Self-Regulatory Organizations; Nasdaq PHLX LLC; Order Approving a Proposed Rule Change, as Modified by Amendment Nos. 1, 2, and 3, To Adopt Protections for Butterfly Spreads and Box Spreads, 16907-16908 [2018-07932]
Download as PDF
<![CDATA[
Federal Register / Vol. 83, No. 74 / Tuesday, April 17, 2018 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83033; File No. SR–Phlx–
2018–14)
Self-Regulatory Organizations; Nasdaq
PHLX LLC; Order Approving a
Proposed Rule Change, as Modified by
Amendment Nos. 1, 2, and 3, To Adopt
Protections for Butterfly Spreads and
Box Spreads
April 11, 2018.
I. Introduction
On February 9, 2018, Nasdaq PHLX
LLC (‘‘Phlx’’ or the ‘‘Exchange’’) 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
change to amend Phlx Rule 1098,
‘‘Complex Orders on the System,’’ to
adopt protections for Complex Orders
that are box spreads or butterfly
spreads.3 On February 21, 2018, the
Exchange filed Amendment No. 1 to the
proposed rule change, which
superseded the original filing in its
entirety. The proposed rule change, as
modified by Amendment No. 1, was
published for comment in the Federal
Register on March 1, 2018.4 On April 9,
2018, the Exchange filed Amendment
No. 2 to the proposal. On April 10,
2018, the Exchange filed Amendment
No. 3 to the proposal, which superseded
Amendment No. 2 in its entirety.5 The
Commission received no comments
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 For purposes of the electronic trading of
Complex Orders, a ‘‘Complex Order’’ is an order
involving the simultaneous purchase and/or sale of
two or more different options series in the same
underlying security, priced as a net debit or credit
based on the relative prices of the individual
components, for the same account, for the purpose
of executing a particular investment strategy. See
Phlx Rule 1098(a)(i).
4 See Securities Exchange Act Release No. 82766
(February 23, 2018), 83 FR 8914 (March 1, 2018)
(‘‘Notice’’).
5 In Amendment No. 3, the Phlx revised the
proposal to (1) replace references in proposed Phlx
Rule 1098(i)(i) to ‘‘Complex Order’’ with ‘‘Butterfly
Spread,’’ and to ‘‘Complex Market Order’’ with
‘‘Butterfly Spread entered as a Market Order;’’ (2)
revise proposed Phlx Rule 1098(i)(i)(a) to indicate
that the Initial Maximum Value is the distance
between the strike price of the leg with the midpoint and either of the outer leg strike prices; (3)
replace references in proposed Phlx Rule 1098(j)(i)
to ‘‘Complex Order’’ with ‘‘Box Spread’’ and to
‘‘Complex Market Order’’ with ‘‘Box Spread entered
as a Market Order;’’ (4) amend proposed Phlx Rules
1098(i)(i) and (j)(i) to refer to ‘‘an order being
auctioned,’’ rather than an ‘‘auction;’’ and (5) delete
the reference to ‘‘spread’’ in proposed Phlx Rule
1098(j)(i)(b). Because Amendment No. 3 makes only
clarifying and technical changes, and does not
present unique or novel regulatory issues, it is not
subject to notice and comment.
daltland on DSKBBV9HB2PROD with NOTICES
2 17
VerDate Sep<11>2014
19:20 Apr 16, 2018
Jkt 244001
regarding the proposed rule change.
This order approves the proposed rule
change, as modified by Amendment
Nos. 1, 2, and 3.
II. Description of the Proposed Rule
Change, as Modified by Amendment
Nos. 1, 2, and 3
As described more fully in the Notice,
the Exchange proposes to amend Phlx
Rule 1098 to adopt protections that will
prevent the execution of a butterfly
spread 6 or a box spread 7 at a price
outside of specified minimum and
maximum values (the ‘‘Butterfly Spread
Protection’’ and the ‘‘Box Spread
Protection,’’ respectively).8 Under the
Butterfly Spread Protection, a butterfly
spread that is priced higher than the
Maximum Value 9 or lower than the
Minimum Value 10 will be cancelled. A
butterfly spread entered as a market
order will be accepted but will be
restricted from trading at a price that is
higher than the Maximum Value or
lower than the Minimum Value. 11
Similarly, under the Box Spread
Protection, a box spread that is priced
6 A butterfly spread is a three legged Complex
Order with the following: (1) Two legs to buy (sell)
the same number of calls (puts); (2) one leg to sell
(buy) twice the number of calls (puts) with a strike
price at mid-point of the two legs to buy (sell); (3)
all legs have the same expiration; and (4) each leg
strike price is equidistant from the next sequential
strike price. See proposed Phlx Rule 1098(i).
7 A box spread is a four legged Complex Order
with the following: (1) One pair of legs with the
same strike price with one leg to buy a call (put)
and one leg to sell a put (call); (2) a second pair
of legs with a different strike price from the pair
described in (1) with one leg to sell a call (put) and
one leg to buy a put (call); (3) all legs have the same
expiration; and (4) all legs have equal volume. See
proposed Phlx Rule 1098(j).
8 See Notice, 83 FR at 8915.
9 For a butterfly spread, the Maximum Value is
calculated by adding the Initial Maximum Value
(the distance between strike price of the leg with
the mid-point strike and either of the outer leg
strike prices) and the Maximum Value Buffer. The
Maximum Value Buffer is the lesser of a
configurable absolute dollar value or percentage of
the Initial Maximum Value set by the Exchange and
announced via a notice to members. See proposed
Phlx Rule 1098(i)(i)(a).
10 For a butterfly spread, the Minimum Value is
calculated by subtracting the Minimum Value
Buffer (a configurable absolute dollar value set by
the Exchange and announced via a notice to
members) from the Initial Minimum Value of zero.
See proposed Phlx Rule 1098(i)(i)(b). The Phlx
notes that the Minimum Value could be less than
zero. See Notice, 83 FR at 8915. The Phlx states that
a market participant seeking to trade out of a
position at intrinsic value might not find a contraside willing to trade without a premium. The Phlx
notes that an incremental allowance outside of the
minimum/maximum value would allow for a small
premium to offset commissions associated with
trading and could incentivize participants to take
the other side of a spread trading at intrinsic value.
The Phlx further notes that a participant might find
it financially beneficial to pay a small premium to
close out its position rather than carry the position
to expiration and take delivery. See id.
11 See proposed Phlx Rule 1098(i)(i).
PO 00000
Frm 00085
Fmt 4703
Sfmt 4703
16907
higher than the Maximum Value 12 or
lower than the Minimum Value 13 will
be cancelled. A box spread entered as a
market order will be accepted but will
be restricted from trading at a price that
is higher than the Maximum Value or
lower than the Minimum Value.14 The
Butterfly Spread Protection and the Box
Spread Protection apply to orders being
auctioned and to auction responses, and
they apply throughout the trading day,
including during the pre-market, the
opening process, and trading halts.15
The Phlx states that the proposal is
responsive to member input and will
provide members with additional
functionality that will assist them in
managing risk.16 In addition, the Phlx
states that the buffer allowance from the
minimum and maximum values
permitted for the execution of butterfly
and box spreads will provide market
participants with flexibility to manage
their business.17 The Phlx notes that it
currently offers similar order protection
features for Complex Orders to avoid
erroneous trades, including the Strategy
Price Protection and the Acceptable
Complex Execution (‘‘ACE’’)
Parameter.18
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.19 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,20 which requires,
among other things, that the rules of a
national securities exchange be
12 For a box spread, the Maximum Value is
calculated by adding the Initial Maximum Value
(the distance between the strike prices of each pair
of leg strike prices) and the Maximum Value Buffer.
The Maximum Value Buffer is the lesser of a
configurable absolute dollar value or percentage of
the Initial Maximum value set by the Exchange and
announced via a notice to members. See proposed
Phlx Rule 1098(j)(i)(a).
13 For a box spread, the Minimum Value is
calculated by subtracting the Minimum Value
Buffer (a configurable absolute dollar value set by
the Exchange and announced via a notice to
members) from the Initial Minimum Value of zero.
See proposed Phlx Rule 1098(j)(i)(b).
14 See proposed Phlx Rule 1098(j)(i).
15 See proposed Phlx Rules 1098(i)(i) and (ii), and
1098(j)(i) and (ii).
16 See Notice, 83 FR at 8916.
17 See id. at 8917.
18 See id. at 8915. See also Phlx Rules 1098(g)
(Strategy Price Protection) and 1098(h)(i) (ACE
Parameter).
19 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).
20 15 U.S.C. 78f(b)(5).
E:\FR\FM\17APN1.SGM
17APN1
16908
Federal Register / Vol. 83, No. 74 / Tuesday, April 17, 2018 / Notices
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, 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 Commission believes that the
Butterfly Spread Protection and the Box
Spread Protection will help market
participants mitigate risk by preventing
the execution of butterfly and box
spreads at prices that are outside of
specified minimum and maximum
values. The Commission notes that the
Phlx has indicated that the protections
are responsive to input from Phlx
members.21 In addition, the
Commission notes that another options
exchange has adopted similar price
protections.22
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,23 that the
proposed rule change (SR–Phlx–2018–
14), as modified by Amendment Nos. 1,
2, and 3, is approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–07932 Filed 4–16–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
Washington, DC 20549–2736
daltland on DSKBBV9HB2PROD with NOTICES
Extension:
Rule 15g–4, SEC File No. 270–347, OMB
Control No. 3235–0393
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the existing collection of information
provided for in Rule 15g–4—Disclosure
of compensation to brokers or dealers
(17 CRF 240.15g–4) under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.). The Commission plans to submit
this existing collection of information to
21 See
22 See
Notice, 83 FR at 8916.
CBOE Rule 6.53C, Interpretation and Policy
.08(g).
23 15 U.S.C. 78s(b)(2).
24 17 CFR 200.30–3(a)(12).
VerDate Sep<11>2014
19:20 Apr 16, 2018
the Office of Management and Budget
(‘‘OMB’’) for extension and approval.
Rule 15g–4 requires brokers and
dealers effecting transactions in penny
stocks for or with customers to disclose
the amount of compensation received by
the broker-dealer in connection with the
transaction. The purpose of the rule is
to increase the level of disclosure to
investors concerning penny stocks
generally and specific penny stock
transactions.
The Commission estimates that
approximately 195 broker-dealers will
spend an average of 87 hours annually
to comply with this rule. Thus, the total
compliance burden is approximately
16,965 burden-hours per year.
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information shall have practical utility;
(b) the accuracy of the agency’s
estimates of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information to be collected; and
(d) ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing within 60 days of this
publication.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
Please direct your written comments
to: Pamela Dyson, Acting Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Remi PavlikSimon, 100 F Street NE, Washington,
DC 20549 or send an email to PRA_
Mailbox@sec.gov.
Dated: April 11, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–07961 Filed 4–16–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Extension:
Jkt 244001
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
Rule 6e–2 and Form N–6EI–1, SEC File No.
270–177, OMB Control No. 3235–0177
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget a
request for extension of the previously
approved collection of information
discussed below.
Rule 6e–2 (17 CFR 270.6e–2) under
the Investment Company Act of 1940
(‘‘Act’’) (15 U.S.C. 80a) is an exemptive
rule that provides separate accounts
formed by life insurance companies to
fund certain variable life insurance
products, exemptions from certain
provisions of the Act, subject to
conditions set forth in the rule.
Rule 6e–2 provides a separate account
with an exemption from the registration
provisions of section 8(a) of the Act if
the account files with the Commission
Form N–6EI–1 (17 CFR 274.301), a
notification of claim of exemption.
The rule also exempts a separate
account from a number of other sections
of the Act, provided that the separate
account makes certain disclosure in its
registration statements (in the case of
those separate account that elect to
register), reports to contract holders,
proxy solicitations, and submissions to
state regulatory authorities, as
prescribed by the rule.
Since 2008, there have been no filings
of Form N–6EI–1 by separate accounts.
Therefore, there has been no cost or
burden to the industry since that time.
The Commission requests authorization
to maintain an inventory of one burden
hour for administrative purposes.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid
control number.
The public may view the background
documentation for this information
collection at the following website,
www.reginfo.gov. Comments should be
directed to: (i) Desk Officer for the
Securities and Exchange Commission,
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Room 10102, New Executive
Office Building, Washington, DC 20503,
or by sending an email to: Shagufta_
Ahmed@omb.eop.gov; and (ii) Pamela
Dyson, Director/Chief Information
Officer, Securities and Exchange
Commission, c/o Remi Pavlik-Simon,
100 F Street NE, Washington, DC 20549
or send an email to: PRA_Mailbox@
sec.gov. Comments must be submitted to
OMB within 30 days of this notice.
E:\FR\FM\17APN1.SGM
17APN1
]]>Agencies
[Federal Register Volume 83, Number 74 (Tuesday, April 17, 2018)]
[Notices]
[Pages 16907-16908]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-07932]
[[Page 16907]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83033; File No. SR-Phlx-2018-14)
Self-Regulatory Organizations; Nasdaq PHLX LLC; Order Approving a
Proposed Rule Change, as Modified by Amendment Nos. 1, 2, and 3, To
Adopt Protections for Butterfly Spreads and Box Spreads
April 11, 2018.
I. Introduction
On February 9, 2018, Nasdaq PHLX LLC (``Phlx'' or the ``Exchange'')
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 change to
amend Phlx Rule 1098, ``Complex Orders on the System,'' to adopt
protections for Complex Orders that are box spreads or butterfly
spreads.\3\ On February 21, 2018, the Exchange filed Amendment No. 1 to
the proposed rule change, which superseded the original filing in its
entirety. The proposed rule change, as modified by Amendment No. 1, was
published for comment in the Federal Register on March 1, 2018.\4\ On
April 9, 2018, the Exchange filed Amendment No. 2 to the proposal. On
April 10, 2018, the Exchange filed Amendment No. 3 to the proposal,
which superseded Amendment No. 2 in its entirety.\5\ The Commission
received no comments regarding the proposed rule change. This order
approves the proposed rule change, as modified by Amendment Nos. 1, 2,
and 3.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ For purposes of the electronic trading of Complex Orders, a
``Complex Order'' is an order involving the simultaneous purchase
and/or sale of two or more different options series in the same
underlying security, priced as a net debit or credit based on the
relative prices of the individual components, for the same account,
for the purpose of executing a particular investment strategy. See
Phlx Rule 1098(a)(i).
\4\ See Securities Exchange Act Release No. 82766 (February 23,
2018), 83 FR 8914 (March 1, 2018) (``Notice'').
\5\ In Amendment No. 3, the Phlx revised the proposal to (1)
replace references in proposed Phlx Rule 1098(i)(i) to ``Complex
Order'' with ``Butterfly Spread,'' and to ``Complex Market Order''
with ``Butterfly Spread entered as a Market Order;'' (2) revise
proposed Phlx Rule 1098(i)(i)(a) to indicate that the Initial
Maximum Value is the distance between the strike price of the leg
with the mid-point and either of the outer leg strike prices; (3)
replace references in proposed Phlx Rule 1098(j)(i) to ``Complex
Order'' with ``Box Spread'' and to ``Complex Market Order'' with
``Box Spread entered as a Market Order;'' (4) amend proposed Phlx
Rules 1098(i)(i) and (j)(i) to refer to ``an order being
auctioned,'' rather than an ``auction;'' and (5) delete the
reference to ``spread'' in proposed Phlx Rule 1098(j)(i)(b). Because
Amendment No. 3 makes only clarifying and technical changes, and
does not present unique or novel regulatory issues, it is not
subject to notice and comment.
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change, as Modified by Amendment
Nos. 1, 2, and 3
As described more fully in the Notice, the Exchange proposes to
amend Phlx Rule 1098 to adopt protections that will prevent the
execution of a butterfly spread \6\ or a box spread \7\ at a price
outside of specified minimum and maximum values (the ``Butterfly Spread
Protection'' and the ``Box Spread Protection,'' respectively).\8\ Under
the Butterfly Spread Protection, a butterfly spread that is priced
higher than the Maximum Value \9\ or lower than the Minimum Value \10\
will be cancelled. A butterfly spread entered as a market order will be
accepted but will be restricted from trading at a price that is higher
than the Maximum Value or lower than the Minimum Value. \11\ Similarly,
under the Box Spread Protection, a box spread that is priced higher
than the Maximum Value \12\ or lower than the Minimum Value \13\ will
be cancelled. A box spread entered as a market order will be accepted
but will be restricted from trading at a price that is higher than the
Maximum Value or lower than the Minimum Value.\14\ The Butterfly Spread
Protection and the Box Spread Protection apply to orders being
auctioned and to auction responses, and they apply throughout the
trading day, including during the pre-market, the opening process, and
trading halts.\15\
---------------------------------------------------------------------------
\6\ A butterfly spread is a three legged Complex Order with the
following: (1) Two legs to buy (sell) the same number of calls
(puts); (2) one leg to sell (buy) twice the number of calls (puts)
with a strike price at mid-point of the two legs to buy (sell); (3)
all legs have the same expiration; and (4) each leg strike price is
equidistant from the next sequential strike price. See proposed Phlx
Rule 1098(i).
\7\ A box spread is a four legged Complex Order with the
following: (1) One pair of legs with the same strike price with one
leg to buy a call (put) and one leg to sell a put (call); (2) a
second pair of legs with a different strike price from the pair
described in (1) with one leg to sell a call (put) and one leg to
buy a put (call); (3) all legs have the same expiration; and (4) all
legs have equal volume. See proposed Phlx Rule 1098(j).
\8\ See Notice, 83 FR at 8915.
\9\ For a butterfly spread, the Maximum Value is calculated by
adding the Initial Maximum Value (the distance between strike price
of the leg with the mid-point strike and either of the outer leg
strike prices) and the Maximum Value Buffer. The Maximum Value
Buffer is the lesser of a configurable absolute dollar value or
percentage of the Initial Maximum Value set by the Exchange and
announced via a notice to members. See proposed Phlx Rule
1098(i)(i)(a).
\10\ For a butterfly spread, the Minimum Value is calculated by
subtracting the Minimum Value Buffer (a configurable absolute dollar
value set by the Exchange and announced via a notice to members)
from the Initial Minimum Value of zero. See proposed Phlx Rule
1098(i)(i)(b). The Phlx notes that the Minimum Value could be less
than zero. See Notice, 83 FR at 8915. The Phlx states that a market
participant seeking to trade out of a position at intrinsic value
might not find a contra-side willing to trade without a premium. The
Phlx notes that an incremental allowance outside of the minimum/
maximum value would allow for a small premium to offset commissions
associated with trading and could incentivize participants to take
the other side of a spread trading at intrinsic value. The Phlx
further notes that a participant might find it financially
beneficial to pay a small premium to close out its position rather
than carry the position to expiration and take delivery. See id.
\11\ See proposed Phlx Rule 1098(i)(i).
\12\ For a box spread, the Maximum Value is calculated by adding
the Initial Maximum Value (the distance between the strike prices of
each pair of leg strike prices) and the Maximum Value Buffer. The
Maximum Value Buffer is the lesser of a configurable absolute dollar
value or percentage of the Initial Maximum value set by the Exchange
and announced via a notice to members. See proposed Phlx Rule
1098(j)(i)(a).
\13\ For a box spread, the Minimum Value is calculated by
subtracting the Minimum Value Buffer (a configurable absolute dollar
value set by the Exchange and announced via a notice to members)
from the Initial Minimum Value of zero. See proposed Phlx Rule
1098(j)(i)(b).
\14\ See proposed Phlx Rule 1098(j)(i).
\15\ See proposed Phlx Rules 1098(i)(i) and (ii), and 1098(j)(i)
and (ii).
---------------------------------------------------------------------------
The Phlx states that the proposal is responsive to member input and
will provide members with additional functionality that will assist
them in managing risk.\16\ In addition, the Phlx states that the buffer
allowance from the minimum and maximum values permitted for the
execution of butterfly and box spreads will provide market participants
with flexibility to manage their business.\17\ The Phlx notes that it
currently offers similar order protection features for Complex Orders
to avoid erroneous trades, including the Strategy Price Protection and
the Acceptable Complex Execution (``ACE'') Parameter.\18\
---------------------------------------------------------------------------
\16\ See Notice, 83 FR at 8916.
\17\ See id. at 8917.
\18\ See id. at 8915. See also Phlx Rules 1098(g) (Strategy
Price Protection) and 1098(h)(i) (ACE Parameter).
---------------------------------------------------------------------------
III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\19\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\20\ which
requires, among other things, that the rules of a national securities
exchange be
[[Page 16908]]
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, 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.
---------------------------------------------------------------------------
\19\ 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).
\20\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Commission believes that the Butterfly Spread Protection and
the Box Spread Protection will help market participants mitigate risk
by preventing the execution of butterfly and box spreads at prices that
are outside of specified minimum and maximum values. The Commission
notes that the Phlx has indicated that the protections are responsive
to input from Phlx members.\21\ In addition, the Commission notes that
another options exchange has adopted similar price protections.\22\
---------------------------------------------------------------------------
\21\ See Notice, 83 FR at 8916.
\22\ See CBOE Rule 6.53C, Interpretation and Policy .08(g).
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\23\ that the proposed rule change (SR-Phlx-2018-14), as modified
by Amendment Nos. 1, 2, and 3, is approved.
---------------------------------------------------------------------------
\23\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
---------------------------------------------------------------------------
\24\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-07932 Filed 4-16-18; 8:45 am]
BILLING CODE 8011-01-P
