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Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Add Seventy-Five Options Classes to the Penny Pilot Program

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Start Preamble July 30, 2010.

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 July 22, 2010, 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, which Items have been prepared by Nasdaq. 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

Nasdaq is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposal for the NASDAQ Options Market (“NOM” or “Exchange”) to designate seventy-five options classes to be added to the Penny Pilot Program (“Penny Pilot” or “Pilot”) on August 2, 2010.[3] The Exchange is not Start Printed Page 47671proposing to amend any rule text, but simply administering or enforcing an existing rule.[4]

The text of the proposed rule change is available from Nasdaq's Web site at​Filings/​, 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 this filing is to identify the next seventy-five options classes to be added to the Penny Pilot effective August 2, 2010.

In the Exchange's immediately effective filing to extend and expand the Penny Pilot through December 31, 2010,[5] the Exchange proposed expanding the Pilot four times on a quarterly basis. Each such quarterly expansion would be of the next seventy-five most actively traded multiply listed options classes based on the national average daily volume (“ADV”) for the six months prior to selection, closing under $200 per share on the Expiration Friday prior to expansion; however, the month immediately preceding the addition of options to the Penny Pilot will not be used for the purpose of the six-month analysis. Index option products would be included in the quarterly expansions if the underlying index levels were under 200.

The Exchange is identifying, in the chart below, seventy-five options classes that it will add to the Penny Pilot on August 2, 2010, based on ADVs for the six months ending June 30, 2010.

Nat'l rankingSymbolSecurity nameNat'l rankingSymbolSecurity name
199MBIMBIA Inc.316CBChubb Corp.
205MAMastercard Inc.320ADMArcher-Daniels-Midland Co.
224ATPGATP Oil & Gas Corp/United States322HSYHershey Co./The
226YUMYum! Brands Inc323TXTTextron Inc.
232RCLRoyal Caribbean Cruises Ltd.324GGPGeneral Growth Properties Inc.
238BPOPPopular Inc.325NOVNational Oilwell Varco Inc.
248EKEastman Kodak Co.326TWXTime Warner Inc.
252CNXConsol Energy Inc.327XOPSPDR S&P Oil & Gas Exploration & Production ETF.
260DCTHDelcath Systems Inc.328MYLMylan Inc./PA.
274MTGMGIC Investment Corp.329TSOTesoro Corp.
277PXPPlains Exploration & Production Co.330CICIGNA Corp.
278GPSGap Inc./The331ESIITT Educational Services Inc.
280TSLTrina Solar Ltd.332NKENIKE Inc.
282EWWiShares MSCI Mexico Investable Market Index Fund335FISFidelity National Information Services Inc. Inc.336SUNSunoco Inc.
286SWNSouthwestern Energy Co.338BBBYBed Bath & Beyond Inc.
287HBANHuntington Bancshares Inc./OH340APWRA-Power Energy Generation Systems Ltd.
288EOGEOG Resources Inc.341FWLTFoster Wheeler AG.
290APAApache Corp.342LNCLincoln National Corp.
291VVUSVivus Inc.343RSHRadioShack Corp.
292JDSUJDS Uniphase Corp.344TYCTyco International Ltd.
293ACIArch Coal Inc.345CLColgate-Palmolive Co.
294NENoble Corp.346FXPProShares UltraShort FTSE/Xinhua China 25.
296BAXBaxter International Inc.347NTAPNetApp Inc.
297ADSKAutodesk Inc.348SOSouthern Co.
299KRESPDR KBW Regional Banking ETF349PHMPulte Group Inc.
300XLXL Group Plc350HOTStarwood Hotels & Resorts Worldwide Inc.
302WLTWalter Energy Inc.351QLDProShares Ultra QQQ.
303IBNICICI Bank Ltd.352VRSNVeriSign Inc.
305EWYiShares MSCI South Korea Index Fund353PCLPlum Creek Timber Co. Inc.
306WHRWhirlpool Corp.354NBRNabors Industries Ltd.
307BHIBaker Hughes Inc.355ESRXExpress Scripts Inc.
308KMPKinder Morgan Energy Partners LP356ACASAmerican Capital Ltd.
309MROMarathon Oil Corp.357XLNXXilinx Inc.
310AGOAssured Guaranty Ltd.358DODiamond Offshore Drilling Inc.
311GISGeneral Mills Inc.359CMAComerica Inc.
312ANRAlpha Natural Resources Inc.360KEYKeyCorp.
Start Printed Page 47672
314GENZGenzyme Corp.

2. Statutory Basis

The Exchange believes that its proposal is consistent with Section 6(b) of the Act [6] in general, and furthers the objectives of Section 6(b)(5) of the Act [7] 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, by identifying the options classes to be added to the Penny Pilot in a manner consistent with prior approvals and filings.

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 proposed rule change is filed for immediate effectiveness pursuant to Section 19(b)(3)(A) [8] of the Act and Rule 19b-4(f)(1) [9] thereunder as it constitutes a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule. 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. 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-NASDAQ-2010-092. 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 (​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 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-NASDAQ-2010-092 and should be submitted on or before August 27, 2010.

Start Signature

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

Florence E. Harmon,

Deputy Secretary.

End Signature End Preamble


3.  The Penny Pilot was established in March 2008 and in October 2009 was expanded and extended through December 31, 2010. See Securities Exchange Act Release Nos. 57579 (March 28, 2008), 73 FR 18587 (April 4, 2008)(SR-NASDAQ-2008-026) (notice of filing and immediate effectiveness establishing Penny Pilot); 60874 (October 23, 2009), 74 FR 56682 (November 2, 2009) (SR-NASDAQ-2009-091) (notice of filing and immediate effectiveness expanding and extending Penny Pilot); 60965 (November 9, 2009), 74 FR 59292 (November 17, 2009) (SR-NASDAQ-2009-097) (notice of filing and immediate effectiveness adding seventy-five classes to Penny Pilot); 61455 (February 1, 2010), 75 FR 6239 (February 8, 2010) (SR-NASDAQ-2010-013) (notice of filing and immediate effectiveness adding seventy-five classes to Penny Pilot); and 62029 (May 4, 2010), 75 FR 25895 (May 10, 2010) (SR-NASDAQ-2010-053) (notice of filing and immediate effectiveness adding seventy-five classes to Penny Pilot).

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4.  See Chapter VI, Section 5 regarding the Penny Pilot.

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5.  See Securities Exchange Act Release No. 60874 (October 23, 2009), 74 FR 56682 (November 2, 2009) (SR-NASDAQ-2009-091) (notice of filing and immediate effectiveness).

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[FR Doc. 2010-19334 Filed 8-5-10; 8:45 am]