80 FR 12687 - Self-Regulatory Organizations; NYSE MKT LLC; Order Granting Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Amend Rule 967NY and To Adopt Rule 967.1NY To Provide Price Protection for Market Maker Quotes
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 46 (March 10, 2015)
Federal Register Volume 80, Issue 46 (March 10, 2015)
| Page Range | 12687-12689 | |
| FR Document | 2015-05496 |
[Federal Register Volume 80, Number 46 (Tuesday, March 10, 2015)] [Notices] [Pages 12687-12689] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-05496] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74440; File No. SR-NYSEMKT-2014-116] Self-Regulatory Organizations; NYSE MKT LLC; Order Granting Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Amend Rule 967NY and To Adopt Rule 967.1NY To Provide Price Protection for Market Maker Quotes March 4, 2015. I. Introduction On December 29, 2014, NYSE MKT LLC (``Exchange'') filed with the Securities and Exchange Commission (``Commission''), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to amend Exchange Rule 967NY (Price Protection) and to adopt Exchange Rule 967.1NY to provide price protection for Market Maker quotes. The proposed rule change was published for comment in the Federal Register on January 14, 2015.\3\ The Commission received no comment letters on the proposal. On March 2, 2015, the Exchange filed Amendment No. 1 to the proposed rule change.\4\ This order approves the proposed rule change, as modified by Amendment No. 1 thereto. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 74017 (January 8, 2015), 80 FR 1979 (``Notice''). \4\ In Amendment No. 1, the Exchange clarified that it believes that Market Maker bids should not be priced the same as or higher than the corresponding benchmark, which would be the price of the underlying security for call options and the strike price for put options. Amendment No. 1 does not change any of the proposed rule text that was submitted in the original filing. Amendment No. 1 is technical in nature and, therefore, the Commission is not publishing it for comment. --------------------------------------------------------------------------- II. Description of the Proposal The Exchange proposed to amend Exchange Rule 967NY and to adopt Exchange Rule 967.1NY to provide price protection for Market Maker quotes. Exchange Rule 967NY currently applies [[Page 12688]] and will continue to apply solely to orders. Exchange Rule 967NY(b), provides a price protection filter for incoming limit orders, pursuant to which the Exchange rejects limit orders priced a specified percentage \5\ through the National Best Bid (``NBB'') or National Best Offer (``NBO'') (``Limit Order Filter''). To clarify that Exchange Rule 967NY applies only to orders, the Exchange proposed to append the word ``Orders'' to the Exchange Rule 967NY header to provide ``Rule 967NY. Price Protection--Orders.''\6\ --------------------------------------------------------------------------- \5\ Pursuant to Exchange Rule 967NY(b), unless determined otherwise by the Exchange and announced to ATP Holders via Trader Update, the specified percentage is 100% for the contra-side NBB or NBO priced at or below $1.00 and 50% for contra-side NBB or NBO priced above $1.00. See Notice, supra note 3, at 1979. \6\ See Notice, supra note 3, at 1979. --------------------------------------------------------------------------- A. Proposed Market Maker Quote Price Protection The Exchange proposed to adopt new Exchange Rule 967.1NY to provide for a price protection mechanism for quotes entered by a Market Maker. Exchange Rule 967.1NY(a) will provide price protection filters applicable only for quotes entered by a Market Maker pursuant to Rule 925.1NY and will not be applicable to orders entered by a Market Maker. The Exchange proposed to provide for two layers of price protection that will be applicable to all incoming Market Maker quotes.\7\ The first layer of price protection will assess incoming sell quotes against the NBB and incoming buy quotes against the NBO.\8\ The second layer of price protection will assess the price of call or put bids against a specified benchmark. --------------------------------------------------------------------------- \7\ The Exchange states that the proposal will assist with the maintenance of fair and orderly markets by averting the risk of Market Maker quotes sweeping through multiple price points resulting in executions at prices that are through the last sale price or National Best Bid or Best Offer (``NBBO''). See Notice, supra note 3, at 1979. \8\ The Exchange represents that this proposed price protection mechanism is similar to the Exchange's Limit Order Filter. See Notice, supra note 3, at 1979. --------------------------------------------------------------------------- 1. NBBO Price Reasonability Check Proposed Exchange Rule 967.1NY(a)(1) sets forth the Exchange's proposed NBBO price reasonability check, which will compare Market Maker bids with the NBO and Market Maker offers with the NBB. Specifically, provided that an NBBO is available, a Market Maker quote will be rejected if it is priced a specified dollar amount or percentage through the contra-side NBBO as follows: (A) $1.00 for Market Maker bids when the contra-side NBO is priced at or below $1.00; or (B) 50% for Market Maker bids (offers) when the contra-side NBO (NBB) is priced above $1.00. The Exchange will reject inbound Market Maker quotes that exceed the parameters set forth in proposed Exchange Rule 967.1NY(a)(1)(A)- (B).\9\ The Exchange states that it has proposed a specific dollar threshold for when the NBO is priced at or below $1.00 because, for such low-priced NBOs, the Exchange believes it is appropriate to provide Market Makers with the ability to enter quotes at least $1.00 higher than the prevailing NBO.\10\ For example, if the NBO were $0.06, when using a 100% filter, the Exchange would be required to reject any bids priced $0.12 or more. In addition, the Exchange proposed that pursuant to proposed Exchange Rule 967.1NY(a)(1)(A), Market Maker offers that arrive when the NBB is priced at or below $1.00 will not be subject to this filter. The Exchange notes that when the NBB is priced at or below $1.00, the price of an offer will be bound by $0.00, and therefore an offer will always be less than $1.00 away from the NBB.\11\ --------------------------------------------------------------------------- \9\ The Exchange states that the proposed percentages are appropriate because they are based on the percentages established for the Limit Order Filter. See Notice, supra note 3, at 1979. \10\ See Notice, supra note 3, at 1979. \11\ The Exchange states that such offer prices would likely not be erroneous and therefore the Exchange does not believe it necessary to reject such Market Maker offers. See Notice, supra note 3, at 1980. --------------------------------------------------------------------------- Because there may be market scenarios that require the proposed parameters to be adjusted, for example, during periods of extreme price volatility, the Exchange has further proposed that the Exchange may revise these parameters, provided such revised parameters are announced to ATP Holders via a Trader Update.\12\ --------------------------------------------------------------------------- \12\ See proposed Exchange Rule 967.1NY(a)(1)(A)-(B) (setting forth the specified dollar amount or percentages ``unless determined otherwise by the Exchange and announced to ATP Holders via Trader Update''). --------------------------------------------------------------------------- The Exchange also proposed that if a Market Maker quote is rejected pursuant to paragraph (a)(1) of the proposed rule, the Exchange will also cancel any resting same-side quote in the affected series from that Market Maker.\13\ According to the Exchange, even if the new quote is rejected because it is priced a specified dollar amount or percentage through the contra-side NBBO, in violation of proposed Exchange Rule 967.1NY(a)(1), the Market Maker's implicit instruction to cancel the resting quote remains valid nonetheless.\14\ --------------------------------------------------------------------------- \13\ See proposed Exchange Rule 967.1NY(b). The Exchange states that it believes it is appropriate to reject any resting same-side quote because when a Market Maker submits a new quote, that Market Maker is implicitly instructing the Exchange to cancel any resting quote in that same series. See Notice, supra note 3, at 1980. \14\ See Notice, supra note 3, at 1980 for examples illustrating how proposed Exchange Rule 967.1NY(a) will operate. --------------------------------------------------------------------------- 2. Underlying Stock Price/Strike Price Check The Exchange also has proposed new Exchange Rule 967.1NY(a)(2) and (3) which will set forth the Exchange's proposed second layer of price protection filters for Market Maker quotes. These price protection mechanisms will be applicable when either there is no NBBO available, for example, during pre-opening or prior to conducting a re-opening after a trading halt, or if the NBBO is so wide as to not to reflect an appropriate price for the respective options series. Proposed Exchange Rule 967.1NY(a)(2) will also provide price protection for Market Maker bids in call options. As proposed, if such bids equal or exceed the price of the underlying security, the Market Maker bid will be rejected.\15\ --------------------------------------------------------------------------- \15\ See proposed Exchange Rule 967.1NY(a)(2). With a call bid, a Market Maker is bidding to buy an option that would be exercised into the right to acquire the underlying security. The Exchange states that it does not believe that a derivative product, which conveys the right to purchase a security underlying the derivative, should ever be priced the same as or higher than the prevailing price of the underlying security itself. Accordingly, the Exchange believes it is appropriate to reject Market Maker bids for call options that are equal to or in excess of the price of the underlying security. See Notice, supra note 3, at 1980. See also Amendment No. 1, supra note 4. --------------------------------------------------------------------------- Under new Exchange Rule 967.1NY(a)(2)(A), before the underlying security is open, the Exchange will use the previous day's closing price to determine the price of the underlying security.\16\ Under new Exchange Rule 967.1NY(a)(2)(B), once the underlying security has opened, the Exchange will use the consolidated last sale price to determine the price of the underlying security. Under new Exchange Rule 967.1NY(a)(2)(C), during a trading halt of the underlying security, the Exchange will use the consolidated last sale reported immediately prior to the trading halt to determine the price of the underlying security.\17\ New Exchange [[Page 12689]] Rule 967.1NY(a)(3) will provide for price protection for Market Maker bids in put options. In particular, any Market Maker bid for put options will be rejected if the price of the bid is equal to or greater than the strike price of the option.\18\ --------------------------------------------------------------------------- \16\ According to the Exchange, although the underlying securities may trade in the equities markets outside of 9:30 a.m. ET to 4:00 p.m. ET, the equities market is generally not as liquid during this time and equity market makers generally do not have quoting obligations in after-hours trading. Therefore, the Exchange believes that using the previous day's closing price--based on trading during Core Trading Hours, when the market is most liquid-- provides a more accurate benchmark and thus a more precise price protection filter for underlying securities that have not yet opened. See Notice, supra note 3, at 1980. \17\ The Exchange believes that the consolidated last sale price for an underlying security that has already opened will provide the most accurate benchmark because the market is most liquid during Core Trading Hours. See Notice, supra note 3, at 1981. \18\ The Exchange states that the value of a put can never exceed the strike price of the option, even if the stock goes to zero. For example, a put with a strike price of $50 gives the holder the right to sell the underlying security for $50 (no more, or no less), therefore the Exchange states that it would be illogical to pay $50 or more for the right to sell that underlying security, no matter what the price of the underlying security. See Notice, supra note 3, at 1981. See also Amendment No. 1, supra note 4. --------------------------------------------------------------------------- The Exchange also has proposed that when a Market Maker quote is rejected pursuant to paragraph (a)(2) or (a)(3) of the proposed rule, the Exchange will also cancel all resting quote(s) in the affected class(es) from that Market Maker and will not accept new quote(s) in the affected class(es) until the Market Maker submits a message (which may be automated) to the Exchange to enable the entry of new quotes.\19\ --------------------------------------------------------------------------- \19\ See proposed Exchange Rule 967.1NY(b). The Exchange believes that this temporary suspension from quoting in the affected option class(es) would operate as a safety valve that forces Market Makers to re-evaluate their positions before requesting to re-enter the market. See Notice, supra note 3, at 1981. See also Notice, supra note 3, at 1981 for examples illustrating how proposed Exchange Rule 967.1NY(a)(2) and (a)(3) would operate. --------------------------------------------------------------------------- B. Implementation The Exchange stated that it would announce the implementation date of the proposed rule change in a Trader Update and publish such announcement at least 30 days prior to implementation. III. Discussion and Commission Findings After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange and, in particular, with section 6(b) of the Act.\20\ In particular, the Commission finds that the proposed rule change is consistent with sections 6(b)(5) of the Act,\21\ which requires, among other things, that the rules of a national securities 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. --------------------------------------------------------------------------- \20\ 15 U.S.C. 78f(b). In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). \21\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The proposed rule change provides a price protection mechanism for quotes entered by a Market Maker when an NBBO is available that are priced a specified dollar amount or percentage through the last sale or prevailing contra-side market, which the Exchange believes is evidence of error. The Commission believes that the proposed price protection mechanism is reasonably designed to promote just and equitable principles of trade by preventing potential price dislocation that could result from erroneous Market Maker quotes sweeping through multiple price points resulting in executions at prices that are through the last sale price or NBBO.\22\ --------------------------------------------------------------------------- \22\ See Notice, supra note 3, at 1981. --------------------------------------------------------------------------- The Exchange's proposed use of benchmarks to check the reasonability of Market Maker bids for call and put options affords a second layer of price protection to Market Maker quotes. The Commission believes that the additional price reasonability check on Market Maker bids that are priced equal to or greater than the price of the underlying security for call options, and equal to or greater than the strike price for put options, is reasonably designed to operate in manner that would remove impediments to and perfect the mechanism of a free and open market and protect investors and the public interest. Further, the Commission notes the Exchange's belief that the additional risk controls that result in the cancellation of a Market Maker's resting same side quote and/or the temporary suspension a Market Maker's quoting activity in the affected option class(es), as applicable, provide market participants with additional protection from anomalous executions.\23\ --------------------------------------------------------------------------- \23\ See Notice, supra note 3, at 1982. --------------------------------------------------------------------------- Accordingly, the Commission believes that the proposed price protection for Market Maker quotes is reasonably 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. IV. Conclusion For the foregoing reasons, the Commission finds that the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange. It is therefore ordered, pursuant to section 19(b)(2) of the Act,\24\ that the proposed rule change (SR-NYSEMKT-2014-116), as modified by Amendment No. 1, be, and hereby is, approved. --------------------------------------------------------------------------- \24\ 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\25\ --------------------------------------------------------------------------- \25\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Jill M. Peterson, Assistant Secretary. [FR Doc. 2015-05496 Filed 3-9-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 46 / Tuesday, March 10, 2015 / Notices 12687
necessary or appropriate in furtherance it appears to the Commission that such should refer to File Number SR–CBOE–
of the purposes of the Act. The action is necessary or appropriate in the 2015–020 and should be submitted on
Exchange does not believe that the public interest, for the protection of or before March 31, 2015.
proposed rule change will impose any investors, or otherwise in furtherance of For the Commission, by the Division of
burden on intramarket competition that the purposes of the Act. If the Trading and Markets, pursuant to delegated
is not necessary or appropriate in Commission takes such action, the authority.27
furtherance of the purposes of the Act Commission will institute proceedings Brent J. Fields,
because, while different fees and rebates to determine whether the proposed rule Secretary.
are assessed to different market change should be approved or [FR Doc. 2015–05476 Filed 3–9–15; 8:45 am]
participants in some circumstances, disapproved.
BILLING CODE 8011–01–P
these different market participants have
IV. Solicitation of Comments
different obligations and different
circumstances. For example, Clearing Interested persons are invited to
submit written data, views, and SECURITIES AND EXCHANGE
TPHs have clearing obligations that COMMISSION
other market participants do not have. arguments concerning the foregoing,
Market-Makers have quoting obligations including whether the proposed rule [Release No. 34–74440; File No. SR–
that other market participants do not change is consistent with the Act. NYSEMKT–2014–116]
have. There is a history in the options Comments may be submitted by any of
markets of providing preferential the following methods: Self-Regulatory Organizations; NYSE
treatment to Customers, as they often do MKT LLC; Order Granting Approval of
Electronic Comments a Proposed Rule Change, as Modified
not have as sophisticated trading
operations and systems as other market • Use the Commission’s Internet by Amendment No. 1, To Amend Rule
participants, which often makes other comment form (http://www.sec.gov/ 967NY and To Adopt Rule 967.1NY To
market participants prefer to trade with rules/sro.shtml); or Provide Price Protection for Market
Customers. Further, the proposed fees, • Send an email to rule-comments@ Maker Quotes
rebates and programs for ETH are sec.gov. Please include File Number SR–
CBOE–2015–020 on the subject line. March 4, 2015.
intended to encourage market
participants to bring liquidity to the Paper Comments I. Introduction
Exchange during ETH (which benefits • Send paper comments in triplicate On December 29, 2014, NYSE MKT
all market participants), while still to Brent J. Fields, Secretary, Securities LLC (‘‘Exchange’’) filed with the
covering Exchange costs (including and Exchange Commission, 100 F Street Securities and Exchange Commission
those associated with the upgrading and NE., Washington, DC 20549. (‘‘Commission’’), pursuant to section
maintenance of Exchange systems). The 19(b)(1) of the Securities Exchange Act
All submissions should refer to File
Exchange does not believe that the of 1934 (‘‘Act’’) 1 and Rule 19b–4
Number SR–CBOE–2015–020. This file
proposed rule changes will impose any number should be included on the thereunder,2 a proposed rule change to
burden on intermarket competition that subject line if email is used. To help the amend Exchange Rule 967NY (Price
is not necessary or appropriate in Commission process and review your Protection) and to adopt Exchange Rule
furtherance of the purposes of the Act comments more efficiently, please use 967.1NY to provide price protection for
because the products offered during only one method. The Commission will Market Maker quotes. The proposed rule
ETH (SPX, SPXW and VIX), are post all comments on the Commission’s change was published for comment in
proprietary products that will only be Internet Web site (http://www.sec.gov/ the Federal Register on January 14,
traded on CBOE. To the extent that the rules/sro.shtml). Copies of the 2015.3 The Commission received no
proposed changes make CBOE a more submission, all subsequent comment letters on the proposal. On
attractive marketplace for market amendments, all written statements March 2, 2015, the Exchange filed
participants at other exchanges, such with respect to the proposed rule Amendment No. 1 to the proposed rule
market participants are welcome to change that are filed with the change.4 This order approves the
become CBOE market participants. Commission, and all written proposed rule change, as modified by
C. Self-Regulatory Organization’s communications relating to the Amendment No. 1 thereto.
Statement on Comments on the proposed rule change between the II. Description of the Proposal
Proposed Rule Change Received From Commission and any person, other than
The Exchange proposed to amend
Members, Participants, or Others those that may be withheld from the
Exchange Rule 967NY and to adopt
The Exchange neither solicited nor public in accordance with the
Exchange Rule 967.1NY to provide price
received comments on the proposed provisions of 5 U.S.C. 552, will be
protection for Market Maker quotes.
rule change. available for Web site viewing and
Exchange Rule 967NY currently applies
printing in the Commission’s Public
III. Date of Effectiveness of the Reference Room, 100 F Street NE., 27 17 CFR 200.30–3(a)(12).
Proposed Rule Change and Timing for Washington, DC 20549, on official 1 15 U.S.C. 78s(b)(1).
Commission Action business days between the hours of 2 17 CFR 240.19b–4.
The foregoing rule change has become 10:00 a.m. and 3:00 p.m. Copies of such 3 See Securities Exchange Act Release No. 74017
effective pursuant to Section 19(b)(3)(A) filing also will be available for (January 8, 2015), 80 FR 1979 (‘‘Notice’’).
4 In Amendment No. 1, the Exchange clarified
mstockstill on DSK4VPTVN1PROD with NOTICES
of the Act 25 and paragraph (f) of Rule inspection and copying at the principal
that it believes that Market Maker bids should not
19b–4 26 thereunder. At any time within office of the Exchange. All comments be priced the same as or higher than the
60 days of the filing of the proposed rule received will be posted without change; corresponding benchmark, which would be the
change, the Commission summarily may the Commission does not edit personal price of the underlying security for call options and
identifying information from the strike price for put options. Amendment No. 1
temporarily suspend such rule change if does not change any of the proposed rule text that
submissions. You should submit only was submitted in the original filing. Amendment
25 15 U.S.C. 78s(b)(3)(A). information that you wish to make No. 1 is technical in nature and, therefore, the
26 17 CFR 240.19b–4(f). available publicly. All submissions Commission is not publishing it for comment.
VerDate Sep<11>2014 17:53 Mar 09, 2015 Jkt 235001 PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 E:\FR\FM\10MRN1.SGM 10MRN1](https://thefederalregister.org/doc/80_FR_12733/page/1.svg)
![Federal Register / Vol. 80, No. 46 / Tuesday, March 10, 2015 / Notices 12689
Rule 967.1NY(a)(3) will provide for regulating, clearing, settling, processing general, to protect investors and the
price protection for Market Maker bids information with respect to, and public interest.
in put options. In particular, any Market facilitating transactions in securities, to
IV. Conclusion
Maker bid for put options will be remove impediments to and perfect the
rejected if the price of the bid is equal mechanism of a free and open market For the foregoing reasons, the
to or greater than the strike price of the and a national market system, and, in Commission finds that the proposed
option.18 general, to protect investors and the rule change is consistent with the Act
The Exchange also has proposed that public interest. and the rules and regulations
when a Market Maker quote is rejected The proposed rule change provides a thereunder applicable to a national
pursuant to paragraph (a)(2) or (a)(3) of price protection mechanism for quotes securities exchange.
the proposed rule, the Exchange will entered by a Market Maker when an It is therefore ordered, pursuant to
also cancel all resting quote(s) in the NBBO is available that are priced a section 19(b)(2) of the Act,24 that the
affected class(es) from that Market specified dollar amount or percentage proposed rule change (SR–NYSEMKT–
Maker and will not accept new quote(s) through the last sale or prevailing 2014–116), as modified by Amendment
in the affected class(es) until the Market contra-side market, which the Exchange No. 1, be, and hereby is, approved.
Maker submits a message (which may be believes is evidence of error. The For the Commission, by the Division of
automated) to the Exchange to enable Commission believes that the proposed Trading and Markets, pursuant to delegated
the entry of new quotes.19 price protection mechanism is authority.25
reasonably designed to promote just and Jill M. Peterson,
B. Implementation
equitable principles of trade by Assistant Secretary.
The Exchange stated that it would preventing potential price dislocation [FR Doc. 2015–05496 Filed 3–9–15; 8:45 am]
announce the implementation date of that could result from erroneous Market BILLING CODE 8011–01–P
the proposed rule change in a Trader Maker quotes sweeping through
Update and publish such announcement multiple price points resulting in
at least 30 days prior to implementation. executions at prices that are through the SECURITIES AND EXCHANGE
III. Discussion and Commission last sale price or NBBO.22 COMMISSION
Findings The Exchange’s proposed use of
benchmarks to check the reasonability [File No. 500–1]
After careful review, the Commission of Market Maker bids for call and put
finds that the proposed rule change is In the Matter of Black Sea Metals, Inc.,
options affords a second layer of price
consistent with the requirements of the GigaBeam Corp., Safe Technologies
protection to Market Maker quotes. The
Act and the rules and regulations International, Inc., and Whitemark
Commission believes that the additional
thereunder applicable to a national Homes, Inc.; Order of Suspension of
price reasonability check on Market
securities exchange and, in particular, Trading
Maker bids that are priced equal to or
with section 6(b) of the Act.20 In greater than the price of the underlying March 5, 2015.
particular, the Commission finds that security for call options, and equal to or It appears to the Securities and
the proposed rule change is consistent greater than the strike price for put Exchange Commission that there is a
with sections 6(b)(5) of the Act,21 which options, is reasonably designed to lack of current and accurate information
requires, among other things, that the operate in manner that would remove concerning the securities of Black Sea
rules of a national securities exchange impediments to and perfect the Metals, Inc. because it has not filed any
be designed to prevent fraudulent and mechanism of a free and open market periodic reports since the period ended
manipulative acts and practices, to and protect investors and the public May 31, 2012.
promote just and equitable principles of interest. Further, the Commission notes It appears to the Securities and
trade, to foster cooperation and the Exchange’s belief that the additional Exchange Commission that there is a
coordination with persons engaged in risk controls that result in the lack of current and accurate information
cancellation of a Market Maker’s resting concerning the securities of GigaBeam
already opened will provide the most accurate same side quote and/or the temporary
benchmark because the market is most liquid
Corp. because it has not filed any
during Core Trading Hours. See Notice, supra note
suspension a Market Maker’s quoting periodic reports since the period ended
3, at 1981. activity in the affected option class(es), September 30, 2007.
18 The Exchange states that the value of a put can as applicable, provide market It appears to the Securities and
never exceed the strike price of the option, even if participants with additional protection Exchange Commission that there is a
the stock goes to zero. For example, a put with a from anomalous executions.23
strike price of $50 gives the holder the right to sell
lack of current and accurate information
the underlying security for $50 (no more, or no Accordingly, the Commission believes concerning the securities of Safe
less), therefore the Exchange states that it would be that the proposed price protection for Technologies International, Inc. because
illogical to pay $50 or more for the right to sell that Market Maker quotes is reasonably it has not filed any periodic reports
underlying security, no matter what the price of the designed to prevent fraudulent and
underlying security. See Notice, supra note 3, at
since the period ended December 31,
1981. See also Amendment No. 1, supra note 4. manipulative acts and practices, to 2010.
19 See proposed Exchange Rule 967.1NY(b). The promote just and equitable principles of It appears to the Securities and
Exchange believes that this temporary suspension trade, to foster cooperation and Exchange Commission that there is a
from quoting in the affected option class(es) would coordination with persons engaged in lack of current and accurate information
operate as a safety valve that forces Market Makers
to re-evaluate their positions before requesting to re-
regulating, clearing, settling, processing concerning the securities of Whitemark
mstockstill on DSK4VPTVN1PROD with NOTICES
enter the market. See Notice, supra note 3, at 1981. information with respect to, and Homes, Inc. because it has not filed any
See also Notice, supra note 3, at 1981 for examples facilitating transactions in securities, to periodic reports since the period ended
illustrating how proposed Exchange Rule remove impediments to and perfect the September 30, 2012.
967.1NY(a)(2) and (a)(3) would operate.
20 15 U.S.C. 78f(b). In approving this proposed
mechanism of a free and open market The Commission is of the opinion that
rule change, the Commission has considered the and a national market system, and, in the public interest and the protection of
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f). 22 See Notice, supra note 3, at 1981. 24 15 U.S.C. 78s(b)(2).
21 15 U.S.C. 78f(b)(5). 23 See Notice, supra note 3, at 1982. 25 17 CFR 200.30–3(a)(12).
VerDate Sep<11>2014 17:53 Mar 09, 2015 Jkt 235001 PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 E:\FR\FM\10MRN1.SGM 10MRN1](https://thefederalregister.org/doc/80_FR_12733/page/3.svg)
Document Created: 2018-02-21 09:34:58
Document Modified: 2018-02-21 09:34:58
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 12687 |
2024 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR