80_FR_10229 80 FR 10192 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Exchange Rule 6.25

80 FR 10192 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Exchange Rule 6.25

SECURITIES AND EXCHANGE COMMISSION

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

Page Range10192-10194
FR Document2015-03820

Federal Register, Volume 80 Issue 37 (Wednesday, February 25, 2015)
[Federal Register Volume 80, Number 37 (Wednesday, February 25, 2015)]
[Notices]
[Pages 10192-10194]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-03820]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74312; File No. SR-CBOE-2015-18]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to Exchange Rule 6.25

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, Chicago Board Options Exchange, 
Incorporated (the ``Exchange'' or ``CBOE'') 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 Exchange. 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

    The Exchange proposes to extend a pilot program related to Rule 
6.25 (Nullification and Adjustment of Options Transactions). The text 
of the proposed rule change is available on the Exchange's Web site 
(http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the 
Exchange's Office of the Secretary, and at the Commission's Public 
Reference Room.

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

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

[[Page 10193]]

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

1. Purpose
    The purpose of this filing is to extend the effectiveness of the 
Exchange's current rule applicable to obvious errors. Interpretation 
and Policy .06 to Rule 6.25, explained in further detail below, is 
currently operating on a pilot program set to expire on February 20, 
2015. The Exchange proposes to extend the pilot program to October 23, 
2015.
    On April 5, 2013, the Commission approved, on a pilot basis, 
amendments to Exchange Rule 6.25 that stated that options executions 
will not be adjusted or nullified if the execution occurs while the 
underlying security is in a limit or straddle state as defined by the 
Plan. Under the terms of this current pilot program, though options 
executions will generally not be adjusted or nullified while the 
underlying security is in a limit or straddle state, such executions 
may be reviewed by the Exchange should the Exchange decide to do so 
under its own motion.
    Pursuant to a comment letter filed in connection with the order 
approving the establishment of the pilot, the Exchange committed to 
submit monthly data regarding the program. In addition, the Exchange 
agreed to submit an overall analysis of the pilot in conjunction with 
the data submitted under the Plan and any other data as requested by 
the Commission. Pursuant to a rule filing, approved on April 3, 2014, 
each month, the Exchange committed to provide 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. The 
Exchange will continue to provide the Commission with this data on a 
monthly basis from February 2015 through the end of the pilot. 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.
    The Exchange is now proposing to extend the pilot period until 
October 23, 2015. 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 provisions of Rule 6.25 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.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\3\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \4\ requirements that the rules of an exchange be 
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 
mechanism 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)\5\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
    \5\ 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 the Exchange Rule 6.25. The Exchange believes the 
application of the current rule will be impracticable given the lack of 
a reliable NBBO 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

    CBOE 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 neither solicited nor received comments on the 
proposed rule change.

[[Page 10194]]

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 \6\ and Rule 19b-
4(f)(6)(iii) thereunder.\7\
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 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 to Address Extraordinary Market Volatility, 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.\8\
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    \8\ 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 [email protected]. Please include 
File Number SR-CBOE-2015-18 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2015-18. 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-CBOE-2015-18, and should be 
submitted on or before March 18, 2015.
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    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Brent J. Fields,
Secretary.
[FR Doc. 2015-03820 Filed 2-24-15; 8:45 am]
BILLING CODE 8011-01-P



                                                    10192                     Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices

                                                    to the Exchange’s existing rules                        traded common stocks (when the Sub-                    SECURITIES AND EXCHANGE
                                                    governing the trading of equity                         Adviser determines that it is more                     COMMISSION
                                                    securities. In support of this proposal,                efficient or otherwise advantageous to
                                                    the Exchange has also made the                          do so), money market funds, U.S.                       [Release No. 34–74312; File No. SR–CBOE–
                                                    following representations:                              treasuries, or money market                            2015–18]
                                                       (1) The Shares will be subject to Rule               instruments. In order to seek its
                                                    5735, which sets forth the initial and                  investment objective, the Fund will not                Self-Regulatory Organizations;
                                                    continued listing criteria applicable to                employ other strategies outside of the                 Chicago Board Options Exchange,
                                                    Managed Fund Shares.                                    above-described ‘‘Principal
                                                       (2) The Exchange has appropriate                                                                            Incorporated; Notice of Filing and
                                                                                                            Investments.’’                                         Immediate Effectiveness of a Proposed
                                                    rules to facilitate transactions in the                    (8) The Fund may hold up to an
                                                    Shares during all trading sessions.                                                                            Rule Change Relating to Exchange
                                                                                                            aggregate amount of 15% of its net                     Rule 6.25
                                                       (3) Prior to the commencement of
                                                                                                            assets in illiquid assets (calculated at
                                                    trading, the Exchange will inform its
                                                                                                            the time of investment) and will                       February 19, 2015.
                                                    members in an Information Circular of
                                                                                                            monitor its portfolio liquidity on an                     Pursuant to Section 19(b)(1) of the
                                                    the special characteristics and risks
                                                                                                            ongoing basis to determine whether, in                 Securities Exchange Act of 1934 (the
                                                    associated with trading the Shares.
                                                                                                            light of current circumstances, an
                                                    Specifically, the Information Circular                                                                         ‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                                                                            adequate level of liquidity is being
                                                    will discuss the following: (a) The                                                                            notice is hereby given that, on February
                                                                                                            maintained. The Fund will consider
                                                    procedures for purchases and                                                                                   19, 2015, Chicago Board Options
                                                                                                            taking appropriate steps in order to
                                                    redemptions of Shares in Creation Units                                                                        Exchange, Incorporated (the ‘‘Exchange’’
                                                    (and that Shares are not individually                   maintain adequate liquidity if, through
                                                                                                            a change in values, net assets, or other               or ‘‘CBOE’’) filed with the Securities
                                                    redeemable); (b) Nasdaq Rule 2111A,                                                                            and Exchange Commission (the
                                                    which imposes suitability obligations on                circumstances, more than 15% of the
                                                                                                            Fund’s net assets are held in illiquid                 ‘‘Commission’’) the proposed rule
                                                    Nasdaq members with respect to                                                                                 change as described in Items I and II
                                                    recommending transactions in the                        assets.
                                                                                                               (9) While the Fund may invest in                    below, which Items have been prepared
                                                    Shares to customers; (c) how
                                                                                                            leveraged ETFs (e.g., 2X or 3X), the                   by the Exchange. The Commission is
                                                    information regarding the Intraday
                                                                                                            Fund will not invest in inverse or                     publishing this notice to solicit
                                                    Indicative Value and Disclosed Portfolio
                                                    is disseminated; (d) the risks involved                 inverse leveraged ETFs. Under normal                   comments on the proposed rule change
                                                    in trading the Shares during the Pre-                   circumstances, the Fund will not invest                from interested persons.
                                                    Market and Post-Market Sessions when                    more than 25% of its total assets in                   I. Self-Regulatory Organization’s
                                                    an updated Intraday Indicative Value                    leveraged ETPs. The Fund will not be                   Statement of the Terms of the Substance
                                                    will not be calculated or publicly                      operated in a manner designed to seek
                                                                                                                                                                   of the Proposed Rule Change
                                                    disseminated; (e) the requirement that                  a multiple of the performance of an
                                                    members deliver a prospectus to                         underlying reference index.                              The Exchange proposes to extend a
                                                    investors purchasing newly issued                          (10) The Fund will not use derivative               pilot program related to Rule 6.25
                                                    Shares prior to or concurrently with the                instruments, including options, swaps,                 (Nullification and Adjustment of
                                                    confirmation of a transaction; and (f)                  forwards, and futures contracts.                       Options Transactions). The text of the
                                                    trading information.                                       (11) The Fund’s investments will be                 proposed rule change is available on the
                                                       (4) Trading in the Shares will be                    consistent with the Fund’s investment                  Exchange’s Web site (http://
                                                    subject to the existing trading                         objective.                                             www.cboe.com/AboutCBOE/
                                                    surveillances, administered by both                        The Commission notes that the Fund                  CBOELegalRegulatoryHome.aspx), at
                                                    Nasdaq and FINRA,33 on behalf of the                    and the Shares must comply with the                    the Exchange’s Office of the Secretary,
                                                    Exchange. The trading surveillance                      requirements of Nasdaq Rule 5735 to be                 and at the Commission’s Public
                                                    procedures are designed to detect                       initially and continuously listed and                  Reference Room.
                                                    violations of Exchange rules and                        traded on the Exchange. This approval
                                                    applicable federal securities laws. These               order is based on all of the Exchange’s                II. Self-Regulatory Organization’s
                                                    procedures are adequate to properly                     representations and description of the                 Statement of the Purpose of, and
                                                    monitor Exchange trading of the Shares                  Fund, including those set forth above                  Statutory Basis for, the Proposed Rule
                                                    in all trading sessions and to deter and                and in the Notice.                                     Change
                                                    detect violations of Exchange rules and
                                                    applicable federal securities laws.                     IV. Conclusion                                           In its filing with the Commission, the
                                                       (5) For initial and continued listing,                 It is therefore ordered, pursuant to                 Exchange included statements
                                                    the Fund must be in compliance with                     Section 19(b)(2) of the Act,35 that the                concerning the purpose of and basis for
                                                    Rule 10A–3 under the Act.34                             proposed rule change (SR–NASDAQ–                       the proposed rule change and discussed
                                                       (6) A minimum of 100,000 Shares will                                                                        any comments it received on the
                                                                                                            2014–127), be, and it hereby is,
                                                    be outstanding at the commencement of                                                                          proposed rule change. The text of these
                                                                                                            approved.
                                                    trading on the Exchange.                                                                                       statements may be examined at the
                                                       (7) The Fund will invest at least 80%                  For the Commission, by the Division of
                                                                                                            Trading and Markets, pursuant to delegated             places specified in Item IV below. The
                                                    of its assets under normal market
asabaliauskas on DSK5VPTVN1PROD with NOTICES




                                                                                                            authority.36                                           Exchange has prepared summaries, set
                                                    conditions in shares of ETPs,
                                                                                                            Brent J. Fields,                                       forth in sections A, B, and C below, of
                                                    individually selected U.S. exchange-
                                                                                                            Secretary.                                             the most significant aspects of such
                                                       33 According to the Exchange, FINRA surveils         [FR Doc. 2015–03812 Filed 2–24–15; 8:45 am]            statements.
                                                    trading on the Exchange pursuant to a regulatory        BILLING CODE 8011–01–P
                                                    services agreement. The Exchange is responsible for
                                                    FINRA’s performance under this regulatory services
                                                                                                                                                                     1 15   U.S.C. 78s(b)(1).
                                                    agreement. See Notice, supra note 3, 80 FR at 544.        35 15   U.S.C. 78s(b)(2).
                                                       34 17 CFR 240.10A–3.                                   36 17   CFR 200.30–3(a)(12).                           2 17   CFR 240.19b–4.



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                                                                              Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices                                              10193

                                                    A. Self-Regulatory Organization’s                       to the last available option price as                   in regulating, clearing, settling,
                                                    Statement of the Purpose of, and                        reported by OPRA before the start of the                processing information with respect to,
                                                    Statutory Basis for, the Proposed Rule                  limit or straddle state (1 if observe 30%               and facilitating transactions in
                                                    Change                                                  and 0 otherwise), and another indicator                 securities, to remove impediments to
                                                                                                            variable for whether the option price                   and perfect the mechanism of a free and
                                                    1. Purpose
                                                                                                            within five minutes of the underlying                   open market and a national market
                                                       The purpose of this filing is to extend              stock leaving the limit or straddle state               system, and, in general, to protect
                                                    the effectiveness of the Exchange’s                     (or halt if applicable) is 30% away from                investors and the public interest.
                                                    current rule applicable to obvious                      the price before the start of the limit or              Additionally, the Exchange believes the
                                                    errors. Interpretation and Policy .06 to                straddle state.                                         proposed rule change is consistent with
                                                    Rule 6.25, explained in further detail                     In addition, the Exchange will                       the Section 6(b)(5)5 requirement that the
                                                    below, is currently operating on a pilot                provide to the Commission and the                       rules of an exchange not be designed to
                                                    program set to expire on February 20,                   public, no later than May 29, 2015,                     permit unfair discrimination between
                                                    2015. The Exchange proposes to extend                   assessments relating to the impact of the               customers, issuers, brokers, or dealers.
                                                    the pilot program to October 23, 2015.                  operation of the obvious error rules                       In particular, the Exchange further
                                                       On April 5, 2013, the Commission                     during limit and straddle states                        believes that it is necessary and
                                                    approved, on a pilot basis, amendments                  including: (1) An evaluation of the                     appropriate in the interest of promoting
                                                    to Exchange Rule 6.25 that stated that                  statistical and economic impact of limit                fair and orderly markets to exclude
                                                    options executions will not be adjusted                 and straddle states on liquidity and                    transactions executed during a limit or
                                                    or nullified if the execution occurs                    market quality in the options markets,                  straddle state from certain aspects of the
                                                    while the underlying security is in a                   and (2) an assessment of whether the                    Exchange Rule 6.25. The Exchange
                                                    limit or straddle state as defined by the               lack of obvious error rules in effect                   believes the application of the current
                                                    Plan. Under the terms of this current                   during the straddle and limit states are                rule will be impracticable given the lack
                                                    pilot program, though options                           problematic.                                            of a reliable NBBO in the options market
                                                    executions will generally not be                           The Exchange is now proposing to                     during limit and straddle states, and
                                                    adjusted or nullified while the                         extend the pilot period until October 23,               that the resulting actions (i.e., nullified
                                                    underlying security is in a limit or                    2015. The Exchange believes the                         trades or adjusted prices) may not be
                                                    straddle state, such executions may be                  benefits to market participants from this               appropriate given market conditions.
                                                    reviewed by the Exchange should the                     provision should continue on a pilot                    Extension of this pilot would ensure
                                                    Exchange decide to do so under its own                  basis. The Exchange continues to                        that limit orders that are filled during a
                                                    motion.                                                 believe that adding certainty to the                    limit or straddle state would have
                                                       Pursuant to a comment letter filed in                execution of orders in limit or straddle                certainty of execution in a manner that
                                                    connection with the order approving the                 states will encourage market                            promotes just and equitable principles
                                                    establishment of the pilot, the Exchange                participants to continue to provide                     of trade, removes impediments to, and
                                                    committed to submit monthly data                        liquidity to the Exchange, and, thus,                   perfects the mechanism of a free and
                                                    regarding the program. In addition, the                 promote a fair and orderly market                       open market and a national market
                                                    Exchange agreed to submit an overall                    during these periods. Barring this                      system. Thus, the Exchange believes
                                                    analysis of the pilot in conjunction with               provision, the provisions of Rule 6.25                  that the protections of the pilot should
                                                    the data submitted under the Plan and                   would likely apply in many instances                    continue while the industry gains
                                                    any other data as requested by the                      during limit and straddle states. The                   further experience operating the Plan.
                                                    Commission. Pursuant to a rule filing,                  Exchange believes that continuing the
                                                    approved on April 3, 2014, each month,                  pilot will protect against any                          B. Self-Regulatory Organization’s
                                                    the Exchange committed to provide the                   unanticipated consequences in the                       Statement on Burden on Competition
                                                    Commission, and the public, a dataset                   options markets during a limit or                         CBOE does not believe that the
                                                    containing the data for each straddle                   straddle state. Thus, the Exchange                      proposed rule change will impose any
                                                    and limit state in optionable stocks that               believes that the protections of current                burden on competition that is not
                                                    had at least one trade on the Exchange.                 Rule should continue while the industry                 necessary or appropriate in furtherance
                                                    The Exchange will continue to provide                   gains further experience operating the                  of the purposes of the Act. Specifically,
                                                    the Commission with this data on a                      Plan.                                                   the Exchange believes that, by extending
                                                    monthly basis from February 2015                                                                                the expiration of the pilot, the proposed
                                                    through the end of the pilot. For each                  2. Statutory Basis                                      rule change will allow for further
                                                    trade on the Exchange, the Exchange                        The Exchange believes the proposed                   analysis of the pilot and a determination
                                                    will provide (a) the stock symbol, option               rule change is consistent with the                      of how the pilot shall be structured in
                                                    symbol, time at the start of the straddle               Securities Exchange Act of 1934 (the                    the future. In doing so, the proposed
                                                    or limit state, an indicator for whether                ‘‘Act’’) and the rules and regulations                  rule change will also serve to promote
                                                    it is a straddle or limit state, and (b) for            thereunder applicable to the Exchange                   regulatory clarity and consistency,
                                                    the trades on the Exchange, the                         and, in particular, the requirements of                 thereby reducing burdens on the
                                                    executed volume, time-weighted quoted                   Section 6(b) of the Act.3 Specifically,                 marketplace and facilitating investor
                                                    bid-ask spread, time-weighted average                   the Exchange believes the proposed rule                 protection.
                                                    quoted depth at the bid, time-weighted                  change is consistent with the Section
                                                    average quoted depth at the offer, high                                                                         C. Self-Regulatory Organization’s
asabaliauskas on DSK5VPTVN1PROD with NOTICES




                                                                                                            6(b)(5) 4 requirements that the rules of
                                                    execution price, low execution price,                   an exchange be designed to prevent                      Statement on Comments on the
                                                    number of trades for which a request for                fraudulent and manipulative acts and                    Proposed Rule Change Received From
                                                    review for error was received during                    practices, to promote just and equitable                Members, Participants, or Others
                                                    straddle and limit states, an indicator                 principles of trade, to foster cooperation                The Exchange neither solicited nor
                                                    variable for whether those options                      and coordination with persons engaged                   received comments on the proposed
                                                    outlined above have a price change                                                                              rule change.
                                                    exceeding 30% during the underlying                       3 15   U.S.C. 78f(b).
                                                    stock’s limit or straddle state compared                  4 15   U.S.C. 78f(b)(5).                                5 Id.




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                                                    10194                      Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices

                                                    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                                      [Release No. 34–74304; File Nos. SR–MIAX–
                                                       Because the proposed rule change                                                                              2014–30 and SR–MIAX–2014–39]
                                                    does not (i) significantly affect the                     • Use the Commission’s Internet
                                                    protection of investors or the public                   comment form (http://www.sec.gov/                        Self-Regulatory Organizations; Miami
                                                    interest; (ii) impose any significant                   rules/sro.shtml); or                                     International Securities Exchange LLC;
                                                    burden on competition; and (iii) become                                                                          Order Disapproving Proposed Rule
                                                                                                              • Send an email to rule-comments@
                                                    operative for 30 days from the date on                                                                           Changes To List and Trade Options on
                                                                                                            sec.gov. Please include File Number SR–
                                                    which it was filed, or such shorter time                                                                         Shares of the iShares ETFs and Market
                                                    as the Commission may designate if                      CBOE–2015–18 on the subject line.                        Vectors ETFs
                                                    consistent with the protection of                       Paper Comments
                                                    investors and the public interest, the                                                                           February 19, 2015.
                                                    proposed rule change has become                           • Send paper comments in triplicate                    I. Introduction
                                                    effective pursuant to Section 19(b)(3)(A)               to Secretary, Securities and Exchange
                                                                                                                                                                        On June 17, 2014, Miami International
                                                    of the Act 6 and Rule 19b–4(f)(6)(iii)                  Commission, 100 F Street NE.,
                                                                                                                                                                     Securities Exchange LLC (‘‘MIAX’’ or
                                                    thereunder.7                                            Washington, DC 20549–1090.
                                                       The Exchange has asked the                                                                                    ‘‘Exchange’’) filed with the Securities
                                                    Commission to waive the 30-day                          All submissions should refer to File                     and Exchange Commission
                                                    operative delay so that the proposal may                Number SR–CBOE–2015–18. This file                        (‘‘Commission’’), pursuant to Section
                                                    become operative immediately upon                       number should be included on the                         19(b)(1) of the Securities Exchange Act
                                                    filing. The Commission believes that                    subject line if email is used. To help the               of 1934 (‘‘Exchange Act’’ or ‘‘Act’’) 1 and
                                                    waiving the 30-day operative delay is                   Commission process and review your                       Rule 19b–4 thereunder,2 a proposed rule
                                                    consistent with the protection of                       comments more efficiently, please use                    change to list and trade options on
                                                    investors and the public interest, as it                only one method. The Commission will                     shares of the iShares MSCI Brazil
                                                    will allow the obvious error pilot                      post all comments on the Commission’s                    Capped ETF, iShares MSCI Chile
                                                    program to continue uninterrupted                       Internet Web site (http://www.sec.gov/                   Capped ETF, iShares MSCI Peru Capped
                                                    while the industry gains further                        rules/sro.shtml). Copies of the                          ETF, and iShares MSCI Spain Capped
                                                    experience operating under the Plan to                                                                           ETF (collectively ‘‘iShares ETFs’’). The
                                                                                                            submission, all subsequent
                                                    Address Extraordinary Market                                                                                     proposed rule change was published for
                                                                                                            amendments, all written statements
                                                    Volatility, and avoid any investor                                                                               comment in the Federal Register on July
                                                                                                            with respect to the proposed rule                        3, 2014.3 On August 13, 2014, the
                                                    confusion that could result from a                      change that are filed with the
                                                    temporary interruption in the pilot                                                                              Commission extended the time period
                                                                                                            Commission, and all written                              in which to either approve the proposed
                                                    program. For this reason, the                           communications relating to the
                                                    Commission designates the proposed                                                                               rule change, disapprove the proposed
                                                                                                            proposed rule change between the                         rule change, or institute proceedings to
                                                    rule change to be operative upon filing.8
                                                       At any time within 60 days of the                    Commission and any person, other than                    determine whether to approve or
                                                    filing of the proposed rule change, the                 those that may be withheld from the                      disapprove the proposed rule change, to
                                                    Commission summarily may                                public in accordance with the                            October 1, 2014.4 On September 25,
                                                    temporarily suspend such rule change if                 provisions of 5 U.S.C. 552, will be                      2014, the Commission instituted
                                                    it appears to the Commission that such                  available for Web site viewing and                       proceedings to determine whether to
                                                    action is necessary or appropriate in the               printing in the Commission’s Public                      approve or disapprove the proposed
                                                    public interest, for the protection of                  Reference Room, 100 F Street NE.,                        rule change.5 The Commission received
                                                    investors, or otherwise in furtherance of               Washington, DC 20549 on official                         a letter from MIAX on the proposal.6 On
                                                    the purposes of the Act. If the                         business days between the hours of                       December 17, 2014, the Commission
                                                    Commission takes such action, the                       10:00 a.m. and 3:00 p.m. Copies of such                  issued a notice of designation of a
                                                    Commission shall institute proceedings                  filing also will be available for                        longer period for Commission action on
                                                    to determine whether the proposed rule                  inspection and copying at the principal                  proceedings to determine whether to
                                                    should be approved or disapproved.                      office of the Exchange. All comments                     approve or disapprove the proposed
                                                                                                            received will be posted without change;                  rule change.7
                                                    IV. Solicitation of Comments                                                                                        In addition, on July 28, 2014, the
                                                                                                            the Commission does not edit personal
                                                      Interested persons are invited to                     identifying information from                             Exchange filed with the Commission a
                                                    submit written data, views, and                         submissions. You should submit only                      proposed rule change to list and trade
                                                    arguments concerning the foregoing,                     information that you wish to make                        options on shares of the Market Vectors
                                                    including whether the proposed rule                     available publicly. All submissions
                                                    change is consistent with the Act.                      should refer to File Number SR–CBOE–
                                                                                                                                                                       1 15  U.S.C. 78s(b)(1).
                                                                                                                                                                       2 17  CFR 240.19b–4.
                                                      6 15
                                                                                                            2015–18, and should be submitted on or                      3 See Securities Exchange Act Release No. 72492
                                                            U.S.C. 78s(b)(3)(A).
                                                      7 17  CFR 240.19b–4(f)(6)(iii). As required under
                                                                                                            before March 18, 2015.                                   (June 27, 2014), 79 FR 38099 (SR–MIAX–2014–30)
                                                    Rule 19b–4(f)(6)(iii), the Exchange provided the                                                                 (‘‘iShares ETFs Proposal’’).
                                                                                                              For the Commission, by the Division of                    4 See Securities Exchange Act Release No. 72835,
                                                    Commission with written notice of its intent to file
asabaliauskas on DSK5VPTVN1PROD with NOTICES




                                                                                                            Trading and Markets, pursuant to delegated               79 FR 49140 (August 19, 2014).
                                                    the proposed rule change, along with a brief
                                                    description and the text of the proposed rule           authority.9                                                 5 See Securities Exchange Act Release No. 73211,

                                                    change, at least five business days prior to the date   Brent J. Fields,                                         79 FR 59338 (October 1, 2014).
                                                    of filing of the proposed rule change, or such                                                                      6 See Letter to Elizabeth M. Murphy, Secretary,

                                                    shorter time as designated by the Commission.           Secretary.                                               Commission, from Brian O’Neill, Vice President
                                                       8 For purposes only of waiving the 30-day            [FR Doc. 2015–03820 Filed 2–24–15; 8:45 am]              and Senior Counsel, MIAX, dated October 22, 2014
                                                    operative delay, the Commission has also                                                                         (providing comment on SR–MIAX–2014–30 and
                                                                                                            BILLING CODE 8011–01–P
                                                    considered the proposed rule’s impact on                                                                         SR–MIAX–2014–39) (‘‘MIAX Letter’’).
                                                    efficiency, competition, and capital formation. See                                                                 7 See Securities Exchange Act Release No. 73856,

                                                    15 U.S.C. 78c(f).                                         9 17   CFR 200.30–3(a)(12).                            79 FR 77075 (December 23, 2014).



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Document Created: 2015-12-18 13:08:35
Document Modified: 2015-12-18 13:08:35
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 10192 

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