Self-Regulatory Organizations; Cboe Exchange, Inc.; Order Approving a Proposed Rule Change To Amend Rule 6.56 To Include Procedures for Multi-Leg Positions, 61637-61638 [2017-28082]
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Federal Register / Vol. 82, No. 248 / Thursday, December 28, 2017 / Notices
the Pilot Program.14 Accordingly, the
Commission designates the proposed
rule change as operative upon filing
with the Commission.15
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
under Section 19(b)(2)(B) 16 of the Act to
determine whether the proposed rule
change 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–
C2–2017–032 on the subject line.
Paper Comments
sradovich on DSK3GMQ082PROD with NOTICES
• 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–C2–2017–032. 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 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
14 See Securities Exchange Act Release No. 61061
(November 24, 2009), 74 FR 62857 (December 1,
2009) (SR–NYSEArca–2009–44). See also supra
note 5.
15 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
16 15 U.S.C. 78s(b)(2)(B).
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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.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–C2–2017–032 and should
be submitted on or before January 18,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–27996 Filed 12–27–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82398; File No. SR–CBOE–
2017–070]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Order Approving a
Proposed Rule Change To Amend Rule
6.56 To Include Procedures for MultiLeg Positions
December 22, 2017.
I. Introduction
On November 3, 2017, the Cboe
Exchange, Inc. (‘‘Exchange’’ or ‘‘Cboe
Options’’) filed with the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule to amend Rule 6.56
(Compression Forums) to include
procedures for multi-leg positions. The
proposed rule change was published for
comment in the Federal Register on
November 22, 2017.3 The Commission
did not receive any comment letters on
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 82102
(Nov. 16, 2017), 82 FR 55667 (Nov. 22, 2017)
(‘‘Notice’’).
1 15
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Sfmt 4703
61637
the proposed rule change. This order
approves the proposed rule change.
II. Description of the Proposed Rule
Change
As described in more detail in the
Notice,4 the Exchange proposes to
amend its SPX Compression Forum
procedures set forth in Cboe Rule 6.56,
primarily to authorize the Exchange to
include information on hypothetical
multi-leg positions constructed from the
single series voluntarily submitted by
Trading Permit Holders (‘‘TPHs’’).
Specifically, in addition to the
information Cboe Options currently
provides on single series interest, the
Exchange now also will generate a list,
using the individual series of SPX
options submitted by TPHs, of all
possible multi-leg positions based on
the three option strategies specified in
Rule 6.56—vertical call spreads, vertical
put spreads, and box spreads.5
In addition to listing hypothetical
multi-leg positions with offsetting
interest in the compression-list position
file, the Exchange also will provide to
each TPH that submitted compressionlist positions, a new individualized
multi-leg position file that includes: (a)
A complete list of all possible
combinations of offsetting multi-leg
positions that are composed of series the
individual TPH submitted as part of a
compression-list position; (b) a unique
identification number for each multi-leg
position (‘‘PID’’) that would enable the
TPH to identify particular multi-leg
positions; (c) the series that make up the
multi-leg position; and (d) the offsetting
size of the multi-leg position against
other TPHs on an individualized and
anonymous basis.6 TPHs would be able
to give the Exchange permission to
share their identity with the contraparty for a particular multi-leg position,
and vice-versa, provided that both
parties have agreed to reveal their
identities.7
Finally, Exchange will extend the
hours for submitting compression-list
positions from 3:15pm to 4:30pm
Chicago time.8
4 Id.
5 Id. at 55667. The Exchange represents that its
‘‘provision of the list does not constitute advice,
guidance, a commitment to trade, an execution, or
a recommendation to trade.’’ See id. Furthermore,
the Exchange notes that TPHs determine whether to
submit compression-list positions, whether to
participate in the compression forum, and whether
to represent orders on the trading floor.
6 Id. at 55671.
7 Id. at 55673. The disclosure of the TPH’s
identity would be done on a multi-leg position by
multi-leg position basis, as referenced by the PID.
8 Id. at 55674.
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28DEN1
61638
Federal Register / Vol. 82, No. 248 / Thursday, December 28, 2017 / Notices
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act 9 and the rules and regulations
thereunder applicable to a national
securities exchange.10 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,11 which requires,
among other things, that the rules of a
national securities exchange be
designed 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 and
that the rules are not designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
The Commission believes that the
proposed rule change is designed to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system by
providing TPHs with information that
may encourage them to close positions
in series of SPX options at the end of the
month, which the Exchange has stated
is intended to ‘‘foster liquidity in the
SPX options market in light of the bank
regulatory capital requirements.’’ 12 The
Commission notes the Exchange has
represented that the proposed multi-leg
compression-list position file provided
by the Exchange is for informational
purposes only and does not constitute
advice, guidance, a commitment to
trade, an execution, or a
recommendation to trade, and that
participation in the process by TPHs is
entirely voluntary.13 TPHs who receive
the individualized multi-leg positions
and wish to enter into a trade may only
do so by finding a counterparty on the
trading floor and executing a trade
thereon, and all transactions must be
effected in accordance with applicable
rules.14 Furthermore, all TPHs on the
trading floor, whether or not they
9 15
U.S.C. 78f.
approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
11 15 U.S.C. 78f(b)(5).
12 See Notice, supra note 3, at 55674. The
Exchange stated its belief that those capital
requirements ‘‘could potentially limit the amount of
capital clearing TPHs can allocate to their clients’
transactions, which in turn, may impact liquidity,
particularly in the SPX market.’’ Id.
13 See Notice, supra note 3, at 55667. The list is
not ranked or weighted and contains all potential
multi-leg positions with offsetting interest.
Accordingly, not all the multi-leg positions on the
list would be possible to trade since one series may
be used to construct multiple potential multi-leg
positions.
14 See Notice, supra note 3, at 55675.
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10 In
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submitted compression-list positions,
have the opportunity to respond to
orders on the trading floor, including
orders represented in compression
forums. For the reasons noted above, the
Commission believes that the proposal
to amend Rule 6.56 to include the
proposed procedures for multi-leg
compression-list positions is consistent
with the Act.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,15 that the
proposed rule change (SR–CBOE–2017–
070) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–28082 Filed 12–27–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82394; File No. SR–MIAX–
2017–49]
Self-Regulatory Organizations; Miami
International Securities Exchange LLC;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change To Amend MIAX Options Rule
612, Aggregate Risk Manager (ARM)
and Rule 518, Complex Orders
December 22, 2017.
Pursuant to the provisions of Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on December 15, 2017, Miami
International Securities Exchange, LLC
(‘‘MIAX Options’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend Rule 612, Aggregate Risk
Manager (ARM), and Rule 518, Complex
Orders.
15 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
16 17
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Frm 00106
Fmt 4703
Sfmt 4703
The text of the proposed rule change
is available on the Exchange’s website at
https://www.miaxoptions.com/rulefilings, at MIAX’s principal office, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Rule 612, Aggregate Risk Manager
(ARM), and Rule 518, Complex Orders,
to enhance the Aggregate Risk Manager
(‘‘ARM’’) protections available to Market
Makers 3 on the Exchange, for both
simple and complex quotes.
Specifically, the Exchange proposes to
adopt a Market Maker single side
protection (‘‘SSP’’) feature, which is an
additional, optional, and more granular
feature of the ARM protections that are
currently offered by the Exchange.
Accordingly, the Exchange proposes to
modify: (i) Rule 612, Interpretations and
Policies .02, to adopt new subsection
(c), Market Maker Single Side
Protection, as well as to make minor,
non-substantive clarifications to
subsections (a) and (b) for greater
precision for simple quotes; and (ii)
Rule 518, Interpretations and Policies
.05, to adopt new subsection (g), Market
Maker Single Side Protection for
complex quotes.
The Exchange currently offers a
number of risk protection mechanisms
to its Members in both the simple and
complex markets. For Market Makers,
an important risk protection mechanism
is the ARM. The purpose of the ARM is
to remove the Market Maker from the
market, once certain pre-determined
trading limit thresholds (set up in
advance by the Market Maker) have
3 The term ‘‘Market Makers’’ refers to ‘‘Lead
Market Makers’’, ‘‘Primary Lead Market Makers’’
and ‘‘Registered Market Makers’’ collectively. See
Exchange Rule 100.
E:\FR\FM\28DEN1.SGM
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Agencies
[Federal Register Volume 82, Number 248 (Thursday, December 28, 2017)]
[Notices]
[Pages 61637-61638]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-28082]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82398; File No. SR-CBOE-2017-070]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Order
Approving a Proposed Rule Change To Amend Rule 6.56 To Include
Procedures for Multi-Leg Positions
December 22, 2017.
I. Introduction
On November 3, 2017, the Cboe Exchange, Inc. (``Exchange'' or
``Cboe Options'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule to amend Rule 6.56 (Compression Forums) to include
procedures for multi-leg positions. The proposed rule change was
published for comment in the Federal Register on November 22, 2017.\3\
The Commission did not receive any comment letters on the proposed rule
change. This order approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 82102 (Nov. 16,
2017), 82 FR 55667 (Nov. 22, 2017) (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
As described in more detail in the Notice,\4\ the Exchange proposes
to amend its SPX Compression Forum procedures set forth in Cboe Rule
6.56, primarily to authorize the Exchange to include information on
hypothetical multi-leg positions constructed from the single series
voluntarily submitted by Trading Permit Holders (``TPHs'').
Specifically, in addition to the information Cboe Options currently
provides on single series interest, the Exchange now also will generate
a list, using the individual series of SPX options submitted by TPHs,
of all possible multi-leg positions based on the three option
strategies specified in Rule 6.56--vertical call spreads, vertical put
spreads, and box spreads.\5\
---------------------------------------------------------------------------
\4\ Id.
\5\ Id. at 55667. The Exchange represents that its ``provision
of the list does not constitute advice, guidance, a commitment to
trade, an execution, or a recommendation to trade.'' See id.
Furthermore, the Exchange notes that TPHs determine whether to
submit compression-list positions, whether to participate in the
compression forum, and whether to represent orders on the trading
floor.
---------------------------------------------------------------------------
In addition to listing hypothetical multi-leg positions with
offsetting interest in the compression-list position file, the Exchange
also will provide to each TPH that submitted compression-list
positions, a new individualized multi-leg position file that includes:
(a) A complete list of all possible combinations of offsetting multi-
leg positions that are composed of series the individual TPH submitted
as part of a compression-list position; (b) a unique identification
number for each multi-leg position (``PID'') that would enable the TPH
to identify particular multi-leg positions; (c) the series that make up
the multi-leg position; and (d) the offsetting size of the multi-leg
position against other TPHs on an individualized and anonymous
basis.\6\ TPHs would be able to give the Exchange permission to share
their identity with the contra-party for a particular multi-leg
position, and vice-versa, provided that both parties have agreed to
reveal their identities.\7\
---------------------------------------------------------------------------
\6\ Id. at 55671.
\7\ Id. at 55673. The disclosure of the TPH's identity would be
done on a multi-leg position by multi-leg position basis, as
referenced by the PID.
---------------------------------------------------------------------------
Finally, Exchange will extend the hours for submitting compression-
list positions from 3:15pm to 4:30pm Chicago time.\8\
---------------------------------------------------------------------------
\8\ Id. at 55674.
---------------------------------------------------------------------------
[[Page 61638]]
III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act \9\ and the rules
and regulations thereunder applicable to a national securities
exchange.\10\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\11\ which
requires, among other things, that the rules of a national securities
exchange be designed 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 and that the
rules are not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f.
\10\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Commission believes that the proposed rule change is designed
to remove impediments to and perfect the mechanism of a free and open
market and a national market system by providing TPHs with information
that may encourage them to close positions in series of SPX options at
the end of the month, which the Exchange has stated is intended to
``foster liquidity in the SPX options market in light of the bank
regulatory capital requirements.'' \12\ The Commission notes the
Exchange has represented that the proposed multi-leg compression-list
position file provided by the Exchange is for informational purposes
only and does not constitute advice, guidance, a commitment to trade,
an execution, or a recommendation to trade, and that participation in
the process by TPHs is entirely voluntary.\13\ TPHs who receive the
individualized multi-leg positions and wish to enter into a trade may
only do so by finding a counterparty on the trading floor and executing
a trade thereon, and all transactions must be effected in accordance
with applicable rules.\14\ Furthermore, all TPHs on the trading floor,
whether or not they submitted compression-list positions, have the
opportunity to respond to orders on the trading floor, including orders
represented in compression forums. For the reasons noted above, the
Commission believes that the proposal to amend Rule 6.56 to include the
proposed procedures for multi-leg compression-list positions is
consistent with the Act.
---------------------------------------------------------------------------
\12\ See Notice, supra note 3, at 55674. The Exchange stated its
belief that those capital requirements ``could potentially limit the
amount of capital clearing TPHs can allocate to their clients'
transactions, which in turn, may impact liquidity, particularly in
the SPX market.'' Id.
\13\ See Notice, supra note 3, at 55667. The list is not ranked
or weighted and contains all potential multi-leg positions with
offsetting interest. Accordingly, not all the multi-leg positions on
the list would be possible to trade since one series may be used to
construct multiple potential multi-leg positions.
\14\ See Notice, supra note 3, at 55675.
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\15\ that the proposed rule change (SR-CBOE-2017-070) be, and
hereby is, approved.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-28082 Filed 12-27-17; 8:45 am]
BILLING CODE 8011-01-P