Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 903 and Rule 900.2NY(50), 62939-62942 [2016-21912]

Download as PDF Federal Register / Vol. 81, No. 177 / Tuesday, September 13, 2016 / Notices they meet the Business Combination Condition, the Exchange believes it is reasonable to shift the time when SPACs are eligible for the services available to Eligible New Listings to the period immediately after meeting the Business Combination Condition. The Exchange believes that it is not unfairly discriminatory to provide SPACs with the applicable services only if and when they meet the Business Combination Condition. The Exchange recognizes that not all SPACs will meet the Business Combination Condition and that some listed SPACs will therefore never become eligible for the services that would be provided to an otherwise similarly qualified operating company. However, given the specific characteristics of the SPAC structure, these services are generally not of any particular value to a SPAC prior to meeting the Business Combination Condition and the Exchange therefore believes that those SPACs that never qualify for the services will not suffer any meaningful detriment as a consequence. Allowing SPACs up to 30 days after meeting the Business Combination Condition to start using the complimentary products and services is a reflection of the Exchange’s experience that it can take companies a period of time to review and complete necessary contracts and training for services following their becoming eligible for those services. Allowing this modest 30 day period, if the company needs it, helps ensure that the company will have the benefit of the full period permitted under the rule to actually use the services, thus giving companies the full intended benefit. Lhorne on DSK30JT082PROD with NOTICES 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 that is not necessary or appropriate in furtherance of the purposes of the Act. In many cases, SPACs will consider transferring to a new listing venue at the time they meet the Business Combination Condition. The proposed rule change enables the Exchange to compete for the retention of these companies by offering them a package of complimentary products and services that assist their transition to being a publicly listed operating company for the first time. All similarly situated companies are eligible for the same package of services. Therefore, the proposed amendment to Section 907.00 will increase competition by enabling the Exchange to more effectively compete for listings. VerDate Sep<11>2014 15:27 Sep 12, 2016 Jkt 238001 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. 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– NYSE–2016–58 on the subject line. Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSE–2016–58. 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 Frm 00086 Fmt 4703 Sfmt 4703 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–NYSE– 2016–58 and should be submitted on or before October 4, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Brent J. Fields, Secretary. [FR Doc. 2016–21914 Filed 9–12–16; 8:45 am] BILLING CODE 8011–01–P IV. Solicitation of Comments PO 00000 62939 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–78780; File No. SR– NYSEMKT–2016–87] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 903 and Rule 900.2NY(50) September 7, 2016. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on September 6, 2016, NYSE MKT LLC (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) 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 self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 903 and Rule 900.2NY(50). The proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the principal office of the Exchange, 9 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 E:\FR\FM\13SEN1.SGM 13SEN1 62940 Federal Register / Vol. 81, No. 177 / Tuesday, September 13, 2016 / Notices 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 self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change Lhorne on DSK30JT082PROD with NOTICES 1. Purpose The purpose of the filing is to amend Rule 903 and Rule 900.2NY(50), so as to allow 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 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’’). 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, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’) recently received approval to list Wednesday expirations for broad-based indexes.4 The Commission also recently approved a proposal by the BOX Options Exchange LLC (‘‘BOX’’) to list 4 See Securities Exchange Act Release No. 76909 (January 14, 2016), 81 FR 3512 (January 21, 2016) (Order Approving SR–CBOE–2015–106). VerDate Sep<11>2014 15:27 Sep 12, 2016 Jkt 238001 Wednesday expirations for SPY Options.5 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. The Exchange is also proposing to clarify that the five expiration limit in the current Short Term Option Series Program Rule will not include any Wednesday SPY Expirations. 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,6 the Exchange is limited to opening thirty (30) series for each expiration date for the specific class. The thirty (30) series restriction 5 See Securities Exchange Act Release No. 78668 (August 24, 2016), 81 FR 59696 (August 30, 2016) (Order Approving SR–BOX–2016–28). 6 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 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 Rule 903(h). PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 does not include series that are open by other securities exchanges under their respective short term option rules; NYSE Amex may list these additional series that are listed by other exchanges. 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 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. 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 is also revising portions of the definition that have not been updated to reflect changes in the Short Term Options rules. Specifically, the Exchange proposes to rename One Week options as Short Term options so that reference to the product is consistent across Rule 900.2NY(50). The Exchange also proposes to amend Rule 900.2NY(50) to clarify that Short Term Options may be opened and may expire on a Tuesday, Wednesday and Thursday, in addition to Friday which was already a part of the rule. The proposed changes are nonsubstantive and are intended to add clarity to Exchange rules. E:\FR\FM\13SEN1.SGM 13SEN1 Federal Register / Vol. 81, No. 177 / Tuesday, September 13, 2016 / Notices Lhorne on DSK30JT082PROD with NOTICES 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 proposed rule change is consistent with Section 6(b) 7 of the Securities Exchange Act of 1934 (the ‘‘Act’’), in general, and furthers the objectives of Section 6(b)(5),8 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanisms of a free and open market and a national market system. 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. The Exchange believes that the proposed non-substantive changes to Rule 900.2NY(50) would remove impediments to and perfect the mechanism of a free and open market and national market system by providing greater clarity to the rule text regarding the listing and trading of Short Term Options on the Exchange. 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. 7 15 8 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). VerDate Sep<11>2014 15:27 Sep 12, 2016 Jkt 238001 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.9 The Exchange does not believe the proposal will impose any burden on intramarket 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 intermarket competition, as nothing prevents the other options exchanges from proposing similar rules to those that the Exchange is currently proposing. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to 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, 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 from the date of filing. However, Rule 19b– 4(f)(6)(iii) 12 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 9 See supra, notes 4 and 5. 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 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. 12 17 CFR 240.19b–4(f)(6)(iii). 10 15 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 62941 proposal to list and trade Wednesday SPY Expirations.13 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.14 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 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– NYSEMKT–2016–87 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–NYSEMKT–2016–87. 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/ 13 See supra note 5. 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). 14 For E:\FR\FM\13SEN1.SGM 13SEN1 62942 Federal Register / Vol. 81, No. 177 / Tuesday, September 13, 2016 / Notices 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– NYSEMKT–2016–87 and should be submitted on or before October 4, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Brent J. Fields, Secretary. [FR Doc. 2016–21912 Filed 9–12–16; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–78781; File No. SR–MIAX– 2016–30] Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule Lhorne on DSK30JT082PROD with NOTICES September 7, 2016. Pursuant to the provisions of 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, Miami International Securities Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit 15 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 15:27 Sep 12, 2016 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing a proposal to amend the MIAX Options Fee Schedule (the ‘‘Fee Schedule’’). The text of the proposed rule change is available on the Exchange’s Web site at https://www.miaxoptions.com/filter/ wotitle/rule_filing, at MIAX’s principal office, 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 SECURITIES AND EXCHANGE COMMISSION VerDate Sep<11>2014 comments on the proposed rule change from interested persons. Jkt 238001 The Exchange is proposing to modify the current list of options for which the Exchange assesses the $0.12 per contract Posted Liquidity Marketing Fee (described below), which applies to options overlying DIA, EEM, FB, GDX, GLD, IWM, QQQ, SLV, SPY, USO, UVXY, and VXX (the ‘‘designated symbols’’), as listed in the Fee Schedule. The Exchange is also proposing to modify the current list of designated symbols for which the Exchange assesses the $0.50 per contract transaction fee applicable to orders executed for the account of non-MIAX market makers in options overlying the designated symbols, and the discounted $0.48 per contract transaction fee with respect to the designated symbols applicable to any Member or its Affiliate that qualifies for Priority Customer Rebate Program volume tiers 3 or higher, as discussed below. The Exchange proposes to remove some of the current designated symbols from both the Posted Liquidity Marketing Fee and the non-MIAX market maker transaction fees beginning with transactions occurring on or after the proposed September 1, 2016 effective PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 date of this proposed rule change, and to continue to assess the Posted Liquidity Marketing Fee and the nonMIAX market maker transaction fees for the remaining symbols for transactions occurring on or after September 1, 2016 and extending through October 31, 2016.3 Posted Liquidity Marketing Fee Marketing Fees are currently assessed on certain transactions of all MIAX Market Makers.4 Currently, Section (1)(b) of the Fee Schedule provides that the Exchange will assess a Marketing Fee to all Market Makers for contracts, including mini options, they execute in their assigned classes when the contraparty to the execution is a Priority Customer. MIAX does not assess a Marketing Fee to Market Makers for contracts executed as a PRIME Agency Order, Contra-side Order, Qualified Contingent Cross Order, PRIME Participating Quote or Order, or a PRIME AOC Response in the PRIME Auction, unless it executes against an unrelated order. The Exchange assesses an additional $0.12 per contract Posted Liquidity Marketing Fee to all Market Makers for any standard options overlying the designated symbols that Market Makers execute in their assigned class when the contra-party to the execution is a Priority Customer and the Priority Customer order was posted on the MIAX Book at the time of the execution.5 The Posted Liquidity Marketing Fee is assessed in addition to the current Marketing Fee of $0.25 per contract for standard options overlying the designated symbols that Market Makers execute in their assigned class when the contra-party to the execution is a Priority Customer.6 3 The Commission notes that in August 2016, the Exchange expanded the Posted Liquidity Marketing Fee to include 7 additional symbols. See File No. SR–MIAX–2016–22 (withdrawn) and Securities Exchange Act Release No. 78681 (August 25, 2016), 81 FR 60077 (August 31, 2016) (SR–MIAX–2016– 28). In the present filing, MIAX has removed those seven additional symbols effective September 1, 2016. Further, the Exchange has proposed to remove the five original symbols after October 31, 2016, which will result in no symbols being subject to the additional $0.12 per contract Posted Liquidity Marketing Fee. With this change, the Commission notes that net transaction fees for removing liquidity on MIAX that are assessed on market makers (i.e., the transaction fee together with the marketing fee and Posted Liquidity Marketing Fee) will no longer exceed $0.50 per contract in classes in the Penny Pilot Program. 4 See MIAX Fee Schedule, Section (1)(b), entitled ‘‘Marketing Fee’’ for more detail regarding the Marketing Fee. 5 For a complete description of the Posted Liquidity Marketing Fee, see Securities Exchange Act Release No. 73848 (December 16, 2014), 79 FR 76421 (December 22, 2014) (SR–MIAX–2014–62). 6 See id. E:\FR\FM\13SEN1.SGM 13SEN1

Agencies

[Federal Register Volume 81, Number 177 (Tuesday, September 13, 2016)]
[Notices]
[Pages 62939-62942]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-21912]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78780; File No. SR-NYSEMKT-2016-87]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change To Amend Rule 903 and 
Rule 900.2NY(50)

September 7, 2016.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on September 6, 2016, NYSE MKT LLC (the ``Exchange'' or 
``NYSE MKT'') 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 self-regulatory 
organization. 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\ 15 U.S.C. 78a.
    \3\ 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 amend Rule 903 and Rule 900.2NY(50). The 
proposed rule change is available on the Exchange's Web site at 
www.nyse.com, at the principal office of the Exchange,

[[Page 62940]]

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 self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the filing is to amend Rule 903 and Rule 
900.2NY(50), so as to allow 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 
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''). 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, the Chicago Board Options Exchange, 
Incorporated (``CBOE'') recently received approval to list Wednesday 
expirations for broad-based indexes.\4\ The Commission also recently 
approved a proposal by the BOX Options Exchange LLC (``BOX'') to list 
Wednesday expirations for SPY Options.\5\
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    \4\ See Securities Exchange Act Release No. 76909 (January 14, 
2016), 81 FR 3512 (January 21, 2016) (Order Approving SR-CBOE-2015-
106).
    \5\ See Securities Exchange Act Release No. 78668 (August 24, 
2016), 81 FR 59696 (August 30, 2016) (Order Approving SR-BOX-2016-
28).
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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. The Exchange is also proposing to 
clarify that the five expiration limit in the current Short Term Option 
Series Program Rule will not include any Wednesday SPY Expirations. 
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,\6\ 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; NYSE Amex may list these 
additional series that are listed by other exchanges. 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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    \6\ 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 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 Rule 903(h).
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    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 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. 
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 is also revising portions of the definition 
that have not been updated to reflect changes in the Short Term Options 
rules. Specifically, the Exchange proposes to rename One Week options 
as Short Term options so that reference to the product is consistent 
across Rule 900.2NY(50). The Exchange also proposes to amend Rule 
900.2NY(50) to clarify that Short Term Options may be opened and may 
expire on a Tuesday, Wednesday and Thursday, in addition to Friday 
which was already a part of the rule. The proposed changes are non-
substantive and are intended to add clarity to Exchange rules.

[[Page 62941]]

    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 proposed rule change is consistent with Section 6(b) \7\ of the 
Securities Exchange Act of 1934 (the ``Act''), in general, and furthers 
the objectives of Section 6(b)(5),\8\ in particular, in that it is 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in facilitating transactions in 
securities, and to remove impediments to and perfect the mechanisms of 
a free and open market and a national market system.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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    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.
    The Exchange believes that the proposed non-substantive changes to 
Rule 900.2NY(50) would remove impediments to and perfect the mechanism 
of a free and open market and national market system by providing 
greater clarity to the rule text regarding the listing and trading of 
Short Term Options on the Exchange.
    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.

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.\9\ The Exchange does not 
believe the proposal will impose any burden on intramarket 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 intermarket competition, as nothing prevents the other 
options exchanges from proposing similar rules to those that the 
Exchange is currently proposing.
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    \9\ See supra, notes 4 and 5.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to 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, 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 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) \12\ 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.\13\ 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.\14\ 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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    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ See supra note 5.
    \14\ 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 
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-NYSEMKT-2016-87 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-NYSEMKT-2016-87. 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/

[[Page 62942]]

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-
NYSEMKT-2016-87 and should be submitted on or before October 4, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-21912 Filed 9-12-16; 8:45 am]
 BILLING CODE 8011-01-P
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