Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Change the Close of Trading Hours on the Last Day of Trading in Expiring Quarterly Index Expirations, 21288-21290 [2015-08796]
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Federal Register / Vol. 80, No. 74 / Friday, April 17, 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 18 and Rule 19b–4(f)(6)(iii)
thereunder.19
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 20 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 21
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The Exchange has asked
the Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Exchange believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because it would allow the Exchange to
timely offer investors a new option for
receiving consolidated volume
information. The Exchange further notes
that other exchanges currently offer
similar data products that include
consolidated volume.22 The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest. Therefore, the
Commission hereby waives the
operative delay and designates the
proposed rule change operative upon
filing.23
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
18 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.
20 17 CFR 240.19b–4(f)(6).
21 17 CFR 240.19b–4(f)(6)(iii).
22 See supra note 14 (noting that NYSE BQT and
NLS Plus carry consolidated volume for all listed
equities).
23 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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19 17
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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–
EDGA–2015–17 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–EDGA–2015–17. 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–EDGA–
PO 00000
Frm 00087
Fmt 4703
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2015–17, and should be submitted on or
before May 8, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Brent J. Fields,
Secretary.
[FR Doc. 2015–08794 Filed 4–16–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74719; File No. SR–C2–
2015–008]
Self-Regulatory Organizations; C2
Options Exchange, Incorporated;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change To Change the Close of
Trading Hours on the Last Day of
Trading in Expiring Quarterly Index
Expirations
April 13, 2015.
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 April 9,
2015 C2 Options Exchange,
Incorporated (the ‘‘Exchange’’ or ‘‘C2’’)
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 the Exchange.
The Exchange filed the proposal as a
‘‘non-controversial’’ proposed rule
change pursuant to Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b–4(f)(6) thereunder.4 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
The Exchange proposes to amend C2
Rule 6.1 (Days and Hours of Business)
to change the close of trading hours
from 3:15 p.m. (Chicago time) to 3:00
p.m. (Chicago time) on the last day of
trading in expiring Quarterly Index
Expirations (‘‘QIXs’’). The text of the
proposed rule change is available on the
Exchange’s Web site (https://
www.c2exchange.com/Legal/), at the
Exchange’s Office of the Secretary, and
at the Commission’s Public Reference
Room.
24 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
1 15
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Federal Register / Vol. 80, No. 74 / Friday, April 17, 2015 / Notices
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.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
tkelley on DSK3SPTVN1PROD with NOTICES
This filing is based on existing
Chicago Board Options Exchange,
Incorporated (‘‘CBOE’’) Rule 24.6.01.5
The majority of C2’s Rules are the
same as CBOE’s Rules and were adopted
as part of the Securities and Exchange
Commission’s (‘‘SEC’’ or
‘‘Commission’’) order approving C2’s
application for registration as a national
securities exchange.6 CBOE Rule 24.9(c)
permits CBOE to list QIXs, which are
cash-settled options on certain specified
broad-based indices that expire on the
5 CBOE Rule 24.6.01 provides, ‘‘On the last
trading day, transactions in expiring Quarterly
Index Expirations (QIXs) may be effected on the
Exchange during Extended Trading Hours and
during the Regular Trading Hours of 8:30 a.m.
(Chicago time) to 3:00 p.m. (Chicago time). This
Interpretation and Policy .01 applies to all
outstanding expiring QIXs that expire at the end of
the second calendar quarter in 2009 and thereafter.’’
See also Securities Exchange Act Release Nos.[sic]
59676 (April 1, 2009), 74 FR 16018 (April 8, 2009)
(Notice of Filing and Immediate Effectiveness of
Proposed Rule Change to Change the Close of
Trading Hours on the Last Day of Trading in
Expiring Quarterly Index Expirations) (SR–CBOE–
2009–020).
6 See Securities Exchange Act Release No. 61152
(December 10, 2009), 74 FR 66699, 66709–10
(December 16, 2009) (In the Matter of the
Application of C2 Options Exchange, Incorporated
for Registration as a National Securities Exchange
Findings, Opinion, and Order of the Commission
(File No. 10–191). In the Order, the Commission
granted C2’s request for exemption, pursuant to
Section 36 of the Securities Exchange Act of 1934
(the ‘‘Act’’), from the rule filing requirements of
Section 19(b) of the Act with respect to the rules
that C2 proposed to incorporate by reference. The
exemption was conditioned upon C2 providing
written notice to its members whenever CBOE
proposes to change a rule that C2 has incorporated
by reference. In the Order, the Commission stated
its belief that ‘‘this exemption is appropriate in the
public interest and consistent with the protection
of investors because it will promote more efficient
use of Commission and SRO resources by avoiding
duplicative rule flings based on simultaneous
changes to identical rules sought by more than one
SRO.’’
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first business day of the month
following the end of a calendar quarter.
QIXs trade simultaneously with, not
independent of, standard options on the
same underlying index. QIXs are subject
to the same rules that currently govern
the trading of standard index options,
including sales practice rules, margin
requirements, and floor trading
proceedings. Contract terms for QIXs are
similar to traditional index options,
with one general exception: the exercise
settlement value is based on the index
value derived from the closing prices of
component stocks. In addition, the
contract multiplier for QIXs may be set
at 500 rather than the customary 100.
Positions in QIXs are aggregated with
option contracts on the same broadbased index and are subject to the
applicable overall position limit.
C2 Chapter 24 provides, in relevant
part, ‘‘[t]he rules contained in CBOE
Chapter XXIV, as such rules may be in
effect from time to time, shall apply to
C2 and are hereby incorporated into this
Chapter.’’ Accordingly, C2 may list
QIXs. However, C2 Chapter 24, in
relevant part, expressly provides that
certain Rules from CBOE Chapter XXIV
shall not apply to C2, including CBOE
Rule 24.6 (Days and Hours of Business).
CBOE Rule 24.6 has a provision that
permits the Exchange to close trading in
expiring QIXs at 3:00 p.m. (Chicago
time), which C2 now proposes to add as
new Interpretation and Policy .03 to C2
Rule 6.1.
In support of this rule change, C2
states that generally, QIXs are priced in
the market based on corresponding
futures values. On the last day of
trading, the closing prices of the
component stocks (which are used to
derive the exercise settlement value) are
known at 3 p.m. (Chicago time) (or soon
after) when the equity markets close.
Despite the fact that the exercise
settlement value is fixed after 3 p.m.
(Chicago time), trading in expiring QIXs
continues, however, for an additional
fifteen minutes until 3:15 p.m. (Chicago
time) and are not priced on
corresponding futures values, but rather
the known cash value. At the same time,
the prices of non-expiring QIX series
continue to move and be priced in
response to changes in corresponding
futures prices.
Because of the potential pricing
divergence that could occur between
3:00 and 3:15 p.m. on the final trading
day in expiring QIXs (e.g., switch from
pricing off of futures to cash), the
Exchange believes that, in order to
mitigate potential investor confusion, it
is appropriate to stop trading expiring
QIX contracts at 3 p.m. (Chicago time)
on the last day of trading. C2 notes that,
PO 00000
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Fmt 4703
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21289
as of the date of this filing, there are no
outstanding QIXs currently listed for
trading on C2.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the Act 7
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
the Section 6(b)(5) 9 requirements 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 to perfect the
mechanism for a free and open market
and a national market system, and, in
general, to protect investors and the
public interest. Preventing continued
trading in a product after the exercise
settlement value has been fixed
eliminates potential confusion and
thereby protects investors and the
public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
This proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
In this regard and as indicated above,
the Exchange notes that the rule change
is based on existing CBOE Rules.
Closing expiring QIXs listed on C2 at
3:00 p.m. (Chicago time) on their last
trading day will align this practice with
the existing practice on CBOE.
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 written comments on the
proposed rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not:
A. Significantly affect the protection
of investors or the public interest;
B. impose any significant burden on
competition; and
C. become operative for 30 days from
the date on which it was filed, or such
shorter time as the Commission may
designate, it has become effective
pursuant to Section 19(b)(3)(A) of the
7 15
U.S.C. 78s(b)(1).
U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
8 15
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21290
Federal Register / Vol. 80, No. 74 / Friday, April 17, 2015 / Notices
Act 10 and Rule 19b–4(f)(6) 11
thereunder. 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 will institute proceedings
to determine whether the proposed rule
change 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:
tkelley on DSK3SPTVN1PROD with NOTICES
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–
C2–2015–008 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–C2–2015–008. 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 the
filing also will be available for
10 15
11 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
VerDate Sep<11>2014
19:08 Apr 16, 2015
Jkt 235001
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–C2–
2015–008 and should be submitted on
or before May 8, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Brent J. Fields,
Secretary.
[FR Doc. 2015–08796 Filed 4–16–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74716; File No. SR–EDGX–
2015–17]
Self-Regulatory Organizations; EDGX
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the Content of
the BATS One Feed Under Rule 13.8(b)
To Include Consolidated Volume for All
Listed Equity Securities
April 13, 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 April 1,
2015, EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange has
designated this proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6)(iii)
thereunder,4 which renders it effective
upon filing with the Commission. 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 amend [sic] the content
of the BATS One Feed under Rule
13.8(b) to include consolidated volume
for all listed equity securities. The text
of the proposed rule change is available
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6)(iii).
1 15
PO 00000
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Fmt 4703
Sfmt 4703
at the Exchange’s Web site at
www.batstrading.com, at the principal
office of the Exchange, 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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
content of the BATS One Feed under
Rule 13.8(b) to include consolidated
volume for all listed equity securities.
The Commission recently approved a
proposed rule change by the Exchange
to establish a new market data product
called the BATS One Feed.5 The BATS
One Feed is a data feed that
disseminates, on a real-time basis, the
aggregate best bid and offer (‘‘BBO’’) of
all displayed orders for securities traded
on EDGX and its affiliated exchanges 6
and for which the BATS Exchanges
reports quotes under the Consolidated
5 See Securities Exchange Act Release No. 73918
(December 23, 2014), 79 FR 78920 (December 31,
2014) (File Nos. SR–EDGX–2014–25; SR–EDGA–
2014–25; SR–BATS–2014–055; SR–BYX–2014–030)
(Notice of Amendments No. 2 and Order Granting
Accelerated Approval to Proposed Rule Changes, as
Modified by Amendments Nos. 1 and 2, to Establish
a New Market Data Product called the BATS One
Feed) (‘‘BATS One Approval Order’’).
6 EDGX’s affiliated exchanges are the BATS
Exchange, Inc. (‘‘BZX’’), the BATS Y-Exchange, Inc.
(‘‘BYX’’), and the EDGA Exchange, Inc. (‘‘EDGA’’,
together with EDGX, BZX, and BYX, the ‘‘BATS
Exchanges’’). On January 31, 2014, Direct Edge
Holdings LLC (‘‘DE Holdings’’), the former parent
company of the Exchange and EDGA, completed its
business combination with BATS Global Markets,
Inc., the parent company of BATS and BYX. See
Securities Exchange Act Release No. 71449 (January
30, 2014), 79 FR 6961 (February 5, 2014) (SR–
EDGX–2013–43, SR–EDGA–2013–34). Upon
completion of the business combination, DE
Holdings and BATS Global Markets, Inc. each
became intermediate holding companies, held
under a single new holding company. The new
holding company, formerly named ‘‘BATS Global
Markets Holdings, Inc.,’’ changed its name to
‘‘BATS Global Markets, Inc.’’
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]]>Agencies
[Federal Register Volume 80, Number 74 (Friday, April 17, 2015)]
[Notices]
[Pages 21288-21290]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-08796]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74719; File No. SR-C2-2015-008]
Self-Regulatory Organizations; C2 Options Exchange, Incorporated;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Change the Close of Trading Hours on the Last Day of Trading in
Expiring Quarterly Index Expirations
April 13, 2015.
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 April 9, 2015 C2 Options Exchange, Incorporated (the
``Exchange'' or ``C2'') 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 the Exchange. The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend C2 Rule 6.1 (Days and Hours of
Business) to change the close of trading hours from 3:15 p.m. (Chicago
time) to 3:00 p.m. (Chicago time) on the last day of trading in
expiring Quarterly Index Expirations (``QIXs''). The text of the
proposed rule change is available on the Exchange's Web site (https://www.c2exchange.com/Legal/), at the Exchange's Office of the Secretary,
and at the Commission's Public Reference Room.
[[Page 21289]]
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.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
This filing is based on existing Chicago Board Options Exchange,
Incorporated (``CBOE'') Rule 24.6.01.\5\
---------------------------------------------------------------------------
\5\ CBOE Rule 24.6.01 provides, ``On the last trading day,
transactions in expiring Quarterly Index Expirations (QIXs) may be
effected on the Exchange during Extended Trading Hours and during
the Regular Trading Hours of 8:30 a.m. (Chicago time) to 3:00 p.m.
(Chicago time). This Interpretation and Policy .01 applies to all
outstanding expiring QIXs that expire at the end of the second
calendar quarter in 2009 and thereafter.'' See also Securities
Exchange Act Release Nos.[sic] 59676 (April 1, 2009), 74 FR 16018
(April 8, 2009) (Notice of Filing and Immediate Effectiveness of
Proposed Rule Change to Change the Close of Trading Hours on the
Last Day of Trading in Expiring Quarterly Index Expirations) (SR-
CBOE-2009-020).
---------------------------------------------------------------------------
The majority of C2's Rules are the same as CBOE's Rules and were
adopted as part of the Securities and Exchange Commission's (``SEC'' or
``Commission'') order approving C2's application for registration as a
national securities exchange.\6\ CBOE Rule 24.9(c) permits CBOE to list
QIXs, which are cash-settled options on certain specified broad-based
indices that expire on the first business day of the month following
the end of a calendar quarter. QIXs trade simultaneously with, not
independent of, standard options on the same underlying index. QIXs are
subject to the same rules that currently govern the trading of standard
index options, including sales practice rules, margin requirements, and
floor trading proceedings. Contract terms for QIXs are similar to
traditional index options, with one general exception: the exercise
settlement value is based on the index value derived from the closing
prices of component stocks. In addition, the contract multiplier for
QIXs may be set at 500 rather than the customary 100. Positions in QIXs
are aggregated with option contracts on the same broad-based index and
are subject to the applicable overall position limit.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 61152 (December 10,
2009), 74 FR 66699, 66709-10 (December 16, 2009) (In the Matter of
the Application of C2 Options Exchange, Incorporated for
Registration as a National Securities Exchange Findings, Opinion,
and Order of the Commission (File No. 10-191). In the Order, the
Commission granted C2's request for exemption, pursuant to Section
36 of the Securities Exchange Act of 1934 (the ``Act''), from the
rule filing requirements of Section 19(b) of the Act with respect to
the rules that C2 proposed to incorporate by reference. The
exemption was conditioned upon C2 providing written notice to its
members whenever CBOE proposes to change a rule that C2 has
incorporated by reference. In the Order, the Commission stated its
belief that ``this exemption is appropriate in the public interest
and consistent with the protection of investors because it will
promote more efficient use of Commission and SRO resources by
avoiding duplicative rule flings based on simultaneous changes to
identical rules sought by more than one SRO.''
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C2 Chapter 24 provides, in relevant part, ``[t]he rules contained
in CBOE Chapter XXIV, as such rules may be in effect from time to time,
shall apply to C2 and are hereby incorporated into this Chapter.''
Accordingly, C2 may list QIXs. However, C2 Chapter 24, in relevant
part, expressly provides that certain Rules from CBOE Chapter XXIV
shall not apply to C2, including CBOE Rule 24.6 (Days and Hours of
Business). CBOE Rule 24.6 has a provision that permits the Exchange to
close trading in expiring QIXs at 3:00 p.m. (Chicago time), which C2
now proposes to add as new Interpretation and Policy .03 to C2 Rule
6.1.
In support of this rule change, C2 states that generally, QIXs are
priced in the market based on corresponding futures values. On the last
day of trading, the closing prices of the component stocks (which are
used to derive the exercise settlement value) are known at 3 p.m.
(Chicago time) (or soon after) when the equity markets close. Despite
the fact that the exercise settlement value is fixed after 3 p.m.
(Chicago time), trading in expiring QIXs continues, however, for an
additional fifteen minutes until 3:15 p.m. (Chicago time) and are not
priced on corresponding futures values, but rather the known cash
value. At the same time, the prices of non-expiring QIX series continue
to move and be priced in response to changes in corresponding futures
prices.
Because of the potential pricing divergence that could occur
between 3:00 and 3:15 p.m. on the final trading day in expiring QIXs
(e.g., switch from pricing off of futures to cash), the Exchange
believes that, in order to mitigate potential investor confusion, it is
appropriate to stop trading expiring QIX contracts at 3 p.m. (Chicago
time) on the last day of trading. C2 notes that, as of the date of this
filing, there are no outstanding QIXs currently listed for trading on
C2.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act \7\ 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 the Section 6(b)(5) \9\ requirements 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 to perfect the mechanism for a free and open market
and a national market system, and, in general, to protect investors and
the public interest. Preventing continued trading in a product after
the exercise settlement value has been fixed eliminates potential
confusion and thereby protects investors and the public interest.
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\7\ 15 U.S.C. 78s(b)(1).
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
This proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. In this regard and as indicated above, the Exchange notes that
the rule change is based on existing CBOE Rules. Closing expiring QIXs
listed on C2 at 3:00 p.m. (Chicago time) on their last trading day will
align this practice with the existing practice on CBOE.
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 written comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
A. Significantly affect the protection of investors or the public
interest;
B. impose any significant burden on competition; and
C. become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the
[[Page 21290]]
Act \10\ and Rule 19b-4(f)(6) \11\ thereunder. 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 will institute proceedings to determine whether the proposed
rule change should be approved or disapproved.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
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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-C2-2015-008 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-C2-2015-008. 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 the 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-C2-2015-008 and should be
submitted on or before May 8, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-08796 Filed 4-16-15; 8:45 am]
BILLING CODE 8011-01-P
