Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the SPY Pilot Program, 32404-32406 [2017-14660]
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Federal Register / Vol. 82, No. 133 / Thursday, July 13, 2017 / Notices
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
BILLING CODE 8011–01–P
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
BOX–2017–22 on the subject line.
sradovich on DSK3GMQ082PROD with NOTICES
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–BOX–2017–22. 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–BOX–
18:49 Jul 12, 2017
Jkt 241001
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–14661 Filed 7–12–17; 8:45 am]
IV. Solicitation of Comments
VerDate Sep<11>2014
2017–22, and should be submitted on or
before August 3, 2017.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81091; File No. SR–Phlx–
2017–52]
Self-Regulatory Organizations;
NASDAQ PHLX LLC; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Extend the
SPY Pilot Program
July 7, 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 June 29,
2017, NASDAQ PHLX LLC (‘‘Phlx’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘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 the Substance
of the Proposed Rule Change
The Exchange proposes to extend for
another twelve (12) month time period
the pilot program to eliminate position
limits for options on the SPDR® S&P
500® exchange-traded fund (‘‘SPY ETF’’
or ‘‘SPY’’),3 which list and trade under
the symbol SPY (‘‘SPY Pilot Program’’).
The text of the proposed rule change
is available on the Exchange’s Web site
at https://nasdaqphlx.cchwallstreet.
com/, at the principal office of the
Exchange, and at the Commission’s
Public Reference Room.
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 ‘‘SPDR®,’’ ‘‘Standard & Poor’s®,’’ ‘‘S&P®,’’ ‘‘S&P
500®,’’ and ‘‘Standard & Poor’s 500’’ are registered
trademarks of Standard & Poor’s Financial Services
LLC. The SPY ETF represents ownership in the
SPDR S&P 500 Trust, a unit investment trust that
generally corresponds to the price and yield
performance of the SPDR S&P 500 Index.
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10 17
1 15
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Fmt 4703
Sfmt 4703
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 the proposed rule
change is to amend the Rule 1001
(Position Limits), to extend the current
pilot which expires on July 12, 2017 for
an additional twelve (12) month time
period to July 12, 2018 (‘‘Extended
Pilot’’). This filing does not propose any
substantive changes to the SPY Pilot
Program. In proposing to extend the
SPY Pilot Program, the Exchange
reaffirms its consideration of several
factors that supported the original
proposal of the SPY Pilot Program,
including (1) the availability of
economically equivalent products and
their respective position limits; (2) the
liquidity of the option and the
underlying security; (3) the market
capitalization of the underlying security
and the related index; (4) the reporting
of large positions and requirements
surrounding margin; and (5) the
potential for market on close volatility.
With this proposal, the Exchange
submits the SPY report to the
Commission, which report reflects,
during the time period from May 2016
through May 2017, the trading of
standardized SPY options with no
position limits consistent with option
exchange provisions.4 The report was
prepared in the manner specified in the
Exchange’s prior rule filing extending
the SPY Pilot Program.5 The Exchange
notes that it is unaware of any problems
created by the SPY Pilot Program and
does not foresee any as a result of the
proposed extension. The proposed
extension will allow the Exchange and
the Commission additional time to
4 The
report is attached as Exhibit 3 [sic].
Securities Exchange Act Release No. 78124
(June 22, 2016), 81 FR 42008 (June 28, 2016) (SR–
PHLX–2016–68).
5 See
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Federal Register / Vol. 82, No. 133 / Thursday, July 13, 2017 / Notices
sradovich on DSK3GMQ082PROD with NOTICES
further evaluate the pilot program and
its effect on the market.
As with the original proposal to
establish the SPY Pilot Program, the
Exchange represents that a SPY Pilot
Report will be submitted at least thirty
(30) days before the end of the Extended
Pilot and would analyze that period.
The Pilot Report will detail the size and
different types of strategies employed
with respect to positions established as
a result of the elimination of position
limits in SPY. In addition, the report
will note whether any problems resulted
due to the no limit approach and any
other information that may be useful in
evaluating the effectiveness of the
Extended Pilot. The Pilot Report will
compare the impact of the SPY Pilot
Program, if any, on the volumes of SPY
options and the volatility in the price of
the underlying SPY shares, particularly
at expiration during the Extended Pilot.
In preparing the report the Exchange
will utilize various data elements such
as volume and open interest. In addition
the Exchange will make available to
Commission staff data elements relating
to the effectiveness of the SPY Pilot
Program. Conditional on the findings in
the SPY Pilot Report, the Exchange will
file with the Commission a proposal to
extend the pilot program, adopt the
pilot program on a permanent basis or
terminate the pilot. If the SPY Pilot
Program is not extended or adopted on
a permanent basis by the expiration of
the Extended Pilot, the position limits
for SPY options would revert to limits
in effect prior to the commencement of
the SPY Pilot Program.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 6 in general, and furthers the
objectives of Section 6(b)(5) of the Act 7
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, 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.
The Exchange believes that the
proposed rule change would be
beneficial to market participants,
including market makers, institutional
investors and retail investors, by
permitting them to establish greater
positions when pursuing their
6 15
7 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
VerDate Sep<11>2014
17:41 Jul 12, 2017
Jkt 241001
investment goals and needs. The
Exchange also believes that
economically equivalent products
should be treated in an equivalent
manner so as to avoid regulatory
arbitrage, especially with respect to
position limits. Treating SPY and SPX
options differently by virtue of imposing
different position limits is inconsistent
with the notion of promoting just and
equitable principles of trade and
removing impediments to perfect the
mechanisms of a free and open market.
At the same time, the Exchange believes
that the elimination of position limits
for SPY options would not increase
market volatility or facilitate the ability
to manipulate the market.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
In this regard, the Exchange notes that
the rule change is being proposed as a
competitive response to similar filings
that the Exchange expects to be filed by
other options exchanges. The Exchange
believes this proposed rule change is
necessary to permit fair competition
among the options exchanges and to
establish uniform position limits for a
multiply listed options class.
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) of the Act and Rule 19b–
4(f)(6) thereunder.8
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 9 normally does not become
operative for 30 days after the date of its
8 17 CFR 240.19b–4(f)(6). 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.
9 17 CFR 240.19b–4(f)(6).
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
32405
filing. However, Rule 19b–4(f)(6)(iii) 10
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The Exchange has asked
the Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Exchange believes that
waiver of the operative delay is
consistent with the protection of
investors and the public interest
because it will allow the SPY Pilot
Program to continue without
interruption. The Commission believes
that waiving the 30-day operative delay
is consistent with the protection of
investors and the public interest.
Therefore, the Commission hereby
waives the operative delay and
designates the proposed rule change
operative upon filing.11
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
Phlx–2017–52 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–Phlx–2017–52. 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
10 17
CFR 240.19b–4(f)(6)(iii).
purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
11 For
E:\FR\FM\13JYN1.SGM
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32406
Federal Register / Vol. 82, No. 133 / Thursday, July 13, 2017 / Notices
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–Phlx–
2017–52, and should be submitted on or
before August 3, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–14660 Filed 7–12–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81096; File No. SR–DTC–
2017–011]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Require
Agents To Use the Automated Tender
Offer Program To Process Consent
Solicitations for Book-Entry Only
Securities
sradovich on DSK3GMQ082PROD with NOTICES
July 7, 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 June 30,
2017, The Depository Trust Company
(‘‘DTC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Sep<11>2014
17:41 Jul 12, 2017
Jkt 241001
in Items I, II and III below, which Items
have been prepared by DTC. DTC filed
the proposed rule change pursuant to
Section 19(b)(3)(A) 3 of the Act and Rule
19b–4(f)(6) 4 thereunder. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change by DTC
would amend the Reorganizations
Service Guide (‘‘Guide’’) 5 and the OA to
establish the requirement that tabulation
agents (‘‘Agents’’) 6 use the DTC
Automated Tender Offer Program
(‘‘ATOP’’) to process ATOP-eligible
consent solicitation events (‘‘Consent
Solicitations’’) 7 for book-entry-only
Securities for which DTC holds the
entire amount of the issue (‘‘BEO
Securities’’) 8 including those in DTC’s
Fast Automated Securities Transfer
program (‘‘FAST’’).9 The Guide would
also be amended to (i) reflect DTC’s
existing criteria for processing Consent
Solicitations through ATOP, (ii) expand
the use of ATOP to Consent
Solicitations where blocking 10 is not
required, and (iii) make ministerial
changes to the Guide, as further
described below.
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
5 Each capitalized term not otherwise defined
herein has the meaning set forth in the Rules, ByLaws and Organization Certificate of DTC (the
‘‘Rules’’), available at https://www.dtcc.com/legal/
rules-and-procedures.aspx; the Guide, available at
https://www.dtcc.com/∼/media/Files/Downloads/
legal/service-guides/Reorganizations.pdf; and in the
DTC Operational Arrangements (Necessary for
Securities to Become and Remain Eligible for DTC
Services)(‘‘OA’’), available at https://www.dtcc.com/
∼/media/Files/Downloads/legal/issue-eligibility/
eligibility/operational-arrangements.pdf.
6 A tabulation agent is an agent designated by the
soliciting party to coordinate the process of
collecting consents.
7 See discussion infra 6–7.
8 There are some book-entry-only Securities for
which DTC, through its nominee, Cede & Co.
(‘‘Cede’’) is not the sole registered holder and
holder of 100 percent of the issue, for example, if
the Security is listed dually in the United States
and another country. The proposed rule change
does not apply to such Securities.
9 BEO Securities are Eligible Securities for which
(i) physical certificates are not available to investors
and (ii) DTC, through Cede, holds the entire amount
of the of the issue, either at DTC or through a FAST
Agent in DTC’s FAST program. BEO Securities are
evidenced by one or more Global Certificates held
at DTC or a FAST balance certificate, as applicable,
representing the entire amount of the issue.
10 To block securities, in this context, means to
restrict transfer of Securities credited to the
Account of a Participant as to which consent has
been submitted (‘‘Blocking’’).
PO 00000
3 15
4 17
Frm 00091
Fmt 4703
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II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission,
DTC 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. DTC has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
1. Purpose
The proposal would amend the Guide
and the OA to establish the requirement
that Agents use ATOP to process
Consent Solicitations for BEO
Securities. The Guide would also be
amended to (i) reflect DTC’s existing
criteria for processing Consent
Solicitations through ATOP, (ii) expand
the use of ATOP to Consent
Solicitations where Blocking is not
required, and (iii) make ministerial
changes to the Guide.
Background
A. Consent Solicitations
A Consent Solicitation is a request
made for the affirmative consent of
holders of securities pursuant to an
indenture (‘‘Holders’’), to change the
terms of such indenture.11 In order to be
processed through DTC, a consent
solicitation cannot be linked to a
security holder meeting, vote, or call for
the objection of Holders while deeming
those who do not object as consenting
(a ‘‘Negative Consent’’).
B. Consent Solicitations Processed
Outside of DTC
If a Consent Solicitation is not
processed through ATOP, but rather is
processed outside of DTC, the Agent
sends a Consent Solicitation
memorandum outlining the terms of the
offer to the registered Holders. Cede, as
a registered Holder of the subject
security, will provide the Agent with a
listing of Participants to whose
Accounts the Securities are credited,
together with an omnibus proxy for
11 In this context, the term ‘‘indenture’’ means
any mortgage, deed of trust, trust or other
indenture, or similar instrument or agreement
(including any supplement or amendment to any of
the foregoing), under which securities are
outstanding or are to be issued, whether or not any
property, real or personal, is, or is to be, pledged,
mortgaged, assigned, or conveyed thereunder. 15
U.S.C. 77ccc (7).
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]]>Agencies
[Federal Register Volume 82, Number 133 (Thursday, July 13, 2017)]
[Notices]
[Pages 32404-32406]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-14660]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-81091; File No. SR-Phlx-2017-52]
Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Extend the SPY
Pilot Program
July 7, 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 June 29, 2017, NASDAQ PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``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 the
Substance of the Proposed Rule Change
The Exchange proposes to extend for another twelve (12) month time
period the pilot program to eliminate position limits for options on
the SPDR[supreg] S&P 500[supreg] exchange-traded fund (``SPY ETF'' or
``SPY''),\3\ which list and trade under the symbol SPY (``SPY Pilot
Program'').
---------------------------------------------------------------------------
\3\ ``SPDR[supreg],'' ``Standard & Poor's[supreg],''
``S&P[supreg],'' ``S&P 500[supreg],'' and ``Standard & Poor's 500''
are registered trademarks of Standard & Poor's Financial Services
LLC. The SPY ETF represents ownership in the SPDR S&P 500 Trust, a
unit investment trust that generally corresponds to the price and
yield performance of the SPDR S&P 500 Index.
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaqphlx.cchwallstreet.com/ 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 the proposed rule change is to amend the Rule 1001
(Position Limits), to extend the current pilot which expires on July
12, 2017 for an additional twelve (12) month time period to July 12,
2018 (``Extended Pilot''). This filing does not propose any substantive
changes to the SPY Pilot Program. In proposing to extend the SPY Pilot
Program, the Exchange reaffirms its consideration of several factors
that supported the original proposal of the SPY Pilot Program,
including (1) the availability of economically equivalent products and
their respective position limits; (2) the liquidity of the option and
the underlying security; (3) the market capitalization of the
underlying security and the related index; (4) the reporting of large
positions and requirements surrounding margin; and (5) the potential
for market on close volatility.
With this proposal, the Exchange submits the SPY report to the
Commission, which report reflects, during the time period from May 2016
through May 2017, the trading of standardized SPY options with no
position limits consistent with option exchange provisions.\4\ The
report was prepared in the manner specified in the Exchange's prior
rule filing extending the SPY Pilot Program.\5\ The Exchange notes that
it is unaware of any problems created by the SPY Pilot Program and does
not foresee any as a result of the proposed extension. The proposed
extension will allow the Exchange and the Commission additional time to
[[Page 32405]]
further evaluate the pilot program and its effect on the market.
---------------------------------------------------------------------------
\4\ The report is attached as Exhibit 3 [sic].
\5\ See Securities Exchange Act Release No. 78124 (June 22,
2016), 81 FR 42008 (June 28, 2016) (SR-PHLX-2016-68).
---------------------------------------------------------------------------
As with the original proposal to establish the SPY Pilot Program,
the Exchange represents that a SPY Pilot Report will be submitted at
least thirty (30) days before the end of the Extended Pilot and would
analyze that period. The Pilot Report will detail the size and
different types of strategies employed with respect to positions
established as a result of the elimination of position limits in SPY.
In addition, the report will note whether any problems resulted due to
the no limit approach and any other information that may be useful in
evaluating the effectiveness of the Extended Pilot. The Pilot Report
will compare the impact of the SPY Pilot Program, if any, on the
volumes of SPY options and the volatility in the price of the
underlying SPY shares, particularly at expiration during the Extended
Pilot. In preparing the report the Exchange will utilize various data
elements such as volume and open interest. In addition the Exchange
will make available to Commission staff data elements relating to the
effectiveness of the SPY Pilot Program. Conditional on the findings in
the SPY Pilot Report, the Exchange will file with the Commission a
proposal to extend the pilot program, adopt the pilot program on a
permanent basis or terminate the pilot. If the SPY Pilot Program is not
extended or adopted on a permanent basis by the expiration of the
Extended Pilot, the position limits for SPY options would revert to
limits in effect prior to the commencement of the SPY Pilot Program.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \6\ in general, and furthers the objectives of Section
6(b)(5) of the Act \7\ 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, 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.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change would be
beneficial to market participants, including market makers,
institutional investors and retail investors, by permitting them to
establish greater positions when pursuing their investment goals and
needs. The Exchange also believes that economically equivalent products
should be treated in an equivalent manner so as to avoid regulatory
arbitrage, especially with respect to position limits. Treating SPY and
SPX options differently by virtue of imposing different position limits
is inconsistent with the notion of promoting just and equitable
principles of trade and removing impediments to perfect the mechanisms
of a free and open market. At the same time, the Exchange believes that
the elimination of position limits for SPY options would not increase
market volatility or facilitate the ability to manipulate the market.
B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. In this regard, the Exchange notes that the rule change is
being proposed as a competitive response to similar filings that the
Exchange expects to be filed by other options exchanges. The Exchange
believes this proposed rule change is necessary to permit fair
competition among the options exchanges and to establish uniform
position limits for a multiply listed options class.
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) of the Act and Rule 19b-
4(f)(6) thereunder.\8\
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\8\ 17 CFR 240.19b-4(f)(6). 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.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \9\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \10\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The Exchange
believes that waiver of the operative delay is consistent with the
protection of investors and the public interest because it will allow
the SPY Pilot Program to continue without interruption. The Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. Therefore, the
Commission hereby waives the operative delay and designates the
proposed rule change operative upon filing.\11\
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\9\ 17 CFR 240.19b-4(f)(6).
\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-Phlx-2017-52 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2017-52. 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
[[Page 32406]]
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-Phlx-2017-52, and should be
submitted on or before August 3, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-14660 Filed 7-12-17; 8:45 am]
BILLING CODE 8011-01-P
