Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Expand the Short Term Option Series Program, 60049-60051 [2016-20961]

Download as PDF Federal Register / Vol. 81, No. 169 / Wednesday, August 31, 2016 / Notices available publicly. All submissions should refer to File Number SR– NYSEMKT–2016–79 and should be submitted on or before September 21, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.40 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–20880 Filed 8–30–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–78694; File No. SR–BX– 2016–047] Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Expand the Short Term Option Series Program August 26, 2016. 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 25, 2016, NASDAQ BX, Inc. (‘‘BX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘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. mstockstill on DSK3G9T082PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to expand the Short Term Option Series Program to allow Wednesday expirations for SPY options. The text of the proposed rule change is available on the Exchange’s Web site at http://nasdaqbx.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 40 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 21:59 Aug 30, 2016 Jkt 238001 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 Exchange proposes to amend BX Rules at Chapter I, Section 1(a)(60) and Chapter IV, Section 6 at Commentary .07 to expand the Short Term Option Series Program to permit the listing and trading of options with Wednesday expirations. Currently, under the Short Term Option Series Program, the Exchange may open for trading on any Thursday or Friday that is a business day series of options on that class that expire on each of the next five consecutive Fridays, provided that such Friday is not a Friday in which monthly options series or Quarterly Options Series expire (‘‘Short Term Option Series’’). The Exchange is now proposing to amend its rule to permit the listing of options expiring on Wednesdays. Specifically, the Exchange is proposing that it may open for trading on any Tuesday or Wednesday that is a business day, series of options on the SPDR S&P 500 ETF Trust (SPY) to expire on any Wednesday of the month that is a business day and is not a Wednesday in which Quarterly Options Series expire (‘‘Wednesday SPY Expirations’’).3 The proposed Wednesday SPY Expiration series will be similar to the current Short Term Option Series, with certain exceptions, as explained in greater detail below. The Exchange notes that having Wednesday expirations is not a novel proposal. Specifically, BOX Options Exchange LLC (‘‘BOX’’) recently received approval to list Wednesday expirations for SPY options.4 In regards to Wednesday SPY Expirations, the Exchange is proposing to remove the current restriction preventing the Exchange from listing Short Term Option Series that expire in the same week in which monthly option series in the same class expire. Specifically, the Exchange will be allowed to list Wednesday SPY Expirations in the same week in which monthly option series in SPY expire. The current restriction to prohibit the 3 See BX Rule Chapter IV, Section 6 at Commentary .07. 4 See Securities Exchange Act Release No. 78668 (SR–BOX–2016–28) (pending publication in the Federal Register). PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 60049 expiration of monthly and Short Term Option Series from expiring on the same trading day is reasonable to avoid investor confusion. This confusion will not apply with Wednesday SPY Expirations and standard monthly options because they will not expire on the same trading day, as standard monthly options do not expire on Wednesdays. Additionally, it would lead to investor confusion if Wednesday SPY Expirations were not listed for one week every month because there was a monthly SPY expiration on the Friday of that week. Under the proposed Wednesday SPY Expirations, the Exchange may list up to five consecutive Wednesday SPY Expirations at one time. The Exchange may have no more than a total of five Wednesday SPY Expirations listed. This is the same listing procedure as Short Term Option Series that expire on Fridays. This means, under the proposal, the Exchange would be allowed to list five Short Term Option Series expirations for SPY expiring on Friday under the current rule and five Wednesday SPY Expirations. The interval between strike prices for the proposed Wednesday SPY Expirations will be the same as those for the current Short Term Option Series. Specifically, the Wednesday SPY Expirations will have $0.50 strike intervals. Currently, for each Short Term Option Expiration Date,5 the Exchange is limited to opening thirty (30) series for each expiration date for the specific class. The thirty (30) series restriction does not include series that are open by other securities exchanges under their respective short term option rules; the Exchange may list these additional series that are listed by other exchanges.6 The thirty (30) series restriction shall apply to Wednesday SPY Expiration series as well. In addition, the Exchange will be able to list series that are listed by other exchanges, assuming they file similar rules with the Commission to list SPY options expiring on Wednesdays. As is the case with current Short Term Option Series, the Wednesday SPY Expiration series will be P.M.settled. The Exchange does not believe that any market disruptions will be encountered with the introduction of 5 BX may open for trading on any Thursday or Friday that is a business day series of options on that class that expire on each of the next five consecutive Fridays that are business days and are not Fridays in which monthly options series or Quarterly Options Series expire (‘‘Short Term Option Expiration Dates’’). See BX Rule Chapter IV, Section 6 at Commentary .07. 6 See BX Rule Chapter IV, Section 6 at Commentary .07. E:\FR\FM\31AUN1.SGM 31AUN1 60050 Federal Register / Vol. 81, No. 169 / Wednesday, August 31, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES P.M.-settled Wednesday SPY Expirations. The Exchange currently trades P.M.-settled Short Term Option Series that expire almost every Friday, which provide market participants a tool to hedge special events and to reduce the premium cost of buying protection. The Exchange seeks to introduce Wednesday SPY Expirations to, among other things, expand hedging tools available to market participants and to continue the reduction of the premium cost of buying protection. The Exchange believes that Wednesday expirations, similar to Friday expirations, would allow market participants to purchase an option based on their timing as needed and allow them to tailor their investment and hedging needs more effectively. The Exchange is also amending the definition of Short Term Option Series to make clear that it includes Wednesday expirations.7 Specifically, the Exchange is amending the definition to expand Short Term Option Series to those listed on any Tuesday or Wednesday and that expire on the Wednesday of the next business week. If a Tuesday or Wednesday is not a business day, the series may be opened (or shall expire) on the first business day immediately prior to that Tuesday or Wednesday. The Exchange believes that the introduction of Wednesday SPY Expirations will provide investors with a flexible and valuable tool to manage risk exposure, minimize capital outlays, and be more responsive to the timing of events affecting the industry. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,8 in general, and furthers the objectives of Section 6(b)(5) of the Act,9 in particular, in that it is designed 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. In particular, the Exchange believes the Short Term Option Series Program has been successful to date and that Wednesday SPY Expirations simply expand the ability of investors to hedge risk against market movements stemming from economic releases or market events that occur throughout the month in the same way that the Short proposed Chapter I, Section 1(a)(60). U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). Term Option Series Program has expanded the landscape of hedging. Similarly, the Exchange believes Wednesday SPY Expirations should create greater trading and hedging opportunities and flexibility, and provide customers with the ability to more closely tailor their investment objectives. The Exchange believes that allowing Wednesday SPY Expirations and monthly SPY expirations in the same week will benefit investors and minimize investor confusion by providing Wednesday SPY Expirations in a continuous and uniform manner. Finally, the Exchange represents that it has an adequate surveillance program in place to detect manipulative trading in Wednesday SPY Expirations in the same way it monitors trading in the current Short Term Option Series. The Exchange also represents that it has the necessary systems capacity to support the new options series. Also, the Exchange notes that BOX Options Exchange LLC (‘‘BOX’’) recently received approval to list Wednesday expirations for SPY options.10 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange notes that having Wednesday expirations is not a novel proposal, BOX has received approval to list Wednesday expirations for SPY options.11 The Exchange does not believe the proposal will impose any burden on intra-market competition, as all market participants will be treated in the same manner. Additionally, the Exchange does not believe the proposal will impose any burden on inter-market competition, as nothing prevents the other options exchanges from proposing similar rules. 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 7 See 8 15 VerDate Sep<11>2014 21:59 Aug 30, 2016 Jkt 238001 10 See 11 See PO 00000 supra, note 4. supra, note 4. Frm 00075 Fmt 4703 Sfmt 4703 which it was filed, or such shorter time as the Commission may designate, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 12 and Rule 19b–4(f)(6) thereunder.13 A proposed rule change filed under Rule 19b–4(f)(6) normally does not become operative for 30 days from the date of filing. However, Rule 19b– 4(f)(6)(iii) 14 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission notes that it recently approved BOX’s substantially similar proposal to list and trade Wednesday SPY Expirations.15 The Exchange has stated that waiver of the operative delay will allow the Exchange to list and trade Wednesday SPY Expirations as soon as possible, and therefore, promote competition among the option exchanges. For these reasons, the Commission believes that the proposed rule change presents no novel issues and that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest, and will allow the Exchange to remain competitive with other exchanges. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposal effective upon filing.16 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and 12 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 intention 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. 14 17 CFR 240.19b–4(f)(6)(iii). 15 See supra note 4. 16 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). 13 17 E:\FR\FM\31AUN1.SGM 31AUN1 Federal Register / Vol. 81, No. 169 / Wednesday, August 31, 2016 / Notices 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: SECURITIES AND EXCHANGE COMMISSION Electronic Comments Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving a Proposed Rule Change To Adopt FINRA Rule 2030 and FINRA Rule 4580 To Establish ‘‘Pay-To-Play’’ and Related Rules • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– BX–2016–047 on the subject line. Paper Comments mstockstill on DSK3G9T082PROD with NOTICES • 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–2016–047. 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 (http://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– 2016–047 and should be submitted on or before September 21, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Brent J. Fields, Secretary. [FR Doc. 2016–20961 Filed 8–30–16; 8:45 am] BILLING CODE 8011–01–P 17 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 21:59 Aug 30, 2016 Jkt 238001 [Release No. 34–78683; File No. SR–FINRA– 2015–056] August 25, 2016. I. Introduction On December 16, 2015, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘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 adopt FINRA Rules 2030 (Engaging in Distribution and Solicitation Activities with Government Entities) and 4580 (Books and Records Requirements for Government Distribution and Solicitation Activities) to establish ‘‘pay-to-play’’ 3 and related rules that would regulate the activities of member firms that engage in distribution or solicitation activities for compensation with government entities on behalf of investment advisers. Member firms serving this role— sometimes referred to as ‘‘placement agents’’ or ‘‘solicitors’’ (collectively referred to herein as ‘‘placement agents’’)—assist investment advisers with obtaining advisory business from such entities. In this context, pay-toplay has historically presented a problem, including when investment advisers retain placement agents who have made contributions to government officials who are responsible for, or can influence the outcome of, the selection process for investment advisers. When investment advisers are chosen on the basis of a placement agent’s political contributions, rather than on, for example, the adviser’s merit, performance, or costs, the market and selection process for advisers becomes distorted. Ultimately, pay-to-play harms investors and the public interest if government entities, including public 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 ‘‘Pay-to-play practices,’’ ‘‘play-to-play arrangements’’ or ‘‘play-to-play activities,’’ as referred to throughout this order, typically involve a person making cash or in-kind political contributions (or soliciting or coordinating others to make such contributions) to help finance the election campaigns of state or local officials or bond ballot initiatives as a quid pro quo for the receipt of government contracts. 2 17 PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 60051 pension plans, and their beneficiaries receive inferior services or pay higher fees. The proposed rule change was published for comment in the Federal Register on December 30, 2015.4 The Commission received ten comment letters, from nine different commenters, in response to the Notice.5 On February 8, 2016, FINRA extended the time period by which the Commission must approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to approve or disapprove the proposed rule change to March 29, 2016.6 On March 28, 2016, FINRA filed a letter with the Commission stating that it considered the comments received by the Commission in response to the Notice, and that FINRA is not intending to make changes to the proposed rule text in response to the comments.7 On March 29, 2016, pursuant to delegated authority, the Commission issued an order instituting proceedings pursuant to Section 19(b)(2)(B) of the Act 8 to determine whether to approve or disapprove the proposed rule change, 4 See Exchange Act Rel. No. 76767 (Dec. 24, 2015), 80 FR 81650 (Dec. 30, 2015) (File No. SR– FINRA–2015–056) (‘‘Notice’’). 5 See Letters from David Keating, President, Center for Competitive Politics (‘‘CCP’’), dated Jan. 20, 2016 (‘‘CCP Letter 1’’); Clifford Kirsch and Michael Koffler, Sutherland Asbill & Brennan LLP, for the Committee of Annuity Insurers (‘‘CAI’’), dated Jan. 20, 2016 (‘‘CAI Letter 1’’); Clifford Kirsch and Michael Koffler, Sutherland Asbill & Brennan LLP, for the CAI, dated Feb. 5, 2016 (‘‘CAI Letter 2’’); David T. Bellaire, Executive Vice President and General Counsel, Financial Services Institute (‘‘FSI’’), dated Jan. 20, 2016 (‘‘FSI Letter 1’’); Tamara K. Salmon, Assistant General Counsel, Investment Company Institute (‘‘ICI’’), dated Jan. 20, 2016 (‘‘ICI Letter’’); Patrick J Moran, Esq., dated Dec. 29, 2015 (‘‘Moran Letter’’); Gary A. Sanders, Counsel and Vice President, National Association of Insurance and Financial Advisors (‘‘NAIFA’’), dated Jan. 20, 2016 (‘‘NAIFA Letter’’); Judith M. Shaw, President, North American Securities Administrators Association, Inc. (‘‘NASAA’’), dated Jan. 20, 2016 (‘‘NASAA Letter’’); Hugh D. Berkson, President, Public Investors Arbitration Bar Association (‘‘PIABA’’), dated Jan. 20, 2016 (‘‘PIABA Letter’’); and H. Christopher Bartolomucci and Brian J. Field, Bancroft PLLC, for the New York Republican State Committee and the Tennessee Republican Party (‘‘State Parties’’), dated Jan. 20, 2016 (‘‘State Parties Letter 1’’). The comment letters filed with the Commission in connection with the proposed rule change are available at: http://www.sec.gov/ comments/sr-finra-2015-056/finra2015056.shtml. 6 See Letter from Victoria Crane, Associate General Counsel, FINRA, to Lourdes Gonzalez, Assistant Chief Counsel—Sales Practices, Division of Trading and Markets, Commission, dated Feb. 8, 2016. 7 See Letter from Victoria Crane, Associate General Counsel, FINRA, to Brent J. Fields, Secretary, Commission, dated Mar. 28, 2016 (‘‘FINRA Response Letter 1’’). 8 15 U.S.C. 78s(b)(2)(B). E:\FR\FM\31AUN1.SGM 31AUN1

Agencies

[Federal Register Volume 81, Number 169 (Wednesday, August 31, 2016)]
[Notices]
[Pages 60049-60051]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-20961]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78694; File No. SR-BX-2016-047]


Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Expand the Short 
Term Option Series Program

August 26, 2016.
    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 25, 2016, NASDAQ BX, Inc. (``BX'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``SEC'' or ``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.
---------------------------------------------------------------------------

    \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 expand the Short Term Option Series 
Program to allow Wednesday expirations for SPY options.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaqbx.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 Exchange proposes to amend BX Rules at Chapter I, Section 
1(a)(60) and Chapter IV, Section 6 at Commentary .07 to expand the 
Short Term Option Series Program to permit the listing and trading of 
options with Wednesday expirations.
    Currently, under the Short Term Option Series Program, the Exchange 
may open for trading on any Thursday or Friday that is a business day 
series of options on that class that expire on each of the next five 
consecutive Fridays, provided that such Friday is not a Friday in which 
monthly options series or Quarterly Options Series expire (``Short Term 
Option Series''). The Exchange is now proposing to amend its rule to 
permit the listing of options expiring on Wednesdays. Specifically, the 
Exchange is proposing that it may open for trading on any Tuesday or 
Wednesday that is a business day, series of options on the SPDR S&P 500 
ETF Trust (SPY) to expire on any Wednesday of the month that is a 
business day and is not a Wednesday in which Quarterly Options Series 
expire (``Wednesday SPY Expirations'').\3\ The proposed Wednesday SPY 
Expiration series will be similar to the current Short Term Option 
Series, with certain exceptions, as explained in greater detail below. 
The Exchange notes that having Wednesday expirations is not a novel 
proposal. Specifically, BOX Options Exchange LLC (``BOX'') recently 
received approval to list Wednesday expirations for SPY options.\4\
---------------------------------------------------------------------------

    \3\ See BX Rule Chapter IV, Section 6 at Commentary .07.
    \4\ See Securities Exchange Act Release No. 78668 (SR-BOX-2016-
28) (pending publication in the Federal Register).
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    In regards to Wednesday SPY Expirations, the Exchange is proposing 
to remove the current restriction preventing the Exchange from listing 
Short Term Option Series that expire in the same week in which monthly 
option series in the same class expire. Specifically, the Exchange will 
be allowed to list Wednesday SPY Expirations in the same week in which 
monthly option series in SPY expire. The current restriction to 
prohibit the expiration of monthly and Short Term Option Series from 
expiring on the same trading day is reasonable to avoid investor 
confusion. This confusion will not apply with Wednesday SPY Expirations 
and standard monthly options because they will not expire on the same 
trading day, as standard monthly options do not expire on Wednesdays. 
Additionally, it would lead to investor confusion if Wednesday SPY 
Expirations were not listed for one week every month because there was 
a monthly SPY expiration on the Friday of that week.
    Under the proposed Wednesday SPY Expirations, the Exchange may list 
up to five consecutive Wednesday SPY Expirations at one time. The 
Exchange may have no more than a total of five Wednesday SPY 
Expirations listed. This is the same listing procedure as Short Term 
Option Series that expire on Fridays. This means, under the proposal, 
the Exchange would be allowed to list five Short Term Option Series 
expirations for SPY expiring on Friday under the current rule and five 
Wednesday SPY Expirations. The interval between strike prices for the 
proposed Wednesday SPY Expirations will be the same as those for the 
current Short Term Option Series. Specifically, the Wednesday SPY 
Expirations will have $0.50 strike intervals.
    Currently, for each Short Term Option Expiration Date,\5\ the 
Exchange is limited to opening thirty (30) series for each expiration 
date for the specific class. The thirty (30) series restriction does 
not include series that are open by other securities exchanges under 
their respective short term option rules; the Exchange may list these 
additional series that are listed by other exchanges.\6\ The thirty 
(30) series restriction shall apply to Wednesday SPY Expiration series 
as well. In addition, the Exchange will be able to list series that are 
listed by other exchanges, assuming they file similar rules with the 
Commission to list SPY options expiring on Wednesdays.
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    \5\ BX may open for trading on any Thursday or Friday that is a 
business day series of options on that class that expire on each of 
the next five consecutive Fridays that are business days and are not 
Fridays in which monthly options series or Quarterly Options Series 
expire (``Short Term Option Expiration Dates''). See BX Rule Chapter 
IV, Section 6 at Commentary .07.
    \6\ See BX Rule Chapter IV, Section 6 at Commentary .07.
---------------------------------------------------------------------------

    As is the case with current Short Term Option Series, the Wednesday 
SPY Expiration series will be P.M.-settled. The Exchange does not 
believe that any market disruptions will be encountered with the 
introduction of

[[Page 60050]]

P.M.-settled Wednesday SPY Expirations. The Exchange currently trades 
P.M.-settled Short Term Option Series that expire almost every Friday, 
which provide market participants a tool to hedge special events and to 
reduce the premium cost of buying protection. The Exchange seeks to 
introduce Wednesday SPY Expirations to, among other things, expand 
hedging tools available to market participants and to continue the 
reduction of the premium cost of buying protection. The Exchange 
believes that Wednesday expirations, similar to Friday expirations, 
would allow market participants to purchase an option based on their 
timing as needed and allow them to tailor their investment and hedging 
needs more effectively.
    The Exchange is also amending the definition of Short Term Option 
Series to make clear that it includes Wednesday expirations.\7\ 
Specifically, the Exchange is amending the definition to expand Short 
Term Option Series to those listed on any Tuesday or Wednesday and that 
expire on the Wednesday of the next business week. If a Tuesday or 
Wednesday is not a business day, the series may be opened (or shall 
expire) on the first business day immediately prior to that Tuesday or 
Wednesday. The Exchange believes that the introduction of Wednesday SPY 
Expirations will provide investors with a flexible and valuable tool to 
manage risk exposure, minimize capital outlays, and be more responsive 
to the timing of events affecting the industry.
---------------------------------------------------------------------------

    \7\ See proposed Chapter I, Section 1(a)(60).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\9\ in particular, in that it is designed 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In particular, the Exchange believes the Short Term Option Series 
Program has been successful to date and that Wednesday SPY Expirations 
simply expand the ability of investors to hedge risk against market 
movements stemming from economic releases or market events that occur 
throughout the month in the same way that the Short Term Option Series 
Program has expanded the landscape of hedging. Similarly, the Exchange 
believes Wednesday SPY Expirations should create greater trading and 
hedging opportunities and flexibility, and provide customers with the 
ability to more closely tailor their investment objectives. The 
Exchange believes that allowing Wednesday SPY Expirations and monthly 
SPY expirations in the same week will benefit investors and minimize 
investor confusion by providing Wednesday SPY Expirations in a 
continuous and uniform manner. Finally, the Exchange represents that it 
has an adequate surveillance program in place to detect manipulative 
trading in Wednesday SPY Expirations in the same way it monitors 
trading in the current Short Term Option Series. The Exchange also 
represents that it has the necessary systems capacity to support the 
new options series. Also, the Exchange notes that BOX Options Exchange 
LLC (``BOX'') recently received approval to list Wednesday expirations 
for SPY options.\10\
---------------------------------------------------------------------------

    \10\ See supra, note 4.
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange notes that having 
Wednesday expirations is not a novel proposal, BOX has received 
approval to list Wednesday expirations for SPY options.\11\ The 
Exchange does not believe the proposal will impose any burden on intra-
market competition, as all market participants will be treated in the 
same manner. Additionally, the Exchange does not believe the proposal 
will impose any burden on inter-market competition, as nothing prevents 
the other options exchanges from proposing similar rules.
---------------------------------------------------------------------------

    \11\ See supra, note 4.
---------------------------------------------------------------------------

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, the proposed rule 
change has become effective pursuant to Section 19(b)(3)(A) of the Act 
\12\ and Rule 19b-4(f)(6) thereunder.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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 intention 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 from the date of filing. However, Rule 
19b-4(f)(6)(iii) \14\ permits the Commission to designate a shorter 
time if such action is consistent with the protection of investors and 
the public interest. The Exchange has asked the Commission to waive the 
30-day operative delay so that the proposal may become operative 
immediately upon filing. The Commission notes that it recently approved 
BOX's substantially similar proposal to list and trade Wednesday SPY 
Expirations.\15\ The Exchange has stated that waiver of the operative 
delay will allow the Exchange to list and trade Wednesday SPY 
Expirations as soon as possible, and therefore, promote competition 
among the option exchanges. For these reasons, the Commission believes 
that the proposed rule change presents no novel issues and that waiver 
of the 30-day operative delay is consistent with the protection of 
investors and the public interest, and will allow the Exchange to 
remain competitive with other exchanges. Therefore, the Commission 
hereby waives the 30-day operative delay and designates the proposal 
effective upon filing.\16\ At any time within 60 days of the filing of 
the proposed rule change, the Commission summarily may temporarily 
suspend such rule change if it appears to the Commission that such 
action is necessary or appropriate in the public interest, for the 
protection of investors, or otherwise in furtherance of the purposes of 
the Act. If the Commission takes such action, the Commission shall 
institute proceedings to determine whether the proposed rule should be 
approved or disapproved.
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    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ See supra note 4.
    \16\ 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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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and

[[Page 60051]]

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-BX-2016-047 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-2016-047. 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 (http://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-2016-047 and should be 
submitted on or before September 21, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Brent J. Fields,
Secretary.
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    \17\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2016-20961 Filed 8-30-16; 8:45 am]
 BILLING CODE 8011-01-P