Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Order Granting Approval of a Proposed Rule Change Relating to Complex Orders as Modified by Amendment No. 1, 78793-78794 [2015-31681]
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Federal Register / Vol. 80, No. 242 / Thursday, December 17, 2015 / Notices
a. Are the Currency Rates calculated
using arm’s length transactions and, if
so, are such transactions verified, and
how? If quotes are used to calculate the
Currency Rates, are those arm’s length
quotes firm?
b. What concerns, if any, do
commenters have regarding the Index’s
susceptibility to manipulation?
4. Are the requirements of NYSE Arca
Equities Rule 8.201(g) adequate to allow
the Exchange to fulfill its regulatory
obligations or, in light of the Shares’
exposure to the Reference Currencies,
should those requirements be expanded
to also apply to market makers’ trading
accounts for all of the applicable nonU.S. currencies, options, futures or
options on futures on such currencies,
or any other derivatives based on such
currencies?
Comments may be submitted by any
of the following methods:
asabaliauskas on DSK5VPTVN1PROD 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–
NYSEArca–2015–76 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
Numbers SR–NYSEArca–2015–76. 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 these
filings 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
VerDate Sep<11>2014
16:53 Dec 16, 2015
Jkt 238001
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEArca–2015–76 and should be
submitted on or before January 7, 2016.
Rebuttal comments should be submitted
by January 21, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.26
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–31680 Filed 12–16–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–76621; File No. SR–C2–
2015–025]
Self-Regulatory Organizations; C2
Options Exchange, Incorporated;
Order Granting Approval of a
Proposed Rule Change Relating to
Complex Orders as Modified by
Amendment No. 1
December 11, 2015.
I. Introduction
On October 13, 2015, C2 Options
Exchange, Incorporated (the ‘‘Exchange’’
or ‘‘C2’’) filed with the Securities and
Exchange Commission (the
‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and
Rule 19b–4 thereunder,2 a proposed rule
change to: (1) Amend the rule
provisions regarding the initiation of a
complex order auction (‘‘COA’’), (2) add
rule provisions regarding the impact of
certain incoming orders and changes in
the leg markets on an ongoing COA, and
(3) amend the rule provision related to
the size of COA responses. On October
26, 2015, the Exchange submitted
Amendment No. 1 to the proposed rule
change. The proposed rule change, as
modified by Amendment No. 1, was
published for comment in the Federal
Register on November 2, 2015.3 The
Commission received no comments on
the proposal. This order grants approval
of the proposed rule change, as
modified by Amendment No. 1.
26 17
CFR 200.30–3(a)(57).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No.76274
(October 27, 2015), 80 FR 67446 (‘‘Notice’’).
1 15
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
78793
II. Description of the Proposed Rule
Change
The Exchange proposes to amend C2
Rule 6.13 and Interpretation and Policy
.02 regarding the initiation of a COA.
Currently, C2 Participants must
affirmatively request that their incoming
COA-eligible orders be COA’d.4 The
Exchange proposes to amend C2 Rule
6.13(c)(2) to provide that COA-eligible
orders be COA’d by default.5 Under the
proposed rule, Participants would be
permitted to request that a COA-eligible
order not COA (referred to as a ‘‘do-notCOA’’ request) on an order-by-order
basis.6 The Exchange believes that
allowing Participants to make a ‘‘do-notCOA’’ request on an order-by-order
basis will better allow them to make
decisions regarding the handling of their
orders based on market conditions at the
time they submit their orders. An order
with a ‘‘do-not-COA’’ request, however,
may still be COA’d after it has rested on
the Complex Order Book (‘‘COB’’)
pursuant to Interpretation and Policy
.02.7
The Exchange notes that an order
with a ‘‘do-not-COA’’ request will still
have execution opportunities. The
Exchange explains that a ‘‘do-not-COA’’
order may execute automatically upon
entry into the System against the leg
markets or complex orders on the COB
to the extent marketable (in accordance
with allocation rules set forth in Rule
6.13).8 Further, the Exchange notes that
an order on the opposite side of, and
marketable against, a COA-eligible order
may trade against the COA-eligible
order if the System receives the order
while a COA is ongoing.9
Second, the Exchange proposes to add
subparagraphs (c)(8)(D) and (E) to C2
Rule 6.13 to describe additional
circumstances that will cause a COA to
end early.10 Proposed subparagraph
(c)(8)(D) will provide that if an order
with a ‘‘do-not-COA’’ request or an
order that is not COA-eligible is
received prior to the expiration of the
Response Time Interval for the original
COA and is on the same side of the
4 See Notice, supra note 3, at 67446. The
Exchange represents that all Participants have
requested that all of their COA-eligible orders
process through COA upon entry into the System.
5 Id.
6 Id. In light of this proposed change, the
Exchange proposes to delete the language in
Interpretation and Policy .02(a) that indicates
Participants may request that complex orders be
processed by COA on a class-by-class basis, as it is
no longer necessary. Id.
7 Id.
8 Id. at 67447.
9 Id.
10 Id. The proposed rule change makes
corresponding changes to the heading and
introductory paragraph of subparagraph (c)(8). Id.
E:\FR\FM\17DEN1.SGM
17DEN1
78794
Federal Register / Vol. 80, No. 242 / Thursday, December 17, 2015 / Notices
market and at a price better than or
equal to the starting price, then the
original COA will end.11 Proposed
subparagraph (c)(8)(E) will provide that
if the leg markets were not marketable
against a COA-eligible order when the
order entered the System (and thus prior
to the initiation of a COA) but became
marketable with the COA-eligible order
prior to the expiration of the Response
Time Interval, it will cause the COA to
end.12 The Exchange believes that these
provisions prevent an order that was
entered after the initiation of a COA
from trading ahead of an order with the
same price that may have executed or
entered the COB if it did not COA.13
Similarly, the Exchange believes it is
fair for a COA-eligible order that was
entered at a better price than an order
that was resting in the COB prior to
initiation of the COA to execute against
leg markets that become marketable
against the COA-eligible order and
resting order during the COA, because
the Participant who entered the COAeligible order was willing to pay a better
price than that of the resting order.14
Third, the Exchange proposes to
amend subparagraph (c)(3)(A) of C2
Rule 6.13 to delete the provision that
states that RFR responses are limited to
the size of the COA-eligible order for
allocation purposes.15 The Exchange
explains that it is proposing this change
because if the allocation algorithm for
complex orders in a class is pro-rata, the
System is unable to block RFR
responses that are larger than the size of
the COA-eligible order.16 The Exchange
notes the pursuant to C2 Rule 6.13(c)(7),
RFR responses are firm with respect to
the COA-eligible order for which the
responses are submitted, provided that
responses that exceed the size of a COAeligible order are also eligible to trade
with other incoming COA-eligible
orders that are received during the
Response Time Interval.17
Finally, the Exchange proposes to
make technical and other
nonsubstantive changes, which are
described in the Notice.18
asabaliauskas on DSK5VPTVN1PROD with NOTICES
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change is
11 Id.
12 Id.
13 Id.
at 67447–8.
at 67449.
14 Id.
15 Id.
at 67448.
The Exchange represents that this proposed
rule change will result in the rule regarding RFR
responses more accurately reflecting current System
functionality. Id.
17 Id.
18 Id.
16 Id.
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16:53 Dec 16, 2015
Jkt 238001
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.19 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,20 which requires,
among other things, that the rules of a
national securities exchange be
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, 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 it is
reasonable for C2 to require that
incoming two-legged COA-eligible
orders be COA’d by default unless a
Participant requests, on an order-byorder basis, that such orders not COA.
The Commission notes that, should a
Participant not wish its orders to be
COA’d, the proposed rule will allow the
Participant to request that its orders not
be COA’d on an order-by-order basis. In
addition, the Commission notes that the
rules of another options exchange
provide that certain complex orders be
routed to a complex order auction
unless a member designates that such
orders not initiate a complex order
auction on that exchange.21
The Commission also believes that it
is reasonable for the Exchange to add
new provisions regarding how incoming
orders with ‘‘do-not-COA’’ requests or
that are not COA-eligible, as well as
how changes in the leg markets, may
impact ongoing COAs. Such additions
enhance the description of current COA
functionality and the circumstances that
may cause a COA to end early to help
ensure investors understand how ‘‘donot-COA’’ orders may impact a COA. As
noted above, these rules provide that if
entry of a ‘‘do-not-COA’’ order causes a
COA to end, any executions that occur
following the COA will occur in
accordance with allocation principles in
place, subject to an exception that the
original COA-eligible order will receive
time priority.
Finally, the Commission believes it is
reasonable for C2 to delete the provision
in its Rules limiting the size of RFR
responses to the size of the COA-eligible
order. The Commission notes that other
19 In approving this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
20 15 U.S.C. 78f(b)(5).
21 See NASDAQ OMX PHLX LLC (‘‘PHLX’’) Rule
1080, Commentary .07(a)(viii) and (e) (describing
the complex order live auction (‘‘COLA’’) process
and ‘‘do not auction’’ orders).
PO 00000
Frm 00087
Fmt 4703
Sfmt 4703
options exchanges do not limit the size
of responses to the auctioned order
sized.22
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,23 that the
proposed rule change (SR–C2–2015–
025), as modified by Amendment No. 1,
be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–31681 Filed 12–16–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–76626; File No. SR–CBOE–
2015–100]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Order Granting Approval
of a Proposed Rule Change, as
Modified by Amendment No. 1, To List
and Trade Options That Overlie a
Reduced Value of the FTSE 100 Index
December 11, 2015.
I. Introduction
On October 30, 2015, the Chicago
Board Options Exchange, Incorporated
(‘‘Exchange’’ or ‘‘CBOE’’) 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
list and trade options that overlie a
reduced value of the FTSE 100 Index.
The proposed rule change was
published for comment in the Federal
Register on November 10, 2015.3 On
December 10, 2015, the Exchange filed
Amendment No. 1 to the proposed rule
change.4 This order grants approval of
22 See
id. and NYSE MKT Rule 6.80NY(e).
U.S.C. 78s(b)(2).
24 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 76353
(November 4, 2015), 80 FR 69751 (‘‘Notice’’).
4 Amendment No. 1 makes certain technical
modifications to Exhibit 5 to reflect the current
CBOE rulebook and to remove a reference to ‘‘(1/
10th)’’ that was inadvertently included. It also
revises rule text to make additional technical edits.
As the changes made by Amendment No. 1 are
technical in nature and do not materially alter the
substance of the proposed rule change or raise any
novel regulatory issues, Amendment No. 1 is not
subject to notice and comment.
23 15
E:\FR\FM\17DEN1.SGM
17DEN1
]]>Agencies
[Federal Register Volume 80, Number 242 (Thursday, December 17, 2015)]
[Notices]
[Pages 78793-78794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-31681]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-76621; File No. SR-C2-2015-025]
Self-Regulatory Organizations; C2 Options Exchange, Incorporated;
Order Granting Approval of a Proposed Rule Change Relating to Complex
Orders as Modified by Amendment No. 1
December 11, 2015.
I. Introduction
On October 13, 2015, C2 Options Exchange, Incorporated (the
``Exchange'' or ``C2'') filed with the Securities and Exchange
Commission (the ``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'' or ``Exchange Act'') \1\ and
Rule 19b-4 thereunder,\2\ a proposed rule change to: (1) Amend the rule
provisions regarding the initiation of a complex order auction
(``COA''), (2) add rule provisions regarding the impact of certain
incoming orders and changes in the leg markets on an ongoing COA, and
(3) amend the rule provision related to the size of COA responses. On
October 26, 2015, the Exchange submitted Amendment No. 1 to the
proposed rule change. The proposed rule change, as modified by
Amendment No. 1, was published for comment in the Federal Register on
November 2, 2015.\3\ The Commission received no comments on the
proposal. This order grants approval of the proposed rule change, as
modified by Amendment No. 1.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No.76274 (October 27,
2015), 80 FR 67446 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
The Exchange proposes to amend C2 Rule 6.13 and Interpretation and
Policy .02 regarding the initiation of a COA. Currently, C2
Participants must affirmatively request that their incoming COA-
eligible orders be COA'd.\4\ The Exchange proposes to amend C2 Rule
6.13(c)(2) to provide that COA-eligible orders be COA'd by default.\5\
Under the proposed rule, Participants would be permitted to request
that a COA-eligible order not COA (referred to as a ``do-not-COA''
request) on an order-by-order basis.\6\ The Exchange believes that
allowing Participants to make a ``do-not-COA'' request on an order-by-
order basis will better allow them to make decisions regarding the
handling of their orders based on market conditions at the time they
submit their orders. An order with a ``do-not-COA'' request, however,
may still be COA'd after it has rested on the Complex Order Book
(``COB'') pursuant to Interpretation and Policy .02.\7\
---------------------------------------------------------------------------
\4\ See Notice, supra note 3, at 67446. The Exchange represents
that all Participants have requested that all of their COA-eligible
orders process through COA upon entry into the System.
\5\ Id.
\6\ Id. In light of this proposed change, the Exchange proposes
to delete the language in Interpretation and Policy .02(a) that
indicates Participants may request that complex orders be processed
by COA on a class-by-class basis, as it is no longer necessary. Id.
\7\ Id.
---------------------------------------------------------------------------
The Exchange notes that an order with a ``do-not-COA'' request will
still have execution opportunities. The Exchange explains that a ``do-
not-COA'' order may execute automatically upon entry into the System
against the leg markets or complex orders on the COB to the extent
marketable (in accordance with allocation rules set forth in Rule
6.13).\8\ Further, the Exchange notes that an order on the opposite
side of, and marketable against, a COA-eligible order may trade against
the COA-eligible order if the System receives the order while a COA is
ongoing.\9\
---------------------------------------------------------------------------
\8\ Id. at 67447.
\9\ Id.
---------------------------------------------------------------------------
Second, the Exchange proposes to add subparagraphs (c)(8)(D) and
(E) to C2 Rule 6.13 to describe additional circumstances that will
cause a COA to end early.\10\ Proposed subparagraph (c)(8)(D) will
provide that if an order with a ``do-not-COA'' request or an order that
is not COA-eligible is received prior to the expiration of the Response
Time Interval for the original COA and is on the same side of the
[[Page 78794]]
market and at a price better than or equal to the starting price, then
the original COA will end.\11\ Proposed subparagraph (c)(8)(E) will
provide that if the leg markets were not marketable against a COA-
eligible order when the order entered the System (and thus prior to the
initiation of a COA) but became marketable with the COA-eligible order
prior to the expiration of the Response Time Interval, it will cause
the COA to end.\12\ The Exchange believes that these provisions prevent
an order that was entered after the initiation of a COA from trading
ahead of an order with the same price that may have executed or entered
the COB if it did not COA.\13\ Similarly, the Exchange believes it is
fair for a COA-eligible order that was entered at a better price than
an order that was resting in the COB prior to initiation of the COA to
execute against leg markets that become marketable against the COA-
eligible order and resting order during the COA, because the
Participant who entered the COA-eligible order was willing to pay a
better price than that of the resting order.\14\
---------------------------------------------------------------------------
\10\ Id. The proposed rule change makes corresponding changes to
the heading and introductory paragraph of subparagraph (c)(8). Id.
\11\ Id.
\12\ Id. at 67447-8.
\13\ Id. at 67449.
\14\ Id.
---------------------------------------------------------------------------
Third, the Exchange proposes to amend subparagraph (c)(3)(A) of C2
Rule 6.13 to delete the provision that states that RFR responses are
limited to the size of the COA-eligible order for allocation
purposes.\15\ The Exchange explains that it is proposing this change
because if the allocation algorithm for complex orders in a class is
pro-rata, the System is unable to block RFR responses that are larger
than the size of the COA-eligible order.\16\ The Exchange notes the
pursuant to C2 Rule 6.13(c)(7), RFR responses are firm with respect to
the COA-eligible order for which the responses are submitted, provided
that responses that exceed the size of a COA-eligible order are also
eligible to trade with other incoming COA-eligible orders that are
received during the Response Time Interval.\17\
---------------------------------------------------------------------------
\15\ Id. at 67448.
\16\ Id. The Exchange represents that this proposed rule change
will result in the rule regarding RFR responses more accurately
reflecting current System functionality. Id.
\17\ Id.
---------------------------------------------------------------------------
Finally, the Exchange proposes to make technical and other
nonsubstantive changes, which are described in the Notice.\18\
---------------------------------------------------------------------------
\18\ Id.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
After careful review, 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
exchange.\19\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\20\ which
requires, among other things, that the rules of a national securities
exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, 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.
---------------------------------------------------------------------------
\19\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
\20\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Commission believes that it is reasonable for C2 to require
that incoming two-legged COA-eligible orders be COA'd by default unless
a Participant requests, on an order-by-order basis, that such orders
not COA. The Commission notes that, should a Participant not wish its
orders to be COA'd, the proposed rule will allow the Participant to
request that its orders not be COA'd on an order-by-order basis. In
addition, the Commission notes that the rules of another options
exchange provide that certain complex orders be routed to a complex
order auction unless a member designates that such orders not initiate
a complex order auction on that exchange.\21\
---------------------------------------------------------------------------
\21\ See NASDAQ OMX PHLX LLC (``PHLX'') Rule 1080, Commentary
.07(a)(viii) and (e) (describing the complex order live auction
(``COLA'') process and ``do not auction'' orders).
---------------------------------------------------------------------------
The Commission also believes that it is reasonable for the Exchange
to add new provisions regarding how incoming orders with ``do-not-COA''
requests or that are not COA-eligible, as well as how changes in the
leg markets, may impact ongoing COAs. Such additions enhance the
description of current COA functionality and the circumstances that may
cause a COA to end early to help ensure investors understand how ``do-
not-COA'' orders may impact a COA. As noted above, these rules provide
that if entry of a ``do-not-COA'' order causes a COA to end, any
executions that occur following the COA will occur in accordance with
allocation principles in place, subject to an exception that the
original COA-eligible order will receive time priority.
Finally, the Commission believes it is reasonable for C2 to delete
the provision in its Rules limiting the size of RFR responses to the
size of the COA-eligible order. The Commission notes that other options
exchanges do not limit the size of responses to the auctioned order
sized.\22\
---------------------------------------------------------------------------
\22\ See id. and NYSE MKT Rule 6.80NY(e).
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\23\ that the proposed rule change (SR-C2-2015-025), as modified by
Amendment No. 1, be, and it hereby is, approved.
---------------------------------------------------------------------------
\23\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
---------------------------------------------------------------------------
\24\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-31681 Filed 12-16-15; 8:45 am]
BILLING CODE 8011-01-P
