Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Exchange Rule 6.25, 10192-10194 [2015-03820]
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asabaliauskas on DSK5VPTVN1PROD with NOTICES
10192
Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices
to the Exchange’s existing rules
governing the trading of equity
securities. In support of this proposal,
the Exchange has also made the
following representations:
(1) The Shares will be subject to Rule
5735, which sets forth the initial and
continued listing criteria applicable to
Managed Fund Shares.
(2) The Exchange has appropriate
rules to facilitate transactions in the
Shares during all trading sessions.
(3) Prior to the commencement of
trading, the Exchange will inform its
members in an Information Circular of
the special characteristics and risks
associated with trading the Shares.
Specifically, the Information Circular
will discuss the following: (a) The
procedures for purchases and
redemptions of Shares in Creation Units
(and that Shares are not individually
redeemable); (b) Nasdaq Rule 2111A,
which imposes suitability obligations on
Nasdaq members with respect to
recommending transactions in the
Shares to customers; (c) how
information regarding the Intraday
Indicative Value and Disclosed Portfolio
is disseminated; (d) the risks involved
in trading the Shares during the PreMarket and Post-Market Sessions when
an updated Intraday Indicative Value
will not be calculated or publicly
disseminated; (e) the requirement that
members deliver a prospectus to
investors purchasing newly issued
Shares prior to or concurrently with the
confirmation of a transaction; and (f)
trading information.
(4) Trading in the Shares will be
subject to the existing trading
surveillances, administered by both
Nasdaq and FINRA,33 on behalf of the
Exchange. The trading surveillance
procedures are designed to detect
violations of Exchange rules and
applicable federal securities laws. These
procedures are adequate to properly
monitor Exchange trading of the Shares
in all trading sessions and to deter and
detect violations of Exchange rules and
applicable federal securities laws.
(5) For initial and continued listing,
the Fund must be in compliance with
Rule 10A–3 under the Act.34
(6) A minimum of 100,000 Shares will
be outstanding at the commencement of
trading on the Exchange.
(7) The Fund will invest at least 80%
of its assets under normal market
conditions in shares of ETPs,
individually selected U.S. exchange33 According to the Exchange, FINRA surveils
trading on the Exchange pursuant to a regulatory
services agreement. The Exchange is responsible for
FINRA’s performance under this regulatory services
agreement. See Notice, supra note 3, 80 FR at 544.
34 17 CFR 240.10A–3.
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traded common stocks (when the SubAdviser determines that it is more
efficient or otherwise advantageous to
do so), money market funds, U.S.
treasuries, or money market
instruments. In order to seek its
investment objective, the Fund will not
employ other strategies outside of the
above-described ‘‘Principal
Investments.’’
(8) The Fund may hold up to an
aggregate amount of 15% of its net
assets in illiquid assets (calculated at
the time of investment) and will
monitor its portfolio liquidity on an
ongoing basis to determine whether, in
light of current circumstances, an
adequate level of liquidity is being
maintained. The Fund will consider
taking appropriate steps in order to
maintain adequate liquidity if, through
a change in values, net assets, or other
circumstances, more than 15% of the
Fund’s net assets are held in illiquid
assets.
(9) While the Fund may invest in
leveraged ETFs (e.g., 2X or 3X), the
Fund will not invest in inverse or
inverse leveraged ETFs. Under normal
circumstances, the Fund will not invest
more than 25% of its total assets in
leveraged ETPs. The Fund will not be
operated in a manner designed to seek
a multiple of the performance of an
underlying reference index.
(10) The Fund will not use derivative
instruments, including options, swaps,
forwards, and futures contracts.
(11) The Fund’s investments will be
consistent with the Fund’s investment
objective.
The Commission notes that the Fund
and the Shares must comply with the
requirements of Nasdaq Rule 5735 to be
initially and continuously listed and
traded on the Exchange. This approval
order is based on all of the Exchange’s
representations and description of the
Fund, including those set forth above
and in the Notice.
SECURITIES AND EXCHANGE
COMMISSION
IV. Conclusion
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.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,35 that the
proposed rule change (SR–NASDAQ–
2014–127), be, and it hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.36
Brent J. Fields,
Secretary.
[FR Doc. 2015–03812 Filed 2–24–15; 8:45 am]
[Release No. 34–74312; File No. SR–CBOE–
2015–18]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to Exchange
Rule 6.25
February 19, 2015.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that, on February
19, 2015, Chicago Board Options
Exchange, Incorporated (the ‘‘Exchange’’
or ‘‘CBOE’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. 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 the Substance
of the Proposed Rule Change
The Exchange proposes to extend a
pilot program related to Rule 6.25
(Nullification and Adjustment of
Options Transactions). The text of the
proposed rule change is available on the
Exchange’s Web site (https://
www.cboe.com/AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
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
BILLING CODE 8011–01–P
35 15
36 17
PO 00000
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
Frm 00149
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Sfmt 4703
1 15
2 17
E:\FR\FM\25FEN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices
asabaliauskas on DSK5VPTVN1PROD with NOTICES
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 extend
the effectiveness of the Exchange’s
current rule applicable to obvious
errors. Interpretation and Policy .06 to
Rule 6.25, explained in further detail
below, is currently operating on a pilot
program set to expire on February 20,
2015. The Exchange proposes to extend
the pilot program to October 23, 2015.
On April 5, 2013, the Commission
approved, on a pilot basis, amendments
to Exchange Rule 6.25 that stated that
options executions will not be adjusted
or nullified if the execution occurs
while the underlying security is in a
limit or straddle state as defined by the
Plan. Under the terms of this current
pilot program, though options
executions will generally not be
adjusted or nullified while the
underlying security is in a limit or
straddle state, such executions may be
reviewed by the Exchange should the
Exchange decide to do so under its own
motion.
Pursuant to a comment letter filed in
connection with the order approving the
establishment of the pilot, the Exchange
committed to submit monthly data
regarding the program. In addition, the
Exchange agreed to submit an overall
analysis of the pilot in conjunction with
the data submitted under the Plan and
any other data as requested by the
Commission. Pursuant to a rule filing,
approved on April 3, 2014, each month,
the Exchange committed to provide the
Commission, and the public, a dataset
containing the data for each straddle
and limit state in optionable stocks that
had at least one trade on the Exchange.
The Exchange will continue to provide
the Commission with this data on a
monthly basis from February 2015
through the end of the pilot. For each
trade on the Exchange, the Exchange
will provide (a) the stock symbol, option
symbol, time at the start of the straddle
or limit state, an indicator for whether
it is a straddle or limit state, and (b) for
the trades on the Exchange, the
executed volume, time-weighted quoted
bid-ask spread, time-weighted average
quoted depth at the bid, time-weighted
average quoted depth at the offer, high
execution price, low execution price,
number of trades for which a request for
review for error was received during
straddle and limit states, an indicator
variable for whether those options
outlined above have a price change
exceeding 30% during the underlying
stock’s limit or straddle state compared
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to the last available option price as
reported by OPRA before the start of the
limit or straddle state (1 if observe 30%
and 0 otherwise), and another indicator
variable for whether the option price
within five minutes of the underlying
stock leaving the limit or straddle state
(or halt if applicable) is 30% away from
the price before the start of the limit or
straddle state.
In addition, the Exchange will
provide to the Commission and the
public, no later than May 29, 2015,
assessments relating to the impact of the
operation of the obvious error rules
during limit and straddle states
including: (1) An evaluation of the
statistical and economic impact of limit
and straddle states on liquidity and
market quality in the options markets,
and (2) an assessment of whether the
lack of obvious error rules in effect
during the straddle and limit states are
problematic.
The Exchange is now proposing to
extend the pilot period until October 23,
2015. The Exchange believes the
benefits to market participants from this
provision should continue on a pilot
basis. The Exchange continues to
believe that adding certainty to the
execution of orders in limit or straddle
states will encourage market
participants to continue to provide
liquidity to the Exchange, and, thus,
promote a fair and orderly market
during these periods. Barring this
provision, the provisions of Rule 6.25
would likely apply in many instances
during limit and straddle states. The
Exchange believes that continuing the
pilot will protect against any
unanticipated consequences in the
options markets during a limit or
straddle state. Thus, the Exchange
believes that the protections of current
Rule should continue while the industry
gains further experience operating the
Plan.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.3 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 4 requirements that the rules of
an exchange be 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
3 15
4 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00150
Fmt 4703
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5)5 requirement that the
rules of an exchange not be designed to
permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the Exchange further
believes that it is necessary and
appropriate in the interest of promoting
fair and orderly markets to exclude
transactions executed during a limit or
straddle state from certain aspects of the
Exchange Rule 6.25. The Exchange
believes the application of the current
rule will be impracticable given the lack
of a reliable NBBO in the options market
during limit and straddle states, and
that the resulting actions (i.e., nullified
trades or adjusted prices) may not be
appropriate given market conditions.
Extension of this pilot would ensure
that limit orders that are filled during a
limit or straddle state would have
certainty of execution in a manner that
promotes just and equitable principles
of trade, removes impediments to, and
perfects the mechanism of a free and
open market and a national market
system. Thus, the Exchange believes
that the protections of the pilot should
continue while the industry gains
further experience operating the Plan.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CBOE 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. Specifically,
the Exchange believes that, by extending
the expiration of the pilot, the proposed
rule change will allow for further
analysis of the pilot and a determination
of how the pilot shall be structured in
the future. In doing so, the proposed
rule change will also serve to promote
regulatory clarity and consistency,
thereby reducing burdens on the
marketplace and facilitating investor
protection.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
5 Id.
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Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the 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, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 6 and Rule 19b–4(f)(6)(iii)
thereunder.7
The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest, as it
will allow the obvious error pilot
program to continue uninterrupted
while the industry gains further
experience operating under the Plan to
Address Extraordinary Market
Volatility, and avoid any investor
confusion that could result from a
temporary interruption in the pilot
program. For this reason, the
Commission designates the proposed
rule change to be operative upon filing.8
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. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
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.
6 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii). As required under
Rule 19b–4(f)(6)(iii), the Exchange provided the
Commission with written notice of its intent to file
the proposed rule change, along with a brief
description and the 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.
8 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–74304; File Nos. SR–MIAX–
2014–30 and SR–MIAX–2014–39]
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2015–18 on the subject line.
Paper Comments
February 19, 2015.
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CBOE–2015–18. 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 Commission’s
Internet Web site (https://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
10:00 a.m. and 3:00 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 SR–CBOE–
2015–18, and should be submitted on or
before March 18, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Brent J. Fields,
Secretary.
[FR Doc. 2015–03820 Filed 2–24–15; 8:45 am]
BILLING CODE 8011–01–P
9 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00151
Fmt 4703
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Order Disapproving Proposed Rule
Changes To List and Trade Options on
Shares of the iShares ETFs and Market
Vectors ETFs
Sfmt 4703
I. Introduction
On June 17, 2014, Miami International
Securities Exchange LLC (‘‘MIAX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Exchange Act’’ or ‘‘Act’’) 1 and
Rule 19b–4 thereunder,2 a proposed rule
change to list and trade options on
shares of the iShares MSCI Brazil
Capped ETF, iShares MSCI Chile
Capped ETF, iShares MSCI Peru Capped
ETF, and iShares MSCI Spain Capped
ETF (collectively ‘‘iShares ETFs’’). The
proposed rule change was published for
comment in the Federal Register on July
3, 2014.3 On August 13, 2014, the
Commission extended the time period
in which to either approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to approve or
disapprove the proposed rule change, to
October 1, 2014.4 On September 25,
2014, the Commission instituted
proceedings to determine whether to
approve or disapprove the proposed
rule change.5 The Commission received
a letter from MIAX on the proposal.6 On
December 17, 2014, the Commission
issued a notice of designation of a
longer period for Commission action on
proceedings to determine whether to
approve or disapprove the proposed
rule change.7
In addition, on July 28, 2014, the
Exchange filed with the Commission a
proposed rule change to list and trade
options on shares of the Market Vectors
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 72492
(June 27, 2014), 79 FR 38099 (SR–MIAX–2014–30)
(‘‘iShares ETFs Proposal’’).
4 See Securities Exchange Act Release No. 72835,
79 FR 49140 (August 19, 2014).
5 See Securities Exchange Act Release No. 73211,
79 FR 59338 (October 1, 2014).
6 See Letter to Elizabeth M. Murphy, Secretary,
Commission, from Brian O’Neill, Vice President
and Senior Counsel, MIAX, dated October 22, 2014
(providing comment on SR–MIAX–2014–30 and
SR–MIAX–2014–39) (‘‘MIAX Letter’’).
7 See Securities Exchange Act Release No. 73856,
79 FR 77075 (December 23, 2014).
2 17
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]]>Agencies
[Federal Register Volume 80, Number 37 (Wednesday, February 25, 2015)]
[Notices]
[Pages 10192-10194]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-03820]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74312; File No. SR-CBOE-2015-18]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change Relating to Exchange Rule 6.25
February 19, 2015.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on February 19, 2015, Chicago Board Options Exchange,
Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities
and Exchange Commission (the ``Commission'') the proposed rule change
as described in Items I and II below, which Items have been prepared by
the Exchange. 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 the
Substance of the Proposed Rule Change
The Exchange proposes to extend a pilot program related to Rule
6.25 (Nullification and Adjustment of Options Transactions). The text
of the proposed rule change is available on the Exchange's Web site
(https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the
Exchange's Office of the Secretary, 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, 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.
[[Page 10193]]
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 extend the effectiveness of the
Exchange's current rule applicable to obvious errors. Interpretation
and Policy .06 to Rule 6.25, explained in further detail below, is
currently operating on a pilot program set to expire on February 20,
2015. The Exchange proposes to extend the pilot program to October 23,
2015.
On April 5, 2013, the Commission approved, on a pilot basis,
amendments to Exchange Rule 6.25 that stated that options executions
will not be adjusted or nullified if the execution occurs while the
underlying security is in a limit or straddle state as defined by the
Plan. Under the terms of this current pilot program, though options
executions will generally not be adjusted or nullified while the
underlying security is in a limit or straddle state, such executions
may be reviewed by the Exchange should the Exchange decide to do so
under its own motion.
Pursuant to a comment letter filed in connection with the order
approving the establishment of the pilot, the Exchange committed to
submit monthly data regarding the program. In addition, the Exchange
agreed to submit an overall analysis of the pilot in conjunction with
the data submitted under the Plan and any other data as requested by
the Commission. Pursuant to a rule filing, approved on April 3, 2014,
each month, the Exchange committed to provide the Commission, and the
public, a dataset containing the data for each straddle and limit state
in optionable stocks that had at least one trade on the Exchange. The
Exchange will continue to provide the Commission with this data on a
monthly basis from February 2015 through the end of the pilot. For each
trade on the Exchange, the Exchange will provide (a) the stock symbol,
option symbol, time at the start of the straddle or limit state, an
indicator for whether it is a straddle or limit state, and (b) for the
trades on the Exchange, the executed volume, time-weighted quoted bid-
ask spread, time-weighted average quoted depth at the bid, time-
weighted average quoted depth at the offer, high execution price, low
execution price, number of trades for which a request for review for
error was received during straddle and limit states, an indicator
variable for whether those options outlined above have a price change
exceeding 30% during the underlying stock's limit or straddle state
compared to the last available option price as reported by OPRA before
the start of the limit or straddle state (1 if observe 30% and 0
otherwise), and another indicator variable for whether the option price
within five minutes of the underlying stock leaving the limit or
straddle state (or halt if applicable) is 30% away from the price
before the start of the limit or straddle state.
In addition, the Exchange will provide to the Commission and the
public, no later than May 29, 2015, assessments relating to the impact
of the operation of the obvious error rules during limit and straddle
states including: (1) An evaluation of the statistical and economic
impact of limit and straddle states on liquidity and market quality in
the options markets, and (2) an assessment of whether the lack of
obvious error rules in effect during the straddle and limit states are
problematic.
The Exchange is now proposing to extend the pilot period until
October 23, 2015. The Exchange believes the benefits to market
participants from this provision should continue on a pilot basis. The
Exchange continues to believe that adding certainty to the execution of
orders in limit or straddle states will encourage market participants
to continue to provide liquidity to the Exchange, and, thus, promote a
fair and orderly market during these periods. Barring this provision,
the provisions of Rule 6.25 would likely apply in many instances during
limit and straddle states. The Exchange believes that continuing the
pilot will protect against any unanticipated consequences in the
options markets during a limit or straddle state. Thus, the Exchange
believes that the protections of current Rule should continue while the
industry gains further experience operating the Plan.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\3\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \4\ requirements that the rules of an exchange be
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 regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5)\5\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(5).
\5\ Id.
---------------------------------------------------------------------------
In particular, the Exchange further believes that it is necessary
and appropriate in the interest of promoting fair and orderly markets
to exclude transactions executed during a limit or straddle state from
certain aspects of the Exchange Rule 6.25. The Exchange believes the
application of the current rule will be impracticable given the lack of
a reliable NBBO in the options market during limit and straddle states,
and that the resulting actions (i.e., nullified trades or adjusted
prices) may not be appropriate given market conditions. Extension of
this pilot would ensure that limit orders that are filled during a
limit or straddle state would have certainty of execution in a manner
that promotes just and equitable principles of trade, removes
impediments to, and perfects the mechanism of a free and open market
and a national market system. Thus, the Exchange believes that the
protections of the pilot should continue while the industry gains
further experience operating the Plan.
B. Self-Regulatory Organization's Statement on Burden on Competition
CBOE 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. Specifically, the Exchange
believes that, by extending the expiration of the pilot, the proposed
rule change will allow for further analysis of the pilot and a
determination of how the pilot shall be structured in the future. In
doing so, the proposed rule change will also serve to promote
regulatory clarity and consistency, thereby reducing burdens on the
marketplace and facilitating investor protection.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
[[Page 10194]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the 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, the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-
4(f)(6)(iii) thereunder.\7\
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the 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.
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The Exchange has asked the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. The Commission believes that waiving the 30-day operative delay
is consistent with the protection of investors and the public interest,
as it will allow the obvious error pilot program to continue
uninterrupted while the industry gains further experience operating
under the Plan to Address Extraordinary Market Volatility, and avoid
any investor confusion that could result from a temporary interruption
in the pilot program. For this reason, the Commission designates the
proposed rule change to be operative upon filing.\8\
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\8\ For purposes only of waiving the 30-day operative delay, the
Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-CBOE-2015-18 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2015-18. 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 Commission's Internet Web site (https://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
10:00 a.m. and 3:00 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 SR-CBOE-2015-18, and should be
submitted on or before March 18, 2015.
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\9\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
Brent J. Fields,
Secretary.
[FR Doc. 2015-03820 Filed 2-24-15; 8:45 am]
BILLING CODE 8011-01-P
