Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Expand the Short Term Options Series Program, 11800-11803 [2018-05333]
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Federal Register / Vol. 83, No. 52 / Friday, March 16, 2018 / Notices
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, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 18 and Rule 19b–4(f)(6)
thereunder.19
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days from the
date of filing. However, Rule 19b–
4(f)(6)(iii) 20 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
Commission notes that it recently
approved Phlx’s substantially similar
proposal to list and trade Monday SPY
Expirations.21 The Exchange has stated
that waiver of the operative delay will
allow the Exchange to list and trade
Monday SPY Expirations as soon as
possible, and therefore, promote
competition among the option
exchanges. For these reasons, the
Commission believes that the proposed
rule change presents no novel issues
and that waiver of the 30-day operative
delay is consistent with the protection
of investors and the public interest, and
will allow the Exchange to remain
competitive with other exchanges.
Therefore, the Commission hereby
waives the 30-day operative delay and
designates the proposal operative upon
filing.22
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
18 15
U.S.C. 78s(b)(3)(A).
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 intention 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.
20 17 CFR 240.19b–4(f)(6)(iii).
21 See supra note 4.
22 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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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–
NYSEARCA–2018–14 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–NYSEARCA–2018–14. 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
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
PO 00000
Frm 00132
Fmt 4703
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Number SR–NYSEARCA–2018–14 and
should be submitted on or before April
6, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–05332 Filed 3–15–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82858; File No. SR–
NYSEAMER–2018–08]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Expand the Short
Term Options Series Program
March 12, 2018.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on March 1,
2018, NYSE American LLC (the
‘‘Exchange’’ or ‘‘NYSE American’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. 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 expand the
Short Term Options Series (‘‘STOS’’)
Program to allow Monday expirations
for SPDR S&P 500 ETF Trust (‘‘SPY’’)
options. The proposed rule change is
available on the Exchange’s website at
www.nyse.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
self-regulatory organization 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 those statements may be examined at
23 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
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Federal Register / Vol. 83, No. 52 / Friday, March 16, 2018 / Notices
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 parts of such
statements.
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to expand the
STOS Program to allow Monday
expirations for SPY options. In
particular, the Exchange proposes to
amend Rule 900.2NY (Definitions) and
Rule 903 (Series of Options Open for
Trading) to permit the listing and
trading of options series with Monday
expirations that are listed pursuant to
the STOS Program. This is a competitive
filing based on a filing submitted by
Nasdaq PHLX LLC (‘‘Phlx’’), which the
Securities and Exchange Commission
(‘‘Commission’’) recently approved.4
Currently Rule 900.2NY(50) provides
that a STOS is a series in an option class
that is approved for listing and trading
on the Exchange in which the series is
opened for trading on any Tuesday,
Wednesday, Thursday or Friday that is
a business day and that expires on the
Wednesday or Friday of the next
business week. The Exchange proposes
to amend Rule 900.2NY(50) to permit
the listing of options series that expire
on Mondays. Specifically, the Exchange
is proposing that it may open for trading
series of options on any Monday that is
a business day and that expires on the
Monday of the next business week. The
Exchange is also proposing to list
Monday expirations series on Fridays
that precede the expiration Monday by
one business week, plus one business
day. Since Rule 900.2NY(50) already
provides for the listing of STOS on
Fridays, the Exchange is not modifying
this provision to allow for Friday listing
of Monday expiration series. However,
the Exchange proposes to amend Rule
900.2NY(50) to clarify that, in the case
of a STOS that is listed on a Friday and
expires on a Monday, that STOS must
be listed one business week and one
business day prior to that expiration
(i.e., two Fridays prior to expiration).
As part of this proposal, the Exchange
is also amending Rule 900.2NY(50) to
address the expiration date of Monday
expiration series when the Monday is
not a business day. In that case, the rule
would provide that the series shall
expire on the first business day
immediately following that Monday.
4 See Securities Exchange Act Release No. 82611
(February 1, 2018), 83 FR 5473 (February 7, 2018)
(SR–Phlx–2017–103).
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This procedure differs from the
expiration date of Wednesday
expiration series that are scheduled to
expire on a holiday. In that case, the
Wednesday expiration series expire on
the first business day immediately prior
to that Wednesday, e.g., Tuesday of that
week.5 However, the Exchange believes
that it is preferable to require Monday
expiration series in this scenario to
expire on the Tuesday of that week
rather than the previous business day,
e.g., the previous Friday, since the
Tuesday is closer in time to the
scheduled expiration date of the series
than the previous Friday, and therefore
may be more representative of
anticipated market conditions. The
Exchange notes that this provision is
identical to the corresponding provision
recently adopted by Phlx in its proposal
to list options series with Monday
expirations pursuant to its Short Term
Options Series program. The Exchange
also notes that Cboe Exchange, Inc.
(‘‘Cboe’’) uses the same procedure for
options on the S&P 500 index (‘‘SPX’’)
with Monday expirations that listed
pursuant to its Nonstandard Expirations
Pilot Program and that are scheduled to
expire on a holiday.6
The Exchange also proposes to make
corresponding changes to Rule 903,
which sets forth the requirements for
SPY options that are listed pursuant to
the STOS Program, to permit Monday
SPY expirations (‘‘Monday SPY
Expirations’’). Accordingly, the
Exchange proposes to amend Rule
903(h) and Rule 903 Commentary .10(e)
to state that, with respect to Monday
SPY Expirations, the Exchange may
open for trading on any Friday or
Monday that is a business day series of
options on the SPY to expire on any
Monday of the month that is a business
day and is not a Monday in which
Quarterly Options Series expire,
provided that Monday SPY Expirations
that are listed on a Friday must be listed
at least one business week and one
business day prior to the expiration. As
with the current rules for Wednesday
SPY Expirations, the Exchange would
also amend Rule 903(h) and Rule 903,
Commentary .10(e) to state that it may
list up to five consecutive Monday SPY
Expirations at one time, and may have
no more than a total of five Monday SPY
Expirations (and no more than a total of
5 See
Rule 900.2NY(50).
CBOE Rule 24.9(e)(1) (‘‘If the Exchange is
not open for business on a respective Monday, the
normally Monday expiring Weekly Expirations will
expire on the following business day. If the
Exchange is not open for business on a respective
Wednesday or Friday, the normally Wednesday or
Friday expiring Weekly Expirations will expire on
the previous business day.’’)
6 See
PO 00000
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11801
five STOS expirations for SPY expiring
on Friday and no more than a total of
five Wednesday SPY Expirations). The
Exchange would also clarify that, as
with Wednesday SPY Expirations,
Monday SPY Expirations would be
subject to the provisions of this Rule.
The interval between strike prices for
the proposed Monday SPY Expirations
would be the same as those for the
current STOS for Wednesday and
Friday SPY Expirations. Specifically,
the Monday SPY Expirations would
have a $0.50 strike interval minimum.
As is the case with other options series
listed pursuant to the STOS, the
Monday SPY Expiration series would be
P.M.-settled.
Currently, for each option class
eligible for participation in the STOS
Program, the Exchange is limited to
opening thirty (30) series for each
expiration date for the specific class.
The thirty (30) series restriction does
not include series that are open by other
securities exchanges under their
respective short term option rules; the
Exchange may list these additional
series that are listed by other
exchanges.7 This thirty (30) series
restriction would apply to Monday SPY
Expiration series as well. In addition,
the Exchange would be able to list series
that are listed by other exchanges,
assuming those exchanges file similar
rules with the Commission to list SPY
options expiring on Mondays.
Finally, the Exchange proposes to
amend Rule 903 to address the listing of
STOS that expire in the same week as
monthly or quarterly options series.
Currently, that rule states that no STOS
may expire in the same week in which
monthly option series on the same class
expire (with the exception of
Wednesday SPY Expirations) or, in the
case of Quarterly Options Series, on an
expiration that coincides with an
expiration of Quarterly Option Series on
the same class. The Exchange proposes
to extend this exemption to Monday
SPY Expirations.8 As with Wednesday
SPY Expirations, the Exchange believes
that it is reasonable to extend this
exemption to Monday SPY Expirations
because Monday SPY Expirations and
standard monthly options will not
expire on the same trading day, as
standard monthly options expire on
Fridays. Additionally, the Exchange
believes that not listing Monday SPY
Expirations for one week every month
because there was a monthly SPY
expiration on the Friday of that week
would create investor confusion.
7 See
8 See
Rule 903, Commentary .10(a).
Rule 903(h) and Rule 903, Commentary
.10(e).
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Federal Register / Vol. 83, No. 52 / Friday, March 16, 2018 / Notices
Finally, like Wednesday SPY
Expirations, Monday SPY Expirations
cannot expire on the same day as any
Quarterly Option Series.
The Exchange does not believe that
any market disruptions would be
encountered with the introduction of
P.M.-settled Monday expirations. The
Exchange has the necessary capacity
and surveillance programs in place to
support and properly monitor trading in
the proposed Monday expiration series,
including Monday SPY Expirations. The
Exchange currently trades P.M.-settled
STOS that expire almost every
Wednesday and Friday, which provide
market participants a tool to hedge
special events and to reduce the
premium cost of buying protection.
Moreover, the Exchange has been listing
Wednesday expirations pursuant to
Rule 903 and Rule 900.2NY(50) since
2016.9 With the exception of Monday
expiration series that are scheduled to
expire on a holiday, the Exchange does
not believe that there are any material
differences between Monday expirations
and Wednesday or Friday expirations
for STOS.
The Exchange seeks to introduce
Monday expirations to, among other
things, expand hedging tools available
to market participants and to continue
the reduction of the premium cost of
buying protection. The Exchange
believes that Monday expirations,
similar to Wednesday and Friday
expirations, would allow market
participants to purchase an option based
on their timing as needed and allow
them to tailor their investment and
hedging needs more effectively.
As noted above, Phlx recently
received approval to list Monday
expirations for SPY options pursuant to
its Short Term Options Series program.
In addition, other exchanges currently
permit Monday expirations for other
options. For example, Cboe lists options
on the SPX with a Monday expiration as
part of its Nonstandard Expirations Pilot
Program.10
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2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with Section
6(b) of the Act 11 in general, and furthers
the objectives of Section 6(b)(5) of the
Act,12 in that it is designed to prevent
9 See Securities Exchange Act Release No. 78780
(September 7, 2016), 81 FR 62939 (September 13,
2016) (SR–NYSEMKT–2016–87).
10 See CBOE Rule 24.9(e)(1) (‘‘The Exchange may
open for trading Weekly Expirations on any broadbased index eligible for standard options trading to
expire on any Monday, Wednesday, or Friday (other
than the third Friday-of-the-month or days that
coincide with an EOM expiration’’).
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
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fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanisms of a free
and open market and a national market
system and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) requirement that the
rules of an exchange not be designed to
permit unfair discrimination between
customers, issuers, brokers, or dealers.13
In particular, the Exchange believes
the STOS Program has been successful
to date and that Monday expirations,
including Monday SPY Expirations,
would expand the ability of investors to
hedge risk against market movements
stemming from economic releases or
market events that occur throughout the
month in the same way that the STOS
Program has expanded the landscape of
hedging. Similarly, the Exchange
believes Monday expirations, including
Monday SPY Expirations, should create
greater trading and hedging
opportunities and flexibility, and would
provide customers with the ability to
tailor their investment objectives more
effectively.
With the exception of Monday
expiration series that are scheduled to
expire on a holiday, the Exchange does
not believe there are any material
differences between Monday SPY
Expirations and Wednesday or Friday
SPY Expirations. The Exchange notes
that it has been listing Wednesday
expiration pursuant to Rule 903 and
Rule 900.2NY(50) since 2016.14 The
Exchange believes that it is consistent
with the Act to treat Monday expiration
series that expire on a holiday
differently than Wednesday or Friday
expiration series, since the proposed
treatment for Monday expiration series
will result in an expiration date that is
closer in time to the scheduled
expiration date of the series, and
therefore may be more representative of
anticipated market conditions. The
Exchange also notes that Cboe uses the
same procedure for SPX options with
Monday expirations that are listed
pursuant to its Nonstandard Expirations
Pilot Program and that are scheduled to
expire on a holiday.15 Additionally, the
proposed rule change is consistent with
rules of another options exchange, as
Phlx recently received Commission
approval to list Monday SPY
Expirations.16
Given the similarities between
Monday SPY Expiration series and
Wednesday and Friday SPY Expiration
series, the Exchange believes that
applying the provisions in Rule 903
Commentary .10 that currently apply to
Wednesday SPY Expirations, to Monday
SPY Expirations, is justified. For
example, the Exchange believes that
allowing Monday SPY Expirations and
monthly SPY expirations in the same
week would benefit investors and
minimize investor confusion by
providing Monday SPY Expirations in a
continuous and uniform manner. The
Exchange also believes that it is
appropriate to amend Rule 903
Commentary .10 to clarify that no STOS
may expire on the same day as an
expiration of Quarterly Option Series on
the same class. This change would make
that provision more consistent with the
existing language in Rule 903
Commentary .10 that prohibits
Wednesday SPY Expirations from
expiring on a Wednesday in which
Quarterly Options Series expire.
The Exchange represents that it has an
adequate surveillance program in place
to detect manipulative trading in
Monday expirations, including Monday
SPY Expirations, in the same way that
it monitors trading in the current STOS
Program.
With regard to the impact of this
proposal on system capacity, the
Exchange believes it and OPRA have the
necessary systems capacity to handle
any potential additional traffic
associated with this proposed rule
change. The Exchange believes that its
members will not have a capacity issue
as a result of this proposal.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change would impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange notes that having Monday
expirations is not a novel proposal, as
Cboe currently lists and trades shortterm SPX options with a Monday
expiration, and Phlx has recently
received approval from the Commission
to list Monday SPY expirations.17
Therefore, the proposal would not
impose any undue burden on intermarket competition. Additionally, other
options exchanges are free to propose
similar rules to list and trade STOS with
13 Id.
14 See
15 See
PO 00000
supra note 9.
supra note 6.
Frm 00134
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16 See
17 See
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supra note 4.
supra notes 4, 6.
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Federal Register / Vol. 83, No. 52 / Friday, March 16, 2018 / Notices
Monday expirations. Finally, the
Exchange does not believe the proposal
would impose any burden on intramarket competition, as all market
participants will be treated in the same
manner under this proposal.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 18 and Rule 19b–4(f)(6)
thereunder.19
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days from the
date of filing. However, Rule 19b–
4(f)(6)(iii) 20 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
Commission notes that it recently
approved Phlx’s substantially similar
proposal to list and trade Monday SPY
Expirations.21 The Exchange has stated
that waiver of the operative delay will
allow the Exchange to list and trade
Monday SPY Expirations as soon as
possible, and therefore, promote
competition among the option
exchanges. For these reasons, the
Commission believes that the proposed
rule change presents no novel issues
and that waiver of the 30-day operative
delay is consistent with the protection
of investors and the public interest, and
will allow the Exchange to remain
competitive with other exchanges.
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18 15
U.S.C. 78s(b)(3)(A).
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 intention 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.
20 17 CFR 240.19b–4(f)(6)(iii).
21 See supra note 4.
19 17
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Therefore, the Commission hereby
waives the 30-day operative delay and
designates the proposal operative upon
filing.22
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–
NYSEAMER–2018–08 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–NYSEAMER–2018–08. 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
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
22 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
PO 00000
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11803
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–NYSEAMER–2018–08 and
should be submitted on or before
April 6, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–05333 Filed 3–15–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82854; File No. SR–CBOE–
2018–012]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Establish Fees for
Options That Overlie the S&P Select
Sector Index Options
March 12, 2018.
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 March 1,
2018, Cboe Exchange, Inc. (the
‘‘Exchange’’ or ‘‘Cboe Options’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
The 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 establish
fees for options that overlie the S&P
Select Sector Index options (‘‘Sector
Index options’’). The text of the
23 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\16MRN1.SGM
16MRN1
]]>Agencies
[Federal Register Volume 83, Number 52 (Friday, March 16, 2018)]
[Notices]
[Pages 11800-11803]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-05333]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82858; File No. SR-NYSEAMER-2018-08]
Self-Regulatory Organizations; NYSE American LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Expand
the Short Term Options Series Program
March 12, 2018.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on March 1, 2018, NYSE American LLC (the ``Exchange'' or
``NYSE American'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the self-regulatory
organization. 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\ 15 U.S.C. 78a.
\3\ 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 expand the Short Term Options Series
(``STOS'') Program to allow Monday expirations for SPDR S&P 500 ETF
Trust (``SPY'') options. The proposed rule change is available on the
Exchange's website at www.nyse.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 self-regulatory organization
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 those statements may be examined at
[[Page 11801]]
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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to expand the STOS Program to allow Monday
expirations for SPY options. In particular, the Exchange proposes to
amend Rule 900.2NY (Definitions) and Rule 903 (Series of Options Open
for Trading) to permit the listing and trading of options series with
Monday expirations that are listed pursuant to the STOS Program. This
is a competitive filing based on a filing submitted by Nasdaq PHLX LLC
(``Phlx''), which the Securities and Exchange Commission
(``Commission'') recently approved.\4\
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\4\ See Securities Exchange Act Release No. 82611 (February 1,
2018), 83 FR 5473 (February 7, 2018) (SR-Phlx-2017-103).
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Currently Rule 900.2NY(50) provides that a STOS is a series in an
option class that is approved for listing and trading on the Exchange
in which the series is opened for trading on any Tuesday, Wednesday,
Thursday or Friday that is a business day and that expires on the
Wednesday or Friday of the next business week. The Exchange proposes to
amend Rule 900.2NY(50) to permit the listing of options series that
expire on Mondays. Specifically, the Exchange is proposing that it may
open for trading series of options on any Monday that is a business day
and that expires on the Monday of the next business week. The Exchange
is also proposing to list Monday expirations series on Fridays that
precede the expiration Monday by one business week, plus one business
day. Since Rule 900.2NY(50) already provides for the listing of STOS on
Fridays, the Exchange is not modifying this provision to allow for
Friday listing of Monday expiration series. However, the Exchange
proposes to amend Rule 900.2NY(50) to clarify that, in the case of a
STOS that is listed on a Friday and expires on a Monday, that STOS must
be listed one business week and one business day prior to that
expiration (i.e., two Fridays prior to expiration).
As part of this proposal, the Exchange is also amending Rule
900.2NY(50) to address the expiration date of Monday expiration series
when the Monday is not a business day. In that case, the rule would
provide that the series shall expire on the first business day
immediately following that Monday. This procedure differs from the
expiration date of Wednesday expiration series that are scheduled to
expire on a holiday. In that case, the Wednesday expiration series
expire on the first business day immediately prior to that Wednesday,
e.g., Tuesday of that week.\5\ However, the Exchange believes that it
is preferable to require Monday expiration series in this scenario to
expire on the Tuesday of that week rather than the previous business
day, e.g., the previous Friday, since the Tuesday is closer in time to
the scheduled expiration date of the series than the previous Friday,
and therefore may be more representative of anticipated market
conditions. The Exchange notes that this provision is identical to the
corresponding provision recently adopted by Phlx in its proposal to
list options series with Monday expirations pursuant to its Short Term
Options Series program. The Exchange also notes that Cboe Exchange,
Inc. (``Cboe'') uses the same procedure for options on the S&P 500
index (``SPX'') with Monday expirations that listed pursuant to its
Nonstandard Expirations Pilot Program and that are scheduled to expire
on a holiday.\6\
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\5\ See Rule 900.2NY(50).
\6\ See CBOE Rule 24.9(e)(1) (``If the Exchange is not open for
business on a respective Monday, the normally Monday expiring Weekly
Expirations will expire on the following business day. If the
Exchange is not open for business on a respective Wednesday or
Friday, the normally Wednesday or Friday expiring Weekly Expirations
will expire on the previous business day.'')
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The Exchange also proposes to make corresponding changes to Rule
903, which sets forth the requirements for SPY options that are listed
pursuant to the STOS Program, to permit Monday SPY expirations
(``Monday SPY Expirations''). Accordingly, the Exchange proposes to
amend Rule 903(h) and Rule 903 Commentary .10(e) to state that, with
respect to Monday SPY Expirations, the Exchange may open for trading on
any Friday or Monday that is a business day series of options on the
SPY to expire on any Monday of the month that is a business day and is
not a Monday in which Quarterly Options Series expire, provided that
Monday SPY Expirations that are listed on a Friday must be listed at
least one business week and one business day prior to the expiration.
As with the current rules for Wednesday SPY Expirations, the Exchange
would also amend Rule 903(h) and Rule 903, Commentary .10(e) to state
that it may list up to five consecutive Monday SPY Expirations at one
time, and may have no more than a total of five Monday SPY Expirations
(and no more than a total of five STOS expirations for SPY expiring on
Friday and no more than a total of five Wednesday SPY Expirations). The
Exchange would also clarify that, as with Wednesday SPY Expirations,
Monday SPY Expirations would be subject to the provisions of this Rule.
The interval between strike prices for the proposed Monday SPY
Expirations would be the same as those for the current STOS for
Wednesday and Friday SPY Expirations. Specifically, the Monday SPY
Expirations would have a $0.50 strike interval minimum. As is the case
with other options series listed pursuant to the STOS, the Monday SPY
Expiration series would be P.M.-settled.
Currently, for each option class eligible for participation in the
STOS Program, the Exchange is limited to opening thirty (30) series for
each expiration date for the specific class. The thirty (30) series
restriction does not include series that are open by other securities
exchanges under their respective short term option rules; the Exchange
may list these additional series that are listed by other exchanges.\7\
This thirty (30) series restriction would apply to Monday SPY
Expiration series as well. In addition, the Exchange would be able to
list series that are listed by other exchanges, assuming those
exchanges file similar rules with the Commission to list SPY options
expiring on Mondays.
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\7\ See Rule 903, Commentary .10(a).
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Finally, the Exchange proposes to amend Rule 903 to address the
listing of STOS that expire in the same week as monthly or quarterly
options series. Currently, that rule states that no STOS may expire in
the same week in which monthly option series on the same class expire
(with the exception of Wednesday SPY Expirations) or, in the case of
Quarterly Options Series, on an expiration that coincides with an
expiration of Quarterly Option Series on the same class. The Exchange
proposes to extend this exemption to Monday SPY Expirations.\8\ As with
Wednesday SPY Expirations, the Exchange believes that it is reasonable
to extend this exemption to Monday SPY Expirations because Monday SPY
Expirations and standard monthly options will not expire on the same
trading day, as standard monthly options expire on Fridays.
Additionally, the Exchange believes that not listing Monday SPY
Expirations for one week every month because there was a monthly SPY
expiration on the Friday of that week would create investor confusion.
[[Page 11802]]
Finally, like Wednesday SPY Expirations, Monday SPY Expirations cannot
expire on the same day as any Quarterly Option Series.
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\8\ See Rule 903(h) and Rule 903, Commentary .10(e).
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The Exchange does not believe that any market disruptions would be
encountered with the introduction of P.M.-settled Monday expirations.
The Exchange has the necessary capacity and surveillance programs in
place to support and properly monitor trading in the proposed Monday
expiration series, including Monday SPY Expirations. The Exchange
currently trades P.M.-settled STOS that expire almost every Wednesday
and Friday, which provide market participants a tool to hedge special
events and to reduce the premium cost of buying protection. Moreover,
the Exchange has been listing Wednesday expirations pursuant to Rule
903 and Rule 900.2NY(50) since 2016.\9\ With the exception of Monday
expiration series that are scheduled to expire on a holiday, the
Exchange does not believe that there are any material differences
between Monday expirations and Wednesday or Friday expirations for
STOS.
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\9\ See Securities Exchange Act Release No. 78780 (September 7,
2016), 81 FR 62939 (September 13, 2016) (SR-NYSEMKT-2016-87).
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The Exchange seeks to introduce Monday expirations to, among other
things, expand hedging tools available to market participants and to
continue the reduction of the premium cost of buying protection. The
Exchange believes that Monday expirations, similar to Wednesday and
Friday expirations, would allow market participants to purchase an
option based on their timing as needed and allow them to tailor their
investment and hedging needs more effectively.
As noted above, Phlx recently received approval to list Monday
expirations for SPY options pursuant to its Short Term Options Series
program. In addition, other exchanges currently permit Monday
expirations for other options. For example, Cboe lists options on the
SPX with a Monday expiration as part of its Nonstandard Expirations
Pilot Program.\10\
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\10\ See CBOE Rule 24.9(e)(1) (``The Exchange may open for
trading Weekly Expirations on any broad-based index eligible for
standard options trading to expire on any Monday, Wednesday, or
Friday (other than the third Friday-of-the-month or days that
coincide with an EOM expiration'').
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Act \11\ in general, and furthers the objectives of
Section 6(b)(5) of the Act,\12\ 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 regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanisms of a
free and open market and a national market system and, in general, to
protect investors and the public interest. Additionally, the Exchange
believes the proposed rule change is consistent with the Section
6(b)(5) requirement that the rules of an exchange not be designed to
permit unfair discrimination between customers, issuers, brokers, or
dealers.\13\
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
\13\ Id.
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In particular, the Exchange believes the STOS Program has been
successful to date and that Monday expirations, including Monday SPY
Expirations, would expand the ability of investors to hedge risk
against market movements stemming from economic releases or market
events that occur throughout the month in the same way that the STOS
Program has expanded the landscape of hedging. Similarly, the Exchange
believes Monday expirations, including Monday SPY Expirations, should
create greater trading and hedging opportunities and flexibility, and
would provide customers with the ability to tailor their investment
objectives more effectively.
With the exception of Monday expiration series that are scheduled
to expire on a holiday, the Exchange does not believe there are any
material differences between Monday SPY Expirations and Wednesday or
Friday SPY Expirations. The Exchange notes that it has been listing
Wednesday expiration pursuant to Rule 903 and Rule 900.2NY(50) since
2016.\14\ The Exchange believes that it is consistent with the Act to
treat Monday expiration series that expire on a holiday differently
than Wednesday or Friday expiration series, since the proposed
treatment for Monday expiration series will result in an expiration
date that is closer in time to the scheduled expiration date of the
series, and therefore may be more representative of anticipated market
conditions. The Exchange also notes that Cboe uses the same procedure
for SPX options with Monday expirations that are listed pursuant to its
Nonstandard Expirations Pilot Program and that are scheduled to expire
on a holiday.\15\ Additionally, the proposed rule change is consistent
with rules of another options exchange, as Phlx recently received
Commission approval to list Monday SPY Expirations.\16\
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\14\ See supra note 9.
\15\ See supra note 6.
\16\ See supra note 4.
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Given the similarities between Monday SPY Expiration series and
Wednesday and Friday SPY Expiration series, the Exchange believes that
applying the provisions in Rule 903 Commentary .10 that currently apply
to Wednesday SPY Expirations, to Monday SPY Expirations, is justified.
For example, the Exchange believes that allowing Monday SPY Expirations
and monthly SPY expirations in the same week would benefit investors
and minimize investor confusion by providing Monday SPY Expirations in
a continuous and uniform manner. The Exchange also believes that it is
appropriate to amend Rule 903 Commentary .10 to clarify that no STOS
may expire on the same day as an expiration of Quarterly Option Series
on the same class. This change would make that provision more
consistent with the existing language in Rule 903 Commentary .10 that
prohibits Wednesday SPY Expirations from expiring on a Wednesday in
which Quarterly Options Series expire.
The Exchange represents that it has an adequate surveillance
program in place to detect manipulative trading in Monday expirations,
including Monday SPY Expirations, in the same way that it monitors
trading in the current STOS Program.
With regard to the impact of this proposal on system capacity, the
Exchange believes it and OPRA have the necessary systems capacity to
handle any potential additional traffic associated with this proposed
rule change. The Exchange believes that its members will not have a
capacity issue as a result of this proposal.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange notes that
having Monday expirations is not a novel proposal, as Cboe currently
lists and trades short-term SPX options with a Monday expiration, and
Phlx has recently received approval from the Commission to list Monday
SPY expirations.\17\ Therefore, the proposal would not impose any undue
burden on inter-market competition. Additionally, other options
exchanges are free to propose similar rules to list and trade STOS with
[[Page 11803]]
Monday expirations. Finally, the Exchange does not believe the proposal
would impose any burden on intra-market competition, as all market
participants will be treated in the same manner under this proposal.
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\17\ See supra notes 4, 6.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, the proposed rule
change has become effective pursuant to Section 19(b)(3)(A) of the Act
\18\ and Rule 19b-4(f)(6) thereunder.\19\
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\18\ 15 U.S.C. 78s(b)(3)(A).
\19\ 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 intention 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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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days from the date of filing. However, Rule
19b-4(f)(6)(iii) \20\ 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 Commission notes that it recently approved
Phlx's substantially similar proposal to list and trade Monday SPY
Expirations.\21\ The Exchange has stated that waiver of the operative
delay will allow the Exchange to list and trade Monday SPY Expirations
as soon as possible, and therefore, promote competition among the
option exchanges. For these reasons, the Commission believes that the
proposed rule change presents no novel issues and that waiver of the
30-day operative delay is consistent with the protection of investors
and the public interest, and will allow the Exchange to remain
competitive with other exchanges. Therefore, the Commission hereby
waives the 30-day operative delay and designates the proposal operative
upon filing.\22\
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\20\ 17 CFR 240.19b-4(f)(6)(iii).
\21\ See supra note 4.
\22\ For purposes only of waiving the 30-day operative delay,
the Commission has also 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 [email protected]. Please include
File Number SR-NYSEAMER-2018-08 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-NYSEAMER-2018-08. 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 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-NYSEAMER-2018-08 and should be submitted
on or before April 6, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-05333 Filed 3-15-18; 8:45 am]
BILLING CODE 8011-01-P
