SECURITIES AND EXCHANGE COMMISSION
[Release No. 34–62029; File No. SR–NASDAQ–2010–053]
Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change by the NASDAQ Stock Market LLC to Add Seventy-Five Options Classes to the Penny Pilot Program
May 4, 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 April 27, 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, II, and III, below, which Items have been prepared by Nasdaq. 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.
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 May 3, 2010.
3
The Exchange is not proposing to amend any rule text, but simply administering or enforcing an existing rule.
4
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); and 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).
4
See
Chapter VI, Section 5 regarding the Penny Pilot.
The text of the proposed rule change is available from Nasdaq's website at
http://nasdaq.cchwallstreet.com/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 May 3, 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.
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).
The Exchange is identifying, in the chart below, seventy-five options classes that it will add to the Penny Pilot on May 3, 2010, based on ADVs for the six months ending March 31, 2010.
Nat'l ranking
Symbol
Security name
Nat'l ranking
Symbol
Security name
153
XLV
Health Care Select Sector SPDR Fund
247
JCP
JC Penney Co Inc.
155
CIEN
Ciena Corp
248
ACL
Alcon Inc.
157
AMLN
Amylin Pharmaceuticals Inc
249
STP
Suntech Power Holdings Co Ltd.
158
CTIC
Cell Therapeutics Inc
250
TLB
Talbots Inc.
159
MDT
Medtronic Inc
251
SYMC
Symantec Corp.
162
TIVO
TiVo Inc
253
AMED
Amedisys Inc.
163
MNKD
MannKind Corp
255
TM
Toyota Motor Corp.
171
MDVN
Medivation Inc
257
HK
Petrohawk Energy Corp.
176
BRKB
Berkshire Hathaway Inc
258
ENER
Energy Conversion Devices Inc.
178
APOL
Apollo Group Inc
259
STT
State Street Corp.
181
BSX
Boston Scientific Corp
260
BHP
BHP Billiton Ltd.
185
XLY
Consumer Discretionary Sel. Sec. SPDR Fund
261
NFLX
NetFlix Inc.
188
CLF
Cliffs Natural Resources Inc
262
LDK
LDK Solar Co Ltd.
190
ZION
Zions Bancorporation
263
SPG
Simon Property Group Inc.
194
IOC
InterOil Corp
264
TIF
Tiffany & Co.
197
ITMN
InterMune Inc
265
BUCY
Bucyrus International Inc.
204
GME
GameStop Corp
266
WAG
Walgreen Co.
209
XLK
Technology Select Sector SPDR Fund
268
IP
International Paper Co.
210
AKS
AK Steel Holding Corp
271
XME
SPDR S&P Metals & Mining ETF.
212
GRMN
Garmin Ltd
272
KGC
Kinross Gold Corp.
213
MRVL
Marvell Technology Group Ltd
273
EP
El Paso Corp.
215
XLP
Consumer Staples Select Sector SPDR Fund
274
SEED
Origin Agritech Ltd.
216
UNP
Union Pacific Corp
275
WIN
Windstream Corp.
220
DTV
DIRECTV
279
DHI
DR Horton Inc.
223
WMB
Williams Cos Inc./The
280
ADBE
Adobe Systems Inc.
225
MEE
Massey Energy Co
281
PCX
Patriot Coal Corp.
227
CELG
Celgene Corp
282
SPWRA
SunPower Corp.
229
GMCR
Green Mountain Coffee Roasters Inc
284
LCC
US Airways Group Inc.
231
WDC
Western Digital Corp
285
PRU
Prudential Financial Inc.
234
DAL
Delta Air Lines Inc
286
LEN
Lennar Corp.
235
FXE
CurrencyShares Euro Trust
287
EWT
iShares MSCI Taiwan Index Fund.
237
COST
Costco Wholesale Corp
288
KBH
KB Home.
239
MJN
Mead Johnson Nutrition Co
289
CREE
Cree Inc.
240
ALL
Allstate Corp/The
290
SIRI
Sirius XM Radio Inc.
241
SII
Smith International Inc
291
MMR
McMoRan Exploration Co.
242
RTN
Raytheon Co
292
CENX
Century Aluminum Co.
243
DVN
Devon Energy Corp
293
GFI
Gold Fields Ltd.
244
MT
ArcelorMittal
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.
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
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
Pursuant to Section 19(b)(3)(A)(i) of the Act
8
and Rule 19b–4(f)(1) thereunder,
9
Nasdaq has designated this proposal as one constituting a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule.
8
15 U.S.C. 78s(b)(3)(A)(i).
9
17 CFR 240.19b–4(f)(1).
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–NASDAQ–2010–053 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–2010–053. 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 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–2010–053 and should be submitted on or before June 1, 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.