Document ID: SEC-2009-1546-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Permit Listing Option Series That Are Restricted to Closing Transactions if Such Series Are Listed and Restricted to Closing Transactions on Another National Securities Exchange
Posted Date: 2009-11-02T05:00Z

[Federal Register: November 2, 2009 (Volume 74, Number 210)]
[Notices]               
[Page 56677-56679]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02no09-89]                         

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60880; File No. SR-NASDAQ-2009-090]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Permit Listing Option Series That Are Restricted to Closing 
Transactions if Such Series Are Listed and Restricted to Closing 
Transactions on Another National Securities Exchange

October 26, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on October 16, 2009, The NASDAQ Stock Market LLC (``Nasdaq'') 
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 Nasdaq. Nasdaq filed the 
proposal as

[[Page 56678]]

a ``non-controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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

    NASDAQ is filing a proposal for the NASDAQ Options Market (``NOM'' 
or ``Exchange'') to amend its Chapter IV, Section 4 (Withdrawal of 
Approval of Underlying Securities) to permit the Exchange to list 
option series that are restricted to closing transactions if such 
series are listed and restricted to closing transactions on another 
exchange. The Exchange requests that the Commission waive the 30-day 
operative delay period contained in Exchange Act Rule 19b-
4(f)(6)(iii).\5\
---------------------------------------------------------------------------

    \5\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The text of the proposed rule change is available from Nasdaq's Web 
site at http://nasdaq.cchwallstreet.com, at Nasdaq's principal office, 
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, Nasdaq 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. Nasdaq 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 the proposed rule change is to amend NOM Chapter IV, 
Section 4 to permit the Exchange to list option series that are 
restricted to closing transactions if such series are listed and 
restricted to closing transactions on another exchange.
    This filing is based on a similar immediately effective filing 
recently filed by another options exchange, Chicago Board Options 
Exchange (``CBOE'').\6\ In that filing, it was noted that the impetus 
for the filing was a customer request for it to list a series of 
options that was previously delisted by the filing exchange but listed 
on another exchange and restricted to closing transactions, a situation 
that may equally occur on NOM as well as other options exchanges.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 60625 (September 4, 
2009), 74 FR 46825 (September 11, 2009) (SR-CBOE-2009-066) (notice 
of filing and immediate effectiveness).
---------------------------------------------------------------------------

    Chapter IV, Section 3 (Criteria for Underlying Securities) sets 
forth the requirements or criteria that underlying securities must meet 
before the Exchange may initially list options on such securities. 
Chapter IV, Section 4 sets forth listing maintenance and delisting 
criteria in respect of securities underlying options listed on the 
Exchange that are used by the Exchange to determine whether such 
listing status should be continued. These rules do not have provisions 
for listing option series that are restricted to closing transactions 
where such series are listed on another exchange.
    The Exchange proposes to add new subsection (m) to Chapter IV, 
Section 4 to provide that if an option series is listed but restricted 
to closing transactions on another national securities exchange, the 
Exchange may list such series (even if such series would not otherwise 
be eligible for listing under the Exchange's rules), which shall also 
be restricted to closing transactions on the Exchange.\7\ No 
restrictions will be in place with respect to the exercise of any 
restricted series.
---------------------------------------------------------------------------

    \7\ The parenthetical text is being proposed to eliminate 
ambiguity about the Exchange's ability to list a restricted series 
pursuant to proposed subsection (m) to Chapter IV, Section 4 in the 
event other Exchange rules would otherwise prohibit the listing of 
that series.
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change should 
encourage competition and be beneficial to traders and market 
participants by providing them with a means to trade on the Exchange 
securities that are listed and traded on other exchanges.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \9\ 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, and to 
remove impediments to and perfect the mechanisms of a free and open 
market and a national market system. Permitting the Exchange to 
accommodate possible customer requests and allow execution of trades on 
the Exchange will encourage competition and not harm investors or the 
public interest.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change will result 
in any burden on competition that is 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

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange believes that the foregoing proposed rule change may 
take effect upon filing with the Commission pursuant to Section 
19(b)(3)(A) \10\ of the Act and Rule 19b-4(f)(6)(iii) thereunder \11\ 
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, if consistent with the protection of 
investors and the public interest.\12\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ 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. Nasdaq 
has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay period. The Commission 
believes that waiver of the 30-day operative delay period is consistent 
with the protection of investors and the public interest. In 
particular, the Exchange would be permitted to list the restricted

[[Page 56679]]

series solely for the purpose of closing transactions as long as the 
restricted series is listed on another national securities exchange. In 
addition, the proposed rule change is substantially similar to the 
rules of CBOE.\14\ The Commission therefore designates the proposal 
operative upon filing.\15\
---------------------------------------------------------------------------

    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ See CBOE Rule 5.4.12(b).
    \15\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such proposed 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.\16\
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

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-NASDAQ-2009-090 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-NASDAQ-2009-090. 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 Nasdaq. 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-NASDAQ-2009-090 and should 
be submitted on or before November 23, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

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

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-26255 Filed 10-30-09; 8:45 am]

BILLING CODE 8011-01-P