Federal Register: July 17, 2007 (Volume 72, Number 136)
DOCID: fr17jy07-84 FR Doc E7-13748
SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission
DOCUMENT ID: [Release No. 34-56040; File No. SR-NYSEArca-2007-67]
NOTICE: NOTICES
DOCID: fr17jy07-84
ACTION: Self-regulatory organizations; proposed rule changes:
SUBJECT CATEGORY:
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Quarterly Options Series Pilot Program for a Two-Week Period
DOCUMENT SUMMARY:
July 10, 2007.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b4 thereunder,\2\ notice is hereby given that
on July 10, 2007, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been substantially prepared by the Exchange. The Exchange has
designated this proposal as noncontroversial under section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b4(f)(6) thereunder,\4\
which renders the proposed rule change 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 240.19b4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b4(f)(6).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange is proposing to extend the Quarterly Options Series
pilot program (``Pilot Program'') for an additional twoweek period,
through July 24, 2007, and to amend Rule 5.19(a) regarding the
restriction on the number of strike prices for Quarterly Options Series
based on an underlying index. The text of the proposed rule change is
available on the Exchange's Web site (http://www.nysearca.com), at the
Exchange's principal office, and at the Commission's Public Reference Room.
II. SelfRegulatory 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. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
1. Purpose
On July 12, 2006, the Exchange filed with the Commission a proposed
rule change that allowed it to establish the Pilot Program, pursuant to
which the Exchange lists and trades Quarterly Options Series.\5\ The
rule change was effective upon filing. The Exchange hereby proposes to
extend the Pilot Program for an additional twoweek period, so that it will expire on July 24, 2007.\6\
\5\ See Securities Exchange Act Release No. 54166 (July 18,
2006), 71 FR 42151 (July 25, 2006) (File No. SRNYSEArca200645) (``Pilot Program Release'').
\6\ At the end of this proposed twoweek extension, NYSE Arca
will submit a subsequent proposal to the Commission, in conjunction
with a report on the Pilot Program, requesting that the Pilot Program be extended until July 10, 2008.
In the Pilot Program Release, the Exchange stated that it would submit, in connection with any proposed extension of the Pilot Program, a Pilot Program Report (``Report'') that would provide an analysis of the Pilot Program covering the entire period which the program was in effect. The Report will include: (1) Data and written analysis on the open interest and trading volume in the classes for which Quarterly Options Series were opened; (2) an assessment of the appropriateness of the option classes selected for the Pilot Program; (3) an assessment of the impact of the Pilot Program on the capacity on the Exchange, OPRA, and market data vendors (to the extent data from market data vendors is available); (4) any capacity problems or other problems that arose during the operation of the Pilot Program and how the Exchange addressed such problems; (5) any complaints that the Exchange received during the operation of the Pilot Program and how the Exchange addressed them; and (6) any additional information that would assist the Commission in assessing the operation of the Pilot Program. The Exchange plans to submit the Report in connection with a proposal that will extend the Pilot Program until July 10, 2008. This proposal and Report will be filed with the Commission at the conclusion of the proposed twoweek extension.
The Exchange also proposes at this time to add a provision to Rule
5.19(a) regarding the limitations on the number of strikes the Exchange
may list for Quarterly Options Series based on an underlying index.
These changes mirror provisions previously submitted by the Chicago
Board Options Exchange (``CBOE'') and approved by the Commission.\7\
The Exchange proposes to: (1) Limit the number of strike prices that
the Exchange may initially open for Quarterly Options Series to five
strike prices above and five below the value of the underlying index;
(2) clarify that the Exchange may open for trading additional Quarterly
Options Series of the same class when the Exchange deems such action
necessary to maintain an orderly market or meet customer demand,
provided that the additional series priced above (below) the value of
the underlying index do not cause there to be more than five strike
process above (below) the value of the underlying index; and (3)
clarify that the opening of any new Quarterly Options Series will not
affect the previously opened series of the same class. These changes
are based on CBOE Rule 24.9 and are shown in Exhibit 5 to the proposed rule change on Form 19b4 filed with the Commission.
\7\ See Securities Exchange Act Release No. 54762 (November 16,
2006), 71 FR 67663 (November 22, 2006) (File No. SRCBOE200693). [[Page 39113]]
Finally, NYSE Arca represents that the Exchange has the necessary system capacity to support any additional series listed as part of the Pilot Program.
2. Statutory Basis
The Exchange believes that the continuation of the Quarterly
Options Series Pilot Program will stimulate customer interest in
options by creating greater trading opportunities and flexibility in
investment choices. The Exchange further believes that continuation of
the Pilot Program will provide the ability to more closely tailor
investment strategies and provide a valuable hedging tool for
investors. For these reasons, the Exchange believes the proposed rule
change is consistent with the Act and the rules and regulations
thereunder and, in particular, the requirements of section 6(b) of the
Act.\8\ Specifically, the Exchange believes the proposed rule change is
consistent with of section 6(b)(5) of the Act,\9\ which requires that
the rules of an exchange be designed to promote just and equitable
principles of trade, to prevent fraudulent and manipulative acts, 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.
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
B. SelfRegulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
C. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others
No written comments were solicited or received with respect to the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
The Exchange has designated the proposed rule change as one that:
(1) Does not significantly affect the protection of investors or the
public interest; (2) does not impose any significant burden on
competition; and (3) does not become operative for 30 days from the
date of filing, or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest.
Therefore, the foregoing rule change has become effective pursuant to
section 19(b)(3)(A) of the Act \10\ and subparagraph (f)(6) of Rule
19b4 thereunder.\11\ The Exchange has asked the Commission to waive
the operative delay to permit the Pilot Program extension to become operative prior to the 30th day after filing.\12\
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b4(f)(6).
\12\ As required under Rule 19b4(f)(6)(iii), the Exchange
provided the Commission with written notice of its intent to file
the proposed rule change at least five business before doing so.
The Commission believes that waiving the 30day operative delay is
consistent with the protection of investors and the public interest
because it will allow the benefits of the Pilot Program to continue
without interruption.\13\ Therefore, the Commission designates the
proposal operative upon filing. The Commission, in deciding to waive
the operative delay in order to allow the Pilot Program to continue
uninterrupted for the proposed twoweek extension, has relied on the
Exchange's representation that it will submit the Report as required by
the Pilot Program on or before the expiration of the extension period (i.e., July 24, 2007).\14\
\13\ For purposes only of waiving the 30day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C. 78c(f).
\14\ As set forth in the Exchange's original filing proposing
the Pilot Program, if the Exchange were to propose an extension, an
expansion, or permanent approval of the Pilot Program, the Exchange
would submit, along with any filing proposing such amendments to the
program, a report that would provide an analysis of the Pilot
Program covering the entire period during which the Pilot Program
was in effect. The report would include, at a minimum: (1) Data and
written analysis on the open interest and trading volume in the
classes for which Quarterly Options Series were opened; (2) an
assessment of the appropriateness of the option classes selected for
the Pilot Program; (3) an assessment of the impact of the Pilot
Program on the capacity of the Exchange, OPRA, and market data
vendors (to the extent data from market data vendors is available);
(4) any capacity problems or other problems that arose during the
operation of the Pilot Program and how the Exchange addressed such
problems; (5) any complaints that the Exchange received during the
operation of the Pilot Program and how the Exchange addressed them;
and (6) any additional information that would assist in assessing
the operation of the Pilot Program. The report must be submitted to
the Commission at least sixty (60) days prior to the expiration date
of the Pilot Program. See Form 19b4 for File No. SRPCX200532, filed March 16, 2005.
At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate the 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
Paper Comments
All submissions should refer to File Number SRNYSEArca200767. 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 Commissions 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 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 SRNYSEArca200767 and should be submitted on or August 7, 2007.
[[Page 39114]]
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\15\
\15\ 17 CFR 200.303(a)(12).
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E713748 Filed 71607; 8:45 am]
BILLING CODE 801001P
SUMMARY:
NYSE Arca, Inc.,
DOCUMENT BODY 2:
July 10, 2007.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b4 thereunder,\2\ notice is hereby given that
on July 10, 2007, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been substantially prepared by the Exchange. The Exchange has
designated this proposal as noncontroversial under section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b4(f)(6) thereunder,\4\
which renders the proposed rule change 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 240.19b4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b4(f)(6).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange is proposing to extend the Quarterly Options Series
pilot program (``Pilot Program'') for an additional twoweek period,
through July 24, 2007, and to amend Rule 5.19(a) regarding the
restriction on the number of strike prices for Quarterly Options Series
based on an underlying index. The text of the proposed rule change is
available on the Exchange's Web site (http://www.nysearca.com), at the
Exchange's principal office, and at the Commission's Public Reference Room.
II. SelfRegulatory 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. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
1. Purpose
On July 12, 2006, the Exchange filed with the Commission a proposed
rule change that allowed it to establish the Pilot Program, pursuant to
which the Exchange lists and trades Quarterly Options Series.\5\ The
rule change was effective upon filing. The Exchange hereby proposes to
extend the Pilot Program for an additional twoweek period, so that it will expire on July 24, 2007.\6\
\5\ See Securities Exchange Act Release No. 54166 (July 18,
2006), 71 FR 42151 (July 25, 2006) (File No. SRNYSEArca200645) (``Pilot Program Release'').
\6\ At the end of this proposed twoweek extension, NYSE Arca
will submit a subsequent proposal to the Commission, in conjunction
with a report on the Pilot Program, requesting that the Pilot Program be extended until July 10, 2008.
In the Pilot Program Release, the Exchange stated that it would submit, in connection with any proposed extension of the Pilot Program, a Pilot Program Report (``Report'') that would provide an analysis of the Pilot Program covering the entire period which the program was in effect. The Report will include: (1) Data and written analysis on the open interest and trading volume in the classes for which Quarterly Options Series were opened; (2) an assessment of the appropriateness of the option classes selected for the Pilot Program; (3) an assessment of the impact of the Pilot Program on the capacity on the Exchange, OPRA, and market data vendors (to the extent data from market data vendors is available); (4) any capacity problems or other problems that arose during the operation of the Pilot Program and how the Exchange addressed such problems; (5) any complaints that the Exchange received during the operation of the Pilot Program and how the Exchange addressed them; and (6) any additional information that would assist the Commission in assessing the operation of the Pilot Program. The Exchange plans to submit the Report in connection with a proposal that will extend the Pilot Program until July 10, 2008. This proposal and Report will be filed with the Commission at the conclusion of the proposed twoweek extension.
The Exchange also proposes at this time to add a provision to Rule
5.19(a) regarding the limitations on the number of strikes the Exchange
may list for Quarterly Options Series based on an underlying index.
These changes mirror provisions previously submitted by the Chicago
Board Options Exchange (``CBOE'') and approved by the Commission.\7\
The Exchange proposes to: (1) Limit the number of strike prices that
the Exchange may initially open for Quarterly Options Series to five
strike prices above and five below the value of the underlying index;
(2) clarify that the Exchange may open for trading additional Quarterly
Options Series of the same class when the Exchange deems such action
necessary to maintain an orderly market or meet customer demand,
provided that the additional series priced above (below) the value of
the underlying index do not cause there to be more than five strike
process above (below) the value of the underlying index; and (3)
clarify that the opening of any new Quarterly Options Series will not
affect the previously opened series of the same class. These changes
are based on CBOE Rule 24.9 and are shown in Exhibit 5 to the proposed rule change on Form 19b4 filed with the Commission.
\7\ See Securities Exchange Act Release No. 54762 (November 16,
2006), 71 FR 67663 (November 22, 2006) (File No. SRCBOE200693). [[Page 39113]]
Finally, NYSE Arca represents that the Exchange has the necessary system capacity to support any additional series listed as part of the Pilot Program.
2. Statutory Basis
The Exchange believes that the continuation of the Quarterly
Options Series Pilot Program will stimulate customer interest in
options by creating greater trading opportunities and flexibility in
investment choices. The Exchange further believes that continuation of
the Pilot Program will provide the ability to more closely tailor
investment strategies and provide a valuable hedging tool for
investors. For these reasons, the Exchange believes the proposed rule
change is consistent with the Act and the rules and regulations
thereunder and, in particular, the requirements of section 6(b) of the
Act.\8\ Specifically, the Exchange believes the proposed rule change is
consistent with of section 6(b)(5) of the Act,\9\ which requires that
the rules of an exchange be designed to promote just and equitable
principles of trade, to prevent fraudulent and manipulative acts, 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.
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
B. SelfRegulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
C. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others
No written comments were solicited or received with respect to the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
The Exchange has designated the proposed rule change as one that:
(1) Does not significantly affect the protection of investors or the
public interest; (2) does not impose any significant burden on
competition; and (3) does not become operative for 30 days from the
date of filing, or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest.
Therefore, the foregoing rule change has become effective pursuant to
section 19(b)(3)(A) of the Act \10\ and subparagraph (f)(6) of Rule
19b4 thereunder.\11\ The Exchange has asked the Commission to waive
the operative delay to permit the Pilot Program extension to become operative prior to the 30th day after filing.\12\
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b4(f)(6).
\12\ As required under Rule 19b4(f)(6)(iii), the Exchange
provided the Commission with written notice of its intent to file
the proposed rule change at least five business before doing so.
The Commission believes that waiving the 30day operative delay is
consistent with the protection of investors and the public interest
because it will allow the benefits of the Pilot Program to continue
without interruption.\13\ Therefore, the Commission designates the
proposal operative upon filing. The Commission, in deciding to waive
the operative delay in order to allow the Pilot Program to continue
uninterrupted for the proposed twoweek extension, has relied on the
Exchange's representation that it will submit the Report as required by
the Pilot Program on or before the expiration of the extension period (i.e., July 24, 2007).\14\
\13\ For purposes only of waiving the 30day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C. 78c(f).
\14\ As set forth in the Exchange's original filing proposing
the Pilot Program, if the Exchange were to propose an extension, an
expansion, or permanent approval of the Pilot Program, the Exchange
would submit, along with any filing proposing such amendments to the
program, a report that would provide an analysis of the Pilot
Program covering the entire period during which the Pilot Program
was in effect. The report would include, at a minimum: (1) Data and
written analysis on the open interest and trading volume in the
classes for which Quarterly Options Series were opened; (2) an
assessment of the appropriateness of the option classes selected for
the Pilot Program; (3) an assessment of the impact of the Pilot
Program on the capacity of the Exchange, OPRA, and market data
vendors (to the extent data from market data vendors is available);
(4) any capacity problems or other problems that arose during the
operation of the Pilot Program and how the Exchange addressed such
problems; (5) any complaints that the Exchange received during the
operation of the Pilot Program and how the Exchange addressed them;
and (6) any additional information that would assist in assessing
the operation of the Pilot Program. The report must be submitted to
the Commission at least sixty (60) days prior to the expiration date
of the Pilot Program. See Form 19b4 for File No. SRPCX200532, filed March 16, 2005.
At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate the 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
Paper Comments
All submissions should refer to File Number SRNYSEArca200767. 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 Commissions 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 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 SRNYSEArca200767 and should be submitted on or August 7, 2007.
[[Page 39114]]
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\15\
\15\ 17 CFR 200.303(a)(12).
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E713748 Filed 71607; 8:45 am]
BILLING CODE 801001P