Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 7150 (The Price Improvement Period (“PIP”)), 9265-9267 [2017-02261]
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Federal Register / Vol. 82, No. 22 / Friday, February 3, 2017 / Notices
provides that such an amendment will
be effective when the amendment is
approved by the Commission or
otherwise becomes effective pursuant to
Section 11A of the Act and Rule 608
thereunder.
II. Effectiveness of the Linkage Plan
Amendment
The foregoing Plan amendment has
become effective pursuant to Rule
608(b)(3)(iii) 8 because it involves solely
technical or ministerial matters. At any
time within sixty days of the filing of
this amendment, the Commission may
summarily abrogate the amendment and
require that it be refiled pursuant to
paragraph (a)(1) of Rule 608,9 if it
appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors or the maintenance of fair and
orderly markets, to remove impediments
to, and perfect the mechanisms of, a
national market system or otherwise in
furtherance of the purposes of the Act.
III. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the amendment is
consistent with the Act. Comments may
be submitted by any of the following
methods:
asabaliauskas on DSK3SPTVN1PROD 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 4–
546 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 4–546. 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
amendment between the Commission
and any person, other than those that
8 17
9 17
CFR 242.608(b)(3)(iii).
CFR 242.608(a)(1).
VerDate Sep<11>2014
17:26 Feb 02, 2017
may be withheld from the public in
accordance with the provisions of 5
U.S.C. 552, will be available for Web
site viewing and printing in the
Commission’s Public Reference Room,
100 F Street NE., Washington, DC
20549, on official business days
between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filing also will
be available for inspection and copying
at the principal office of MIAX PEARL.
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 4–546 and should be submitted
on or before February 24, 2017.
Internet Web site at https://
boxexchange.com.
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 these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization has
prepared summaries, set forth in
Sections A, B, and C below, of the most
significant aspects of such statements.
By the Commission.
Eduardo A. Aleman,
Assistant Secretary.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2017–02265 Filed 2–2–17; 8:45 am]
1. Purpose
BILLING CODE 8011–01–P
The purpose of the proposed rule
change is to amend Rule 7150 (The
Price Improvement Period (‘‘PIP’’)) to
provide that if at the start of the auction
the quoted NBBO spread is less than or
equal to a $0.01, only PIP Orders for less
than 50 contracts will be rejected.
The Exchange recently filed to amend
the BOX Rules to make permanent the
pilot programs that permit the Exchange
to have no minimum size requirement
for orders entered into the PIP (‘‘PIP
Pilot Program’’) and COPIP (‘‘COPIP
Pilot Program’’), collectively known as
the (‘‘Programs’’).3 As part of this filing,
BOX also modified the requirements for
the PIP to specify where the National
Best Bid and Offer (‘‘NBBO’’) spread is
less than equal to $0.01, the PIP Order
and corresponding Primary
Improvement Order will be rejected.
The Exchange now proposes to
modify the requirements of the PIP to
specify where the NBBO spread is less
than or equal to $0.01; only PIP Orders
for less than 50 contracts will be
rejected. This is a competitive filing
based on the price improvement auction
proposed rules of the Miami
International Securities Exchange, LLC
(‘‘MIAX’’).4 Specifically, under MIAX
Rule 515A(a)(1)(iii), with respect to
Agency Orders that have a size of less
than 50 contracts, if at the receipt of the
Agency Order, the NBBO has a bid/ask
differential of $0.01, the System will
reject the Agency Order. Further,
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79900; File No. SR–BOX–
2017–06]
Self-Regulatory Organizations; BOX
Options Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Amend
Rule 7150 (The Price Improvement
Period (‘‘PIP’’))
January 30, 2017.
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 January
18, 2017, BOX Options Exchange LLC
(the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘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
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 7150 (The Price Improvement
Period (‘‘PIP’’)). The text of the
proposed rule change is available from
the principal office of the Exchange, at
the Commission’s Public Reference
Room and also on the Exchange’s
1 15
2 17
Jkt 241001
9265
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00075
Fmt 4703
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3 See Securities Exchange Act Release No. 79531
(December 12, 2016), 81 FR 91227 (December 16,
2016) (SR–BOX–2016–58).
4 See Securities Exchange Act Release No. 79500
(December 7, 2016), 81 FR 90030 (December 13,
2016). See also MIAX Rule 515A.(a)(1)(iii).
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Federal Register / Vol. 82, No. 22 / Friday, February 3, 2017 / Notices
Agency Orders with a size of under 50
contracts will be accepted and
processed by the MIAX System when
the NBBO bid/ask differential is greater
than $0.01.
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the Act,5
in general, and Section 6(b)(5) of the
Act,6 in particular, in that it is designed
to promote just and equitable principles
of trade, remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general protect investors
and the public interest.
The proposed rule change will allow
PIP auctions of 50 or more contracts to
continue without restriction on NBBO
spread. The Exchange believes this
removes impediments to and better
provides for a free and open market. As
such, BOX believes the proposed rule
change is in the public interest, and
therefore, consistent with the Act. The
Exchange also notes that the proposal
would provide increased opportunities
for increased price improvements for
these types of orders which will benefit
market participants engaging in the PIP
auctions.
Additionally, as set forth above, the
Exchange believes this proposed change
is reasonable and appropriate as it is
based on the rules of another exchange.7
B. Self-Regulatory Organization’s
Statement on Burden on Competition
asabaliauskas on DSK3SPTVN1PROD with NOTICES
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. To the
contrary, the proposal is procompetitive because it will enable the
Exchange to better compete with
another options exchange that allows
PIP Orders of more than 50 contracts to
trade when the NBBO spread is $0.01 or
less.8
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
7 See supra note 4.
8 Id.
6 15
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17:26 Feb 02, 2017
Jkt 241001
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Commission deems this
requirement to have been met.
11 17 CFR 240.19b–4(f)(6)(iii).
12 See supra note 4.
13 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
10 17
The Exchange has neither solicited
nor received comments on the proposed
rule change.
5 15
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 9 and
subparagraph (f)(6) of Rule 19b–4
thereunder.10
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing. However, Rule 19b–
4(f)(6)(iii) 11 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. In its
filing with the Commission, the
Exchange requests that the Commission
waive the 30-day operative delay so that
the changes can be implemented
immediately. The Exchange states that
waiver of the operative delay is
consistent with the protection of
investors and the public interest
because it will promote fair competition
among the exchanges by allowing the
Exchange to adjust the PIP rules to
provide that if at the start of the auction
the quoted NBBO spread is less than or
equal to a $0.01, only PIP Orders for less
than 50 contracts will be rejected. The
Exchange also states that the proposed
rule change is substantially similar to
the rules in place at another options
exchange.12 For these reasons, the
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest. Therefore, the
Commission designates the proposed
rule change operative upon filing.13
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
PO 00000
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Fmt 4703
Sfmt 4703
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–
BOX–2017–06 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–BOX–2017–06. 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, on official business
days between the hours of 10:00 a.m.
and 3:00 p.m., located at 100 F Street
NE., Washington, DC 20549. Copies of
such filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–BOX–
2017–06 and should be submitted on or
before February 24, 2017.
E:\FR\FM\03FEN1.SGM
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Federal Register / Vol. 82, No. 22 / Friday, February 3, 2017 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–02261 Filed 2–2–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79899; File No. SR–CBOE–
2016–080]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing of
Amendment No. 1 and Order Granting
Accelerated Approval of a Proposed
Rule Change, as Modified by
Amendment No. 1, To Amend CBOE
Rule 6.53C
January 30, 2017.
I. Introduction
On November 17, 2016, Chicago
Board Options Exchange, Incorporated
(‘‘CBOE’’ or the ‘‘Exchange’’) 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 amend CBOE Rule 6.53C,
Interpretation and Policy .10, to provide
for the electronic trading of complex
orders consisting of series authorized for
trading on the Hybrid 3.0 Platform and
series authorized for trading on the
Hybrid Trading System (‘‘Hybrid’’ or
‘‘Hybrid Trading System’’). The
proposed rule change was published for
comment in the Federal Register on
December 2, 2016.3 The Commission
received no comment letters regarding
the proposed rule change. On December
30, 2016, the Exchange filed
Amendment No. 1 to the proposed rule
change.4 On January 12, 2017, the
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 79406
(November 28, 2016), 81 FR 87102 (‘‘Notice’’).
4 As discussed more fully below, Amendment No.
1 revises the proposal to describe the treatment of
an SPX/SPXW order resting on the complex order
book (‘‘COB’’) that becomes marketable against
orders residing in the EBook for the individual legs
of the order; indicate when an incoming SPX/SPXW
order will be subject to a complex order auction
(‘‘COA’’); indicate that non-customer SPX/SPXW
orders that are marketable upon receipt will not be
COA-eligible; describe the treatment of SPX/SPXW
orders during extended trading hours; and indicate
that CBOE will announce the implementation date
of the proposal via Regulatory Circular at least
seven days prior to the implementation date. To
promote transparency of its proposed amendment,
when CBOE filed Amendment No. 1 with the
Commission, it also submitted Amendment No. 1 as
asabaliauskas on DSK3SPTVN1PROD with NOTICES
1 15
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17:26 Feb 02, 2017
Jkt 241001
Commission extended the time for
Commission consideration of the
proposal until March 2, 2017.5 This
order provides notice of filing of
Amendment No. 1 and approves the
proposed rule change, as modified by
Amendment No. 1, on an accelerated
basis.
II. Description of the Proposed Rule
Change
Currently, there are two trading
platforms operating on CBOE’s trade
engine, CBOE Command: (i) Hybrid; and
(ii) the Hybrid 3.0 Platform.6 For each
Hybrid 3.0 class, CBOE may determine
to authorize a group of series of the class
for trading on Hybrid.7 CBOE may
establish Hybrid trading parameters for
such a group on a group basis to the
extent that CBOE’s rules otherwise
allow CBOE to establish such trading
parameters on a class basis.8 Currently,
options on the Standard & Poor’s 500
Index (‘‘S&P 500’’), trading under the
symbol SPX, are the only Hybrid 3.0
a comment letter to the file, which the Commission
posted on its Web site and placed in the public
comment file for CBOE–2016–080 (available at
https://www.sec.gov/comments/sr-cboe-2016-080/
cboe2016080-1454634-130131.pdf). CBOE also
posted a copy of its Amendment No. 1 on its Web
site (https://www.cboe.com/framed/
PDFframed.aspx?content=/publish/RuleFilingsSEC/
SR-CBOE-2016-080.a1.pdf§ion=SEC_ABOUT_
CBOE_BOD&title=Proposal+Regarding+Complex+
Orders+Consisting+of+SPX+Options+Series+and+
SPXW+Options+Series) when it filed Amendment
No. 1 with the Commission.
5 See Securities Exchange Act Release No. 79783
(January 12, 2017), 82 FR 6673 (January 19, 2017).
6 See Notice, 81 FR at 87103. As described more
fully in the Notice, CBOE introduced Hybrid, an
electronic trading platform integrated with CBOE’s
floor-based open-outcry auction market, in 2003.
See Securities Exchange Act Release No. 47959
(May 30, 2003), 68 FR 34441 (June 9, 2003) (order
approving File No. SR CBOE–2002–05). CBOE
subsequently implemented an enhanced version of
Hybrid, known as Hybrid 2.0, which allows remote
quoting in option classes. See Securities Exchange
Act Release No. 50003 (July 12, 2004), 69 FR 43028
(July 19, 2004) (order approving File No. SR–CBOE–
2004–24). CBOE later implemented the Hybrid 3.0
Platform, a trading platform on Hybrid that allows
one or more quoters to submit electronic quotes that
represent the aggregate Market Maker quotation
interest in a series for the trading crowd. See
Securities Exchange Act Release No. 55874 (June 7,
2007), 72 FR 32688 (June 13, 2007) (order approving
File No. SR–CBOE–2006–101). In 2008, CBOE
removed the distinction between Hybrid and
Hybrid 2.0 classes and deleted references to the
Hybrid 2.0 platform because CBOE migrated all
option classes, other than classes traded on the
Hybrid 3.0 Platform, from Hybrid to Hybrid 2.0. See
Securities Exchange Act Release No. 58153 (July 14,
2008), 73 FR 41386 (July 18, 2008) (notice of filing
and immediate effectiveness of File No. SR–CBOE–
2008–067). Following the removal of the Hybrid 2.0
distinction, all options classes, other than those
trading on the Hybrid 3.0 Platform, have been
referred to as Hybrid classes trading on the Hybrid
Trading System.
7 See CBOE Rule 8.14, Interpretation and Policy
.01.
8 See CBOE Rule 8.14, Interpretation and Policy
.01(c).
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9267
Platform class.9 CBOE has authorized a
group of series within the S&P 500
options class, trading under the symbol
SPXW, to trade on Hybrid.10 The SPX
options series, which trade on the
Hybrid 3.0 Platform, are a.m.-settled
contracts with standard third Friday
expirations.11 The SPXW options series,
which trade on Hybrid, are p.m.-settled
contracts with non-standard
expirations.12
Currently, when CBOE receives a
complex order consisting of both SPX
and SPXW options series (an ‘‘SPX/
SPXW order’’) during regular trading
hours, the order is routed to a PAR
workstation pursuant to CBOE Rule
6.12(a)(1) to provide an opportunity for
the order to trade in open outcry.13 If
CBOE receives an SPX/SPXW order
during extended trading hours, the
order is rejected back to the sender.14
CBOE handles SPX/SPXW orders in this
manner because its system currently
cannot accept complex orders consisting
of series that trade on different trading
platforms.15 CBOE is updating its
system to accept SPX/SPXW orders so
they will be able to trade with other
SPX/SPXW orders electronically during
regular trading hours and extended
trading hours.16 As described in more
detail below, the proposal amends
CBOE’s rules to specify the manner in
which SPX/SPXW orders, and any other
complex orders consisting of series that
trade on Hybrid and on the Hybrid 3.0
Platform, will be executed
electronically.17
CBOE Rule 6.53C, Interpretation and
Policy .10 provides rules governing the
execution of complex orders in Hybrid
3.0 classes trading on the Hybrid 3.0
Platform. CBOE proposes to amend
CBOE Rule 6.53C, Interpretation and
Policy .10 to provide that if CBOE
authorizes a group of series of a Hybrid
3.0 class for trading on Hybrid pursuant
to CBOE Rule 8.14, Interpretation and
Policy .01, CBOE Rule 6.53C,
Interpretation and Policy .10 will apply
to a complex order with at least one leg
in a series from the group authorized for
trading on the Hybrid 3.0 Platform,
including if the order has another leg(s)
9 See
CBOE Rule 8.3(c)(iii).
Notice, 81 FR at 87103.
11 See id. at 87103–87104.
12 See id. at 87104.
13 See id.
14 See id. See also CBOE Rule 6.1A(b) and RG15–
013.
15 See Notice, 81 FR at 87104.
16 See id.
17 Although the proposal focuses on SPX/SPXW
orders, the proposed rules will apply to all complex
orders consisting of series that trade on Hybrid and
series that trade on the Hybrid 3.0 Platform. See
Notice, 81 FR at 87104. See also CBOE Rule 6.53C,
Interpretation and Policy .10.
10 See
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]]>Agencies
[Federal Register Volume 82, Number 22 (Friday, February 3, 2017)]
[Notices]
[Pages 9265-9267]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-02261]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-79900; File No. SR-BOX-2017-06]
Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Rule 7150 (The Price Improvement Period (``PIP''))
January 30, 2017.
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 January 18, 2017, BOX Options Exchange LLC (the ``Exchange'') filed
with the Securities and Exchange Commission (``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 from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 7150 (The Price Improvement
Period (``PIP'')). The text of the proposed rule change is available
from the principal office of the Exchange, at the Commission's Public
Reference Room and also on the Exchange's Internet Web site at https://boxexchange.com.
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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in Sections A, B, and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to amend Rule 7150 (The
Price Improvement Period (``PIP'')) to provide that if at the start of
the auction the quoted NBBO spread is less than or equal to a $0.01,
only PIP Orders for less than 50 contracts will be rejected.
The Exchange recently filed to amend the BOX Rules to make
permanent the pilot programs that permit the Exchange to have no
minimum size requirement for orders entered into the PIP (``PIP Pilot
Program'') and COPIP (``COPIP Pilot Program''), collectively known as
the (``Programs'').\3\ As part of this filing, BOX also modified the
requirements for the PIP to specify where the National Best Bid and
Offer (``NBBO'') spread is less than equal to $0.01, the PIP Order and
corresponding Primary Improvement Order will be rejected.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 79531 (December 12,
2016), 81 FR 91227 (December 16, 2016) (SR-BOX-2016-58).
---------------------------------------------------------------------------
The Exchange now proposes to modify the requirements of the PIP to
specify where the NBBO spread is less than or equal to $0.01; only PIP
Orders for less than 50 contracts will be rejected. This is a
competitive filing based on the price improvement auction proposed
rules of the Miami International Securities Exchange, LLC
(``MIAX'').\4\ Specifically, under MIAX Rule 515A(a)(1)(iii), with
respect to Agency Orders that have a size of less than 50 contracts, if
at the receipt of the Agency Order, the NBBO has a bid/ask differential
of $0.01, the System will reject the Agency Order. Further,
[[Page 9266]]
Agency Orders with a size of under 50 contracts will be accepted and
processed by the MIAX System when the NBBO bid/ask differential is
greater than $0.01.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 79500 (December 7,
2016), 81 FR 90030 (December 13, 2016). See also MIAX Rule
515A.(a)(1)(iii).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\5\ in general, and Section
6(b)(5) of the Act,\6\ in particular, in that it is designed to promote
just and equitable principles of trade, remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general protect investors and the public interest.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The proposed rule change will allow PIP auctions of 50 or more
contracts to continue without restriction on NBBO spread. The Exchange
believes this removes impediments to and better provides for a free and
open market. As such, BOX believes the proposed rule change is in the
public interest, and therefore, consistent with the Act. The Exchange
also notes that the proposal would provide increased opportunities for
increased price improvements for these types of orders which will
benefit market participants engaging in the PIP auctions.
Additionally, as set forth above, the Exchange believes this
proposed change is reasonable and appropriate as it is based on the
rules of another exchange.\7\
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\7\ See supra note 4.
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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. To the contrary, the proposal
is pro-competitive because it will enable the Exchange to better
compete with another options exchange that allows PIP Orders of more
than 50 contracts to trade when the NBBO spread is $0.01 or less.\8\
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\8\ Id.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \9\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Commission deems this requirement to have been met.
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) \11\ permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest. In its filing with the Commission,
the Exchange requests that the Commission waive the 30-day operative
delay so that the changes can be implemented immediately. The Exchange
states that waiver of the operative delay is consistent with the
protection of investors and the public interest because it will promote
fair competition among the exchanges by allowing the Exchange to adjust
the PIP rules to provide that if at the start of the auction the quoted
NBBO spread is less than or equal to a $0.01, only PIP Orders for less
than 50 contracts will be rejected. The Exchange also states that the
proposed rule change is substantially similar to the rules in place at
another options exchange.\12\ For these reasons, the Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. Therefore, the
Commission designates the proposed rule change operative upon
filing.\13\
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\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ See supra note 4.
\13\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. 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-BOX-2017-06 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-BOX-2017-06. 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, on official
business days between the hours of 10:00 a.m. and 3:00 p.m., located at
100 F Street NE., Washington, DC 20549. Copies of such filing also will
be available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-BOX-
2017-06 and should be submitted on or before February 24, 2017.
[[Page 9267]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-02261 Filed 2-2-17; 8:45 am]
BILLING CODE 8011-01-P
