; (iii) petitioning 
The Options Clearing Corporation (``OCC'') to review the eligibility, 
pursuant to the exchanges' listing standards, of a selected option 
class without delaying the trading of that option class; (iv) 
determining operational details for option contracts adjusted pursuant 
to OCC By-Laws; (v) admitting new sponsors; and (vi) losing eligibility 
to participate in the OLPP.
---------------------------------------------------------------------------

    \5\ See e.g., Securities Exchange Act Release Nos. 44521 (July 
6, 2001), 66 FR 36809 (July 13, 2001) (Order Approving a Proposed 
Options Listing Procedures Plan); 58205 (July 22, 2008), 73 FR 43798 
(July 28, 2008) (Order Granting Permanent Approval to Amendment No. 
1 to the Plan for the Purpose of Developing and Implementing 
Procedures Designed To Facilitate the Listing and Trading of 
Standardized Options); 58630 (September 24, 2008), 73 FR 57166 
(October 1, 2008) (Order Granting Permanent Approval to Amendment 
No. 2 to the Plan for the Purpose of Developing and Implementing 
Procedures Designed To Facilitate the Listing and Trading of 
Standardized Options); and 60531 (August 19, 2009), 74 FR 43173 
(August 26, 2009) (Order Approving Amendment No. 3 to the Plan for 
the Purpose of Developing and Implementing Procedures Designed To 
Facilitate the Listing and Trading of Standardized Options).
---------------------------------------------------------------------------

    This current filing is primarily concerned with codifying certain 
provisions of the OLPP pertaining to selecting new option series and 
certain strike setting parameters that have been adopted under the 
OLPP. The Exchange believes that it is helpful to codify select 
provisions into the BOX Rules so that all applicable rules governing 
series selection and applicable strike setting parameters are located 
in a single place. In addition, the Exchange understands that other 
Sponsor Exchanges to the OLPP have submitted, or will be submitting, 
similar filings to codify portions of the OLPP in their respective 
rulebooks. Below the Exchange briefly describes the provisions of the 
OLPP that the Exchange is proposing to codify into the BOX Rules.
OLPP Amendments Pertaining to LEAPS
    Amendments 1 and 2 to the OLPP adopted provisions governing the 
listing of Long-Term Equity Options Series (``LEAPS''). Amendment 1 
provided for a uniform time frame for the introduction of new LEAPS on 
equity option classes, options on Exchange Traded Fund Shares 
(``ETFs''), or options on Trust Issued Receipts (``TIRs''). The 
Exchange is proposing to codify the changes made to the OLPP by 
Amendment 1 as new subparagraph (c) to Chapter IV, Section 8 (Long-Term 
Options Contracts) of the BOX Rules. Amendment 2 provided for a uniform 
minimum volume threshold per underlying class to qualify for the 
introduction of a new expiration year of LEAPs on equity, ETF and TIR 
classes. The Exchange is proposing to codify the changes made to the 
OLPP by Amendment 2 as new subparagraph (d) to Chapter IV, Section 8 of 
the BOX Rules.
Strike Setting Parameters
    Amendment 3 to the OLPP adopted uniform objective standards to the 
range of options series exercise (or strike) prices available for 
trading on the OLPP's Sponsor Exchanges as a quote mitigation strategy. 
The Exchange is proposing to codify the changes made to the OLPP by 
Amendment 3 by adding certain new rule text to Chapter IV, Section 6(b) 
of the BOX Rules.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\6\ in general, and Section 
6(b)(5) of the Act,\7\ 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 codifying certain provisions 
of the OLPP, as amended, serves to foster investor protection.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    This proposed rule change codifies certain provisions of the OLPP 
that were previously approved by the Commission \8\ and 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 if consistent with 
the protection of investors and the public interest. The Exchange 
requests that the Commission waive the 30-day operative delay period 
for ``non-controversial'' proposals and make the proposed rule change 
effective and operative upon filing.\9\
---------------------------------------------------------------------------

    \8\ See supra note 5.
    \9\ 17 CFR 240.19b-4(f)(6). In addition, as required under Rule 
19b-4(f)(6)(iii), the Exchange has submitted to the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and the 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.
---------------------------------------------------------------------------

    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-2010-015 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary,

[[Page 9468]]

Securities and Exchange Commission, 100 F Street, NE., Washington, DC 
20549-1090.
All submissions should refer to File Number SR-BX-2010-015. 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 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 self-regulatory 
organization. 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-
2010-015 and should be submitted on or before March 23, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-4234 Filed 3-1-10; 8:45 am]
BILLING CODE 8011-01-P