Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Market-Maker Reports of Executed Orders, 25034-25035 [2017-11148]

Download as PDF 25034 Federal Register / Vol. 82, No. 103 / Wednesday, May 31, 2017 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80759; File No. SR–C2– 2017–019] Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Market-Maker Reports of Executed Orders May 24, 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 May 15, 2017, C2 Options Exchange, Incorporated (the ‘‘Exchange’’ or ‘‘C2’’) 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 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Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend outdated rule language contained in Rule 8.7(b) related to Market-Maker reports of orders. The text of the proposed rule change is available on the Exchange’s Web site (http://www.cboe. com/AboutCBOE/CBOELegalRegulatory Home.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 nlaroche on DSK30NT082PROD with NOTICES 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 C2 Rule 8.7(b) currently provides that: 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 14:54 May 30, 2017 Jkt 241001 ‘‘Each Market-Maker shall, in the prescribed form, report to the Exchange every order entered by the MarketMaker for the purchase or sale of (i) a security underlying options traded on the Exchange, or (ii) a security convertible into or exchangeable for such underlying security, as well as opening and closing positions in all such securities held in each account reported pursuant to paragraph (a) of this Rule. The report pertaining to orders must include the terms of each order, identification of the brokerage firms through which the orders were entered, the times of entry or cancellation, the times report of execution were received and, if all or part of the order was executed, the quantity and execution price.’’ The Exchange is amending Rule 8.7(b) so that it is substantially similar to that of the International Securities Exchange, LLC [sic] (‘‘ISE’’); ISE Gemini, LLC [sic] (‘‘ISE Gemini’’); BATS Options Market (‘‘BZX’’); BOX Options Exchange, LLC (‘‘BOX’); NASDAQ Options Market (‘‘NOM’’); and NASDAQ OMX BX, Inc. (‘‘BX’’).3 As a result of the rule change, MarketMakers will no longer be required to submit daily reports of orders entered and/or opening and closing positions in underlying securities. Instead, the proposed rule will provide that orders, entered by Market-Makers for the purchase of (i) a security underlying options on the Exchange, or (ii) a security convertible into or exchangeable for such underlying security, as well as opening and closing positions in all such securities shall be provided to the Exchange by MarketMakers upon request in a form prescribed by the Exchange. The obligation to provide order and position reports will only be required on an as needed basis. The Exchange believes current Rule 8.7(b) is outdated and operationally obsolete. The Exchange does not currently use the daily order and position reports from Market-Makers. The daily order and position reports from Market-Makers are no longer needed to conduct any routine regulatory surveillances or examinations or fulfill any other of the Exchange’s regulatory obligations. Any regulatory surveillance or examination that previously used the daily order and position reports can be operated without the information due to the development of effective workarounds. As such, the 3 See ISE Rule 807(b); ISE Gemini Rule 807(b); BZX Rule 22.7(b); BOX Rule 8060(b), NOM Rules Chapter 7, Section 7(b); BX Rules Chapter 7, Section 7(b). PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 rule, as currently written, presents an undue burden on Market-Makers. 2. Statutory Basis The 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.4 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 5 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) 6 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. In particular, the Exchange believes the proposed rule change removes impediments and perfects the mechanism of a free and open market by amending obsolete rule requirements related to daily order and position reports provided to the Exchange by Market-Makers. The daily order and position reports are no longer needed in the normal course of the Exchange fulfilling its regulatory responsibilities. In the event order or position information related to Market-Maker activity in securities underlying options traded on the exchange is needed, the proposed rule provides that MarketMakers must provide those reports to the Exchange upon request. In addition, the proposed rule change is substantially similar to rules of other options exchanges.7 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 proposed rule raises neither intermarket nor intermarket competition issues, as it 4 15 5 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 6 Id. 7 See E:\FR\FM\31MYN1.SGM supra note 1 [sic]. 31MYN1 Federal Register / Vol. 82, No. 103 / Wednesday, May 31, 2017 / Notices relates to the submission of reports to the Exchange for regulatory purposes. The proposed rule amends obsolete rule language. The daily order and position reports from Market-Makers are no longer needed to conduct any routine regulatory surveillances or examinations or fulfill any other of the Exchange’s regulatory obligations. The proposed rule change removes this undue burden on Market-Makers and replaces it with a requirement substantially similar to that of other options exchanges.8 The proposed requirement will apply to equally to all Market-Makers on the Exchange. 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: (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) 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. 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: nlaroche on DSK30NT082PROD with NOTICES 8 Id. 9 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6)(iii). As required under Rule 19b–4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of 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. 10 17 VerDate Sep<11>2014 14:54 May 30, 2017 Jkt 241001 Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– C2–2017–019 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–C2–2017–019. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–C2– 2017–019 and should be submitted on or before June 21, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–11148 Filed 5–30–17; 8:45 am] BILLING CODE 8011–01–P 11 17 PO 00000 CFR 200.30–3(a)(12). Frm 00102 Fmt 4703 Sfmt 4703 25035 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80761; File No. SR–GEMX– 2017–16] Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Cancel and Replace Rule May 24, 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 May 11, 2017, Nasdaq GEMX, LLC (‘‘GEMX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the 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 proposes to conform its cancel and replace rule change with that of Nasdaq ISE, LLC (‘‘ISE’’) which was recently filed.3 The text of the proposed rule change is available on the Exchange’s Web site at www.ise.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 80432 (April 11, 2017), 82 FR 18191 (April 17, 2017) (SR– ISE–2017–03) (Order Approving Proposed Rule Change, as Modified by Amendment No. 1, to Amend Various Rules in Connection with a System Migration to Nasdaq INET Technology). 2 17 E:\FR\FM\31MYN1.SGM 31MYN1

Agencies

[Federal Register Volume 82, Number 103 (Wednesday, May 31, 2017)]
[Notices]
[Pages 25034-25035]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-11148]



[[Page 25034]]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80759; File No. SR-C2-2017-019]


Self-Regulatory Organizations; C2 Options Exchange, Incorporated; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating To Market-Maker Reports of Executed Orders

May 24, 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 May 15, 2017, C2 Options Exchange, Incorporated (the 
``Exchange'' or ``C2'') 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 
Exchange. The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend outdated rule language contained in 
Rule 8.7(b) related to Market-Maker reports of orders. The text of the 
proposed rule change is available on the Exchange's Web site (http://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
    C2 Rule 8.7(b) currently provides that:

``Each Market-Maker shall, in the prescribed form, report to the 
Exchange every order entered by the Market-Maker for the purchase or 
sale of (i) a security underlying options traded on the Exchange, or 
(ii) a security convertible into or exchangeable for such underlying 
security, as well as opening and closing positions in all such 
securities held in each account reported pursuant to paragraph (a) of 
this Rule. The report pertaining to orders must include the terms of 
each order, identification of the brokerage firms through which the 
orders were entered, the times of entry or cancellation, the times 
report of execution were received and, if all or part of the order was 
executed, the quantity and execution price.''

    The Exchange is amending Rule 8.7(b) so that it is substantially 
similar to that of the International Securities Exchange, LLC [sic] 
(``ISE''); ISE Gemini, LLC [sic] (``ISE Gemini''); BATS Options Market 
(``BZX''); BOX Options Exchange, LLC (``BOX'); NASDAQ Options Market 
(``NOM''); and NASDAQ OMX BX, Inc. (``BX'').\3\
---------------------------------------------------------------------------

    \3\ See ISE Rule 807(b); ISE Gemini Rule 807(b); BZX Rule 
22.7(b); BOX Rule 8060(b), NOM Rules Chapter 7, Section 7(b); BX 
Rules Chapter 7, Section 7(b).
---------------------------------------------------------------------------

    As a result of the rule change, Market-Makers will no longer be 
required to submit daily reports of orders entered and/or opening and 
closing positions in underlying securities. Instead, the proposed rule 
will provide that orders, entered by Market-Makers for the purchase of 
(i) a security underlying options on the Exchange, or (ii) a security 
convertible into or exchangeable for such underlying security, as well 
as opening and closing positions in all such securities shall be 
provided to the Exchange by Market-Makers upon request in a form 
prescribed by the Exchange. The obligation to provide order and 
position reports will only be required on an as needed basis.
    The Exchange believes current Rule 8.7(b) is outdated and 
operationally obsolete. The Exchange does not currently use the daily 
order and position reports from Market-Makers. The daily order and 
position reports from Market-Makers are no longer needed to conduct any 
routine regulatory surveillances or examinations or fulfill any other 
of the Exchange's regulatory obligations. Any regulatory surveillance 
or examination that previously used the daily order and position 
reports can be operated without the information due to the development 
of effective workarounds. As such, the rule, as currently written, 
presents an undue burden on Market-Makers.
2. Statutory Basis
    The 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.\4\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \5\ 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) \6\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ Id.
---------------------------------------------------------------------------

    In particular, the Exchange believes the proposed rule change 
removes impediments and perfects the mechanism of a free and open 
market by amending obsolete rule requirements related to daily order 
and position reports provided to the Exchange by Market-Makers. The 
daily order and position reports are no longer needed in the normal 
course of the Exchange fulfilling its regulatory responsibilities. In 
the event order or position information related to Market-Maker 
activity in securities underlying options traded on the exchange is 
needed, the proposed rule provides that Market-Makers must provide 
those reports to the Exchange upon request. In addition, the proposed 
rule change is substantially similar to rules of other options 
exchanges.\7\
---------------------------------------------------------------------------

    \7\ See supra note 1 [sic].
---------------------------------------------------------------------------

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 proposed rule raises 
neither intermarket nor intermarket competition issues, as it

[[Page 25035]]

relates to the submission of reports to the Exchange for regulatory 
purposes. The proposed rule amends obsolete rule language. The daily 
order and position reports from Market-Makers are no longer needed to 
conduct any routine regulatory surveillances or examinations or fulfill 
any other of the Exchange's regulatory obligations. The proposed rule 
change removes this undue burden on Market-Makers and replaces it with 
a requirement substantially similar to that of other options 
exchanges.\8\ The proposed requirement will apply to equally to all 
Market-Makers on the Exchange.
---------------------------------------------------------------------------

    \8\ Id.
---------------------------------------------------------------------------

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: (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) 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of 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.
---------------------------------------------------------------------------

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-C2-2017-019 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-C2-2017-019. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-C2-2017-019 and should be 
submitted on or before June 21, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-11148 Filed 5-30-17; 8:45 am]
BILLING CODE 8011-01-P