80 FR 29767 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Relating to Floor Broker Due Diligence

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 99 (May 22, 2015)

Page Range		29767-29769
FR Document		2015-12417

Federal Register, Volume 80 Issue 99 (Friday, May 22, 2015)

[Federal Register Volume 80, Number 99 (Friday, May 22, 2015)]
[Notices]
[Pages 29767-29769]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-12417]

[[Page 29767]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74990; File No. SR-CBOE-2015-047]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of a Proposed Rule Change Relating to
Floor Broker Due Diligence

May 18, 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 May 5, 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, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
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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 Substance
of the Proposed Rule Change

The Exchange proposes to amend Exchange rules related to Floor
Broker due diligence. The text of the proposed rule change is provided
below (additions are italicized; deletions are [bracketed]).
* * * * *

Chicago Board Options Exchange, Incorporated Rules

* * * * *
Rule 6.53. Certain Types of Orders Defined
One or more of the following order types may be made available on a
class-by-class basis. Certain order types may not be made available for
all Exchange systems. The classes and/or systems for which the order
types shall be available will be as provided in the Rules, as the
context may indicate, or as otherwise specified via Regulatory
Circular.
* * * * *
(g) Not Held Order. A not held order is an order marked ``not
held'', ``take time'' or which bears any qualifying notation giving
discretion as to the price or time at which such order is to be
executed. An order entrusted to a Floor Broker will be considered a Not
Held Order, unless otherwise specified by a Floor Broker's client or
the order was received by the Exchange electronically and subsequently
routed to a Floor Broker or PAR Official pursuant to the order entry
firm's routing instructions.
* * * * *
Rule 6.73. Responsibilities of Floor Brokers
(a)-(c) No Change.
. . . Interpretations and Policies:
.01-.05 No Change.
.06 Pursuant to Rule 6.73(a), an order entrusted to a Floor Broker
will be considered a Not Held Order as defined in Rule 6.53(g), unless
otherwise specified by a Floor Broker's client or the order was
received by the Exchange electronically and subsequently routed to a
Floor Broker or PAR Official pursuant to the order entry firm's routing
instructions.
* * * * *
Rule 6.75. Discretionary Transactions
No Floor Broker shall execute or cause to be executed any order or
orders on this Exchange with respect to which such Floor Broker is
vested with discretion as to: (1) The choice of the class of options to
be bought or sold, (2) the number of contracts to be bought or sold, or
(3) whether any such transaction shall be one of purchase or sale;
however, the provisions of this paragraph shall not apply to any
discretionary transaction executed by a Market-Maker for an account in
which he has an interest. [Under normal market conditions, and in the
absence of a ``not held'' instruction, a Floor Broker may not exercise
time discretion on market or marketable limit orders and shall
immediately execute such orders at the best price or prices available.]
Unless an order was received by the Exchange electronically and
subsequently routed to a Floor Broker or PAR Official pursuant to the
order entry firm's routing instructions or it is otherwise specified by
a Floor Broker's client, an order entrusted to a Floor Broker will be
considered a Not Held Order as defined in Rule 6.53(g).
* * * * *
The text of the proposed rule change is also 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.

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

1. Purpose
The Exchange is proposing to amend Rules 6.53, 6.73, and 6.75 in
order to clarify a Floor Broker's due diligence obligations as it
relates to executing orders on the Exchange's floor.
Currently, ``[a] Floor Broker handling an order is to use due
diligence to execute the order at the best price or prices available to
him, in accordance with the Rules.'' \3\ Rule 6.73 also provides a non-
exclusive list of the duties a Floor Broker must perform in order to
satisfy the due diligence requirement.\4\ For instance, interpretation
and policy .01 states that ``[p]ursuant to Rule 6.73(a), a Floor
Broker's use of due diligence in executing an order shall include
ascertaining whether a better price than is being displayed by the
Order Book Official is being quoted by another Floor Broker or a
Market-Maker.'' \5\ However, current Rule 6.73 is generally silent on
the exact meaning of due diligence, including, for example, whether a
Floor Broker must execute a portion of an order against an order in an
applicable order book when the displayed size in the order book is less
than the size of the Floor Broker's order. Additionally, Rule 6.75
provides that ``[u]nder normal market conditions, and in the absence of
a ``not held'' instruction, a Floor Broker may not exercise time
discretion on market or marketable limit orders and shall immediately
execute such orders at the best price or prices available.'' The
Exchange believes that this requirement from Rule 6.75 is applicable
and generally intended for situations when an entire order represented
by a Floor Broker can be executed.\6\ Furthermore, even when that

[[Page 29768]]

is possible, Rule 6.73 requires a broker to ascertain if a better price
is available in the trading crowd.\7\ Thus, we strongly believe that
these provisions are intended to protect against a broker failing to
properly represent and ultimately execute orders. This makes even more
sense when considering that virtually all options orders (large or
small and retail or professional) were handled by Floor Brokers at the
time these rules were adopted. Given the discrete profile of orders
handled by Floor Brokers today (generally large size orders and often
multi-leg) it is reasonable for Floor Brokers to ``work'' orders that
are entrusted to them because that is the reason a customer would
utilize a Floor Broker in today's environment. In order to address the
above scenarios, as well as to provide clarity and latitude to Floor
Brokers using their experience and expertise in the execution of
orders, the Exchange is proposing to add new interpretation and policy
.06 to Rule 6.73, which is proposed to state that ``[p]ursuant to Rule
6.73(a), an order entrusted to a Floor Broker will be considered a Not
Held Order as defined in Rule 6.53(g), unless otherwise specified by a
Floor Broker's client or the order was received by the Exchange
electronically and subsequently routed to a Floor Broker or PAR
Official pursuant to the order entry firm's routing instructions.'' \8\
The Exchange is also proposing to make conforming changes to Rules 6.53
and 6.75 in order for an order received by a Floor Broker to be
considered a Not Held Order, unless the order was routed to the
Exchange electronically or otherwise specified by the Floor Broker's
client.
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\3\ See Rule 6.73(a).
\4\ See, e.g., Rule 6.73 Interpretation and Policies .01-.05.
\5\ See Rule 6.73.01.
\6\ The Exchange notes that the rule filing that added the rule
text in Rule 6.75, which this current proposal seeks to amend, did
not specify whether brokers had to execute a portion of an order
against a smaller sized order to satisfy the requirements of Rule
6.75. See Securities Exchange Act Release No. 24666, 50 FR 25679
(July 8, 1987) (SR-CBOE-85-31).
\7\ See Rule 6.73.01.
\8\ A ``Not Held Order'' is defined as an order marked ``not
held'', ``take time'' or which bears any qualifying notation giving
discretion as to the price or time at which such order is to be
executed. See Rule 6.53(g).
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The purpose of this filing is to codify the amount of discretion a
Floor Broker has when they receive an order. As Rules 6.73 and 6.75
were adopted prior to electronic trading, the rules did not contemplate
the interaction between an electronic environment and a trading floor,
and they have not been amended to specifically address that
interaction. While it is clear that Floor Brokers have more discretion
with regards to the manner in which they represent and execute orders
on a trading floor than does a computer routing an order to the
Exchange for execution, the bounds of the discretion have not been
entirely clear. Rules 6.73 and 6.75, among others, set certain
boundaries to a Floor Broker's discretion, but the Exchange believes
the current marketplace, with electronic and floor trading, favors an
amendment to those boundaries.
Electronic and floor trading gives clients the choice between a
Trading Permit Holder (``TPH'') that routes orders to the Exchange
electronically or a TPH that executes orders via a Floor Broker.
Clients are keenly aware that the differences between electronic and
floor trading include at least the following factors: A computer cannot
deviate from its programed instructions and a Floor Broker can take
into account the nuisances [sic] of the marketplace, such as the makeup
of a particular trading floor, the individuals on that trading floor,
and how the electronic books interact with that environment. The
Exchange argues that the reason clients use Floor Brokers is precisely
because Floor Brokers can take into account the nuisances [sic] of the
marketplace (i.e., exercise a certain level of discretion) to
potentially provide higher execution quality. The argument is furthered
by the fact that if a client did not want a Floor Broker to use their
expertise in the execution of an order, the client would simply send
orders to the Exchange electronically.
It is evident that Floor Brokers have more discretion with regards
to the manner in which they represent and execute orders than do
computers executing electronic orders. With this rule change the
Exchange seeks to amend certain boundaries related to that discretion.
In particular, in recognition of the discretion implicit with the use
of a Floor Broker, the Exchange seeks to provide notice to the
marketplace that, unless otherwise specified by a Floor Broker's client
or if the order is received by the Exchange electronically and routed
to a Floor Broker, an order is deemed to be ``not held.'' The Exchange
believes clients that choose to use Floor Brokers do so in order to
utilize a Floor Broker's expertise in the execution of orders. This
rule change updates Exchange rules by setting forth the presumptive
discretion available to Floor Brokers in a manner consistent with
modern market structure and the Floor Broker's role in the current
trading environment. This filing also serves as notice to the investing
community that orders sent to Floor Brokers will be deemed ``not held''
unless otherwise specified by the client or if the order is received by
the Exchange electronically and routed to a floor broker. In addition,
the Exchange will announce the implementation of this rule change in a
Regulatory Circular to be published within 90 days of the effective
date of this filing. The implementation date will be within 180 days of
the effective date of this filing.
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.\9\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \10\ 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) \11\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
\11\ Id.
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In particular, the Exchange believes the proposed change adds
clarity and removes ambiguity related to the due diligence requirements
of Floor Brokers, which helps serve the public interest and perfect the
mechanism of a free and open market. In addition, the Exchange believes
designating certain orders as ``not held'' is in the interest of
facilitating transactions in securities and reflective of today's
marketplace, which generally helps to protect investors and the public
interest.

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. The Exchange does not believe
the proposed rule change will impose any burden on competition because
the rule change adds clarity to the due diligence requirements
governing Floor Brokers, reflects the modern market structure, is
consistent with the reasons customers utilize Floor Brokers, and will
be applied equally to all TPHs. To the extent that the proposed rule
change

[[Page 29769]]

will cause clients or brokers to choose CBOE over other trading venues,
market participants on other exchanges are welcome to become TPHs and
trade at CBOE if they determine that this proposed rule change has made
CBOE more attractive or favorable.

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.

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

Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
A. By order approve or disapprove such proposed rule change, or
B. institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-CBOE-2015-047 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CBOE-2015-047. 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 the filing will also 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-2015-047 and should be
submitted on or before June 12, 2015.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-12417 Filed 5-21-15; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 80, No. 99 / Friday, May 22, 2015 / Notices 29767

SECURITIES AND EXCHANGE Broker or PAR Official pursuant to the any comments it received on the
COMMISSION order entry firm’s routing instructions. proposed rule change. The text of these
* * * * * statements may be examined at the
[Release No. 34–74990; File No. SR–CBOE–
2015–047]
places specified in Item IV below. The
Rule 6.73. Responsibilities of Floor Exchange has prepared summaries, set
Brokers forth in sections A, B, and C below, of
Self-Regulatory Organizations;
Chicago Board Options Exchange, (a)–(c) No Change. the most significant aspects of such
Incorporated; Notice of Filing of a . . . Interpretations and Policies: statements.
Proposed Rule Change Relating to .01–.05 No Change.
A. Self-Regulatory Organization’s
Floor Broker Due Diligence .06 Pursuant to Rule 6.73(a), an order
Statement of the Purpose of, and
entrusted to a Floor Broker will be
May 18, 2015. Statutory Basis for, the Proposed Rule
considered a Not Held Order as defined
Pursuant to Section 19(b)(1) of the Change
in Rule 6.53(g), unless otherwise
Securities Exchange Act of 1934 (the specified by a Floor Broker’s client or 1. Purpose
‘‘Act’’),1 and Rule 19b–4 thereunder,2 the order was received by the Exchange
notice is hereby given that on May 5, electronically and subsequently routed The Exchange is proposing to amend
2015, Chicago Board Options Exchange, to a Floor Broker or PAR Official Rules 6.53, 6.73, and 6.75 in order to
Incorporated (the ‘‘Exchange’’ or pursuant to the order entry firm’s clarify a Floor Broker’s due diligence
‘‘CBOE’’) filed with the Securities and routing instructions. obligations as it relates to executing
Exchange Commission (the orders on the Exchange’s floor.
‘‘Commission’’) the proposed rule * * * * *
Currently, ‘‘[a] Floor Broker handling
change as described in Items I, II, and Rule 6.75. Discretionary Transactions an order is to use due diligence to
III below, which Items have been execute the order at the best price or
No Floor Broker shall execute or
prepared by the Exchange. The prices available to him, in accordance
cause to be executed any order or orders
Commission is publishing this notice to with the Rules.’’ 3 Rule 6.73 also
on this Exchange with respect to which
solicit comments on the proposed rule provides a non-exclusive list of the
such Floor Broker is vested with
change from interested persons. duties a Floor Broker must perform in
discretion as to: (1) The choice of the
I. Self-Regulatory Organization’s class of options to be bought or sold, (2) order to satisfy the due diligence
Statement of the Terms of Substance of the number of contracts to be bought or requirement.4 For instance,
the Proposed Rule Change sold, or (3) whether any such interpretation and policy .01 states that
The Exchange proposes to amend transaction shall be one of purchase or ‘‘[p]ursuant to Rule 6.73(a), a Floor
Exchange rules related to Floor Broker sale; however, the provisions of this Broker’s use of due diligence in
due diligence. The text of the proposed paragraph shall not apply to any executing an order shall include
rule change is provided below discretionary transaction executed by a ascertaining whether a better price than
(additions are italicized; deletions are Market-Maker for an account in which is being displayed by the Order Book
[bracketed]). he has an interest. [Under normal Official is being quoted by another Floor
market conditions, and in the absence of Broker or a Market-Maker.’’ 5 However,
* * * * * current Rule 6.73 is generally silent on
a ‘‘not held’’ instruction, a Floor Broker
Chicago Board Options Exchange, may not exercise time discretion on the exact meaning of due diligence,
Incorporated Rules market or marketable limit orders and including, for example, whether a Floor
* * * * * shall immediately execute such orders Broker must execute a portion of an
at the best price or prices available.] order against an order in an applicable
Rule 6.53. Certain Types of Orders Unless an order was received by the order book when the displayed size in
Defined Exchange electronically and the order book is less than the size of
One or more of the following order subsequently routed to a Floor Broker or the Floor Broker’s order. Additionally,
types may be made available on a class- PAR Official pursuant to the order entry Rule 6.75 provides that ‘‘[u]nder normal
by-class basis. Certain order types may firm’s routing instructions or it is market conditions, and in the absence of
not be made available for all Exchange otherwise specified by a Floor Broker’s a ‘‘not held’’ instruction, a Floor Broker
systems. The classes and/or systems for client, an order entrusted to a Floor may not exercise time discretion on
which the order types shall be available Broker will be considered a Not Held market or marketable limit orders and
will be as provided in the Rules, as the Order as defined in Rule 6.53(g). shall immediately execute such orders
context may indicate, or as otherwise * * * * * at the best price or prices available.’’
specified via Regulatory Circular. The text of the proposed rule change The Exchange believes that this
* * * * * is also available on the Exchange’s Web requirement from Rule 6.75 is
(g) Not Held Order. A not held order site (http://www.cboe.com/AboutCBOE/ applicable and generally intended for
is an order marked ‘‘not held’’, ‘‘take CBOELegalRegulatoryHome.aspx), at situations when an entire order
time’’ or which bears any qualifying the Exchange’s Office of the Secretary, represented by a Floor Broker can be
notation giving discretion as to the price and at the Commission’s Public executed.6 Furthermore, even when that
or time at which such order is to be Reference Room. 3 See Rule 6.73(a).
asabaliauskas on DSK5VPTVN1PROD with NOTICES

executed. An order entrusted to a Floor
II. Self-Regulatory Organization’s 4 See, e.g., Rule 6.73 Interpretation and Policies
Broker will be considered a Not Held .01–.05.
Statement of the Purpose of, and
Order, unless otherwise specified by a 5 See Rule 6.73.01.
Statutory Basis for, the Proposed Rule
Floor Broker’s client or the order was 6 The Exchange notes that the rule filing that
Change added the rule text in Rule 6.75, which this current
received by the Exchange electronically
In its filing with the Commission, the proposal seeks to amend, did not specify whether
and subsequently routed to a Floor brokers had to execute a portion of an order against
Exchange included statements a smaller sized order to satisfy the requirements of
1 15 U.S.C. 78s(b)(1). concerning the purpose of and basis for Rule 6.75. See Securities Exchange Act Release No.
2 17 CFR 240.19b–4. the proposed rule change and discussed Continued

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Federal Register / Vol. 80, No. 99 / Friday, May 22, 2015 / Notices 29769

will cause clients or brokers to choose change that are filed with the proposal. Amendment No. 1 amended
CBOE over other trading venues, market Commission, and all written and replaced the original proposal in its
participants on other exchanges are communications relating to the entirety. The Commission is publishing
welcome to become TPHs and trade at proposed rule change between the this notice to solicit comments on the
CBOE if they determine that this Commission and any person, other than proposed rule change, as modified by
proposed rule change has made CBOE those that may be withheld from the Amendment No. 1, from interested
more attractive or favorable. public in accordance with the persons.
provisions of 5 U.S.C. 552, will be
C. Self-Regulatory Organization’s available for Web site viewing and I. Self-Regulatory Organization’s
Statement on Comments on the printing in the Commission’s Public Statement of the Terms of Substance of
Proposed Rule Change Received From Reference Room, 100 F Street NE., the Proposed Rule Change
Members, Participants, or Others Washington, DC 20549, on official The Exchange filed a proposal to
The Exchange neither solicited nor business days between the hours of amend Rule 11.2 to state that the
received comments on the proposed 10:00 a.m. and 3:00 p.m. Copies of the Exchange will not designate for trading
rule change. filing will also be available for any security admitted to unlisted
inspection and copying at the principal trading privileges on the Exchange
III. Date of Effectiveness of the
office of the Exchange. All comments unless that security satisfies certain
Proposed Rule Change and Timing for
received will be posted without change; liquidity requirements, as further
Commission Action
the Commission does not edit personal described below.
Within 45 days of the date of identifying information from The text of the proposed rule change
publication of this notice in the Federal submissions. You should submit only is available at the Exchange’s Web site
Register or within such longer period information that you wish to make at www.batstrading.com, at the
up to 90 days (i) as the Commission may available publicly. All submissions principal office of the Exchange, and at
designate if it finds such longer period should refer to File Number SR–CBOE– the Commission’s Public Reference
to be appropriate and publishes its 2015–047 and should be submitted on Room.
reasons for so finding or (ii) as to which or before June 12, 2015.
the Exchange consents, the Commission II. Self-Regulatory Organization’s
For the Commission, by the Division of Statement of the Purpose of, and
will: Trading and Markets, pursuant to delegated
A. By order approve or disapprove authority.12 Statutory Basis for, the Proposed Rule
such proposed rule change, or Change
Robert W. Errett,
B. institute proceedings to determine Deputy Secretary. In its filing with the Commission, the
whether the proposed rule change Exchange included statements
[FR Doc. 2015–12417 Filed 5–21–15; 8:45 am]
should be disapproved. concerning the purpose of and basis for
BILLING CODE 8011–01–P
IV. Solicitation of Comments the proposed rule change and discussed
any comments it received on the
Interested persons are invited to proposed rule change. The text of these
SECURITIES AND EXCHANGE
submit written data, views, and statements may be examined at the
COMMISSION
arguments concerning the foregoing, places specified in Item IV below. The
including whether the proposed rule [Release No. 34–74987; File No. SR–BATS–
Exchange has prepared summaries, set
change is consistent with the Act. 2015–37]
forth in Sections A, B, and C below, of
Comments may be submitted by any of the most significant parts of such
the following methods: Self-Regulatory Organizations; BATS
Exchange, Inc.; Notice of Filing of a statements.
Electronic Comments Proposed Rule Change, and (A) Self-Regulatory Organization’s
• Use the Commission’s Internet Amendment No. 1 Thereto, To Amend Statement of the Purpose of, and
comment form (http://www.sec.gov/ Rule 11.2 To State That the BATS Statutory Basis for, the Proposed Rule
rules/sro.shtml); or Exchange, Inc. Will Not Designate for Change
• Send an email to rule-comments@ Trading Any Security Admitted to
sec.gov. Please include File Number SR– Unlisted Trading Privileges on the 1. Purpose
CBOE–2015–047 on the subject line. Exchange Unless That Security With limited exception, the current
Satisfies Certain Liquidity equity market structure under
Paper Comments Requirements Regulation NMS applies the same rules
• Send paper comments in triplicate with respect to, among other things, tick
May 18, 2015.
to Brent J. Fields, Secretary, Securities sizes, order protection, locked and
Pursuant to Section 19(b)(1) of the
and Exchange Commission, 100 F Street crossed markets, and access fees to all
Securities Exchange Act of 1934 (the
NE., Washington, DC 20549–1090. exchange-listed securities. The
‘‘Act’’),1 and Rule 19b–4 thereunder,2
All submissions should refer to File notice is hereby given that on May 5, Exchange believes that Regulation NMS,
Number SR–CBOE–2015–047. This file 2015, BATS Exchange, Inc. (the along with technological advancements,
number should be included on the ‘‘Exchange’’ or ‘‘BATS’’) filed with the has produced great efficiencies to the
subject line if email is used. To help the Securities and Exchange Commission equity market, resulting in intense
Commission process and review your competition between exchanges and
asabaliauskas on DSK5VPTVN1PROD with NOTICES

(‘‘Commission’’) the proposed rule
comments more efficiently, please use change as described in Items I, II and III broker-dealers. The Exchange believes
only one method. The Commission will below, which Items have been prepared the net result for most exchange-listed
post all comments on the Commission’s by the Exchange. On May 15, 2015, the securities has been decreases in
Internet Web site (http://www.sec.gov/ Exchange filed Amendment No. 1 to the transaction costs, including decreases in
rules/sro.shtml). Copies of the explicit commissions and the narrowing
submission, all subsequent 12 17 CFR 200.30–3(a)(12). of effective spreads investors pay to
amendments, all written statements 1 15 U.S.C. 78s(b)(1). enter and exit positions. However, the
with respect to the proposed rule 2 17 CFR 240.19b–4. Exchange recognizes that not all

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Document Created: 2015-12-15 15:46:16
Document Modified: 2015-12-15 15:46:16

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 29767