Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Chapter VI, Section 5, 26201-26203 [2017-11608]
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26201
Federal Register / Vol. 82, No. 107 / Tuesday, June 6, 2017 / Notices
burden on competition that is
inappropriate in furtherance of the
purposes of the Act.
C. Clearing Agency’s Statement on
Comments on the Proposed Rule
Change, Received From Members,
Participants or Others
Written comments relating to the
proposed rule change have not been
solicited or received. ICC will notify the
Commission of any written comments
received by ICC.
III. Date of Effectiveness of the
Proposed Rule Change
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
(A) By order approve or disapprove
such proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be 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:
mstockstill on DSK30JT082PROD 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 SR–
ICC–2017–005 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–ICC–2017–005. 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, security-based swap
submission, or advance notice that are
filed with the Commission, and all
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Jkt 241001
written communications relating to the
proposed rule change, security-based
swap submission, or advance notice
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
filings will also be available for
inspection and copying at the principal
office of ICE Clear Credit and on ICE
Clear Credit’s Web site at https://
www.theice.com/clear-credit/regulation.
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–ICC–2017–005 and should
be submitted on or before June 27, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–11603 Filed 6–5–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80824; File No. SR–BX–
2017–026]
Self-Regulatory Organizations;
NASDAQ BX, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Chapter VI,
Section 5
May 31, 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 24,
2017, NASDAQ BX, Inc. (‘‘BX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I, 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.
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Chapter VI, Section 5 (Minimum
Increments),3 to extend through
December 31, 2017 or the date of
permanent approval, if earlier, the
Penny Pilot Program in options classes
in certain issues (‘‘Penny Pilot’’ or
‘‘Pilot’’), and to change the date when
delisted classes may be replaced in the
Penny Pilot.4
Proposed new language is underlined
and deleted text is in brackets.
*
*
*
*
*
NASDAQ BX Rules
Options Rules
*
*
*
*
*
Chapter VI Trading Systems
*
*
*
*
*
Sec. 5 Minimum Increments
(a) The Board may establish minimum
quoting increments for options contracts
traded on BX Options. Such minimum
increments established by the Board
will be designated as a stated policy,
practice, or interpretation with respect
to the administration of this Section
within the meaning of Section 19 of the
Exchange Act and will be filed with the
SEC as a rule change for effectiveness
upon filing. Until such time as the
Board makes a change in the
increments, the following principles
shall apply:
(1)–(2) No Change.
(3) For a pilot period scheduled to
expire on [June 30, 2017] December 31,
2017 or the date of permanent approval,
if earlier, if the options series is trading
pursuant to the Penny Pilot program one
(1) cent if the options series is trading
at less than $3.00, five (5) cents if the
options series is trading at $3.00 or
higher, unless for QQQQs, SPY and
IWM where the minimum quoting
increment will be one cent for all series
regardless of price. A list of such
3 References herein to Chapter and Series refer to
rules of the BX Options Market (‘‘BX Options’’),
unless otherwise noted.
4 The Penny Pilot was established in June 2012
and extended in 2016. See Securities Exchange Act
Release Nos. 67256 (June 26, 2012), 77 FR 39277
(July 2, 2012) (SR–BX–2012–030); 75326 (June 29,
2015), 80 FR 38481 (July 6, 2015) (SR–BX–2015–
037); 78036 (June 10, 2016), 81 FR 39308 (June 16,
2016) (SR–BX–2016–021) (notice of filing and
immediate effectiveness of a proposed rule change
relating to extension of the Exchange’s Penny Pilot
Program and replacement of Penny Pilot Issues that
have been delisted); and 79420 (November 29,
2016), 81 FR 87639 (December 5, 2016) (SR–BX–
2016–062) (notice of filing and immediate
effectiveness of proposed rule change to amend
Chapter VI, Section 5 to extend the Penny Pilot
Program).
E:\FR\FM\06JNN1.SGM
06JNN1
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Federal Register / Vol. 82, No. 107 / Tuesday, June 6, 2017 / Notices
options shall be communicated to
membership via an Options Trader Alert
(‘‘OTA’’) posted on the Exchange’s web
site.
The Exchange may replace any pilot
issues that have been delisted with the
next most actively traded multiply
listed options classes that are not yet
included in the pilot, based on trading
activity in the previous six months. The
replacement issues may be added to the
pilot on the second trading day
following [January 1, 2017] July 1, 2017.
(4) No Change.
(b) No Change.
*
*
*
*
*
The text of the proposed rule change
is also available on the Exchange’s
website at https://
nasdaqomxbx.cchwallstreet.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
mstockstill on DSK30JT082PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to amend
Chapter VI, Section 5, to extend the
Penny Pilot through December 31, 2017
or the date of permanent approval, if
earlier,5 and to change the date when
delisted classes may be replaced in the
Penny Pilot. The Exchange believes that
extending the Penny Pilot will allow for
further analysis of the Penny Pilot and
a determination of how the program
should be structured in the future.
Under the Penny Pilot, the minimum
price variation for all participating
options classes, except for the Nasdaq100 Index Tracking Stock (‘‘QQQQ’’),
the SPDR S&P 500 Exchange Traded
Fund (‘‘SPY’’) and the iShares Russell
5 The options exchanges in the U.S. that have
pilot programs similar to the Penny Pilot (together
‘‘pilot programs’’) are currently working on a
proposal for permanent approval of the respective
pilot programs.
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2000 Index Fund (‘‘IWM’’), is $0.01 for
all quotations in options series that are
quoted at less than $3 per contract and
$0.05 for all quotations in options series
that are quoted at $3 per contract or
greater. QQQQ, SPY and IWM are
quoted in $0.01 increments for all
options series. The Penny Pilot is
currently scheduled to expire on June
30, 2017.
The Exchange proposes to extend the
time period of the Penny Pilot through
December 31, 2017 or the date of
permanent approval, if earlier, and to
provide a revised date for adding
replacement issues to the Penny Pilot.
The Exchange proposes that any Penny
Pilot Program issues that have been
delisted may be replaced on the second
trading day following July 1, 2017. The
replacement issues will be selected
based on trading activity in the previous
six months.6
This filing does not propose any
substantive changes to the Penny Pilot
Program; all classes currently
participating in the Penny Pilot will
remain the same and all minimum
increments will remain unchanged. The
Exchange believes the benefits to public
customers and other market participants
who will be able to express their true
prices to buy and sell options have been
demonstrated to outweigh the potential
increase in quote traffic.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,7 in general, and furthers the
objectives of Section 6(b)(5) of the Act,8
in particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, and to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
In particular, the proposed rule
change, which extends the Penny Pilot
6 The replacement issues will be announced to
the Exchange’s membership via an Options Trader
Alert (OTA) posted on the Exchange’s Web site.
Penny Pilot replacement issues will be selected
based on trading activity in the previous six
months, as is the case today. The replacement
issues would be identified based on The Options
Clearing Corporation’s trading volume data. For
example, for the July replacement, trading volume
from December 1, 2016 through May 31, 2017
would be analyzed. The month immediately
preceding the replacement issues’ addition to the
Pilot Program (i.e., June) would not be used for
purposes of the six-month analysis.
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
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for an additional six months through
December 31, 2017 or the date of
permanent approval, if earlier, and
changes the date for replacing Penny
Pilot issues that were delisted to the
second trading day following July 1,
2017, will enable public customers and
other market participants to express
their true prices to buy and sell options
for the benefit of all market participants.
This is consistent with the Act.
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, this proposal is procompetitive because it allows Penny
Pilot issues to continue trading on the
Exchange.
Moreover, the Exchange believes that
the proposed rule change will allow for
further analysis of the Pilot and a
determination of how the Pilot should
be structured in the future; and will
serve to promote regulatory clarity and
consistency, thereby reducing burdens
on the marketplace and facilitating
investor protection.
The Pilot is an industry-wide
initiative supported by all other option
exchanges. The Exchange believes that
extending the Pilot will allow for
continued competition between market
participants on the Exchange trading
similar products as their counterparts
on other exchanges, while at the same
time allowing the Exchange to continue
to compete for order flow with other
exchanges in option issues trading as
part of the Pilot.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 9 and
9 15
E:\FR\FM\06JNN1.SGM
U.S.C. 78s(b)(3)(A)(iii).
06JNN1
Federal Register / Vol. 82, No. 107 / Tuesday, June 6, 2017 / Notices
subparagraph (f)(6) of Rule 19b–4
thereunder.10
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) 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:
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly.
All submissions should refer to File
Number SR–BX–2017–026 and should
be submitted on or before June 27, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–11608 Filed 6–5–17; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rule-comments@
sec.gov. Please include File Number SR–
BX–2017–026 on the subject line.
mstockstill on DSK30JT082PROD with NOTICES
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–BX–2017–026. This file
number should be included on the
subject line if e-mail 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 website
(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 website viewing and
printing in the Commission’s Public
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 Exchange has satisfied this
requirement.
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20:52 Jun 05, 2017
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SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold a closed meeting
on Thursday, June 8, 2017 at 2 p.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (7), 9(B) and (10)
and 17 CFR 200.402(a)(3), (a)(5), (a)(7),
(a)(9)(ii) and (a)(10), permit
consideration of the scheduled matter at
the closed meeting.
Commissioner Stein, as duty officer,
voted to consider the items listed for the
closed meeting in closed session.
The subject matter of the closed
meeting will be:
Institution and settlement of
injunctive actions;
Institution and settlement of
administrative proceedings;
Consideration of amici participation;
and
Other matters relating to enforcement
proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed; please
contact Brent J. Fields from the Office of
the Secretary at (202) 551–5400.
Dated: June 1, 2017.
Lynn M. Powalski,
Deputy Secretary.
[FR Doc. 2017–11769 Filed 6–2–17; 11:15 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80826; File No. SR–GEMX–
2017–21]
Self-Regulatory Organizations; Nasdaq
GEMX, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend a Pilot
Program To Quote and To Trade
Certain Options Classes in Penny
Increments
May 31, 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 25,
2017, Nasdaq GEMX, LLC (‘‘GEMX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘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 extend a
pilot program to quote and to trade
certain options classes in penny
increments (‘‘Penny Pilot Program’’).
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
1 15
11 17
PO 00000
CFR 200.30–3(a)(12).
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26203
2 17
E:\FR\FM\06JNN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
06JNN1
Agencies
[Federal Register Volume 82, Number 107 (Tuesday, June 6, 2017)]
[Notices]
[Pages 26201-26203]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-11608]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80824; File No. SR-BX-2017-026]
Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Chapter
VI, Section 5
May 31, 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 24, 2017, NASDAQ BX, Inc. (``BX'' or ``Exchange'') filed with
the Securities and Exchange Commission (``SEC'' or ``Commission'') the
proposed rule change as described in Items I, 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Chapter VI, Section 5 (Minimum
Increments),\3\ to extend through December 31, 2017 or the date of
permanent approval, if earlier, the Penny Pilot Program in options
classes in certain issues (``Penny Pilot'' or ``Pilot''), and to change
the date when delisted classes may be replaced in the Penny Pilot.\4\
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\3\ References herein to Chapter and Series refer to rules of
the BX Options Market (``BX Options''), unless otherwise noted.
\4\ The Penny Pilot was established in June 2012 and extended in
2016. See Securities Exchange Act Release Nos. 67256 (June 26,
2012), 77 FR 39277 (July 2, 2012) (SR-BX-2012-030); 75326 (June 29,
2015), 80 FR 38481 (July 6, 2015) (SR-BX-2015-037); 78036 (June 10,
2016), 81 FR 39308 (June 16, 2016) (SR-BX-2016-021) (notice of
filing and immediate effectiveness of a proposed rule change
relating to extension of the Exchange's Penny Pilot Program and
replacement of Penny Pilot Issues that have been delisted); and
79420 (November 29, 2016), 81 FR 87639 (December 5, 2016) (SR-BX-
2016-062) (notice of filing and immediate effectiveness of proposed
rule change to amend Chapter VI, Section 5 to extend the Penny Pilot
Program).
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Proposed new language is underlined and deleted text is in
brackets.
* * * * *
NASDAQ BX Rules
Options Rules
* * * * *
Chapter VI Trading Systems
* * * * *
Sec. 5 Minimum Increments
(a) The Board may establish minimum quoting increments for options
contracts traded on BX Options. Such minimum increments established by
the Board will be designated as a stated policy, practice, or
interpretation with respect to the administration of this Section
within the meaning of Section 19 of the Exchange Act and will be filed
with the SEC as a rule change for effectiveness upon filing. Until such
time as the Board makes a change in the increments, the following
principles shall apply:
(1)-(2) No Change.
(3) For a pilot period scheduled to expire on [June 30, 2017]
December 31, 2017 or the date of permanent approval, if earlier, if the
options series is trading pursuant to the Penny Pilot program one (1)
cent if the options series is trading at less than $3.00, five (5)
cents if the options series is trading at $3.00 or higher, unless for
QQQQs, SPY and IWM where the minimum quoting increment will be one cent
for all series regardless of price. A list of such
[[Page 26202]]
options shall be communicated to membership via an Options Trader Alert
(``OTA'') posted on the Exchange's web site.
The Exchange may replace any pilot issues that have been delisted
with the next most actively traded multiply listed options classes that
are not yet included in the pilot, based on trading activity in the
previous six months. The replacement issues may be added to the pilot
on the second trading day following [January 1, 2017] July 1, 2017.
(4) No Change.
(b) No Change.
* * * * *
The text of the proposed rule change is also available on the
Exchange's website at https://nasdaqomxbx.cchwallstreet.com, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to amend Chapter VI, Section 5, to
extend the Penny Pilot through December 31, 2017 or the date of
permanent approval, if earlier,\5\ and to change the date when delisted
classes may be replaced in the Penny Pilot. The Exchange believes that
extending the Penny Pilot will allow for further analysis of the Penny
Pilot and a determination of how the program should be structured in
the future.
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\5\ The options exchanges in the U.S. that have pilot programs
similar to the Penny Pilot (together ``pilot programs'') are
currently working on a proposal for permanent approval of the
respective pilot programs.
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Under the Penny Pilot, the minimum price variation for all
participating options classes, except for the Nasdaq-100 Index Tracking
Stock (``QQQQ''), the SPDR S&P 500 Exchange Traded Fund (``SPY'') and
the iShares Russell 2000 Index Fund (``IWM''), is $0.01 for all
quotations in options series that are quoted at less than $3 per
contract and $0.05 for all quotations in options series that are quoted
at $3 per contract or greater. QQQQ, SPY and IWM are quoted in $0.01
increments for all options series. The Penny Pilot is currently
scheduled to expire on June 30, 2017.
The Exchange proposes to extend the time period of the Penny Pilot
through December 31, 2017 or the date of permanent approval, if
earlier, and to provide a revised date for adding replacement issues to
the Penny Pilot. The Exchange proposes that any Penny Pilot Program
issues that have been delisted may be replaced on the second trading
day following July 1, 2017. The replacement issues will be selected
based on trading activity in the previous six months.\6\
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\6\ The replacement issues will be announced to the Exchange's
membership via an Options Trader Alert (OTA) posted on the
Exchange's Web site. Penny Pilot replacement issues will be selected
based on trading activity in the previous six months, as is the case
today. The replacement issues would be identified based on The
Options Clearing Corporation's trading volume data. For example, for
the July replacement, trading volume from December 1, 2016 through
May 31, 2017 would be analyzed. The month immediately preceding the
replacement issues' addition to the Pilot Program (i.e., June) would
not be used for purposes of the six-month analysis.
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This filing does not propose any substantive changes to the Penny
Pilot Program; all classes currently participating in the Penny Pilot
will remain the same and all minimum increments will remain unchanged.
The Exchange believes the benefits to public customers and other market
participants who will be able to express their true prices to buy and
sell options have been demonstrated to outweigh the potential increase
in quote traffic.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\7\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\8\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system and, in general, to protect
investors and the public interest.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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In particular, the proposed rule change, which extends the Penny
Pilot for an additional six months through December 31, 2017 or the
date of permanent approval, if earlier, and changes the date for
replacing Penny Pilot issues that were delisted to the second trading
day following July 1, 2017, will enable public customers and other
market participants to express their true prices to buy and sell
options for the benefit of all market participants. This is consistent
with the Act.
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, this proposal
is pro-competitive because it allows Penny Pilot issues to continue
trading on the Exchange.
Moreover, the Exchange believes that the proposed rule change will
allow for further analysis of the Pilot and a determination of how the
Pilot should be structured in the future; and will serve to promote
regulatory clarity and consistency, thereby reducing burdens on the
marketplace and facilitating investor protection.
The Pilot is an industry-wide initiative supported by all other
option exchanges. The Exchange believes that extending the Pilot will
allow for continued competition between market participants on the
Exchange trading similar products as their counterparts on other
exchanges, while at the same time allowing the Exchange to continue to
compete for order flow with other exchanges in option issues trading as
part of the Pilot.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \9\ and
[[Page 26203]]
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 Exchange has satisfied this requirement.
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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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) 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 e-mail to rule-comments@sec.gov. Please include
File Number SR-BX-2017-026 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-BX-2017-026. This file
number should be included on the subject line if e-mail 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 website (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 website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly.
All submissions should refer to File Number SR-BX-2017-026 and
should be submitted on or before June 27, 2017.
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\11\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-11608 Filed 6-5-17; 8:45 am]
BILLING CODE 8011-01-P