Skip to Content

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Add 75 Classes to the Penny Pilot Program


Table of Contents Back to Top

November 6, 2009.

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 October 27, 2009, 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 Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

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

NASDAQ OMX BX, Inc. (the “Exchange”) proposes to designate 75 options classes to be added to the Penny Pilot Program, as referenced in Chapter V, Section 33 of the Rules of the Boston Options Exchange Group, LLC (“BOX”). The Exchange intends to notify Participants of the classes to be added to the Penny Pilot Program via Regulatory Circular. The text of the proposed Regulatory Circular is attached as Exhibit 2. [3]

II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Back to Top

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 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, andStatutory Basis for, the Proposed Rule Change

1. Purpose

On Monday, October 19, 2009 the Exchange submitted a proposed rule change with the Securities and Exchange Commission (“Commission”) to (i) extend the Penny Pilot Program in options classes (“Penny Pilot Program”) previously approved by the Commission through December 31, 2010; (ii) expand the number of classes included in the Penny Pilot Program; and (iii) replace on a semi-annual basis any Penny Pilot Program classes that have been delisted. [4]

The top 300 most actively traded multiply listed options classes in the prior six calendar months [5] preceding their addition to the Penny Pilot Program that are not yet included in the Penny Pilot Program will be phased-in to the Penny Pilot Program over four successive quarters with 75 classes added in each of November 2009, February 2010, May 2010, and August 2010. [6] Options classes with high premiums will be excluded for the quarterly additions. [7]

Based on trading activity for the six months ending September 30, 2009, the Exchange proposes to add the following 75 classes to the Penny Pilot Program on November 2, 2009:

Nat'l ranking Symbol Company name Nat'l ranking Symbol Company name
118 ABX Barrick Gold Corp 120 MRK Merck Co Inc/NJ.
134 AUY Yamana Gold Inc 35 MS Morgan Stanley.
48 AXP American Express Co 73 NLY Annaly Capital Management Inc.
93 BA Boeing Co/The 99 NOK Nokia OYJ.
115 BBT BBT Corp 121 NVDA Nvidia Corp.
111 BBY Best Buy Co Inc 80 ORCL Oracle Corp.
94 BP BP PLC 61 PALM Palm Inc.
67 CHK Chesapeake Energy Corp 37 PBR Petroleo Brasileiro SA.
58 CIT CIT Group Inc 85 PG Procter Gamble Co/The.
78 COF Capital One Financial Corp 41 POT Potash Corp of Saskatchewan Inc.
68 CVX Chevron Corp 74 RF Regions Financial Corp.
130 DE Deere Co 124 RIG Transocean Ltd.
104 DOW Dow Chemical Co/The 132 RMBS Rambus Inc.
49 DRYS DryShips Inc 103 S Sprint Nextel Corp.
88 EFA iShares MSCI EAFE Index Fund 83 SDS ProShares UltraShort SP500.
64 ETFC E*Trade Financial Corp 122 SKF ProShares UltraShort Financials.
32 EWZ iShares MSCI Brazil Index Fund 107 SLB Schlumberger Ltd.
25 FAS Direxion Daily Financial Bull 3X Shares 91 SLV iShares Silver Trust.
33 FAZ Direxion Daily Financial Bear 3X Shares 84 SRS ProShares UltraShort Real Estate.
112 FITB Fifth Third Bancorp 119 SSO ProShares Ultra SP500.
70 FSLR First Solar Inc 101 STI SunTrust Banks Inc.
26 FXI iShares FTSE/Xinhua China 25 Index Fund 125 SVNT Savient Pharmaceuticals Inc.
82 GDX Market Vectors—Gold Miners ETF 92 TBT ProShares UltraShort 20+ Year Treasury.
127 GG Goldcorp Inc 14 UNG United States Natural Gas Fund LP.
18 GLD SPDR Gold Trust 117 UNH UnitedHealth Group Inc.
129 HGSI Human Genome Sciences Inc 110 UPS United Parcel Service Inc.
62 HIG Hartford Financial Services Group Inc 81 USB US Bancorp.
72 HPQ Hewlett-Packard Co 44 USO United States Oil Fund LP.
59 IBM International Business Machines Corp 60 UYG ProShares Ultra Financials.
45 IYR iShares Dow Jones US Real Estate Index Fund 96 V Visa Inc.
105 JNJ Johnson Johnson 10 WFC Wells Fargo Co.
131 JNPR Juniper Networks Inc 133 WYNN Wynn Resorts Ltd.
98 KO Coca-Cola Co/The 52 X United States Steel Corp.
39 LVS Las Vegas Sands Corp 114 XHB SPDR SP Homebuilders ETF.
87 MCD McDonald's Corp 86 XLI Industrial Select Sector SPDR Fund.
71 MGM MGM Mirage 79 XLU Utilities Select Sector SPDR Fund.
113 MON Monsanto Co 54 XRT SPDR SP Retail ETF.
63 MOS Mosaic Co/The

2. Statutory Basis

The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act, [8] in general, and Section 6(b)(5) of the Act, [9] 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, by identifying the options classes added to the Pilot in a manner consistent with prior rule changes.

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 Back to Top

The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(i) of the Exchange Act [10] and Rule 19b-4(f)(1) thereunder, [11] because it constitutes a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing BOX rule. 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 the action is necessary or appropriate in the public interest, for the protection of investors, or would otherwise further the purposes of the Act.

IV. Solicitation of Comments Back to Top

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

  • 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-2009-069. 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 ( 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 No. SR-BX-2009-069 and should be submitted on or before December 4, 2009.

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. [12]

Florence E. Harmon,

Deputy Secretary.

[FR Doc. E9-27256 Filed 11-12-09; 8:45 am]


Footnotes Back to Top

3. The Commission notes that the text of the proposed Regulatory Circular is attached at Exhibit 2 to the Form 19b-4, but is not attached to this Notice.

Back to Context

4. See Securities and Exchange Act Release No. 60886 (October 27, 2009) (SR-BX-2009-067). This proposal was effective immediately upon filing.

Back to Context

5. For purposes of assessing national average daily volume the Exchange will use data compiled and disseminated by the Options Clearing Corporation.

Back to Context

6. The quarterly additions will be effective on November 2, 2009, February 1, 2010, May 3, 2010 and August 2, 2010, respectively. For purposes of identifying the classes to be added per quarter, the Exchange shall use data from the prior six calendar months preceding the implementation month, except that the month immediately preceding their addition to the Pilot would not be utilized for purposes of the six month analysis. For example, the quarterly additions to be added on November 2, 2009 shall be determined using data from the six month period ending September 30, 2009.

Back to Context

7. The threshold for designation as “high priced” at the time of selection of new classes to be included in the Penny Pilot Program is $200 per share or a calculated index value of 200. The determination of whether a security is trading above $200 or above a calculated index value of 200 shall be based on the price at the close of trading on the Expiration Friday prior to being added to the Penny Pilot Program.

Back to Context
Site Feedback