Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Approval of Proposed Rule Change, as Modified by Amendment No. 1, Relating to the Short Term Option Series Program, 75395-75396 [2013-29551]

Download as PDF emcdonald on DSK67QTVN1PROD with NOTICES Federal Register / Vol. 78, No. 238 / Wednesday, December 11, 2013 / Notices 7. No trustee or officer of a SubAdvised Fund or director or officer of the Manager, will own directly or indirectly (other than through a pooled investment vehicle that is not controlled by such person), any interest in a SubAdviser except for ownership of interests in the Manager or any entity that controls, is controlled by or is under common control with the Manager; or ownership of less than 1% of the outstanding securities of any class of equity or debt securities of any publicly traded company that is either a Sub-Adviser or an entity that controls, is controlled by or is under common control with a Sub-Adviser. 8. Sub-Advised Funds will inform shareholders of the hiring of a new SubAdviser in reliance on the order within 90 days after the hiring of the new SubAdviser pursuant to the Modified Notice and Access Procedures. 9. In the event the Commission adopts a rule under the Act providing substantially similar relief to that in the order requested in the application, the requested order will expire on the effective date of that rule. 10. Independent legal counsel, as defined in rule 0–1(a)(6) under the Act, will be engaged to represent the Independent Trustees. The selection of such counsel will be within the discretion of the then-existing Independent Trustees. 11. Whenever a Sub-Adviser is hired or terminated, the Manager will provide the Board with information showing the expected impact on the profitability of the Manager. 12. The Manager will provide the Board, no less frequently than quarterly, with information about the profitability of the Manager on a per Sub-Advised Fund basis. The information will reflect the impact on profitability of the hiring or termination of any Sub-Adviser during the applicable quarter. 13. Each Sub-Advised Fund will disclose in its registration statement the Aggregate Fee Disclosure. 14. Any changes to a Sub-Advisory Agreement that would result in an increase in the total management and advisory fees payable by a Sub-Advised Fund will be required to be approved by the shareholders of the Sub-Advised Fund. For the Commission, by the Division of Investment Management, under delegated authority. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–29499 Filed 12–10–13; 8:45 am] BILLING CODE 8011–01–P VerDate Mar<15>2010 17:00 Dec 10, 2013 Jkt 232001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71005; File No. SR–CBOE– 2013–096] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Approval of Proposed Rule Change, as Modified by Amendment No. 1, Relating to the Short Term Option Series Program December 6, 2013. I. Introduction On October 2, 2013, Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend Exchange Rules 5.5(d) and 24.9(a)(2)(A) to make certain modifications to the Exchange’s Short Term Option Series Program (‘‘Weeklys Program’’). The proposed rule change was published for comment in the Federal Register on October 22, 2013.3 The Commission received no comment letters on the proposal. This order approves the proposed rule change, as modified by Amendment No. 1. II. Description of the Proposal The Exchange proposed to amend Exchange Rules 5.5(d) and 24.9(a)(2)(A) to: (i) Allow for the Exchange to list options in the Weeklys Progam (‘‘Weekly options’’) on each of the next five Fridays that are business days and are not Fridays in which monthly options series or quarterly options series expire (‘‘Short Term Option Expiration Dates’’) at one time; and (ii) state that additional series of Weekly options may be listed up to, and including on, the day of expiration. The proposed rule change would give the Exchange the ability to list a total of five Weekly options expirations at one time, not including monthly or quarterly option expirations. Currently, the Exchange’s rules provide that the Exchange may open for trading on any Thursday or Friday that is a business day (‘‘Short Term Option Opening Date’’) options expiring ‘‘on each of the next five consecutive Fridays that are 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Securities Exchange Act Release No. 70685 (October 15, 2013), 78 FR 62858 (‘‘Notice’’). The Commission notes that on October 15, 2013, the Exchange submitted Amendment No. 1 to the proposed rule change to make certain amendments that removed the phrase ‘‘for each series’’ from the proposed rule language relating to Short Term Option Expiration Dates. 2 17 PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 75395 business days.’’ 4 Because a Friday expiration may coincide with an existing expiration of a monthly or quarterly series of an option in the same class as the Weekly options series, the current requirement that the Fridays be consecutive may mean that the Exchange cannot open five Short Term Option Expiration Dates because of existing monthly or quarterly expirations. The proposed rule change would allow the Exchange to open the five Weekly options expirations closest to the Short Term Option Opening Date, not including monthly or quarterly option expirations. The proposed rule change also adds language to Rules 5.5(d) and 24.9(a)(2)(A) to state that additional series of Weekly options may be added up to, and including on, the expiration date of the series.5 Currently, Exchange rules state that the Exchange ‘‘may open up to 20 initial series for each option class that participates in the Short Term Option Series Program’’ and ‘‘up to 10 additional series for each option class that participates in the Short Term Option Series Program.’’ 6 However, the Exchange’s rules are silent on when series may be added. Therefore, the Exchange is proposing to add language stating that additional Weekly options series may be added up to and on the day of expiration. The Exchange asserts that the proposed revisions to the Weeklys Program will permit the Exchange to meet increased customer demand and provide market participants with the ability to hedge in a greater number of option classes and series.7 In addition, the Exchange stated that it believes that, given the short lifespan of Weekly options, the ability to list new series of options intraday is appropriate.8 III. Discussion and Commission Findings After careful review of the proposed rule change, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities 4 See Exchange Rules 5.5(d) and 24.9(a)(2)(A). Exchange also proposed to add language stating that the proposed provisions in Rules 5.5(d)(4) and 24.9(a)(2)(A)(iv) will not contradict current provisions in CBOE Rules. More specifically, the proposed provisions would not contradict 5.5.04 and 24.9.01(c) respectively. The Exchange stated that it believes this addition will eliminate any confusion about when additional series may be added in the Weeklys Program in comparison to other Exchange listing programs. 6 See Exchange Rules 5.5(d)(3), 5.5.(d)(4), 24.9(a)(2)(A)(iii), and 24.9(a)(2)(A)(iv). 7 See Notice, supra note 3 at 62859. 8 See id. 5 The E:\FR\FM\11DEN1.SGM 11DEN1 75396 Federal Register / Vol. 78, No. 238 / Wednesday, December 11, 2013 / Notices exchange.9 Specifically, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act,10 which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, 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. The Commission believes that the proposed change may provide the investing public and other market participants with greater flexibility to closely tailor their investment and hedging decisions in a greater number of option series, thus allowing investors to better manage their risk exposure. In approving this proposal, the Commission notes that the Exchange has represented that it and the Options Price Reporting Authority (‘‘OPRA’’) have the necessary systems capacity to handle the potential additional traffic associated with the Exchange’s proposed amendments to the Weeklys Program.11 That Commission also notes that the Exchange represented that the Options Clearing Corporation (‘‘OCC’’) has the ability to accommodate series in the Weeklys Program added intraday.12 The Commission expects the Exchange to monitor the frequency of additional series listed as a result of this proposal and record the reasons therefor, and monitor the trading volume associated with the additional options series listed as a result of this proposal and the effect of these additional series on market fragmentation and on the capacity of the Exchange’s, OPRA’s, OCC’s, and vendors’ automated systems. IV. Conclusion emcdonald on DSK67QTVN1PROD with NOTICES It is therefore ordered, pursuant to Section 19(b)(2) of the Act,13 that the proposed rule change, as modified by Amendment No. 1 (SR–CBOE–2013– 096), be, and it hereby is, approved. 9 In approving this proposed rule change, the Commission considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 10 15 U.S.C. 78f(b)(5). 11 See Notice, supra note 3 at 62860. 12 See id. at 62859, n. 10. 13 15 U.S.C. 78s(b)(2). VerDate Mar<15>2010 17:00 Dec 10, 2013 Jkt 232001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–29551 Filed 12–10–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70998; File No. SR– NYSEARCA–2013–133] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Proposes To Amend the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services To Specify the Exclusion of Odd Lot Transactions From Consolidated Average Daily Volume Calculations for a Limited Period of Time for Purposes of Certain Transaction Pricing on the Exchange Through January 31, 2014 December 5, 2013. 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 November 22, 2013, NYSE Arca, Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the selfregulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the NYSE Arca Equities Schedule of Fees and Charges for Exchange Services (the ‘‘Fee Schedule’’) to specify the exclusion of odd lot transactions from consolidated average daily volume (‘‘CADV’’) calculations for a limited period of time for purposes of certain transaction pricing on the Exchange. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 14 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00068 Fmt 4703 Sfmt 4703 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 self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the Fee Schedule to specify the exclusion of odd lot transactions from CADV calculations for a limited period of time for purposes of certain transaction pricing on the Exchange. The Exchange proposes to implement the Fee Schedule on December 9, 2013. The Exchange provides an ETP Holder with the opportunity to qualify for one or more pricing Tiers based on its level of activity during a particular month. Each Tier has a corresponding fee or credit that applies to the ETP Holder’s transactions during the month. Generally, a qualifying ETP Holder would be subject to a lower transaction fee or a higher transaction credit, depending on the particular Tier. Many of these Tiers use a specific percentage of CADV as a threshold that an ETP Holder’s activity must meet or exceed in order to qualify for the particular Tier. For example, an ETP Holder must, among other things, provide liquidity an average daily volume (‘‘ADV’’) of 0.70% or more of CADV during the month to qualify for Tier 1 pricing.3 As an additional example, transaction pricing for an ETP Holder that is a Lead Market Maker (‘‘LMM’’) can depend on the CADV for the security in the previous month. CADV is a measure of transactions in Tape A, Tape B and Tape C securities reported to the consolidated tape. 3 To qualify for Tier 1, an ETP Holder must (1) provide liquidity an ADV per month of 0.70% or more of CADV or (2)(a) provide liquidity an ADV per month of 0.15% or more of CADV and (b) be affiliated with an Options Trading Permit (‘‘OTP’’) Holder or OTP Firm that provides an ADV of electronic posted executions (including all account types) in Penny Pilot issues on NYSE Arca Options (excluding mini options) of at least 100,000 contracts, of which at least 25,000 contracts must be for the account of a market maker. E:\FR\FM\11DEN1.SGM 11DEN1

Agencies

[Federal Register Volume 78, Number 238 (Wednesday, December 11, 2013)]
[Notices]
[Pages 75395-75396]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-29551]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71005; File No. SR-CBOE-2013-096]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Order Granting Approval of Proposed Rule Change, as 
Modified by Amendment No. 1, Relating to the Short Term Option Series 
Program

December 6, 2013.

I. Introduction

    On October 2, 2013, Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to amend Exchange Rules 5.5(d) 
and 24.9(a)(2)(A) to make certain modifications to the Exchange's Short 
Term Option Series Program (``Weeklys Program''). The proposed rule 
change was published for comment in the Federal Register on October 22, 
2013.\3\ The Commission received no comment letters on the proposal. 
This order approves the proposed rule change, as modified by Amendment 
No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 70685 (October 15, 
2013), 78 FR 62858 (``Notice''). The Commission notes that on 
October 15, 2013, the Exchange submitted Amendment No. 1 to the 
proposed rule change to make certain amendments that removed the 
phrase ``for each series'' from the proposed rule language relating 
to Short Term Option Expiration Dates.
---------------------------------------------------------------------------

II. Description of the Proposal

    The Exchange proposed to amend Exchange Rules 5.5(d) and 
24.9(a)(2)(A) to: (i) Allow for the Exchange to list options in the 
Weeklys Progam (``Weekly options'') on each of the next five Fridays 
that are business days and are not Fridays in which monthly options 
series or quarterly options series expire (``Short Term Option 
Expiration Dates'') at one time; and (ii) state that additional series 
of Weekly options may be listed up to, and including on, the day of 
expiration.
    The proposed rule change would give the Exchange the ability to 
list a total of five Weekly options expirations at one time, not 
including monthly or quarterly option expirations. Currently, the 
Exchange's rules provide that the Exchange may open for trading on any 
Thursday or Friday that is a business day (``Short Term Option Opening 
Date'') options expiring ``on each of the next five consecutive Fridays 
that are business days.'' \4\ Because a Friday expiration may coincide 
with an existing expiration of a monthly or quarterly series of an 
option in the same class as the Weekly options series, the current 
requirement that the Fridays be consecutive may mean that the Exchange 
cannot open five Short Term Option Expiration Dates because of existing 
monthly or quarterly expirations. The proposed rule change would allow 
the Exchange to open the five Weekly options expirations closest to the 
Short Term Option Opening Date, not including monthly or quarterly 
option expirations.
---------------------------------------------------------------------------

    \4\ See Exchange Rules 5.5(d) and 24.9(a)(2)(A).
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    The proposed rule change also adds language to Rules 5.5(d) and 
24.9(a)(2)(A) to state that additional series of Weekly options may be 
added up to, and including on, the expiration date of the series.\5\ 
Currently, Exchange rules state that the Exchange ``may open up to 20 
initial series for each option class that participates in the Short 
Term Option Series Program'' and ``up to 10 additional series for each 
option class that participates in the Short Term Option Series 
Program.'' \6\ However, the Exchange's rules are silent on when series 
may be added. Therefore, the Exchange is proposing to add language 
stating that additional Weekly options series may be added up to and on 
the day of expiration.
---------------------------------------------------------------------------

    \5\ The Exchange also proposed to add language stating that the 
proposed provisions in Rules 5.5(d)(4) and 24.9(a)(2)(A)(iv) will 
not contradict current provisions in CBOE Rules. More specifically, 
the proposed provisions would not contradict 5.5.04 and 24.9.01(c) 
respectively. The Exchange stated that it believes this addition 
will eliminate any confusion about when additional series may be 
added in the Weeklys Program in comparison to other Exchange listing 
programs.
    \6\ See Exchange Rules 5.5(d)(3), 5.5.(d)(4), 
24.9(a)(2)(A)(iii), and 24.9(a)(2)(A)(iv).
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    The Exchange asserts that the proposed revisions to the Weeklys 
Program will permit the Exchange to meet increased customer demand and 
provide market participants with the ability to hedge in a greater 
number of option classes and series.\7\ In addition, the Exchange 
stated that it believes that, given the short lifespan of Weekly 
options, the ability to list new series of options intraday is 
appropriate.\8\
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    \7\ See Notice, supra note 3 at 62859.
    \8\ See id.
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III. Discussion and Commission Findings

    After careful review of the proposed rule change, the Commission 
finds that the proposed rule change is consistent with the requirements 
of the Act and the rules and regulations thereunder applicable to a 
national securities

[[Page 75396]]

exchange.\9\ Specifically, the Commission finds that the proposal is 
consistent with Section 6(b)(5) of the Act,\10\ which requires, among 
other things, that the rules of a national securities exchange be 
designed to promote just and equitable principles of trade, to prevent 
fraudulent and manipulative acts, 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. The 
Commission believes that the proposed change may provide the investing 
public and other market participants with greater flexibility to 
closely tailor their investment and hedging decisions in a greater 
number of option series, thus allowing investors to better manage their 
risk exposure.
---------------------------------------------------------------------------

    \9\ In approving this proposed rule change, the Commission 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b)(5).
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    In approving this proposal, the Commission notes that the Exchange 
has represented that it and the Options Price Reporting Authority 
(``OPRA'') have the necessary systems capacity to handle the potential 
additional traffic associated with the Exchange's proposed amendments 
to the Weeklys Program.\11\ That Commission also notes that the 
Exchange represented that the Options Clearing Corporation (``OCC'') 
has the ability to accommodate series in the Weeklys Program added 
intraday.\12\ The Commission expects the Exchange to monitor the 
frequency of additional series listed as a result of this proposal and 
record the reasons therefor, and monitor the trading volume associated 
with the additional options series listed as a result of this proposal 
and the effect of these additional series on market fragmentation and 
on the capacity of the Exchange's, OPRA's, OCC's, and vendors' 
automated systems.
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    \11\ See Notice, supra note 3 at 62860.
    \12\ See id. at 62859, n. 10.
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\13\ that the proposed rule change, as modified by Amendment No. 1 
(SR-CBOE-2013-096), be, and it hereby is, approved.
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    \13\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-29551 Filed 12-10-13; 8:45 am]
BILLING CODE 8011-01-P