Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To List Two Additional Products During Extended Trading Hours, 56522-56525 [2015-23395]
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Federal Register / Vol. 80, No. 181 / Friday, September 18, 2015 / Notices
SBS Entity to make an application to the
Commission to allow an associated
person who is subject to a statutory
disqualification to effect or be involved
in effecting security-based swaps on the
SBS Entity’s behalf. Accordingly, the
Commission is extending the temporary
and limited exception from the
requirements of Section 15F(b)(6) until
the Registration Compliance Date.
As discussed in the Temporary
Exemptions Order, the Commission
does not believe that Section 29(b) of
the Exchange Act would apply to the
provisions of Title VII for which the
Commission has taken the view that
compliance will either be triggered by
registration of a person or by adoption
of final rules by the Commission, or for
which the Commission has provided an
exception or exemption in that order.
For the avoidance of doubt and to avoid
possible legal uncertainty or market
disruption, the Temporary Exemptions
Order granted a temporary exemption
from Section 29(b) until such date as the
Commission specifies.26 The
Commission believes that the exemption
from Section 29(b) provided under the
Temporary Exemptions Order with
respect to Sections 3E(f) and 15F(b)(6) of
the Exchange Act will continue to apply
during the period of time covered by the
extensions in this Order. However, to
avoid any doubt or possible legal
uncertainty regarding the continuing
availability of the temporary exemption
from Section 29(b) with respect to
Sections 3E(f) and 15(b)(6), the
Commission is exercising its authority
under Section 36 of the Exchange Act to
continue the exemption from Section
29(b) with respect to Sections 3E(f) and
15(b)(6) until the Registration
Compliance Date.
to a statutory disqualification who were
associated with an SBS Entity as of July
16, 2011, and who effect or are involved
in effecting SB swaps on behalf of such
SBS Entity until the Registration
Compliance Date.
It is hereby further ordered, pursuant
to Section 36 of the Exchange Act, that
no SB swap contract entered into on or
after July 16, 2011 shall be void or
considered voidable by reason of
Section 29(b) of the Exchange Act
because any person that is a party to the
contract violated Section 3E(f) of the
Exchange Act prior to the Registration
Compliance Date.
It is hereby further ordered, pursuant
to Section 36 of the Exchange Act, that
no SB swap contract entered into on or
after July 16, 2011 shall be void or
considered voidable by reason of
Section 29(b) of the Exchange Act
because any person that is a party to the
contract violated Section 15F(b)(6) of
the Exchange Act prior to the
Registration Compliance.
By the Commission.
Brent J. Fields,
Secretary.
[FR Doc. 2015–23464 Filed 9–17–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75914; File No. SR–CBOE–
2015–079]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To List Two Additional
Products During Extended Trading
Hours
IV. Conclusion
September 14, 2015.
It is hereby ordered, pursuant to
Section 36 of the Exchange Act, that
SBS Entities are exempt from the
requirements of Section 3E(f) of the
Exchange Act until the Registration
Compliance Date.
It is hereby further ordered, pursuant
to Section 15F(b)(6) of the Exchange
Act, that SBS Entities are temporarily
excepted from the prohibition of Section
15F(b)(6) with respect to persons subject
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
September 10, 2015, Chicago Board
Options Exchange, Incorporated (the
‘‘Exchange’’ or ‘‘CBOE’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
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Tier
•
•
•
•
Options
Options
Options
Options
Temporary Exemptions Order at 36305–06.
1 15
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to list two
additional products during extended
trading hours (‘‘ETH’’). The text of the
proposed rule change is provided
below.
(additions are italicized; deletions are
[bracketed])
*
*
*
*
*
Chicago Board Options Exchange,
Incorporated
Rules
*
*
*
*
*
Rule 6.1A. Extended Trading Hours
(a)–(b) No change.
(c) Eligibility. The Exchange may designate
as eligible for trading during Extended
Trading Hours any exclusively listed index
option designated for trading under Rules
24.2 and 24.9. The following options are
approved for trading on the Exchange during
Extended Trading Hours:
(i) Standard & Poor’s 500 Stock Index
(SPX)
(ii) CBOE Volatility Index® (VIX®)
(iii) Standard & Poor’s 500 Stock Index
(P.M.-Settled) (SPXPM)
(iv) Mini-SPX Index (XSP)
Any series in these classes that are
expected to be open for trading during
Regular Trading Hours will be open for
trading during Extended Trading Hours on
that same trading day (subject to Rules 6.2B
and 24.13, Interpretation and Policy .03).
FLEX options (pursuant to Chapters XXIVA
and XXIVB) will not be eligible for trading
during Extended Trading Hours.
(d) No change.
(e) Market-Makers.
(i) Appointments. A Market-Maker’s
appointment to a class during Regular
Trading Hours does not apply during
Extended Trading Hours. Market-Makers may
request appointments for Extended Trading
Hours in accordance with Rule 8.3 and this
subparagraph (i). Notwithstanding Rule
8.3(c), a Market-Maker can create a Virtual
Trading Crowd (‘‘VTC’’) appointment, which
confers the right to quote electronically
during Extended Trading Hours in the
appropriate number of classes selected from
the Extended Trading Hours tier and related
appointment costs as follows:
Appointment
cost
Classes
Extended Trading Hours ............................
26 See
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
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on
on
on
on
the
the
the
the
CBOE Volatility Index (VIX) ...............................................................
Standard & Poor’s 500 (SPX) ............................................................
Standard & Poor’s 500 Stock Index (P.M.-Settled) (SPXPM) ...........
Mini-SPX Index (XSP) ........................................................................
U.S.C. 78s(b)(1).
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CFR 240.19b–4.
18SEN1
[.5].4
[.5].4
.1
.1
Federal Register / Vol. 80, No. 181 / Friday, September 18, 2015 / Notices
Each Extended Trading Hours Trading
Permit held by a Market-Maker has an
appointment credit of 1.0. A Market-Maker
may select for each Extended Trading Hours
Trading Permit the Market-Maker holds any
combination of Extended Trading Hours
classes, whose aggregate appointment cost
does not exceed 1.0.
(ii)–(iv) No change.
(f)–(k) No change.
*
*
*
*
*
The text of the proposed rule change
is also available on the Exchange’s Web
site (https://www.cboe.com/AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
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1. Purpose
In March 2015, the Exchange
launched Extended Trading Hours
(‘‘ETH’’) for options on the S&P 500
Index (‘‘SPX’’) and CBOE Volatility
Index® (‘‘VIX’’), two of the Exchange’s
exclusively listed options,3 as
alternatives for hedging and other
investment purposes, particularly as a
complementary investment tool to VIX
futures.4 Rule 6.1A(c) provides that the
Exchange may designate as eligible for
trading during ETH any exclusively
listed index option designated for
trading under Rules 24.2 and 24.9. In
3 An ‘‘exclusively listed option’’ is an option that
trades exclusively on an exchange because the
exchange has an exclusive license to list and trade
the option or has the proprietary rights in the
interest underlying the option. An exclusively
listed option is different than a ‘‘singly listed
option,’’ which is an option that is not an
‘‘exclusively listed option’’ but that is listed by one
exchange and not by any other national securities
exchange.
4 See Securities Exchange Act Release No. 34–
73704 (November 28, 2014), 79 FR 72044
(December 4, 2014) (SR–CBOE–2014–062) (order
granting accelerated approval of proposed rule
change to adopt Extended Trading Hours for SPX
and VIX).
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response to customer demand for
additional options to trade during ETH
for similar purposes, the Exchange has
designated Mini-SPX Index Options
(‘‘XSP’’) and p.m.-settled options on the
Standard & Poor’s 500 Stock Index
(‘‘SPXpm’’) to be eligible for trading
during ETH. The proposed rule change
amends Rule 6.1A(c) to add these two
products to the list of products the
Exchange has approved for trading on
the Exchange during ETH. CBOE
currently lists XSP and SPXpm options
during Regular Trading Hours (‘‘RTH’’);
the proposed rule change merely
extends the hours during which these
options will trade on the Exchange. The
Exchange notes that the S&P 500 Stock
Index underlies both of these options, as
it does for SPX options, which currently
trade during ETH. During ETH, XSP and
SPXpm options would trade in
accordance with Rule 6.1A as VIX and
SPX options currently do.5 The
proposed rule change makes no changes
to the trading rules applicable to ETH.
The Exchange lists SPXpm options
and p.m.-settled XSP options pursuant
to a pilot program.6 Pursuant to the pilot
program, CBOE submits annual reports
to the Commission that contain analyses
of volume, open interest and trading
patterns, as well as interim reports that
contain some of the information that is
included in the annual reports. The
Exchange will include in those annual
and interim reports the applicable
information regarding SPXpm and p.m.settled XSP options that trade during
ETH.
The Exchange also proposes to amend
Rule 6.1A(e)(i) to change the current
appointment cost for each of SPX and
VIX from .5 to .4 and add an
appointment cost of .1 for each of XSP
and SPXpm. The Exchange believes
these appointment costs are consistent
with an analysis of various factors based
on which the Exchange determines
appointment costs, including
competitive forces and trading volume.
Because each ETH Trading Permit has
an appointment credit of 1.0, a MarketMaker will continue to need to hold
only one ETH Trading Permit if it wants
to quote in all four products approved
for trading during ETH.
5 Rule 6.1A(a) states that all CBOE Rules apply to
trading during ETH except as set forth in Rule 6.1A
and for Rules that by their terms are inapplicable
during ETH or where the context otherwise
requires.
6 See Securities Exchange Act Release No. 34–
73338 (October 10, 2014), 79 FR 62502 (October 17,
2014) (SR–CBOE–2014–076) (notice of filing and
immediate effectiveness of extension of pilot
program to May 3, 2016).
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56523
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the Act
and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.7 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 8 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 9 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the Exchange believes
the proposed rule change will further
improve the Exchange’s marketplace for
the benefit of investors. The listing of
two additional products for trading
during ETH will provide more hedging
and other investment opportunities
within the options trading industry that
is consistent with the continued
globalization of the securities markets.
The proposed rule change also allows
the Exchange to more effectively
compete with exchanges located outside
of the United States. The Exchange
proposes to make two more products
available during ETH in response to
demand by investors to have access to
these products outside of RTH. During
ETH, XSP and SPXpm options would
trade in accordance with Rule 6.1A as
VIX and SPX options currently do. The
proposed rule change makes no changes
to the trading rules applicable to ETH;
it merely approves for trading during
ETH two products that already trade on
the Exchange during RTH. Additionally,
the S&P 500 index underlies both of
these options, as it does for SPX
options, which are currently approved
for trading during ETH.
The Exchange believes the
appointment costs for the four classes
approved for trading during ETH are
appropriate given various factors
considered by the Exchange, including
competitive forces and trading volume.
7 15
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
9 Id.
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Federal Register / Vol. 80, No. 181 / Friday, September 18, 2015 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
The Exchange believes that allowing
ETH Market-Makers to trade all four
available products during ETH while
holding only one ETH Trading Permit
may encourage Trading Permit Holders
to become ETH Market-Makers, as they
can quote in more classes for the same
cost. Additionally, current ETH MarketMakers can obtain appointments in
these two additional classes without
having to obtain an additional ETH
Trading Permit. This may increase
liquidity and result in more competitive
pricing in these products during ETH,
which will promote just and equitable
principles of trade and ultimately
benefit investors. The proposed rule
change does not result in unfair
discrimination, as the appointment
costs for these products during ETH will
apply to all ETH Market-Makers.
also believes the proposed rule change
could increase its competitive position
outside of the United States by
providing investors with an additional
investment vehicles with respect to
their global trading strategies during
times that correspond with RTH outside
of the United States. The Exchange
proposes to make two more products
available during ETH in response to
demand by investors to have access to
these products outside of RTH.
Additionally, the Exchange believes the
appointment costs for the four products
available for trading during ETH, which
allow ETH Market-Makers to have
appointments in all four products with
only one ETH Trading Permit, may
increase liquidity and enhance
competition in those products during
those hours.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CBOE does not believe that the
proposed rule change will impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. If CBOE lists
XSP and SPXpm options for trading
during ETH, all ETH Trading Permit
Holders may trade these options during
ETH. Additionally, non-ETH Trading
Permit Holders may trade these options
during ETH through a broker that is an
ETH Trading Permit Holder. The
proposed rule change is merely
extending the trading hours of two
products that currently trade on CBOE.
The appointment costs for the four
products approved for trading during
ETH will apply to all ETH MarketMakers. Additionally, ETH MarketMakers will not need to obtain
additional ETH Trading Permits to have
appointments in the two additional
products.
CBOE does not believe the proposed
rule change will detriment market
participants on other exchanges, as it
relates to options listed solely on CBOE
and to trading hours during which no
other U.S. options exchange is currently
open for trading. Market participants on
other exchanges are welcome to become
ETH Trading Permit Holders, or engage
a broker that is an ETH Trading Permit
Holder, and trade at CBOE if they
determine that this proposed rule
change has made CBOE more attractive
or favorable.
CBOE believes that the proposed rule
change will relieve any burden on, or
otherwise promote, competition. As
discussed above, listing two additional
products for trading during ETH will
provide more hedging and other
investment opportunities within the
options trading industry. The Exchange
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
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The Exchange neither solicited nor
received 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: (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 10 and Rule 19b–4(f)(6)
thereunder.11
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing. However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange requests that the Commission
waive the 30-day operative delay to
allow the proposed rule change to
become effective immediately. In its
proposal, the Exchange stated that its
10 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
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. The Exchange has satisfied this
requirement.
11 17
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proposal does not raise any new or
unique issues, and only makes available
for trading during ETH two additional
exclusively-listed products that the
Exchange currently lists and trades
during RTH. In addition, the Exchange
stated that the proposed changes to the
appointment costs for these products is
intended to allow Market-Makers to
have appointments in all four ETH
products without having to obtain an
additional ETH Trading Permit. The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest.12 Among other things,
the proposed rule change makes no
changes to the trading rules applicable
to ETH, and the Exchange states that
XSP and SPXpm will trade during ETH
in the same manner as VIX and SPX
currently do during ETH. The
Commission notes that the Exchange
will include in its annual and interim
reports to the Commission the
applicable information regarding
SPXpm and p.m.-settled XSP options
that trade during ETH. Because the
proposed rule change involves two
exclusively-listed products that already
trade during RTH, does not alter the
trading rules applicable to ETH, and
does not raise any novel or unique
regulatory issues, the Commission
designates the proposed rule change as
operative upon filing.
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.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2015–079 on the subject line.
12 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CBOE-2015–079. 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–CBOE–
2015–079 and should be submitted on
or before October 9, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Brent J. Fields,
Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75908; File No. SR–CBOE–
2015–026]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Designation of
a Longer Period for Commission
Action on Proceedings To Determine
Whether To Approve or Disapprove a
Proposed Rule Change Relating to
Rules 6.74A and 6.74B
September 14, 2015.
On March 6, 2015, Chicago Board
Options Exchange, Incorporated (the
‘‘Exchange’’ or ‘‘CBOE’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’), pursuant to
Section 19(b)(1) of the Securities
Exchange Act of 1934 (the ‘‘Act’’),1 and
Rule 19b–4 thereunder,2 a proposed rule
change to amend its rules regarding the
solicitation of Market-Makers as the
contra party to an agency order entered
into the Exchange’s Automated
Improvement Mechanism (‘‘AIM’’) and
Solicitation Auction Mechanism
(‘‘SAM’’) auctions. The proposed rule
change was published for comment in
the Federal Register on March 23,
2015.3 On May 4, 2015, the Commission
extended the time period within which
to approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether to disapprove the proposed
rule change, to June 21, 2015.4 On June
18, 2015, the Commission instituted
proceedings to determine whether to
approve or disapprove the proposed
rule change.5 On July 21, 2015, the
Commission received a letter from the
Exchange responding to the Order
Instituting Proceedings.6 Subsequently,
the Commission received one other
comment letter on the proposed rule
change.7
Section 19(b)(2) of the Act 8 provides
that, after initiating disapproval
proceedings, the Commission shall issue
an order approving or disapproving the
tkelley on DSK3SPTVN1PROD with NOTICES
13 17
1 15
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 74519
(March 17, 2015), 80 FR 15264 (‘‘Notice’’).
4 See Securities Exchange Act Release No. 74862
(May 4, 2015), 80 FR 26599 (May 8, 2015).
5 See Securities Exchange Act Release No. 75245
(June 18, 2015), 80 FR 36386 (June 24, 2015)
(‘‘Order Instituting Proceedings’’).
6 See Letter to Brent J. Fields, Secretary,
Commission, from Kyle Edwards, Attorney, CBOE,
dated July 21, 2015 (‘‘CBOE Letter’’).
7 See Letter to Brent J. Fields, Secretary,
Commission, from Gavin Rowe, Senior Director,
Dash Financial LLC, dated August 11, 2015 (‘‘Dash
Financial Letter’’).
8 15 U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
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proposed rule change not later than 180
days after the date of publication of
notice of filing of the proposed rule
change. The Commission may extend
the period for issuing an order
approving or disapproving the proposed
rule change, however, by not more than
60 days if the Commission determines
that a longer period is appropriate and
publishes the reasons for such
determination. In this case, the
proposed rule change was published for
notice and comment in the Federal
Register on March 23, 2015.9 September
19, 2015, is 180 days from that date, and
November 18, 2015, is 240 days from
that date.
The Commission finds it appropriate
to designate a longer period within
which to issue an order approving or
disapproving the proposed rule change
so that it has sufficient time to consider
the proposed rule change and the
comment letters submitted in response
to the Order Instituting Proceedings.
Accordingly, the Commission,
pursuant to Section 19(b)(2) of the
Act,10 designates November 18, 2015 as
the date by which the Commission shall
either approve or disapprove the
proposed rule change (File No. SR–
CBOE–2015–026).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Brent J. Fields,
Secretary.
[FR Doc. 2015–23401 Filed 9–17–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75913; File No. SR–CBOE–
2015–076]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the Fees
Schedule
September 14, 2015.
[FR Doc. 2015–23395 Filed 9–17–15; 8:45 am]
BILLING CODE 8011–01–P
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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
September 1, 2015, Chicago Board
Options Exchange, Incorporated (the
‘‘Exchange’’ or ‘‘CBOE’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
9 See
supra note 3.
U.S.C. 78s(b)(2).
11 17 CFR 200.30–3(a)(57).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
10 15
E:\FR\FM\18SEN1.SGM
18SEN1
]]>Agencies
[Federal Register Volume 80, Number 181 (Friday, September 18, 2015)]
[Notices]
[Pages 56522-56525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23395]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-75914; File No. SR-CBOE-2015-079]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To List Two Additional Products During Extended
Trading Hours
September 14, 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 September 10, 2015, Chicago Board Options Exchange,
Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities
and Exchange Commission (the ``Commission'') the proposed rule change
as described in Items I and II below, which Items have been prepared by
the Exchange. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to list two additional products during
extended trading hours (``ETH''). The text of the proposed rule change
is provided below.
(additions are italicized; deletions are [bracketed])
* * * * *
Chicago Board Options Exchange, Incorporated
Rules
* * * * *
Rule 6.1A. Extended Trading Hours
(a)-(b) No change.
(c) Eligibility. The Exchange may designate as eligible for
trading during Extended Trading Hours any exclusively listed index
option designated for trading under Rules 24.2 and 24.9. The
following options are approved for trading on the Exchange during
Extended Trading Hours:
(i) Standard & Poor's 500 Stock Index (SPX)
(ii) CBOE Volatility Index[supreg] (VIX[supreg])
(iii) Standard & Poor's 500 Stock Index (P.M.-Settled) (SPXPM)
(iv) Mini-SPX Index (XSP)
Any series in these classes that are expected to be open for
trading during Regular Trading Hours will be open for trading during
Extended Trading Hours on that same trading day (subject to Rules
6.2B and 24.13, Interpretation and Policy .03). FLEX options
(pursuant to Chapters XXIVA and XXIVB) will not be eligible for
trading during Extended Trading Hours.
(d) No change.
(e) Market-Makers.
(i) Appointments. A Market-Maker's appointment to a class during
Regular Trading Hours does not apply during Extended Trading Hours.
Market-Makers may request appointments for Extended Trading Hours in
accordance with Rule 8.3 and this subparagraph (i). Notwithstanding
Rule 8.3(c), a Market-Maker can create a Virtual Trading Crowd
(``VTC'') appointment, which confers the right to quote
electronically during Extended Trading Hours in the appropriate
number of classes selected from the Extended Trading Hours tier and
related appointment costs as follows:
------------------------------------------------------------------------
Appointment
Tier Classes cost
------------------------------------------------------------------------
Extended Trading Hours........... Options on the [.5].4
CBOE Volatility Index
(VIX).
Options on the [.5].4
Standard & Poor's 500
(SPX).
Options on the .1
Standard & Poor's 500
Stock Index (P.M.-
Settled) (SPXPM).
Options on the .1
Mini-SPX Index (XSP).
------------------------------------------------------------------------
[[Page 56523]]
Each Extended Trading Hours Trading Permit held by a Market-
Maker has an appointment credit of 1.0. A Market-Maker may select
for each Extended Trading Hours Trading Permit the Market-Maker
holds any combination of Extended Trading Hours classes, whose
aggregate appointment cost does not exceed 1.0.
(ii)-(iv) No change.
(f)-(k) No change.
* * * * *
The text of the proposed rule change is also available on the
Exchange's Web site (https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
In March 2015, the Exchange launched Extended Trading Hours
(``ETH'') for options on the S&P 500 Index (``SPX'') and CBOE
Volatility Index[supreg] (``VIX''), two of the Exchange's exclusively
listed options,\3\ as alternatives for hedging and other investment
purposes, particularly as a complementary investment tool to VIX
futures.\4\ Rule 6.1A(c) provides that the Exchange may designate as
eligible for trading during ETH any exclusively listed index option
designated for trading under Rules 24.2 and 24.9. In response to
customer demand for additional options to trade during ETH for similar
purposes, the Exchange has designated Mini-SPX Index Options (``XSP'')
and p.m.-settled options on the Standard & Poor's 500 Stock Index
(``SPXpm'') to be eligible for trading during ETH. The proposed rule
change amends Rule 6.1A(c) to add these two products to the list of
products the Exchange has approved for trading on the Exchange during
ETH. CBOE currently lists XSP and SPXpm options during Regular Trading
Hours (``RTH''); the proposed rule change merely extends the hours
during which these options will trade on the Exchange. The Exchange
notes that the S&P 500 Stock Index underlies both of these options, as
it does for SPX options, which currently trade during ETH. During ETH,
XSP and SPXpm options would trade in accordance with Rule 6.1A as VIX
and SPX options currently do.\5\ The proposed rule change makes no
changes to the trading rules applicable to ETH.
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\3\ An ``exclusively listed option'' is an option that trades
exclusively on an exchange because the exchange has an exclusive
license to list and trade the option or has the proprietary rights
in the interest underlying the option. An exclusively listed option
is different than a ``singly listed option,'' which is an option
that is not an ``exclusively listed option'' but that is listed by
one exchange and not by any other national securities exchange.
\4\ See Securities Exchange Act Release No. 34-73704 (November
28, 2014), 79 FR 72044 (December 4, 2014) (SR-CBOE-2014-062) (order
granting accelerated approval of proposed rule change to adopt
Extended Trading Hours for SPX and VIX).
\5\ Rule 6.1A(a) states that all CBOE Rules apply to trading
during ETH except as set forth in Rule 6.1A and for Rules that by
their terms are inapplicable during ETH or where the context
otherwise requires.
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The Exchange lists SPXpm options and p.m.-settled XSP options
pursuant to a pilot program.\6\ Pursuant to the pilot program, CBOE
submits annual reports to the Commission that contain analyses of
volume, open interest and trading patterns, as well as interim reports
that contain some of the information that is included in the annual
reports. The Exchange will include in those annual and interim reports
the applicable information regarding SPXpm and p.m.-settled XSP options
that trade during ETH.
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\6\ See Securities Exchange Act Release No. 34-73338 (October
10, 2014), 79 FR 62502 (October 17, 2014) (SR-CBOE-2014-076) (notice
of filing and immediate effectiveness of extension of pilot program
to May 3, 2016).
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The Exchange also proposes to amend Rule 6.1A(e)(i) to change the
current appointment cost for each of SPX and VIX from .5 to .4 and add
an appointment cost of .1 for each of XSP and SPXpm. The Exchange
believes these appointment costs are consistent with an analysis of
various factors based on which the Exchange determines appointment
costs, including competitive forces and trading volume. Because each
ETH Trading Permit has an appointment credit of 1.0, a Market-Maker
will continue to need to hold only one ETH Trading Permit if it wants
to quote in all four products approved for trading during ETH.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\7\ Specifically, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \8\ requirements that the rules of
an exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \9\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ Id.
---------------------------------------------------------------------------
In particular, the Exchange believes the proposed rule change will
further improve the Exchange's marketplace for the benefit of
investors. The listing of two additional products for trading during
ETH will provide more hedging and other investment opportunities within
the options trading industry that is consistent with the continued
globalization of the securities markets. The proposed rule change also
allows the Exchange to more effectively compete with exchanges located
outside of the United States. The Exchange proposes to make two more
products available during ETH in response to demand by investors to
have access to these products outside of RTH. During ETH, XSP and SPXpm
options would trade in accordance with Rule 6.1A as VIX and SPX options
currently do. The proposed rule change makes no changes to the trading
rules applicable to ETH; it merely approves for trading during ETH two
products that already trade on the Exchange during RTH. Additionally,
the S&P 500 index underlies both of these options, as it does for SPX
options, which are currently approved for trading during ETH.
The Exchange believes the appointment costs for the four classes
approved for trading during ETH are appropriate given various factors
considered by the Exchange, including competitive forces and trading
volume.
[[Page 56524]]
The Exchange believes that allowing ETH Market-Makers to trade all four
available products during ETH while holding only one ETH Trading Permit
may encourage Trading Permit Holders to become ETH Market-Makers, as
they can quote in more classes for the same cost. Additionally, current
ETH Market-Makers can obtain appointments in these two additional
classes without having to obtain an additional ETH Trading Permit. This
may increase liquidity and result in more competitive pricing in these
products during ETH, which will promote just and equitable principles
of trade and ultimately benefit investors. The proposed rule change
does not result in unfair discrimination, as the appointment costs for
these products during ETH will apply to all ETH Market-Makers.
B. Self-Regulatory Organization's Statement on Burden on Competition
CBOE does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. If CBOE lists XSP and SPXpm
options for trading during ETH, all ETH Trading Permit Holders may
trade these options during ETH. Additionally, non-ETH Trading Permit
Holders may trade these options during ETH through a broker that is an
ETH Trading Permit Holder. The proposed rule change is merely extending
the trading hours of two products that currently trade on CBOE. The
appointment costs for the four products approved for trading during ETH
will apply to all ETH Market-Makers. Additionally, ETH Market-Makers
will not need to obtain additional ETH Trading Permits to have
appointments in the two additional products.
CBOE does not believe the proposed rule change will detriment
market participants on other exchanges, as it relates to options listed
solely on CBOE and to trading hours during which no other U.S. options
exchange is currently open for trading. Market participants on other
exchanges are welcome to become ETH Trading Permit Holders, or engage a
broker that is an ETH Trading Permit Holder, and trade at CBOE if they
determine that this proposed rule change has made CBOE more attractive
or favorable.
CBOE believes that the proposed rule change will relieve any burden
on, or otherwise promote, competition. As discussed above, listing two
additional products for trading during ETH will provide more hedging
and other investment opportunities within the options trading industry.
The Exchange also believes the proposed rule change could increase its
competitive position outside of the United States by providing
investors with an additional investment vehicles with respect to their
global trading strategies during times that correspond with RTH outside
of the United States. The Exchange proposes to make two more products
available during ETH in response to demand by investors to have access
to these products outside of RTH. Additionally, the Exchange believes
the appointment costs for the four products available for trading
during ETH, which allow ETH Market-Makers to have appointments in all
four products with only one ETH Trading Permit, may increase liquidity
and enhance competition in those products during those hours.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
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, 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
\10\ and Rule 19b-4(f)(6) thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange requests that the Commission waive
the 30-day operative delay to allow the proposed rule change to become
effective immediately. In its proposal, the Exchange stated that its
proposal does not raise any new or unique issues, and only makes
available for trading during ETH two additional exclusively-listed
products that the Exchange currently lists and trades during RTH. In
addition, the Exchange stated that the proposed changes to the
appointment costs for these products is intended to allow Market-Makers
to have appointments in all four ETH products without having to obtain
an additional ETH Trading Permit. The Commission believes that waiving
the 30-day operative delay is consistent with the protection of
investors and the public interest.\12\ Among other things, the proposed
rule change makes no changes to the trading rules applicable to ETH,
and the Exchange states that XSP and SPXpm will trade during ETH in the
same manner as VIX and SPX currently do during ETH. The Commission
notes that the Exchange will include in its annual and interim reports
to the Commission the applicable information regarding SPXpm and p.m.-
settled XSP options that trade during ETH. Because the proposed rule
change involves two exclusively-listed products that already trade
during RTH, does not alter the trading rules applicable to ETH, and
does not raise any novel or unique regulatory issues, the Commission
designates the proposed rule change as operative upon filing.
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\12\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-CBOE-2015-079 on the subject line.
[[Page 56525]]
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2015-079. 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-CBOE-2015-079 and should be
submitted on or before October 9, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-23395 Filed 9-17-15; 8:45 am]
BILLING CODE 8011-01-P
