Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to the Automated Improvement Mechanism, 13155-13157 [2017-04604]
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Federal Register / Vol. 82, No. 45 / Thursday, March 9, 2017 / Notices
appropriateness for the Regulated
Entities of participating in new and
existing Co-Investment Transactions.
10. Each Regulated Entity will
maintain the records required by section
57(f)(3) as if each of the Regulated
Entities were a BDC and each of the
investments permitted under these
conditions were approved by the
Required Majority under section 57(f).
11. No Independent Director of a
Regulated Entity will also be a director,
general partner, managing member or
principal, or otherwise an ‘‘affiliated
person’’ (as defined in the Act) of, any
of the Affiliated Funds.
12. The expenses, if any, associated
with acquiring, holding or disposing of
any securities acquired in a CoInvestment Transaction (including,
without limitation, the expenses of the
distribution of any such securities
registered for sale under the 1933 Act)
shall, to the extent not payable by the
Regulated Entity Advisers or the
Affiliated Investment Advisers under
their respective investment advisory
agreements with the Regulated Entities
and the Participating Funds, be shared
by the applicable Regulated Entities and
the Participating Funds in proportion to
the relative amounts of their securities
held or being acquired or disposed of,
as the case may be.
13. Any transaction fee (including
break-up or commitment fees but
excluding brokers’ fees contemplated by
section 57(k)(2) or 17(e)(2), as
applicable) received in connection with
a Co-Investment Transaction will be
distributed to the applicable Regulated
Entities and the Participating Funds on
a pro rata basis based on the amounts
each invested or committed, as the case
may be, in such Co-Investment
Transaction. If any transaction fee is to
be held by a Regulated Entity Adviser or
an Affiliated Investment Adviser
pending consummation of the
transaction, the fee will be deposited
into an account maintained by the
Regulated Entity Adviser or such other
adviser, as the case may be, at a bank
or banks having the qualifications
prescribed in Section 26(a)(1), and the
account will earn a competitive rate of
interest that will also be divided pro
rata among each applicable Regulated
Entity and each Participating Fund
based on the amount each invests in
such Co-Investment Transaction. None
of the Affiliated Funds, Regulated Entity
Advisers, Affiliated Investment
Advisers, or any affiliated person of any
of the Regulated Entities will receive
additional compensation or
remuneration of any kind (other than (a)
in the case of the Regulated Entities and
the Participating Funds, the pro rata
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transaction fees described above and
fees or other compensation described in
condition 2(c)(iii)(C) and (b) in the case
of the Regulated Entity Advisers and the
Affiliated Advisers, investment advisory
fees paid in accordance with the
Regulated Entities’ and Affiliated
Funds’ governing agreements) as a result
of or in connection with a CoInvestment Transaction.
14. If the Regulated Entity Advisers,
the Principals, any person controlling,
controlled by, or under common control
with the Regulated Entity Advisers or
the Principals, and the Affiliated Funds
(collectively, the ‘‘Holders’’) own in the
aggregate more than 25% of the
outstanding voting securities of a
Regulated Entity (‘‘Shares’’), then the
Holders will vote such Shares as
directed by an independent third party
when voting on (1) the election of
directors; (2) the removal of one or more
directors; or (3) any other matter under
either the Act or applicable State law
affecting the Board’s composition, size
or manner of election.
15. The Regulated Entity Advisers and
the Affiliated Investment Advisers will
maintain written policies and
procedures reasonably designed to
ensure compliance with the foregoing
conditions. These policies and
procedures will require, among other
things, that each Regulated Entity
Adviser will be notified of all Potential
Co-Investment Transactions that fall
within the then-current Objectives and
Strategies of any Regulated Entity it
advises and will be given sufficient
information to make its independent
determination and recommendations
under conditions 1, 2(a), 7 and 8.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–04591 Filed 3–8–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80152; File No. SR–CBOE–
2017–018)]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Related to the Automated
Improvement Mechanism
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
Frm 00067
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange seeks to amend Rule
6.74A. The text of the proposed rule
change is provided below. (additions are
italicized; deletions are [bracketed])
*
*
*
*
*
Chicago Board Options Exchange,
Incorporated Rules
*
*
*
Fmt 4703
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*
*
Rule 6.74A. Automated Improvement
Mechanism (‘‘AIM’’)
Notwithstanding the provisions of
Rule 6.74, a Trading Permit Holder that
represents agency orders may
electronically execute an order it
represents as agent (‘‘Agency Order’’)
against principal interest or against a
solicited order provided it submits the
Agency Order for electronic execution
into the AIM auction (‘‘Auction’’)
pursuant to this Rule.
(a) No change.
(b) Auction Process. Only one
Auction may be ongoing at any given
time in a series and Auctions in the
same series may not queue or overlap in
any manner. The Auction may not be
cancelled and shall proceed as follows:
(1) Auction Period and Request for
Responses (RFRs).
(A) To initiate the Auction, the
Initiating Trading Permit Holder must
mark the Agency Order for Auction
processing, and specify (i) a single price
at which it seeks to cross the Agency
Order (with principal interest or a
solicited order) (a ‘‘single-price
submission’’), including whether the
Initiating Trading Permit Holder elects
to have last priority in allocation, [or]
(ii) that it is willing to automatically
1 15
March 3, 2017.
PO 00000
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that, on February
23, 2017, Chicago Board Options
Exchange, Incorporated (the ‘‘Exchange’’
or ‘‘CBOE’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of
the Act 3 and Rule 19b–4(f)(6)
thereunder.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
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13156
Federal Register / Vol. 82, No. 45 / Thursday, March 9, 2017 / Notices
match (‘‘auto-match’’) as principal the
price and size of all Auction responses
up to an optional designated limit price
in which case the Agency Order will be
stopped at the NBBO (if 50 standard
option contracts or 500 mini-option
contracts or greater) or one cent/one
minimum increment better than the
NBBO (if less than 50 standard option
contracts or 500 mini-option contracts),
or (iii) the initial price at which it seeks
to cross the Agency Order (with
principal interest or a solicited order)
and that it is willing to auto-match.
Once the Initiating Trading Permit
Holder has submitted an Agency Order
for processing pursuant to this
subparagraph, such submission may not
be modified or cancelled.
(B)–(I) No change.
(2)–(3) No change.
*
*
*
*
*
The text of the proposed rule change
is also available on the Exchange’s Web
site (https://www.cboe.com/AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange seeks to amend Rule
6.74A in order to allow a Trading Permit
Holder (‘‘TPH’’) to input an initial price
when selecting the auto-match feature
in the Automated Improvement
Mechanism (‘‘AIM’’).
In order to initiate an AIM auction a
TPH must specify: (i) A single price at
which it seeks to cross the Agency
Order (with principal interest or a
solicited order) (a ‘‘single-price
submission’’), including whether the
Initiating Trading Permit Holder elects
to have last priority in allocation, (ii)
that it is willing to automatically match
(‘‘auto-match’’) as principal the price
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and size of all Auction responses up to
an optional designated limit price in
which case the Agency Order will be
stopped at the NBBO (if 50 standard
option contracts or 500 mini-option
contracts or greater) or one cent/one
minimum increment better than the
NBBO (if less than 50 standard option
contracts or 500 mini-option contracts).
When a TPH specifies the auto-match
feature the TPH does not identify the
initial stop price. Instead, the Agency
Order is automatically stopped at the
NBBO (if 50 standard option contracts
or 500 mini-option contracts or greater)
or one cent/one minimum increment
better than the NBBO (if less than 50
standard option contracts or 500 minioption contracts). In order to allow
TPHs to offer greater price improvement
to Agency Orders the Exchange is
seeking to amend Rule 6.74A in order to
allow TPHs to specify the initial auction
price when the TPH specifies the automatch feature.
Currently, if a TPH selects the automatch feature and there are no auction
responses, the Agency Order will
execute at either the NBBO (if 50
standard option contracts or 500 minioption contracts or greater) or one cent/
one minimum increment better than the
NBBO (if less than 50 standard option
contracts or 500 mini-option contracts).
In order to allow price-improvement
beyond the NBBO or beyond one cent/
one minimum increment better than the
NBBO when there are no auction
responses, the Exchange is amending
Rule 6.74A to allow a TPH to input an
initial auction price when using the
auto-match feature. For example,
consider a TPH using the auto-match
feature when the NBBO is 1.00–1.20 and
the Agency Order is to buy for 50
contracts or less. Currently, the Agency
Order is automatically stopped at 1.19.
If there are no auction responses the
Agency Order will be executed at 1.19.
This proposed amendment will allow
TPHs to specify the auto-match feature
and specify the initial auction price.
Thus, in the above example, a TPH
could specify the initial auction price as
1.18 instead of 1.19, guaranteeing price
improvement beyond the NBBO
improved by one minimum increment.
If any auction responses are received
they would be processed in the same
manner as the current auto-match
feature (i.e., Rule 6.74A(b)(1)(A)(ii)).
Additionally, the Exchange notes that as
provided in Rule 6.74A(a) the Agency
Order and contra order will be cancelled
if the initial auction price does not meet
the conditions described in paragraph
(a) of Rule 6.74A.
The Exchange will announce the
availability of the new feature via
PO 00000
Frm 00068
Fmt 4703
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Regulatory Circular at least 7 business
days prior to the implementation date.
The implementation date will be within
120 days of the operative date of this
filing.
2. Statutory Basis
The The [sic] Exchange believes the
proposed rule change is consistent with
the Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.5 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 6 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 7 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, the proposed
amendment will give TPHs initiating
AIM auctions the ability, when utilizing
the auto-match feature, to guarantee
price improvement beyond the NBBO (if
50 standard option contracts or 500
mini-option contracts or greater) or
beyond one cent/one minimum
increment better than the NBBO (if less
than 50 standard option contracts or 500
mini-option contracts), which generally
protects investors and the public
interest by giving Agency Orders the
possibility of receiving better execution
prices. The Exchange also notes that the
proposed functionality is not unique as
Nasdaq PHLX LLC (‘‘PHLX’’) and
Nasdaq BX, Inc. (‘‘BX’’) currently offer
such functionality.8
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CBOE does not believe that the
proposed rule change will impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act because the
5 15
6 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
7 Id.
8 See PHLX Rule 1080(n)(ii)(A)(1) and BX Rules
at Chapter VI, Section 9(ii)(A)(1).
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Federal Register / Vol. 82, No. 45 / Thursday, March 9, 2017 / Notices
proposed amendment simply gives
TPHs initiating AIM auctions the
ability, when utilizing the auto-match
feature, to guarantee price improvement
beyond the NBBO (if 50 standard option
contracts or 500 mini-option contracts
or greater) or beyond one cent/one
minimum increment better than the
NBBO (if less than 50 standard option
contracts or 500 mini-option contracts,
which generally protects investors and
the public interest by giving Agency
Orders the possibility of receiving better
execution prices.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not:
A. Significantly affect the protection
of investors or the public interest;
B. impose any significant burden on
competition; and
C. 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) of the
Act 9 and Rule 19b–4(f)(6) 10 thereunder.
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 will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
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:
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2017–018 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–CBOE–2017–018. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of 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–CBOE–
2017–018, and should be submitted on
or before March 30, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–04604 Filed 3–8–17; 8:45 am]
13157
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80148; File No. SR–MIAX–
2017–10]
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend Its Fee Schedule
March 3, 2017.
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 February 24, 2017, Miami
International Securities Exchange LLC
(‘‘MIAX Options’’ 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 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 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/rulefilings, 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.
Electronic Comments
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
1. Purpose
The Exchange proposes to amend the
Market Maker Sliding Scale (defined
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
1 15
10 17
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CFR 200.30–3(a)(12).
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2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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]]>Agencies
[Federal Register Volume 82, Number 45 (Thursday, March 9, 2017)]
[Notices]
[Pages 13155-13157]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-04604]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80152; File No. SR-CBOE-2017-018)]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change Related to the Automated Improvement Mechanism
March 3, 2017.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on February 23, 2017, Chicago Board Options Exchange,
Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities
and Exchange Commission (the ``Commission'') the proposed rule change
as described in Items I, II, and III below, which Items have been
prepared by the Exchange. The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange seeks to amend Rule 6.74A. The text of the proposed
rule change is provided below. (additions are italicized; deletions are
[bracketed])
* * * * *
Chicago Board Options Exchange, Incorporated Rules
* * * * *
Rule 6.74A. Automated Improvement Mechanism (``AIM'')
Notwithstanding the provisions of Rule 6.74, a Trading Permit
Holder that represents agency orders may electronically execute an
order it represents as agent (``Agency Order'') against principal
interest or against a solicited order provided it submits the Agency
Order for electronic execution into the AIM auction (``Auction'')
pursuant to this Rule.
(a) No change.
(b) Auction Process. Only one Auction may be ongoing at any given
time in a series and Auctions in the same series may not queue or
overlap in any manner. The Auction may not be cancelled and shall
proceed as follows:
(1) Auction Period and Request for Responses (RFRs).
(A) To initiate the Auction, the Initiating Trading Permit Holder
must mark the Agency Order for Auction processing, and specify (i) a
single price at which it seeks to cross the Agency Order (with
principal interest or a solicited order) (a ``single-price
submission''), including whether the Initiating Trading Permit Holder
elects to have last priority in allocation, [or] (ii) that it is
willing to automatically
[[Page 13156]]
match (``auto-match'') as principal the price and size of all Auction
responses up to an optional designated limit price in which case the
Agency Order will be stopped at the NBBO (if 50 standard option
contracts or 500 mini-option contracts or greater) or one cent/one
minimum increment better than the NBBO (if less than 50 standard option
contracts or 500 mini-option contracts), or (iii) the initial price at
which it seeks to cross the Agency Order (with principal interest or a
solicited order) and that it is willing to auto-match. Once the
Initiating Trading Permit Holder has submitted an Agency Order for
processing pursuant to this subparagraph, such submission may not be
modified or cancelled.
(B)-(I) No change.
(2)-(3) No change.
* * * * *
The text of the proposed rule change is also available on the
Exchange's Web site (https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange seeks to amend Rule 6.74A in order to allow a Trading
Permit Holder (``TPH'') to input an initial price when selecting the
auto-match feature in the Automated Improvement Mechanism (``AIM'').
In order to initiate an AIM auction a TPH must specify: (i) A
single price at which it seeks to cross the Agency Order (with
principal interest or a solicited order) (a ``single-price
submission''), including whether the Initiating Trading Permit Holder
elects to have last priority in allocation, (ii) that it is willing to
automatically match (``auto-match'') as principal the price and size of
all Auction responses up to an optional designated limit price in which
case the Agency Order will be stopped at the NBBO (if 50 standard
option contracts or 500 mini-option contracts or greater) or one cent/
one minimum increment better than the NBBO (if less than 50 standard
option contracts or 500 mini-option contracts). When a TPH specifies
the auto-match feature the TPH does not identify the initial stop
price. Instead, the Agency Order is automatically stopped at the NBBO
(if 50 standard option contracts or 500 mini-option contracts or
greater) or one cent/one minimum increment better than the NBBO (if
less than 50 standard option contracts or 500 mini-option contracts).
In order to allow TPHs to offer greater price improvement to Agency
Orders the Exchange is seeking to amend Rule 6.74A in order to allow
TPHs to specify the initial auction price when the TPH specifies the
auto-match feature.
Currently, if a TPH selects the auto-match feature and there are no
auction responses, the Agency Order will execute at either the NBBO (if
50 standard option contracts or 500 mini-option contracts or greater)
or one cent/one minimum increment better than the NBBO (if less than 50
standard option contracts or 500 mini-option contracts). In order to
allow price-improvement beyond the NBBO or beyond one cent/one minimum
increment better than the NBBO when there are no auction responses, the
Exchange is amending Rule 6.74A to allow a TPH to input an initial
auction price when using the auto-match feature. For example, consider
a TPH using the auto-match feature when the NBBO is 1.00-1.20 and the
Agency Order is to buy for 50 contracts or less. Currently, the Agency
Order is automatically stopped at 1.19. If there are no auction
responses the Agency Order will be executed at 1.19. This proposed
amendment will allow TPHs to specify the auto-match feature and specify
the initial auction price. Thus, in the above example, a TPH could
specify the initial auction price as 1.18 instead of 1.19, guaranteeing
price improvement beyond the NBBO improved by one minimum increment. If
any auction responses are received they would be processed in the same
manner as the current auto-match feature (i.e., Rule
6.74A(b)(1)(A)(ii)). Additionally, the Exchange notes that as provided
in Rule 6.74A(a) the Agency Order and contra order will be cancelled if
the initial auction price does not meet the conditions described in
paragraph (a) of Rule 6.74A.
The Exchange will announce the availability of the new feature via
Regulatory Circular at least 7 business days prior to the
implementation date. The implementation date will be within 120 days of
the operative date of this filing.
2. Statutory Basis
The The [sic] Exchange believes the proposed rule change is
consistent with the Securities Exchange Act of 1934 (the ``Act'') and
the rules and regulations thereunder applicable to the Exchange and, in
particular, the requirements of Section 6(b) of the Act.\5\
Specifically, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \6\ requirements that the rules of
an exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \7\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
\7\ Id.
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In particular, the proposed amendment will give TPHs initiating AIM
auctions the ability, when utilizing the auto-match feature, to
guarantee price improvement beyond the NBBO (if 50 standard option
contracts or 500 mini-option contracts or greater) or beyond one cent/
one minimum increment better than the NBBO (if less than 50 standard
option contracts or 500 mini-option contracts), which generally
protects investors and the public interest by giving Agency Orders the
possibility of receiving better execution prices. The Exchange also
notes that the proposed functionality is not unique as Nasdaq PHLX LLC
(``PHLX'') and Nasdaq BX, Inc. (``BX'') currently offer such
functionality.\8\
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\8\ See PHLX Rule 1080(n)(ii)(A)(1) and BX Rules at Chapter VI,
Section 9(ii)(A)(1).
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B. Self-Regulatory Organization's Statement on Burden on Competition
CBOE does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act because the
[[Page 13157]]
proposed amendment simply gives TPHs initiating AIM auctions the
ability, when utilizing the auto-match feature, to guarantee price
improvement beyond the NBBO (if 50 standard option contracts or 500
mini-option contracts or greater) or beyond one cent/one minimum
increment better than the NBBO (if less than 50 standard option
contracts or 500 mini-option contracts, which generally protects
investors and the public interest by giving Agency Orders the
possibility of receiving better execution prices.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
A. Significantly affect the protection of investors or the public
interest;
B. impose any significant burden on competition; and
C. 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) of the Act \9\ and
Rule 19b-4(f)(6) \10\ thereunder. 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 will institute proceedings to determine whether the proposed
rule change should be approved or disapproved.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
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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-CBOE-2017-018 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-CBOE-2017-018. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of 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-CBOE-2017-018, and should be
submitted on or before March 30, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-04604 Filed 3-8-17; 8:45 am]
BILLING CODE 8011-01-P
