Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to BX Options Lead Market Maker Rules, 52092-52094 [2014-20700]
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52092
Federal Register / Vol. 79, No. 169 / Tuesday, September 2, 2014 / Notices
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:
mstockstill on DSK4VPTVN1PROD 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–
NSX–2014–16 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–NSX–2014–16. 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–NSX–
VerDate Mar<15>2010
16:57 Aug 29, 2014
Jkt 232001
2014–16, and should be submitted on or
before September 23, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–20696 Filed 8–29–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72918; File No. SR–BX–
2014–042]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Relating to BX
Options Lead Market Maker Rules
August 26, 2014.
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 August
21, 2014, NASDAQ OMX BX, Inc. (‘‘BX’’
or ‘‘Exchange’’) 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
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
certain rule text related to an options
rule at Chapter VI, Section 10,
pertaining to system order executions
on BX.
The text of the proposed rule
change is available on the Exchange’s
Web site at https://
nasdaqomxbx.cchwallstreet.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
23 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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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
The purpose of the proposed rule
change is to amend rule text in the BX
Options Rules at Chapter VI, Section 10
to clarify certain language. A proposed
rule change amending Chapter VI,
Section 10 was recently approved by the
Commission.3 As part of that rule
change, Chapter VI, Section 10, entitled
‘‘Book Processing’’ was amended to
afford a Lead Market Maker (‘‘LMM’’) a
participation entitlement if the LMM’s
bid/offer is at the Exchange’s
disseminated price and all Public
Customer 4 orders have been fully
executed.5 In that proposal the
Exchange explained the manner in
which orders will be allocated in both
a Size Pro-Rata and Price/Time scenario
and provided examples. The text of the
rule change specified that prior to
remaining interest being allocated, an
LMM would receive an allocation based
on the allocation methods noted in
Chapter VI, Section 10.
While the Exchange believes that the
rule text is clear on the allocations that
the LMM shall be afforded, the
Exchange is seeking to further amend
Chapter VI, Section 10(1)(C)(1)(b)(2) to
3 See Securities Exchange Act Release No. 72883
(August 20, 2014), 79 FR 50971 (August 26, 2014)
(SR–BX–2014–035).
4 See Chapter I, Section 1(50). The term ‘‘Public
Customer’’ means a person that is not a broker or
dealer in securities.
5 The LMM participation entitlement is as follows
with respect to Size Pro Rata executions: A BX
Options LMM shall receive the greater of: The
LMM’s Size Pro-Rata share pursuant to proposed
rule BX Options Rule at Chapter VI, Section
10(1)(C)(2)(iii); 50% of remaining interest if there is
one or no other Market Maker at that price; 40%
of remaining interest if there are two other Market
Makers at that price; or 30% of remaining interest
if there are more than two other Market Makers at
that price; or if rounding would result in an
allocation of less than one contract, a BX Options
LMM shall receive one contract. The LMM
participation entitlement is as follows is as follows
with respect to Price/Time executions: A BX
Options LMM shall receive the greater of: (a)
Contracts the LMM would receive if the allocation
was based on time priority with Public Customer
priority pursuant to proposed BX Options Rule at
Chapter VI, Section 10(1)(a); (b) 50% of remaining
interest if there is one or no other Market Maker at
that price; (c) 40% of remaining interest if there are
two other Market Makers at that price; or (d) 30%
of remaining interest if there are more than two
other Market Makers at that price or if rounding
would result in an allocation of less than one
contract, a BX Options LMM shall receive one
contract.
E:\FR\FM\02SEN1.SGM
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Federal Register / Vol. 79, No. 169 / Tuesday, September 2, 2014 / Notices
mstockstill on DSK4VPTVN1PROD with NOTICES
amend the sentence that currently
states, ‘‘If there are contracts remaining
after all LMM interest has been fully
executed, such contracts shall be
executed based on the Price/Time
execution algorithm.’’ The Exchange
proposes to amend the sentence to state,
‘‘If there are contracts remaining, such
contracts shall be executed based on the
Price/Time execution algorithm.’’ The
Exchange believes that removing the
words ‘‘after all LMM interest has been
fully executed’’ will avoid any
confusion such as that an LMM would
not be entitled to a portion of the
remainder. The Exchange intended
those words to apply to the remaining
contracts, which would be allocated
after the LMM was afforded their
allocation. The Exchange believes the
proposed text would avoid any
confusion as to its interpretation. The
Exchange’s proposed change would also
be added to Chapter VI, Section
10(2)(ii)(2). The Exchange would add
the corresponding sentence to the Size
Pro-Rata allocation as follows, ‘‘If there
are contracts remaining, such contracts
shall be executed based on the Size ProRata execution algorithm.’’ The
Exchange believes that adding the
aforementioned sentence to Chapter VI,
Section 10(2)(ii)(2) clarifies that the
remaining contracts would be treated in
a similar manner within the Size ProRata allocation method.
The amendments proposed herein are
in accordance with the text of the
proposed rule change and the examples
provided in the prior filing.6 The
Exchange does not believe that the
amendments are substantive, but rather
are clarifying because the text adds
specificity to allocation of remainder
contracts. The allocation of remainder
contracts is not impacted by this rule
change. The amendments provide
consistency to BX Rules to clarify that
remainder contracts are treated in the
same general manner under both
allocation models.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 7 in general, and furthers the
objectives of Section 6(b)(5) of the Act 8
in particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, to remove
impediments to and perfect the
note 3.
U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
mechanism of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
The Exchange believes that the nonsubstantive amendments to the rule text
of Chapter VI, Section 10 will conform
the wording in the rule text and add
clarity. The Exchange believes that
while the rule text does reflect the
current allocation method, which will
remain in place unaffected by this filing,
by adding clarifying language the
Exchange’s text will be clear and
concise.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
The proposed rule change seeks to
correct an error in rule text and make
other clarifying changes to conform rule
text to avoid confusion.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing 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, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 9 and
subparagraph (f)(6) of Rule 19b–4
thereunder.10
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) 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. The
Exchange has provided the Commission
written notice of its intent to file the
proposed rule change, along with a brief
description and text of the proposed
6 See
7 15
VerDate Mar<15>2010
16:57 Aug 29, 2014
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
10 17
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52093
rule change, at least five business days
prior to the date of filing of the
proposed rule change.
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–
BX–2014–042 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–BX–2014–042. 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–BX–2014–042 and should
be submitted on or before September 23,
2014.
11 17
E:\FR\FM\02SEN1.SGM
CFR 200.30–3(a)(12).
02SEN1
52094
Federal Register / Vol. 79, No. 169 / Tuesday, September 2, 2014 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–20700 Filed 8–29–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72916; File No. SR–NYSE–
2014–44]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To (i) Delete
Obsolete Rules Relating to ExchangeListed Options Trading and Related
References (NYSE Rules 700–794); (ii)
Delete Obsolete Rules Related to the
Defunct Exchange Stock Portfolio
Service and Related References (NYSE
Rules 800–817); and (iii) Amend NYSE
Rules 15A and 123D To Remove
Outdated References to the
Terminated Intermarket Trading
System Plan
August 26, 2014.
mstockstill on DSK4VPTVN1PROD with NOTICES
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 August
15, 2014, New York Stock Exchange
LLC (‘‘NYSE’’ or ‘‘Exchange’’) 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 (i) delete
obsolete rules relating to Exchangelisted options trading (Rules 700–794)
and related references; (ii) delete
obsolete rules related to the defunct
Exchange Stock Portfolio Service (Rules
800–817) and related references; and
(iii) amend Rules 15A and 123D to
remove outdated references to the
terminated Intermarket Trading System
(‘‘ITS’’) Plan. 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.
1 15
2 17
U.S.C.78s(b)(1).
CFR 240.19b–4.
VerDate Mar<15>2010
16:57 Aug 29, 2014
Jkt 232001
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 (i) delete
obsolete rules governing Exchangelisted options trading (Rules 700–794)
and related references; (ii) delete
obsolete rules governing the defunct
Exchange Stock Portfolio Service (Rules
800–817) and related references; and
(iii) amend Rules 15A and 123D to
remove references to the terminated ITS
Plan.
First, the Exchange proposes to delete
the 700 rule series (Rules 700–794),
which apply to the trading of option
contracts issued by The Options
Clearing Corporation on the Exchange.
The NYSE sold its listed options
business in 1997 and does not currently
trade Exchange-listed options.3 It is no
longer necessary to maintain options
trading rules for a business the
Exchange no longer conducts. The
Exchange also proposes to amend Rule
345, relating to registration of
employees, to remove references to Rule
700(b)(4). Similarly, the Exchange
proposes to remove 700 series rules
from the minor rule violation plan and
amend Rules 9217 and 476A
accordingly.4
3 The business was sold to the Chicago Board
Options Exchange, Inc. See Securities Exchange Act
Release No. 38542 (April 23, 1997), 62 FR 23521
(April 30, 1997).
4 In 2013, the NYSE adopted a new set of
procedural rules modeled on the rules of the
Financial Industry Regulatory Authority (‘‘FINRA’’)
that included aspects of FINRA’s process and fine
levels for minor rule violations. The Exchange
maintained the specific list of rules set forth in
NYSE Rule 476A, which were moved to new Rule
9217. See Securities Exchange Act Release Nos.
68678 (Jan. 16, 2013), 78 FR 5213 (Jan. 24, 2013),
and 69045 (Mar. 5, 2013), 78 FR 15394 (Mar. 11,
2013) (SR–NYSE–2013–02). Rule 476A continues to
apply to disciplinary proceedings filed prior to July
1, 2013. The Exchange also proposes to remove
references to the terminated ITS Plan in Rule 476A.
See note 12, infra.
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Second, the Exchange proposes to
delete the 800 rule series (Rules 800–
817), which governs the NYSE’s
Exchange Stock Portfolio Service (‘‘ESP
Service’’). The ESP Service was initiated
in 1989 to enable the trading of
standardized baskets of stocks at an
aggregate price in a single execution on
the Exchange’s trading Floor.5 The ESP
Service allowed trades in the
component stocks of an index basket to
be effected in a single execution, as
opposed to separate executions for each
of the component stocks. The program
was suspended in 1991.6 Because the
Exchange no longer conducts the ESP
Service, the rules associated with it are
also obsolete.
The Exchange also proposes to amend
the following rules to remove references
to rules in the 800 series:
• Rule 111, governing reports of
executions;
• Rule 96, governing limitations on
members’ trading based on existing
options positions;
• Rule 104T, governing dealings by
Exchange Designated Market Makers;
and,
• Rule 36, governing communications
between Exchange and Members’
Offices.
Finally, the Exchange proposes to
amend Rule 15A, the order protection
rule, and Rule 123D, which governs
openings and halts in trading, to remove
references to the ITS Plan.7
Rule 15A was amended in 2007 to
describe how the Exchange would
automatically route orders to other
market centers to prevent trade-throughs
on the Exchange in conformance with
SEC Rule 611 (the ‘‘Order Protection
Rule’’) of Regulation National Market
System (‘‘Reg. NMS’’) beginning on
March 5, 2007.8 However, since the ITS
Plan was still in effect, the Exchange
retained those portions of Rule 15A
describing the circumstances under
which the Exchange routed orders to
5 See SEC No-Action Letter, 1989 WL 246468
(Oct. 26, 1989).
6 See, e.g., SEC No-Action Letter, 2009 WL
1758909 (June 11, 2009).
7 Between 1978 and 2007, ITS was the principal
means of electronically transmitting orders between
market centers to avoid trading through superior
quotes in those markets. When the Commission
adopted Reg. NMS, the ITS Plan participants
terminated the governing agreement, the ITS Plan,
and replaced it with the NMS Linkage Plan. See
Securities Exchange Act Release No. 34–54551
(September 29, 2006), 71 FR 194 (October 6, 2006).
The purpose of the NMS Linkage Plan was to enable
the plan participants to act jointly in planning,
developing, operating and regulating the NMS
Linkage System that would electronically link the
participant markets to one another.
8 See Securities Exchange Act Release No. 34–
55387 (March 2, 2007), 72 FR 10808 (March 9,
2007) (SR–NYSE–2007–2[sic]).
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]]>Agencies
[Federal Register Volume 79, Number 169 (Tuesday, September 2, 2014)]
[Notices]
[Pages 52092-52094]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-20700]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72918; File No. SR-BX-2014-042]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
BX Options Lead Market Maker Rules
August 26, 2014.
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 August 21, 2014, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'') 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 Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend certain rule text related to an
options rule at Chapter VI, Section 10, pertaining to system order
executions on BX.
The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaqomxbx.cchwallstreet.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 aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to amend rule text in
the BX Options Rules at Chapter VI, Section 10 to clarify certain
language. A proposed rule change amending Chapter VI, Section 10 was
recently approved by the Commission.\3\ As part of that rule change,
Chapter VI, Section 10, entitled ``Book Processing'' was amended to
afford a Lead Market Maker (``LMM'') a participation entitlement if the
LMM's bid/offer is at the Exchange's disseminated price and all Public
Customer \4\ orders have been fully executed.\5\ In that proposal the
Exchange explained the manner in which orders will be allocated in both
a Size Pro-Rata and Price/Time scenario and provided examples. The text
of the rule change specified that prior to remaining interest being
allocated, an LMM would receive an allocation based on the allocation
methods noted in Chapter VI, Section 10.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 72883 (August 20,
2014), 79 FR 50971 (August 26, 2014) (SR-BX-2014-035).
\4\ See Chapter I, Section 1(50). The term ``Public Customer''
means a person that is not a broker or dealer in securities.
\5\ The LMM participation entitlement is as follows with respect
to Size Pro Rata executions: A BX Options LMM shall receive the
greater of: The LMM's Size Pro-Rata share pursuant to proposed rule
BX Options Rule at Chapter VI, Section 10(1)(C)(2)(iii); 50% of
remaining interest if there is one or no other Market Maker at that
price; 40% of remaining interest if there are two other Market
Makers at that price; or 30% of remaining interest if there are more
than two other Market Makers at that price; or if rounding would
result in an allocation of less than one contract, a BX Options LMM
shall receive one contract. The LMM participation entitlement is as
follows is as follows with respect to Price/Time executions: A BX
Options LMM shall receive the greater of: (a) Contracts the LMM
would receive if the allocation was based on time priority with
Public Customer priority pursuant to proposed BX Options Rule at
Chapter VI, Section 10(1)(a); (b) 50% of remaining interest if there
is one or no other Market Maker at that price; (c) 40% of remaining
interest if there are two other Market Makers at that price; or (d)
30% of remaining interest if there are more than two other Market
Makers at that price or if rounding would result in an allocation of
less than one contract, a BX Options LMM shall receive one contract.
---------------------------------------------------------------------------
While the Exchange believes that the rule text is clear on the
allocations that the LMM shall be afforded, the Exchange is seeking to
further amend Chapter VI, Section 10(1)(C)(1)(b)(2) to
[[Page 52093]]
amend the sentence that currently states, ``If there are contracts
remaining after all LMM interest has been fully executed, such
contracts shall be executed based on the Price/Time execution
algorithm.'' The Exchange proposes to amend the sentence to state, ``If
there are contracts remaining, such contracts shall be executed based
on the Price/Time execution algorithm.'' The Exchange believes that
removing the words ``after all LMM interest has been fully executed''
will avoid any confusion such as that an LMM would not be entitled to a
portion of the remainder. The Exchange intended those words to apply to
the remaining contracts, which would be allocated after the LMM was
afforded their allocation. The Exchange believes the proposed text
would avoid any confusion as to its interpretation. The Exchange's
proposed change would also be added to Chapter VI, Section
10(2)(ii)(2). The Exchange would add the corresponding sentence to the
Size Pro-Rata allocation as follows, ``If there are contracts
remaining, such contracts shall be executed based on the Size Pro-Rata
execution algorithm.'' The Exchange believes that adding the
aforementioned sentence to Chapter VI, Section 10(2)(ii)(2) clarifies
that the remaining contracts would be treated in a similar manner
within the Size Pro-Rata allocation method.
The amendments proposed herein are in accordance with the text of
the proposed rule change and the examples provided in the prior
filing.\6\ The Exchange does not believe that the amendments are
substantive, but rather are clarifying because the text adds
specificity to allocation of remainder contracts. The allocation of
remainder contracts is not impacted by this rule change. The amendments
provide consistency to BX Rules to clarify that remainder contracts are
treated in the same general manner under both allocation models.
---------------------------------------------------------------------------
\6\ See note 3.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \7\ in general, and furthers the objectives of Section
6(b)(5) of the Act \8\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, 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.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the non-substantive amendments to the
rule text of Chapter VI, Section 10 will conform the wording in the
rule text and add clarity. The Exchange believes that while the rule
text does reflect the current allocation method, which will remain in
place unaffected by this filing, by adding clarifying language the
Exchange's text will be clear and concise.
B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. The proposed rule change seeks to correct an error in rule
text and make other clarifying changes to conform rule text to avoid
confusion.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing 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, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
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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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) 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. The Exchange has
provided the Commission written notice of its intent to file the
proposed rule change, along with a brief description and text of the
proposed rule change, at least five business days prior to the date of
filing of the proposed rule change.
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-BX-2014-042 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-BX-2014-042. 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-BX-2014-042 and
should be submitted on or before September 23, 2014.
[[Page 52094]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-20700 Filed 8-29-14; 8:45 am]
BILLING CODE 8011-01-P
