80 FR 30514 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change To Amend Exchange Rules Related to Order Tickets
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 102 (May 28, 2015)
Federal Register Volume 80, Issue 102 (May 28, 2015)
| Page Range | 30514-30517 | |
| FR Document | 2015-12832 |
[Federal Register Volume 80, Number 102 (Thursday, May 28, 2015)] [Notices] [Pages 30514-30517] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-12832] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75026; File No. SR-CBOE-2015-048] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change To Amend Exchange Rules Related to Order Tickets May 21, 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 11, 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 Exchange filed the proposal as a ``non-controversial'' proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The Commission is publishing this notice to solicit comments on the [[Page 30515]] proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ 15 U.S.C. 78s(b)(3)(A). \4\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange seeks to amend its rules related to order tickets. 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 * * * * * . . . Interpretations and Policies: .01 No change. .02 Complex orders of twelve (12) legs or less (one leg of which may be for an underlying security or security future, as applicable) must be entered on a single order ticket at time of systemization. If permitted by the Exchange (which the Exchange will announce by Regulatory Circular), complex orders of more than twelve (12) legs (one leg of which may be for an underlying security or security future, as applicable) may be split across multiple order tickets if the Trading Permit Holder representing the complex order [includes twelve (12) legs on one of the order tickets] uses the fewest order tickets necessary to systematize the order and identifies for the Exchange the order tickets that are part of the same complex order (in a form and manner prescribed by the Exchange). * * * * * Rule 24.20. SPX Combo Orders * * * * * . . . Interpretations and Policies: .01 An SPX Combo Order for twelve (12) legs or less must be entered on a single order ticket at time of systemization. If permitted by the Exchange (which the Exchange will announce by Regulatory Circular), an SPX Combo Order for more than twelve (12) legs may be represented or executed as a single SPX Combo Order in accordance with this Rule 24.20 if it is split across multiple order tickets and the Trading Permit Holder representing the SPX Combo Order [includes twelve (12) legs on one of the order tickets] uses the fewest order tickets necessary to systematize the order and identifies for the Exchange the order tickets that are part of the same SPX Combo Order (in a manner and form prescribed by the Exchange). * * * * * 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 proposes to amend the order ticket requirements applicable to complex orders in open outcry pursuant to Rule 6.53, as well as SPX Combo Orders \5\ pursuant to Rule 24.20. --------------------------------------------------------------------------- \5\ An ``SPX Combo Order'' consists of an order to purchase or sell one or more SPX option series and the offsetting number of SPX combinations defined by the delta, where an ``SPX combination'' is a purchase (sale) of an SPX call and sale (purchase) of an SPX put having the same expiration date and strike price and a ``delta'' is the positive (negative) number of SPX combinations that must be sold (bought) to establish a market neutral hedge with one or more SPX option series. --------------------------------------------------------------------------- Background On February 26, 2015, rule change filing SR-CBOE-2015-011 was approved by the Securities and Exchange Commission (the ``Commission'').\6\ As amended by SR-CBOE-2015-011, Rule 6.53 requires complex orders of twelve (12) legs or less (one leg of which may be for an underlying security or security future, as applicable) to be entered on a single order ticket at time of systemization. Rule 6.53, as amended, also states that if permitted by the Exchange (which the Exchange will announce by Regulatory Circular), complex orders of more than twelve (12) legs (one leg of which may be for an underlying security or security future, as applicable) may be split across multiple order tickets, if the Trading Permit Holder (``TPH'') representing the complex order includes twelve (12) legs on one of the order tickets and identifies for the Exchange the order tickets that are part of the same complex order (in a form and manner prescribed by the Exchange). --------------------------------------------------------------------------- \6\ Securities Exchange Act Release No. 34-74389 (February 26, 2015), 80 FR 11717 (March 4, 2015) (``Order''). --------------------------------------------------------------------------- Rule 24.20, as amended, also requires that an SPX Combo Order for twelve (12) legs or less be entered on a single order ticket at time of systemization. An SPX Combo Order that contains more than twelve (12) legs may be represented and executed as a single SPX Combo Order in accordance with Rule 24.20 if it is split across multiple order tickets and the TPH representing the SPX Combo Order includes twelve (12) legs on one of the order tickets and identifies for the Exchange the order tickets that are part of the same SPX Combo Order (in a manner and form prescribed by the Exchange). As noted above, SR-CBOE-2015-011 specifically provided that if an open outcry complex order or an SPX Combo Order with more than twelve legs is split across multiple order tickets, one of the order tickets must contain twelve legs. For example, a thirteen leg order could not have seven legs on one ticket and six legs on another ticket; rather, one ticket must have twelve legs and the other ticket must have one leg. However, prior to the Commission's approval of SR-CBOE-2015-011, the Exchange held an informational session for Floor Broker Trading Permit Holders regarding the requirement to use a single order ticket to enter complex orders and SPX Combo Orders of twelve legs or fewer.\7\ At the informational session, Floor Broker TPHs indicated that for a 13 leg order in SPX (where the rule requires 12 legs to be on 1 order ticket and the 13th leg to be on a [[Page 30516]] separate order ticket), the 13th leg would not be able to execute in complex order increments (pennies) because CBOE's Hybrid System (the ``System'') would block the trade.\8\ In effect, the System would treat the 13th leg as a simple order that is ineligible to execute in penny increments.\9\ --------------------------------------------------------------------------- \7\ See CBOE Information Circular IC15-012 (February 24, 2015). \8\ For certain options, SPX options included, single leg orders may not be executed in $0.01 increments, but individual legs of complex orders may be executed in $0.01 increments. See Rule 6.42. \9\ The Exchange notes that the System would treat any standalone leg of a complex order in the same manner. --------------------------------------------------------------------------- Additionally, for complex orders with over twelve legs and an equal number of put legs versus call legs, Floor Broker TPHs expressed the desire to place the put legs on one order ticket and the call legs on a separate order ticket. The Floor Broker TPHs indicated that splitting an order across multiple order tickets in this manner is a more efficient and simpler way to price the entire complex order. Proposal In an effort to address the above concerns and maintain an effective audit trail, the Exchange is seeking to amend Rules 6.53.02 and 24.20.1 by removing the requirement that for orders with over 12 legs TPHs must include 12 legs on one of the order tickets. As proposed, Rule 6.53.02 will provide:Complex orders of twelve (12) legs or less (one leg of which may be for an underlying security or security future, as applicable) must be entered on a single order ticket at time of systemization. If permitted by the Exchange (which the Exchange will announce by Regulatory Circular), complex orders of more than twelve (12) legs (one leg of which may be for an underlying security or security future, as applicable) may be split across multiple order tickets if the Trading Permit Holder representing the complex order uses the fewest order tickets necessary to systematize the order and identifies for the Exchange the order tickets that are part of the same complex order (in a form and manner prescribed by the Exchange). Proposed Rule 24.20.01 will similarly provide: An SPX Combo Order for twelve (12) legs or less must be entered on a single order ticket at time of systemization. If permitted by the Exchange (which the Exchange will announce by Regulatory Circular), an SPX Combo Order for more than twelve (12) legs may be represented or executed as a single SPX Combo Order in accordance with this Rule 24.20 if it is split across multiple order tickets and the Trading Permit Holder representing the SPX Combo Order uses the fewest order tickets necessary to systematize the order and identifies for the Exchange the order tickets that are part of the same SPX Combo Order (in a manner and form prescribed by the Exchange). As noted in the rule text, the Exchange will announce via Regulatory Circular whether an open outcry complex order or SPX Combo Order may have more than 12 legs.\10\ In addition, for orders with more than 12 legs, the Exchange will not prescribe the number of legs that must be on each order ticket, except that TPHs must use the fewest number of tickets necessary to systematize the order.\11\ This will allow TPHs to split orders with more than 12 legs across multiple order tickets in any manner they choose, provided they use the fewest number of order tickets. For example, a 13 legged order could be split across two order tickets with 6 legs on one order ticket and 7 legs on another ticket but the order could not be split across three order tickets because the fewest number of order tickets required for an order with 13 to 24 legs is two.\12\ The only restriction, as provided in the rule text, is that for orders greater than 12 legs TPHs must use the fewest number of order tickets necessary to systematize the order. Without the proposed restriction there would be no limit on the number of order tickets a TPH could use to systematize an order, which could burden the manual process by which the CBOE Regulatory Division reviews these large orders. For example, without the restriction, an order with 13 legs could potentially be split across 13 different order tickets, which would require the Regulatory Division to manually review 13 different order tickets. --------------------------------------------------------------------------- \10\ As noted in SR-CBOE-2015-011, current Exchange system limitations prevent a multi-part order with more than 12 legs from being entered on a single order ticket for representation and execution in open outcry as a complex order or SPX Combo Order. \11\ The Exchange notes that the requirement to use the fewest order tickets necessary to systematize an order is not meant to allow the Exchange the flexibility to increase the number of legs that must be on a single order ticket; rather, the Exchange will submit a rule filing to amend Rules 6.53.02 and 24.20.01 if the Exchange seeks to modify the number of legs required to be on a single order ticket. \12\ The fewest number of order tickets necessary to systematize an order is based on the current Exchange system limitation, which caps the number of legs that can be on a single order ticket at 12 legs. Thus, orders with 12-24 legs would be required to be on no more than two order tickets, orders with 25-36 legs would be required to be on no more than three order tickets, and so forth. As previously noted, the Exchange will submit a rule filing to amend Rules 6.53.02 and 24.20.01 if the Exchange seeks to modify the number of legs required to be on a single order ticket. The Exchange will announce the implementation date of the proposed rule change, as well as the specific order ticket requirements to be set by the Exchange in accordance with this proposed rule, in a Regulatory Circular to be published within 90 days of the effective date of this filing. The implementation date of this filing 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.\13\ Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \14\ 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 [[Page 30517]] proposed rule change is consistent with the Section 6(b)(5) \15\ requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \13\ 15 U.S.C. 78f(b). \14\ 15 U.S.C. 78f(b)(5). \15\ Id. --------------------------------------------------------------------------- In particular, the Exchange believes the proposed rule change will allow the Exchange to maintain an enhanced audit trail with respect to open outcry complex order processing and SPX Combo Orders, which helps to protect investors and the public interest because an enhanced audit trail promotes transparency and aids in surveillance, as well as, provides the Exchange the ability to better enforce compliance by the Exchange's TPHs (and persons associated with its TPHs) with the Act, the rules and regulations thereunder and the rules of the Exchange, thereby protecting investors. Additionally, the Exchange believes allowing TPHs to split orders across multiple order tickets as proposed would allow TPHs to more quickly and efficiently systematize and execute open outcry complex orders and SPX Combo Orders, which helps to remove impediments to and perfect the mechanism of a free and open market. Finally, the proposal to require TPHs to use the fewest number of order tickets to systematize an order will prevent TPHs from utilizing five order tickets, for example, when two would suffice, which aids in surveillance and provides the Exchange the ability to better enforce compliance by TPHs. 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 that the proposed rule change will impose any burden on intramarket or intermarket competition because the order ticket requirements will be applicable to all TPHs executing complex orders in open outcry and SPX Combo Orders. 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 proposal. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: A. Significantly affect the protection of investors or the public interest; B. impose any significant burden on competition; and C. become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act \16\ and Rule 19b-4(f)(6) \17\ thereunder. 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 will institute proceedings to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \16\ 15 U.S.C. 78s(b)(3)(A). \17\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- 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-2015-048 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-2015-048. 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 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-2015-048 and should be submitted on or before June 12, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\18\ --------------------------------------------------------------------------- \18\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-12832 Filed 5-27-15; 8:45 am] BILLING CODE 8011-01-P
![30514 Federal Register / Vol. 80, No. 102 / Thursday, May 28, 2015 / Notices
direct orders to the Exchange rather III. Date of Effectiveness of the Commission and any person, other than
than competing venues. Proposed Rule Change and Timing for those that may be withheld from the
Commission Action public in accordance with the
B. Self-Regulatory Organization’s provisions of 5 U.S.C. 552, will be
Statement on Burden on Competition Pursuant to Section 19(b)(3)(A)(ii) of
the Act,17 the Exchange has designated available for Web site viewing and
The proposed rule change does not this proposal as establishing or changing printing in the Commission’s Public
impose any burden on competition that a due, fee, or other charge imposed by Reference Room, 100 F Street NE.,
is not necessary or appropriate in the self-regulatory organization on any Washington, DC 20549, on official
person, whether or not the person is a business days between the hours of
furtherance of the purposes of the Act.
member of the self-regulatory 10:00 a.m. and 3:00 p.m. Copies of the
To the contrary, BX has designed its fees
organization, which renders the filing also will be available for
and rebates to compete effectively for
proposed rule change effective upon inspection and copying at the principal
the execution and routing of Penny Pilot
filing. office of the Exchange. All comments
Options contracts on the Exchange. received will be posted without change;
At any time within 60 days of the
The Exchange believes that the the Commission does not edit personal
filing of the proposed rule change, the
proposed amended fees and rebates will identifying information from
Commission summarily may
attract market participants and BX submissions. You should submit only
temporarily suspend such rule change if
Options Market Makers to engage in it appears to the Commission that such information that you wish to make
market making activities at the action is necessary or appropriate in the available publicly. All submissions
Exchange, which results in tighter public interest, for the protection of should refer to File Number SR–BX–
markets and order interaction and investors, or otherwise in furtherance of 2015–029 and should be submitted on
benefits all market participants. the purposes of the Act. If the or before June 18, 2015.
Moreover, BX Options Market Makers Commission takes such action, the For the Commission, by the Division of
have obligations to the market and Commission shall institute proceedings Trading and Markets, pursuant to delegated
regulatory requirements, which to determine whether the proposed rule authority.18
normally do not apply to other market should be approved or disapproved. Robert W. Errett,
participants.16 While BX Options Deputy Secretary.
Market Makers will continue to pay a IV. Solicitation of Comments
[FR Doc. 2015–12830 Filed 5–27–15; 8:45 am]
Fee to Add Liquidity in all Penny Pilot Interested persons are invited to BILLING CODE 8011–01–P
Options that will not be higher than for submit written data, views, and
Customers, Customers will pay a fee arguments concerning the foregoing,
which is lower than that assessed to including whether the proposed rule SECURITIES AND EXCHANGE
Non-Customers. The Exchange believes change is consistent with the Act. COMMISSION
that this does not present an undue Comments may be submitted by any of
burden on competition because the the following methods: [Release No. 34–75026; File No. SR–CBOE–
2015–048]
pricing seeks to reward liquidity Electronic Comments
providers, which in turn benefits all Self-Regulatory Organizations;
market participants. • Use the Commission’s Internet
comment form (http://www.sec.gov/ Chicago Board Options Exchange,
The Exchange believes the proposals rules/sro.shtml); or Incorporated; Notice of Filing of a
discussed herein do not pose an undue • Send an email to rule-comments@ Proposed Rule Change To Amend
burden on intermarket competition. The sec.gov. Please include File Number SR– Exchange Rules Related to Order
Exchange operates in a highly BX–2015–029 on the subject line. Tickets
competitive market comprised of twelve
Paper Comments May 21, 2015.
U.S. options exchanges in which
Pursuant to Section 19(b)(1) of the
sophisticated and knowledgeable • Send paper comments in triplicate Securities Exchange Act of 1934 (the
market participants can and do send to Secretary, Securities and Exchange
order flow to competing exchanges if ‘‘Act’’),1 and Rule 19b–4 thereunder,2
Commission, 100 F Street NE., notice is hereby given that on May 11,
they deem fee levels at a particular Washington, DC 20549–1090. 2015, Chicago Board Options Exchange,
exchange to be excessive. The Exchange All submissions should refer to File Incorporated (the ‘‘Exchange’’ or
believes that the proposed fee and Number SR–BX–2015–029. This file ‘‘CBOE’’) filed with the Securities and
rebate scheme discussed herein is number should be included on the Exchange Commission (the
competitive. The Exchange believes that subject line if email is used. To help the ‘‘Commission’’) the proposed rule
this competitive marketplace materially Commission process and review your change as described in Items I, II, and
impacts the fees and rebates present on comments more efficiently, please use III below, which Items have been
the Exchange today and substantially only one method. The Commission will prepared by the Exchange. The
influences the proposal set forth above. post all comments on the Commission’s Exchange filed the proposal as a ‘‘non-
C. Self-Regulatory Organization’s Internet Web site (http://www.sec.gov/ controversial’’ proposed rule change
Statement on Comments on the rules/sro.shtml). Copies of the pursuant to Section 19(b)(3)(A) of the
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Proposed Rule Change Received From submission, all subsequent Act 3 and Rule 19b–4(f)(6) thereunder.4
amendments, all written statements The Commission is publishing this
Members, Participants, or Others
with respect to the proposed rule notice to solicit comments on the
No written comments were either change that are filed with the
solicited or received. Commission, and all written 18 17 CFR 200.30–3(a)(12).
communications relating to the 1 15 U.S.C. 78s(b)(1).
16 In registering as a BX Options Market Maker, proposed rule change between the 2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
an Options Participant commits himself to various
obligations. See Chapter VII, Sections 5 and 6. 17 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(6).
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proposed rule change from interested the SPX Combo Order [includes twelve complex orders of twelve (12) legs or
persons. (12) legs on one of the order tickets] less (one leg of which may be for an
uses the fewest order tickets necessary underlying security or security future,
I. Self-Regulatory Organization’s
to systematize the order and identifies as applicable) to be entered on a single
Statement of the Terms of Substance of
for the Exchange the order tickets that order ticket at time of systemization.
the Proposed Rule Change
are part of the same SPX Combo Order Rule 6.53, as amended, also states that
The Exchange seeks to amend its rules (in a manner and form prescribed by the if permitted by the Exchange (which the
related to order tickets. The text of the Exchange). Exchange will announce by Regulatory
proposed rule change is provided * * * * * Circular), complex orders of more than
below. The text of the proposed rule change twelve (12) legs (one leg of which may
(additions are italicized; deletions are is also available on the Exchange’s Web be for an underlying security or security
[bracketed]) site (http://www.cboe.com/AboutCBOE/ future, as applicable) may be split across
* * * * * CBOELegalRegulatoryHome.aspx), at multiple order tickets, if the Trading
the Exchange’s Office of the Secretary, Permit Holder (‘‘TPH’’) representing the
Chicago Board Options Exchange, and at the Commission’s Public
Incorporated Rules complex order includes twelve (12) legs
Reference Room. on one of the order tickets and identifies
* * * * * for the Exchange the order tickets that
II. Self-Regulatory Organization’s
Rule 6.53. Certain Types of Orders Statement of the Purpose of, and are part of the same complex order (in
Defined Statutory Basis for, the Proposed Rule a form and manner prescribed by the
Change Exchange).
* * * * *
In its filing with the Commission, the Rule 24.20, as amended, also requires
. . . Interpretations and Policies: that an SPX Combo Order for twelve
Exchange included statements
.01 No change. concerning the purpose of and basis for (12) legs or less be entered on a single
.02 Complex orders of twelve (12) legs the proposed rule change and discussed order ticket at time of systemization. An
or less (one leg of which may be for an any comments it received on the SPX Combo Order that contains more
underlying security or security future, proposed rule change. The text of these than twelve (12) legs may be
as applicable) must be entered on a statements may be examined at the represented and executed as a single
single order ticket at time of places specified in Item IV below. The SPX Combo Order in accordance with
systemization. If permitted by the Exchange has prepared summaries, set Rule 24.20 if it is split across multiple
Exchange (which the Exchange will forth in sections A, B, and C below, of order tickets and the TPH representing
announce by Regulatory Circular), the most significant aspects of such the SPX Combo Order includes twelve
complex orders of more than twelve (12) statements. (12) legs on one of the order tickets and
legs (one leg of which may be for an identifies for the Exchange the order
underlying security or security future, A. Self-Regulatory Organization’s
Statement of the Purpose of, and tickets that are part of the same SPX
as applicable) may be split across Combo Order (in a manner and form
multiple order tickets if the Trading Statutory Basis for, the Proposed Rule
Change prescribed by the Exchange).
Permit Holder representing the complex
order [includes twelve (12) legs on one 1. Purpose As noted above, SR–CBOE–2015–011
of the order tickets] uses the fewest specifically provided that if an open
The Exchange proposes to amend the outcry complex order or an SPX Combo
order tickets necessary to systematize
order ticket requirements applicable to Order with more than twelve legs is
the order and identifies for the
complex orders in open outcry pursuant split across multiple order tickets, one
Exchange the order tickets that are part to Rule 6.53, as well as SPX Combo
of the same complex order (in a form of the order tickets must contain twelve
Orders 5 pursuant to Rule 24.20.
and manner prescribed by the legs. For example, a thirteen leg order
Exchange). Background could not have seven legs on one ticket
* * * * * On February 26, 2015, rule change and six legs on another ticket; rather,
filing SR–CBOE–2015–011 was one ticket must have twelve legs and the
Rule 24.20. SPX Combo Orders other ticket must have one leg.
approved by the Securities and
* * * * * Exchange Commission (the However, prior to the Commission’s
‘‘Commission’’).6 As amended by SR– approval of SR–CBOE–2015–011, the
. . . Interpretations and Policies: Exchange held an informational session
CBOE–2015–011, Rule 6.53 requires
.01 An SPX Combo Order for twelve for Floor Broker Trading Permit Holders
(12) legs or less must be entered on a 5 An ‘‘SPX Combo Order’’ consists of an order to regarding the requirement to use a
single order ticket at time of purchase or sell one or more SPX option series and single order ticket to enter complex
systemization. If permitted by the the offsetting number of SPX combinations defined orders and SPX Combo Orders of twelve
by the delta, where an ‘‘SPX combination’’ is a
Exchange (which the Exchange will purchase (sale) of an SPX call and sale (purchase) legs or fewer.7 At the informational
announce by Regulatory Circular), an of an SPX put having the same expiration date and session, Floor Broker TPHs indicated
SPX Combo Order for more than twelve strike price and a ‘‘delta’’ is the positive (negative) that for a 13 leg order in SPX (where the
asabaliauskas on DSK5VPTVN1PROD with NOTICES
(12) legs may be represented or executed number of SPX combinations that must be sold rule requires 12 legs to be on 1 order
(bought) to establish a market neutral hedge with
as a single SPX Combo Order in ticket and the 13th leg to be on a
one or more SPX option series.
accordance with this Rule 24.20 if it is 6 Securities Exchange Act Release No. 34–74389
split across multiple order tickets and (February 26, 2015), 80 FR 11717 (March 4, 2015)
7 See CBOE Information Circular IC15–012
the Trading Permit Holder representing (‘‘Order’’). (February 24, 2015).
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proposed rule change is consistent with A. Significantly affect the protection public in accordance with the
the Section 6(b)(5) 15 requirement that of investors or the public interest; provisions of 5 U.S.C. 552, will be
the rules of an exchange not be designed B. impose any significant burden on available for Web site viewing and
to permit unfair discrimination between competition; and printing in the Commission’s Public
customers, issuers, brokers, or dealers. C. become operative for 30 days from Reference Room, 100 F Street NE.,
In particular, the Exchange believes the date on which it was filed, or such Washington, DC 20549 on official
the proposed rule change will allow the shorter time as the Commission may business days between the hours of
Exchange to maintain an enhanced designate, it has become effective 10:00 a.m. and 3:00 p.m. Copies of the
audit trail with respect to open outcry pursuant to Section 19(b)(3)(A) of the filing also will be available for
complex order processing and SPX Act 16 and Rule 19b–4(f)(6) 17 inspection and copying at the principal
Combo Orders, which helps to protect thereunder. At any time within 60 days office of the Exchange. All comments
investors and the public interest of the filing of the proposed rule change, received will be posted without change;
because an enhanced audit trail the Commission summarily may the Commission does not edit personal
promotes transparency and aids in temporarily suspend such rule change if identifying information from
surveillance, as well as, provides the it appears to the Commission that such submissions. You should submit only
Exchange the ability to better enforce action is necessary or appropriate in the information that you wish to make
compliance by the Exchange’s TPHs public interest, for the protection of available publicly. All submissions
(and persons associated with its TPHs) investors, or otherwise in furtherance of should refer to File Number SR–CBOE–
with the Act, the rules and regulations the purposes of the Act. If the 2015–048 and should be submitted on
thereunder and the rules of the Commission takes such action, the or before June 12, 2015.
Exchange, thereby protecting investors. Commission will institute proceedings For the Commission, by the Division of
Additionally, the Exchange believes to determine whether the proposed rule Trading and Markets, pursuant to delegated
allowing TPHs to split orders across change should be approved or authority.18
multiple order tickets as proposed disapproved. Robert W. Errett,
would allow TPHs to more quickly and IV. Solicitation of Comments Deputy Secretary.
efficiently systematize and execute open [FR Doc. 2015–12832 Filed 5–27–15; 8:45 am]
outcry complex orders and SPX Combo Interested persons are invited to
BILLING CODE 8011–01–P
Orders, which helps to remove submit written data, views, and
impediments to and perfect the arguments concerning the foregoing,
mechanism of a free and open market. including whether the proposed rule SECURITIES AND EXCHANGE
Finally, the proposal to require TPHs to change is consistent with the Act. COMMISSION
use the fewest number of order tickets Comments may be submitted by any of
the following methods: [Release No. 34–75022; File No. SR–CBOE–
to systematize an order will prevent 2015–049]
TPHs from utilizing five order tickets, Electronic Comments
for example, when two would suffice, • Use the Commission’s Internet Self-Regulatory Organizations;
which aids in surveillance and provides comment form (http://www.sec.gov/ Chicago Board Options Exchange,
the Exchange the ability to better rules/sro.shtml); or Incorporated; Notice of Filing and
enforce compliance by TPHs. • Send an email to rule-comments@ Immediate Effectiveness of Proposed
sec.gov. Please include File Number SR– Rule Change To Amend the Fees
B. Self-Regulatory Organization’s
CBOE–2015–048 on the subject line. Schedule
Statement on Burden on Competition
Paper Comments May 21, 2015.
CBOE does not believe that the
Pursuant to Section 19(b)(1) of the
proposed rule change will impose any • Send paper comments in triplicate Securities Exchange Act of 1934
burden on competition that is not to Secretary, Securities and Exchange
necessary or appropriate in furtherance (‘‘Act’’),1 and Rule 19b–4 thereunder,2
Commission, 100 F Street NE., notice is hereby given that, on May 11,
of the purposes of the Act. The Washington, DC 20549–1090.
Exchange does not believe that the 2015, Chicago Board Options Exchange,
All submissions should refer to File Incorporated (the ‘‘Exchange’’ or
proposed rule change will impose any Number SR–CBOE–2015–048. This file
burden on intramarket or intermarket ‘‘CBOE’’) filed with the Securities and
number should be included on the Exchange Commission (‘‘Commission’’)
competition because the order ticket subject line if email is used. To help the
requirements will be applicable to all the proposed rule change as described
Commission process and review your in Items I, II, and III below, which Items
TPHs executing complex orders in open comments more efficiently, please use
outcry and SPX Combo Orders. have been prepared by the Exchange.
only one method. The Commission will The Commission is publishing this
C. Self-Regulatory Organization’s post all comments on the Commission’s notice to solicit comments on the
Statement on Comments on the Internet Web site (http://www.sec.gov/ proposed rule change from interested
Proposed Rule Change Received From rules/sro.shtml). Copies of the persons.
Members, Participants, or Others submission, all subsequent
amendments, all written statements I. Self-Regulatory Organization’s
The Exchange neither solicited nor with respect to the proposed rule Statement of the Terms of Substance of
received comments on the proposal. the Proposed Rule Change
asabaliauskas on DSK5VPTVN1PROD with NOTICES
change that are filed with the
III. Date of Effectiveness of the Commission, and all written The Exchange proposes to amend its
Proposed Rule Change and Timing for communications relating to the Fees Schedule. The text of the proposed
Commission Action proposed rule change between the rule change is available on the
Commission and any person, other than Exchange’s Web site (http://
Because the foregoing proposed rule those that may be withheld from the
change does not: 18 17 CFR 200.30–3(a)(12).
16 15 U.S.C. 78s(b)(3)(A). 1 15 U.S.C. 78s(b)(1).
15 Id. 17 17 CFR 240.19b–4(f)(6). 2 17 CFR 240.19b–4.
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Document Created: 2018-02-21 10:33:00
Document Modified: 2018-02-21 10:33:00
| 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 30514 |
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