80_FR_10212 80 FR 10175 - Self-Regulatory Organizations; ISE Gemini, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend the Limit Up-Limit Down Obvious Error Pilot

80 FR 10175 - Self-Regulatory Organizations; ISE Gemini, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend the Limit Up-Limit Down Obvious Error Pilot

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 37 (February 25, 2015)

Page Range10175-10177
FR Document2015-03822

Federal Register, Volume 80 Issue 37 (Wednesday, February 25, 2015)
[Federal Register Volume 80, Number 37 (Wednesday, February 25, 2015)]
[Notices]
[Pages 10175-10177]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-03822]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74311; File No. SR-ISEGemini-2015-05]


Self-Regulatory Organizations; ISE Gemini, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change to Extend the Limit 
Up-Limit Down Obvious Error Pilot

February 19, 2015.
    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 February 19, 2015, ISE Gemini, LLC (the ``Exchange'' or ``ISE 
Gemini'') filed with the Securities and Exchange Commission 
(``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\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    ISE Gemini proposes to extend a pilot program under Rule 703A(d) 
that suspends Rule 720 regarding obvious errors during Limit and 
Straddle States in securities that underlie options traded on the 
Exchange. The text of the proposed rule change is available on the 
Exchange's Internet Web site at http://www.ise.com, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The self-regulatory organization has prepared summaries, 
set forth in Sections A, B and C below, of the most significant aspects 
of such statements.

[[Page 10176]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Rule 703A(d), which was adopted as part of the Exchange's Form 1 
application for registration as a national securities exchange,\3\ is 
designed to address certain issues related to the Plan to Address 
Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS 
under the Act (the ``Limit Up-Limit Down Plan'' or the ``Plan'').\4\ 
Specifically, pursuant to a pilot program adopted under Rule 703A(d), 
the Exchange excludes transactions executed during a Limit State \5\ or 
Straddle State \6\ from the obvious error provisions of Rule 720. The 
purpose of this filing is to extend the effectiveness of the pilot 
program to coincide with the proposed extension of the Limit Up-Limit 
Down Plan to October 23, 2015.\7\
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    \3\ The Securities and Exchange Commission granted the 
Exchange's application for registration as a national securities 
exchange on July 26, 2013. See Securities Exchange Act Release No. 
Release No. 70050 (July 26, 2013), 78 FR 46622 (Aug. 1, 2013).
    \4\ See Securities Exchange Act Release No. 67091 (May 31, 
2012), 77 FR 33498 (June 6, 2012) (the ``Limit Up-Limit Down 
Release'').
    \5\ The term ``Limit State'' means the condition when the 
national best bid or national best offer for an underlying security 
equals an applicable price band, as determined by the primary 
listing exchange for the underlying security. See Rule 703A.
    \6\ The term ``Straddle State'' means the condition when the 
national best bid or national best offer for an underlying security 
is non-executable, as determined by the primary listing exchange for 
the underlying security, but the security is not in a Limit State. 
See Rule 703A.
    \7\ See Exchange Act Release No. 74110 (January 21, 2015), 80 FR 
4321 (January 27, 2015) (Eighth Amendment to the Limit-Up Limit-Down 
Plan). The Exchange notes that the current text of Rule 703A 
mistakenly states a pilot period end date of April 8, 2014, which 
was the prior end date selected by the options exchanges for this 
industry wide initiative. The Exchange has maintained compliance 
with Rule 703A, including by submitting applicable pilot reports 
subsequent to this date.
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    The Exchange believes the benefits to market participants from this 
provision should continue on a pilot basis. The Exchange continues to 
believe that adding certainty to the execution of orders in Limit or 
Straddle States will encourage market participants to continue to 
provide liquidity to the Exchange, and, thus, promote a fair and 
orderly market during these periods. Barring this provision, the 
obvious error provisions of Rule 720 would likely apply in many 
instances during Limit and Straddle States. The Exchange believes that 
continuing the pilot will protect against any unanticipated 
consequences in the options markets during a Limit or Straddle State. 
Thus, the Exchange believes that the protections of current rule should 
continue while the industry gains further experience operating the 
Plan.
    In connection with this proposed extension, each month the Exchange 
shall provide to the Commission, and the public, a dataset containing 
the data for each Straddle and Limit State in optionable stocks that 
had at least one trade on the Exchange. For each trade on the Exchange, 
the Exchange will provide (a) the stock symbol, option symbol, time at 
the start of the Straddle or Limit State, an indicator for whether it 
is a Straddle or Limit State, and (b) for the trades on the Exchange, 
the executed volume, time-weighted quoted bid-ask spread, time-weighted 
average quoted depth at the bid, time-weighted average quoted depth at 
the offer, high execution price, low execution price, number of trades 
for which a request for review for error was received during Straddle 
and Limit States, an indicator variable for whether those options 
outlined above have a price change exceeding 30% during the underlying 
stock's Limit or Straddle State compared to the last available option 
price as reported by OPRA before the start of the Limit or Straddle 
State (1 if observe 30% and 0 otherwise), and another indicator 
variable for whether the option price within five minutes of the 
underlying stock leaving the Limit or Straddle State (or halt if 
applicable) is 30% away from the price before the start of the Limit or 
Straddle State.
    In addition, the Exchange will provide to the Commission, and the 
public, no later than May 29, 2015, assessments relating to the impact 
of the operation of the obvious error rules during Limit and Straddle 
States including: (1) An evaluation of the statistical and economic 
impact of Limit and Straddle States on liquidity and market quality in 
the options markets, and (2) an assessment of whether the lack of 
obvious error rules in effect during the Straddle and Limit States are 
problematic.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with the 
requirements of the Act and the rules and regulations thereunder that 
are applicable to a national securities exchange, and, in particular, 
with the requirements of Section 6(b) of the Act.\8\ In particular, the 
proposal is consistent with Section 6(b)(5) of the Act,\9\ because it 
is designed to promote just and equitable principles of trade, 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) \10\ requirement that the 
rules of an exchange not be designed to permit unfair discrimination 
between customers, issuers, brokers, or dealers.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ Id.
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    In particular, the Exchange further believes that it is necessary 
and appropriate in the interest of promoting fair and orderly markets 
to exclude transactions executed during a Limit or Straddle State from 
certain aspects of Rule 720. The Exchange believes the application of 
the current rule will be impracticable given the lack of a reliable 
national best bid or offer in the options market during Limit and 
Straddle States, and that the resulting actions (i.e., nullified trades 
or adjusted prices) may not be appropriate given market conditions. 
Extension of this pilot would ensure that limit orders that are filled 
during a Limit or Straddle State would have certainty of execution in a 
manner that promotes just and equitable principles of trade, removes 
impediments to, and perfects the mechanism of a free and open market 
and a national market system. Thus, the Exchange believes that the 
protections of the pilot should continue while the industry gains 
further experience operating the Plan.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. Specifically, the Exchange 
believes that, by extending the expiration of the pilot, the proposed 
rule change will allow for further analysis of the pilot and a 
determination of how the pilot shall be structured in the future. In 
doing so, the proposed rule change will also serve to promote 
regulatory clarity and consistency, thereby reducing burdens on the 
marketplace and facilitating investor protection.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The

[[Page 10177]]

Exchange has not received any unsolicited written comments from members 
or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the 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 if consistent with the protection of investors 
and the public interest, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6)(iii) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
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    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 believes that waiving the 30-day operative delay 
is consistent with the protection of investors and the public interest, 
as it will allow the obvious error pilot program to continue 
uninterrupted while the industry gains further experience operating 
under the Plan, and avoid any investor confusion that could result from 
a temporary interruption in the pilot program. For this reason, the 
Commission designates the proposed rule change to be operative upon 
filing.\13\
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    \13\ 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-ISEGemini-2015-05 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-ISEGemini-2015-05. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-ISEGemini-2015-05, and 
should be submitted on or before March 18, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-03822 Filed 2-24-15; 8:45 am]
BILLING CODE 8011-01-P



                                                                               Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices                                               10175

                                                    III. Date of Effectiveness of the                       Comments may be submitted by any of                    SECURITIES AND EXCHANGE
                                                    Proposed Rule Change and Timing for                     the following methods:                                 COMMISSION
                                                    Commission Action
                                                                                                            Electronic Comments
                                                       Because the proposed rule change                                                                            [Release No. 34–74311; File No. SR–
                                                    does not (i) significantly affect the                     • Use the Commission’s Internet                      ISEGemini–2015–05]
                                                    protection of investors or the public                   comment form (http://www.sec.gov/
                                                    interest; (ii) impose any significant                   rules/sro.shtml); or                                   Self-Regulatory Organizations; ISE
                                                    burden on competition; and (iii) become                                                                        Gemini, LLC; Notice of Filing and
                                                                                                              • Send an email to rule-comments@
                                                    operative for 30 days from the date on                                                                         Immediate Effectiveness of Proposed
                                                                                                            sec.gov. Please include File Number SR–
                                                    which it was filed, or such shorter time                                                                       Rule Change to Extend the Limit Up-
                                                    as the Commission may designate, the                    MIAX–2015–10 on the subject line.
                                                                                                                                                                   Limit Down Obvious Error Pilot
                                                    proposed rule change has become                         Paper Comments
                                                    effective pursuant to Section 19(b)(3)(A)                                                                      February 19, 2015.
                                                    of the Act 13 and Rule 19b–4(f)(6)                         • Send paper comments in triplicate                    Pursuant to Section 19(b)(1) of the
                                                    thereunder.14                                           to Secretary, Securities and Exchange                  Securities Exchange Act of 1934 (the
                                                       The Exchange has asked the                           Commission, 100 F Street NE.,                          ‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                    Commission to waive the 30-day                          Washington, DC 20549–1090.                             notice is hereby given that on February
                                                    operative delay so that the proposal may
                                                                                                            All submissions should refer to File                   19, 2015, ISE Gemini, LLC (the
                                                    become operative immediately upon
                                                                                                            Number SR–MIAX–2015–10. This file                      ‘‘Exchange’’ or ‘‘ISE Gemini’’) filed with
                                                    filing. The Exchange stated that waiver
                                                    of this requirement will allow the                      number should be included on the                       the Securities and Exchange
                                                    Exchange to compete with other                          subject line if email is used. To help the             Commission (‘‘Commission’’) the
                                                    exchanges with similar provisions                       Commission process and review your                     proposed rule change as described in
                                                    without putting the Exchange at a                       comments more efficiently, please use                  Items I and II below, which Items have
                                                    competitive disadvantage. For this                      only one method. The Commission will                   been prepared by the self-regulatory
                                                    reason, the Commission believes that                    post all comments on the Commission’s                  organization. The Commission is
                                                    the proposed rule change presents no                    Internet Web site (http://www.sec.gov/                 publishing this notice to solicit
                                                    novel issues and that waiver of the 30-                 rules/sro.shtml). Copies of the                        comments on the proposed rule change
                                                    day operative delay is consistent with                  submission, all subsequent                             from interested persons.
                                                    the protection of investors and the                     amendments, all written statements
                                                    public interest; and will allow the                     with respect to the proposed rule                      I. Self-Regulatory Organization’s
                                                    Exchange to remain competitive with                     change that are filed with the                         Statement of the Terms of the Substance
                                                    other exchanges. Therefore, the                         Commission, and all written                            of the Proposed Rule Change
                                                    Commission designates the proposed                      communications relating to the                            ISE Gemini proposes to extend a pilot
                                                    rule change to be operative upon                        proposed rule change between the
                                                    filing.15                                                                                                      program under Rule 703A(d) that
                                                                                                            Commission and any person, other than                  suspends Rule 720 regarding obvious
                                                       At any time within 60 days of the                    those that may be withheld from the
                                                    filing of the proposed rule change, the                                                                        errors during Limit and Straddle States
                                                                                                            public in accordance with the                          in securities that underlie options
                                                    Commission summarily may
                                                                                                            provisions of 5 U.S.C. 552, will be                    traded on the Exchange. The text of the
                                                    temporarily suspend such rule change if
                                                    it appears to the Commission that such                  available for Web site viewing and                     proposed rule change is available on the
                                                    action is necessary or appropriate in the               printing in the Commission’s Public                    Exchange’s Internet Web site at http://
                                                    public interest, for the protection of                  Reference Room, 100 F Street NE.,                      www.ise.com, at the principal office of
                                                    investors, or otherwise in furtherance of               Washington, DC 20549, on official                      the Exchange, and at the Commission’s
                                                    the purposes of the Act. If the                         business days between the hours of                     Public Reference Room.
                                                    Commission takes such action, the                       10:00 a.m. and 3:00 p.m. Copies of the
                                                    Commission shall institute proceedings                  filing also will be available for                      II. Self-Regulatory Organization’s
                                                    to determine whether the proposed rule                  inspection and copying at the principal                Statement of the Purpose of, and
                                                    should be approved or disapproved.                      office of the Exchange. All comments                   Statutory Basis for, the Proposed Rule
                                                                                                            received will be posted without change;                Change
                                                    IV. Solicitation of Comments
                                                                                                            the Commission does not edit personal
                                                      Interested persons are invited to                                                                              In its filing with the Commission, the
                                                                                                            identifying information from
                                                    submit written data, views and                                                                                 Exchange included statements
                                                                                                            submissions. You should submit only
                                                    arguments concerning the foregoing,                                                                            concerning the purpose of, and basis for,
                                                                                                            information that you wish to make
                                                    including whether the proposed rule                                                                            the proposed rule change and discussed
                                                                                                            available publicly. All submissions
                                                    change is consistent with the Act.                                                                             any comments it received on the
                                                                                                            should refer to File Number SR–MIAX–
                                                                                                                                                                   proposed rule change. The text of these
                                                                                                            2015–10 and should be submitted on or
                                                      13 15  U.S.C. 78s(b)(3)(A).                                                                                  statements may be examined at the
                                                                                                            before March 18, 2015.
                                                      14 17  CFR 240.19b–4(f)(6). As required under Rule                                                           places specified in Item IV below. The
                                                    19b–4(f)(6)(iii), the Exchange provided the               For the Commission, by the Division of               self-regulatory organization has
                                                    Commission with written notice of its intent to file
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                                                                                                            Trading and Markets, pursuant to delegated             prepared summaries, set forth in
                                                    the proposed rule change, along with a brief
                                                    description and the text of the proposed rule           authority.16                                           Sections A, B and C below, of the most
                                                    change, at least five business days prior to the date   Brent J. Fields,                                       significant aspects of such statements.
                                                    of filing of the proposed rule change, or such
                                                    shorter time as designated by the Commission.           Secretary.
                                                       15 For purposes only of waiving the 30-day           [FR Doc. 2015–03810 Filed 2–24–15; 8:45 am]
                                                    operative delay, the Commission has also                BILLING CODE 8011–01–P
                                                    considered the proposed rule’s impact on
                                                                                                                                                                     1 15   U.S.C. 78s(b)(1).
                                                    efficiency, competition, and capital formation. See
                                                    15 U.S.C. 78c(f).                                         16 17   CFR 200.30–3(a)(12).                           2 17   CFR 240.19b–4.



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                                                    10176                      Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices

                                                    A. Self-Regulatory Organization’s                       consequences in the options markets                     it is designed to promote just and
                                                    Statement of the Purpose of, and                        during a Limit or Straddle State. Thus,                 equitable principles of trade, remove
                                                    Statutory Basis for, the Proposed Rule                  the Exchange believes that the                          impediments to and perfect the
                                                    Change                                                  protections of current rule should                      mechanisms of a free and open market
                                                                                                            continue while the industry gains                       and a national market system and, in
                                                    1. Purpose
                                                                                                            further experience operating the Plan.                  general, to protect investors and the
                                                       Rule 703A(d), which was adopted as                      In connection with this proposed                     public interest. Additionally, the
                                                    part of the Exchange’s Form 1                           extension, each month the Exchange                      Exchange believes the proposed rule
                                                    application for registration as a national              shall provide to the Commission, and                    change is consistent with the Section
                                                    securities exchange,3 is designed to                    the public, a dataset containing the data               6(b)(5) 10 requirement that the rules of
                                                    address certain issues related to the Plan              for each Straddle and Limit State in                    an exchange not be designed to permit
                                                    to Address Extraordinary Market                         optionable stocks that had at least one                 unfair discrimination between
                                                    Volatility Pursuant to Rule 608 of                      trade on the Exchange. For each trade                   customers, issuers, brokers, or dealers.
                                                    Regulation NMS under the Act (the                       on the Exchange, the Exchange will                         In particular, the Exchange further
                                                    ‘‘Limit Up-Limit Down Plan’’ or the                     provide (a) the stock symbol, option                    believes that it is necessary and
                                                    ‘‘Plan’’).4 Specifically, pursuant to a                 symbol, time at the start of the Straddle               appropriate in the interest of promoting
                                                    pilot program adopted under Rule                        or Limit State, an indicator for whether                fair and orderly markets to exclude
                                                    703A(d), the Exchange excludes                          it is a Straddle or Limit State, and (b)                transactions executed during a Limit or
                                                    transactions executed during a Limit                    for the trades on the Exchange, the                     Straddle State from certain aspects of
                                                    State 5 or Straddle State 6 from the                    executed volume, time-weighted quoted                   Rule 720. The Exchange believes the
                                                    obvious error provisions of Rule 720.                   bid-ask spread, time-weighted average                   application of the current rule will be
                                                    The purpose of this filing is to extend                 quoted depth at the bid, time-weighted                  impracticable given the lack of a reliable
                                                    the effectiveness of the pilot program to               average quoted depth at the offer, high                 national best bid or offer in the options
                                                    coincide with the proposed extension of                 execution price, low execution price,                   market during Limit and Straddle
                                                    the Limit Up-Limit Down Plan to                         number of trades for which a request for                States, and that the resulting actions
                                                    October 23, 2015.7                                      review for error was received during                    (i.e., nullified trades or adjusted prices)
                                                       The Exchange believes the benefits to                Straddle and Limit States, an indicator                 may not be appropriate given market
                                                    market participants from this provision                 variable for whether those options                      conditions. Extension of this pilot
                                                    should continue on a pilot basis. The                   outlined above have a price change                      would ensure that limit orders that are
                                                    Exchange continues to believe that                      exceeding 30% during the underlying                     filled during a Limit or Straddle State
                                                    adding certainty to the execution of                    stock’s Limit or Straddle State compared                would have certainty of execution in a
                                                    orders in Limit or Straddle States will                 to the last available option price as                   manner that promotes just and equitable
                                                    encourage market participants to                        reported by OPRA before the start of the                principles of trade, removes
                                                    continue to provide liquidity to the                    Limit or Straddle State (1 if observe                   impediments to, and perfects the
                                                    Exchange, and, thus, promote a fair and                 30% and 0 otherwise), and another                       mechanism of a free and open market
                                                    orderly market during these periods.                    indicator variable for whether the                      and a national market system. Thus, the
                                                    Barring this provision, the obvious error               option price within five minutes of the                 Exchange believes that the protections
                                                    provisions of Rule 720 would likely                     underlying stock leaving the Limit or                   of the pilot should continue while the
                                                    apply in many instances during Limit                    Straddle State (or halt if applicable) is               industry gains further experience
                                                    and Straddle States. The Exchange                       30% away from the price before the start                operating the Plan.
                                                    believes that continuing the pilot will                 of the Limit or Straddle State.
                                                    protect against any unanticipated                          In addition, the Exchange will                       B. Self-Regulatory Organization’s
                                                                                                            provide to the Commission, and the                      Statement on Burden on Competition
                                                       3 The Securities and Exchange Commission
                                                                                                            public, no later than May 29, 2015,                       The Exchange does not believe that
                                                    granted the Exchange’s application for registration
                                                    as a national securities exchange on July 26, 2013.     assessments relating to the impact of the               the proposed rule change will impose
                                                    See Securities Exchange Act Release No. Release         operation of the obvious error rules                    any burden on competition that is not
                                                    No. 70050 (July 26, 2013), 78 FR 46622 (Aug. 1,         during Limit and Straddle States                        necessary or appropriate in furtherance
                                                    2013).                                                  including: (1) An evaluation of the                     of the purposes of the Act. Specifically,
                                                       4 See Securities Exchange Act Release No. 67091
                                                                                                            statistical and economic impact of Limit                the Exchange believes that, by extending
                                                    (May 31, 2012), 77 FR 33498 (June 6, 2012) (the
                                                    ‘‘Limit Up-Limit Down Release’’).                       and Straddle States on liquidity and                    the expiration of the pilot, the proposed
                                                       5 The term ‘‘Limit State’’ means the condition       market quality in the options markets,                  rule change will allow for further
                                                    when the national best bid or national best offer for   and (2) an assessment of whether the                    analysis of the pilot and a determination
                                                    an underlying security equals an applicable price                                                               of how the pilot shall be structured in
                                                    band, as determined by the primary listing
                                                                                                            lack of obvious error rules in effect
                                                    exchange for the underlying security. See Rule          during the Straddle and Limit States are                the future. In doing so, the proposed
                                                    703A.                                                   problematic.                                            rule change will also serve to promote
                                                       6 The term ‘‘Straddle State’’ means the condition                                                            regulatory clarity and consistency,
                                                    when the national best bid or national best offer for   2. Statutory Basis                                      thereby reducing burdens on the
                                                    an underlying security is non-executable, as               The Exchange believes that its
                                                    determined by the primary listing exchange for the
                                                                                                                                                                    marketplace and facilitating investor
                                                    underlying security, but the security is not in a       proposal is consistent with the                         protection.
                                                    Limit State. See Rule 703A.                             requirements of the Act and the rules
                                                                                                                                                                    C. Self-Regulatory Organization’s
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                                                       7 See Exchange Act Release No. 74110 (January
                                                                                                            and regulations thereunder that are
                                                    21, 2015), 80 FR 4321 (January 27, 2015) (Eighth        applicable to a national securities                     Statement on Comments on the
                                                    Amendment to the Limit-Up Limit-Down Plan). The
                                                                                                            exchange, and, in particular, with the                  Proposed Rule Change Received From
                                                    Exchange notes that the current text of Rule 703A                                                               Members, Participants, or Others
                                                    mistakenly states a pilot period end date of April      requirements of Section 6(b) of the Act.8
                                                    8, 2014, which was the prior end date selected by       In particular, the proposal is consistent                 The Exchange has not solicited, and
                                                    the options exchanges for this industry wide            with Section 6(b)(5) of the Act,9 because               does not intend to solicit, comments on
                                                    initiative. The Exchange has maintained
                                                    compliance with Rule 703A, including by
                                                                                                                                                                    this proposed rule change. The
                                                                                                              8 15   U.S.C. 78f(b).
                                                    submitting applicable pilot reports subsequent to
                                                    this date.                                                9 15   U.S.C. 78f(b)(5).                                10 Id.




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                                                                               Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices                                          10177

                                                    Exchange has not received any                           arguments concerning the foregoing,                    SECURITIES AND EXCHANGE
                                                    unsolicited written comments from                       including whether the proposed rule                    COMMISSION
                                                    members or other interested parties.                    change is consistent with the Act.
                                                                                                            Comments may be submitted by any of                    [Release No. 34–74306; File No. SR–BOX–
                                                    III. Date of Effectiveness of the
                                                                                                            the following methods:                                 2015–13]
                                                    Proposed Rule Change and Timing for
                                                    Commission Action                                       Electronic Comments
                                                                                                                                                                   Self-Regulatory Organizations; BOX
                                                       Because the proposed rule change                       • Use the Commission’s Internet                      Options Exchange LLC; Notice of
                                                    does not (i) significantly affect the                   comment form (http://www.sec.gov/                      Filing and Immediate Effectiveness of
                                                    protection of investors or the public                   rules/sro.shtml); or                                   a Proposed Rule Change To Extend
                                                    interest; (ii) impose any significant                     • Send an email to rule-                             the Pilot Program That Suspends
                                                    burden on competition; and (iii) become                 comments@sec.gov. Please include File                  Certain Obvious Error Provisions
                                                    operative for 30 days from the date on                  Number SR–ISEGemini–2015–05 on the                     During Limit Up-Limit Down States in
                                                    which it was filed, or such shorter time                subject line.                                          Securities That Underlie Options
                                                    as the Commission may designate if                                                                             Traded on the Exchange
                                                                                                            Paper Comments
                                                    consistent with the protection of
                                                    investors and the public interest, the                     • Send paper comments in triplicate                 February 19, 2015.
                                                    proposed rule change has become                         to Brent J. Fields, Secretary, Securities                 Pursuant to Section 19(b)(1) of the
                                                    effective pursuant to Section 19(b)(3)(A)               and Exchange Commission, 100 F Street                  Securities Exchange Act of 1934 (the
                                                    of the Act 11 and Rule 19b–4(f)(6)(iii)                 NE., Washington, DC 20549–1090.                        ‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                    thereunder.12                                           All submissions should refer to File                   notice is hereby given that on February
                                                       The Exchange has asked the                           Number SR–ISEGemini–2015–05. This                      18, 2015, BOX Options Exchange LLC
                                                    Commission to waive the 30-day                          file number should be included on the                  (the ‘‘Exchange’’) filed with the
                                                    operative delay so that the proposal may                subject line if email is used. To help the             Securities and Exchange Commission
                                                    become operative immediately upon                       Commission process and review your                     (‘‘Commission’’) the proposed rule
                                                    filing. The Commission believes that                    comments more efficiently, please use                  change as described in Items I and II
                                                    waiving the 30-day operative delay is                   only one method. The Commission will                   below, which Items have been prepared
                                                    consistent with the protection of                       post all comments on the Commission’s                  by the self-regulatory organization. The
                                                    investors and the public interest, as it                Internet Web site (http://www.sec.gov/                 Commission is publishing this notice to
                                                    will allow the obvious error pilot                      rules/sro.shtml). Copies of the                        solicit comments on the proposed rule
                                                    program to continue uninterrupted                       submission, all subsequent                             change from interested persons.
                                                    while the industry gains further                        amendments, all written statements
                                                    experience operating under the Plan,                    with respect to the proposed rule                      I. Self-Regulatory Organization’s
                                                    and avoid any investor confusion that                   change that are filed with the                         Statement of the Terms of the Substance
                                                    could result from a temporary                           Commission, and all written                            of the Proposed Rule Change
                                                    interruption in the pilot program. For                  communications relating to the                            The Exchange proposes to amend
                                                    this reason, the Commission designates                  proposed rule change between the                       Interpretive Material 1 to Rule 7080 to
                                                    the proposed rule change to be operative                Commission and any person, other than                  extend, through October 23, 2015, the
                                                    upon filing.13                                          those that may be withheld from the                    pilot program that suspends certain
                                                       At any time within 60 days of the                    public in accordance with the                          obvious error provisions during limit
                                                    filing of the proposed rule change, the                 provisions of 5 U.S.C. 552, will be                    up-limit down states in securities that
                                                    Commission summarily may                                available for Web site viewing and                     underlie options traded on the
                                                    temporarily suspend such rule change if                 printing in the Commission’s Public                    Exchange. The text of the proposed rule
                                                    it appears to the Commission that such                  Reference Room, 100 F Street NE.,                      change is available from the principal
                                                    action is necessary or appropriate in the               Washington, DC 20549 on official                       office of the Exchange, at the
                                                    public interest, for the protection of                  business days between the hours of                     Commission’s Public Reference Room
                                                    investors, or otherwise in furtherance of               10:00 a.m. and 3:00 p.m. Copies of such                and also on the Exchange’s Internet Web
                                                    the purposes of the Act. If the                         filing also will be available for                      site at http://boxexchange.com.
                                                    Commission takes such action, the                       inspection and copying at the principal
                                                    Commission shall institute proceedings                  office of the Exchange. All comments                   II. Self-Regulatory Organization’s
                                                    to determine whether the proposed rule                  received will be posted without change;                Statement of the Purpose of, and
                                                    should be approved or disapproved.                      the Commission does not edit personal                  Statutory Basis for, the Proposed Rule
                                                                                                            identifying information from                           Change
                                                    IV. Solicitation of Comments
                                                                                                            submissions. You should submit only                      In its filing with the Commission, the
                                                      Interested persons are invited to                     information that you wish to make                      self-regulatory organization included
                                                    submit written data, views, and                         available publicly. All submissions                    statements concerning the purpose of,
                                                                                                            should refer to File Number SR–                        and basis for, the proposed rule change
                                                      11 15  U.S.C. 78s(b)(3)(A).                           ISEGemini–2015–05, and should be                       and discussed any comments it received
                                                      12 17  CFR 240.19b–4(f)(6)(iii). As required under    submitted on or before March 18, 2015.                 on the proposed rule change. The text
                                                    Rule 19b–4(f)(6)(iii), the Exchange provided the
                                                    Commission with written notice of its intent to file      For the Commission, by the Division of               of these statements may be examined at
asabaliauskas on DSK5VPTVN1PROD with NOTICES




                                                    the proposed rule change, along with a brief            Trading and Markets, pursuant to delegated             the places specified in Item IV below.
                                                    description and the text of the proposed rule           authority.14
                                                    change, at least five business days prior to the date                                                          The self-regulatory organization has
                                                    of filing of the proposed rule change, or such          Brent J. Fields,                                       prepared summaries, set forth in
                                                    shorter time as designated by the Commission.           Secretary.                                             Sections A, B, and C below, of the most
                                                       13 For purposes only of waiving the 30-day
                                                                                                            [FR Doc. 2015–03822 Filed 2–24–15; 8:45 am]            significant aspects of such statements.
                                                    operative delay, the Commission has also
                                                    considered the proposed rule’s impact on                BILLING CODE 8011–01–P
                                                                                                                                                                     1 15   U.S.C. 78s(b)(1).
                                                    efficiency, competition, and capital formation. See
                                                    15 U.S.C. 78c(f).                                         14 17   CFR 200.30–3(a)(12).                           2 17   CFR 240.19b–4.



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Document Created: 2015-12-18 13:08:37
Document Modified: 2015-12-18 13:08:37
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation80 FR 10175 

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