80 FR 37690 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 7260 To Extend, Through June 30, 2016, the Pilot Program That Permits Certain Classes To Be Quoted in Penny Increments
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 126 (July 1, 2015)
Federal Register Volume 80, Issue 126 (July 1, 2015)
| Page Range | 37690-37692 | |
| FR Document | 2015-16084 |
[Federal Register Volume 80, Number 126 (Wednesday, July 1, 2015)] [Notices] [Pages 37690-37692] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-16084] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75295; File No. SR-BOX-2015-23] Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 7260 To Extend, Through June 30, 2016, the Pilot Program That Permits Certain Classes To Be Quoted in Penny Increments June 25, 2015. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on June 17, 2015, BOX Options Exchange LLC (the ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 7260 to extend, through June 30, 2016, the pilot program that permits certain classes to be quoted in penny increments (``Penny Pilot Program''). The text of the proposed rule change is available from the principal office of the Exchange, at the Commission's Public Reference Room and also on the Exchange's Internet Web site at http://boxexchange.com. 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 self-regulatory organization 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 [[Page 37691]] the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to extend the effective time period of the Penny Pilot Program that is currently scheduled to expire on June 30, 2015, for an additional year, through June 30, 2016.\3\ The Penny Pilot Program permits certain classes to be quoted in penny increments. The minimum price variation for all classes included in the Penny Pilot Program, except for PowerShares QQQ Trust (``QQQQ'')[supreg], SPDR S&P 500 Exchange Traded Funds (``SPY''), and iShares Russell 2000 Index Funds (``IWM''), will continue to be $0.01 for all quotations in options series that are quoted at less than $3 per contract and $0.05 for all quotations in options series that are quoted at $3 per contract or greater. QQQQ, SPY, and IWM will continue to be quoted in $0.01 increments for all options series. --------------------------------------------------------------------------- \3\ The Penny Pilot Program has been in effect on the Exchange since its inception in May 2012. See Securities Exchange Act Release Nos. 66871 (April 27, 2012), 77 FR 26323 (May 3, 2012) (File No.10- 206, In the Matter of the Application of BOX Options Exchange LLC for Registration as a National Securities Exchange Findings, Opinion, and Order of the Commission), 67328 (June 29, 2012), 77 FR 40123 (July 6, 2012) (SR-BOX-2012-007), 68425 (December 13, 2012), 77 FR 75234 (December 19, 2013) (SR-BOX-2012-021), 69789 (June 18, 2013), 78 FR 37854 (June 24, 2013) (SR-BOX-2013-31), 71056 (December 12, 2013), 78 FR 76691 (December 18, 2013) (SR-BOX-2013-56), 72348 (June 9, 2014), 79 FR 33976 (June 13, 2014) (SR-BOX-2014-17), 73822 (December 11, 2014), 79 FR 75606 (December 18, 2014) (SR-BOX-2014- 29). The extension of the effective date and the revision of the dates to replace issues that have been delisted are the only changes to the Penny Pilot Program being proposed at this time. --------------------------------------------------------------------------- The Exchange may replace, on a semi-annual basis, any Pilot Program classes that have been delisted on the second trading day following July 1, 2015 and January 1, 2016. The Exchange notes that the replacement classes will be selected based on trading activity for the six month period beginning December 1, 2014 and ending May 31, 2015 for the July 2015 replacements, and the six month period beginning June 1, 2015 and ending November 30, 2015 for the January 2016 replacements. The Exchange will employ the same parameters to prospective replacement classes as approved and applicable under the Pilot Program, including excluding high-priced underlying securities. The Exchange will distribute Regulatory Circulars notifying Participants which replacement classes shall be included in the Penny Pilot Program. BOX is specifically authorized to act jointly with the other options exchanges participating in the Pilot Program in identifying any replacement class. 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act,\4\ in general, and Section 6(b)(5) of the Act,\5\ in particular, in that it is 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 facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general protect investors and the public interest. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78f(b). \5\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- In particular, the proposed rule change, which extends the Penny Pilot for an additional year through June 30, 2016 and changes the dates for replacing Penny Pilot issues that were delisted to the second trading day following July 1, 2015 and January 1, 2016, will enable public customers and other market participants to express their true prices to buy and sell options for the benefit of all market participants. This is consistent with the Act. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, this proposal is pro-competitive because it allows Penny Pilot issues to continue trading on the Exchange. Moreover, the Exchange believes that the proposed rule change will allow for further analysis of the Pilot and a determination of how the Pilot should be structured in the future; and will serve to promote regulatory clarity and consistency, thereby reducing burdens on the marketplace and facilitating investor protection. The Pilot is an industry wide initiative supported by all other option exchanges. The Exchange believes that extending the Pilot will allow for continued competition between market participants on the Exchange trading similar products as their counterparts on other exchanges, while at the same time allowing the Exchange to continue to compete for order flow with other exchanges in option issues trading as part of the Pilot. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \6\ and Rule 19b-4(f)(6) thereunder.\7\ Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b- 4(f)(6)(iii) thereunder. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78s(b)(3)(A)(iii). \7\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \8\ normally does not become operative prior to 30 days after the date of the filing.\9\ However, pursuant to Rule 19b-4(f)(6)(iii), the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because doing so will allow the Pilot Program to continue without interruption in a manner that is consistent with the Commission's prior approval of the extension and expansion of the Pilot Program and will allow the Exchange and the Commission [[Page 37692]] additional time to analyze the impact of the Pilot Program. Accordingly, the Commission designates the proposed rule change as operative upon filing with the Commission.\10\ --------------------------------------------------------------------------- \8\ 17 CFR 240.19b-4(f)(6). \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange's intent to file the proposed rule change along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this pre-filing requirement. \10\ For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) of the Act to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse 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-BOX-2015-23 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-BOX-2015-23. 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 20549-1090 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-BOX-2015-23 and should be submitted on or before July 22, 2015. --------------------------------------------------------------------------- \11\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\11\ Robert W. Errett, Deputy Secretary. [FR Doc. 2015-16084 Filed 6-30-15; 8:45 am] BILLING CODE 8011-01-P
![37690 Federal Register / Vol. 80, No. 126 / Wednesday, July 1, 2015 / Notices
exchanges and other market participants to determine whether the proposed rule For the Commission, by the Division of
make technology products, including change should be approved or Trading and Markets, pursuant to delegated
products similar to the applications, disapproved. authority.29
available to the industry. Other market Robert W. Errett,
participants that offer these products IV. Solicitation of Comments Deputy Secretary.
can adjust pricing or add functionality Interested persons are invited to [FR Doc. 2015–16090 Filed 6–30–15; 8:45 am]
to attract users to their products to submit written data, views, and BILLING CODE 8011–01–P
compete with the Exchange-offered arguments concerning the foregoing,
products based on all competitive forces including whether the proposed rule
in the marketplace, as the Exchange SECURITIES AND EXCHANGE
change is consistent with the Act.
expects these other market participants COMMISSION
Comments may be submitted by any of
currently do. The Exchange believes [Release No. 34–75295; File No. SR–BOX–
the following methods:
that other market participants that offer 2015–23]
these products will continue to remain Electronic Comments
competitive in the market for order- Self-Regulatory Organizations; BOX
entry, management and routing • Use the Commission’s Internet Options Exchange LLC; Notice of
products, as they currently are in this comment form (http://www.sec.gov/ Filing and Immediate Effectiveness of
market in which at least two exchanges rules/sro.shtml); or a Proposed Rule Change To Amend
(including CBOE) offer similar • Send an email to rule-comments@ Rule 7260 To Extend, Through June 30,
technology products. For example, sec.gov. Please include File Number SR– 2016, the Pilot Program That Permits
CBOE currently offers PULSe, and ISE CBOE–2015–062 on the subject line. Certain Classes To Be Quoted in
currently offers PrecISE. The Exchange Penny Increments
believes that many investors will Paper Comments
continue to elect to use competing June 25, 2015.
products available from non-exchange • Send paper comments in triplicate Pursuant to Section 19(b)(1) of the
technology providers. to Secretary, Securities and Exchange Securities Exchange Act of 1934
Commission, 100 F Street NE., (‘‘Act’’),1 and Rule 19b–4 thereunder,2
C. Self-Regulatory Organization’s Washington, DC 20549–1090. notice is hereby given that on June 17,
Statement on Comments on the 2015, BOX Options Exchange LLC (the
Proposed Rule Change Received From All submissions should refer to File
‘‘Exchange’’) filed with the Securities
Members, Participants, or Others Number SR–CBOE–2015–062. This file
and Exchange Commission
number should be included on the
The Exchange neither solicited nor (‘‘Commission’’) the proposed rule
subject line if email is used. To help the
received comments on the proposed change as described in Items I, and II
Commission process and review your below, which Items have been prepared
rule change.
comments more efficiently, please use by the self-regulatory organization. The
III. Date of Effectiveness of the only one method. The Commission will Commission is publishing this notice to
Proposed Rule Change and Timing for post all comments on the Commission’s solicit comments on the proposed rule
Commission Action Internet Web site (http://www.sec.gov/ from interested persons.
Because the foregoing proposed rule rules/sro.shtml). Copies of the
submission, all subsequent I. Self-Regulatory Organization’s
change does not: (i) Significantly affect
amendments, all written statements Statement of the Terms of Substance of
the protection of investors or the public
with respect to the proposed rule the Proposed Rule Change
interest; (ii) impose any significant
burden on competition; and (iii) become change that are filed with the The Exchange proposes to amend
operative for 30 days from the date on Commission, and all written Rule 7260 to extend, through June 30,
which it was filed, or such shorter time communications relating to the 2016, the pilot program that permits
as the Commission may designate, it has proposed rule change between the certain classes to be quoted in penny
become effective pursuant to Section Commission and any person, other than increments (‘‘Penny Pilot Program’’).
19(b)(3)(A) of the Act 27 and Rule 19b– those that may be withheld from the The text of the proposed rule change is
4(f)(6) 28 thereunder. public in accordance with the available from the principal office of the
At any time within 60 days of the provisions of 5 U.S.C. 552, will be Exchange, at the Commission’s Public
filing of the proposed rule change, the available for Web site viewing and Reference Room and also on the
Commission summarily may printing in the Commission’s Public Exchange’s Internet Web site at http://
temporarily suspend such rule change if Reference Room, 100 F Street NE., boxexchange.com.
it appears to the Commission that such Washington, DC 20549 on official II. Self-Regulatory Organization’s
action is necessary or appropriate in the business days between the hours of Statement of the Purpose of, and
public interest, for the protection of 10:00 a.m. and 3:00 p.m. Copies of such Statutory Basis for, the Proposed Rule
investors, or otherwise in furtherance of filing also will be available for Change
the purposes of the Act. If the inspection and copying at the principal
Commission takes such action, the office of the Exchange. All comments In its filing with the Commission, the
Commission shall institute proceedings received will be posted without change; self-regulatory organization included
the Commission does not edit personal statements concerning the purpose of,
products is the hallmark of the national market identifying information from and basis for, the proposed rule change
tkelley on DSK3SPTVN1PROD with NOTICES
system.’’) (SR–NYSEArca–2006–21); Regulation
submissions. You should submit only and discussed any comments it received
NMS, 70 FR at 37499 (observing that NMS on the proposed rule change. The text
regulation ‘‘has been remarkably successful in information that you wish to make
of these statements may be examined at
promoting market competition in [the] forms that available publicly. All submissions
are most important to investors and listed
companies’’).
should refer to File Number SR–CBOE– 29 17 CFR 200.30–3(a)(12).
27 15 U.S.C. 78s(b)(3)(A). 2015–062, and should be submitted on 1 15 U.S.C. 78s(b)(1).
28 17 CFR 240.19b–4(f)(6). or before July 22, 2015. 2 17 CFR 240.19b–4.
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![37692 Federal Register / Vol. 80, No. 126 / Wednesday, July 1, 2015 / Notices
additional time to analyze the impact of available for Web site viewing and I. Self-Regulatory Organization’s
the Pilot Program. Accordingly, the printing in the Commission’s Public Statement of the Terms of the Substance
Commission designates the proposed Reference Room, 100 F Street NE., of the Proposed Rule Change
rule change as operative upon filing Washington, DC 20549–1090 on official CBOE proposes to amend Rule 5.3.06
with the Commission.10 business days between the hours of to allow the listing of options overlying
At any time within 60 days of the 10:00 a.m. and 3:00 p.m. Copies of the Exchange-Traded Fund Shares (‘‘ETFs’’)
filing of such proposed rule change, the filing will also be available for that are listed pursuant to generic listing
Commission summarily may inspection and copying at the principal standards on equities exchanges for
temporarily suspend such rule change if series of portfolio depositary receipts
office of the Exchange. All comments
it appears to the Commission that such and index fund shares based on
received will be posted without change;
action is necessary or appropriate in the international or global indexes under
public interest, for the protection of the Commission does not edit personal
identifying information from which a comprehensive surveillance
investors, or otherwise in furtherance of agreement is not required. The text of
the purposes of the Act. If the submissions. You should submit only
information that you wish to make the proposed rule change is available on
Commission takes such action, the the Exchange’s Web site (http://
Commission shall institute proceedings available publicly. All submissions
should refer to File Number SR–BOX– www.cboe.com/AboutCBOE/
under Section 19(b)(2)(B) of the Act to CBOELegalRegulatoryHome.aspx), at
determine whether the proposed rule 2015–23 and should be submitted on or
the Exchange’s Office of the Secretary,
change should be approved or before July 22, 2015.
and at the Commission.
disapproved. For the Commission, by the Division of
Trading and Markets, pursuant to delegated
II. Self-Regulatory Organization’s
IV. Solicitation of Comments Statement of the Purpose of, and
authority.11
Interested persons are invited to Statutory Basis for, the Proposed Rule
Robert W. Errett,
submit written data, views, and Change
arguments concerning the foregoing, Deputy Secretary.
In its filing with the Commission, the
including whether the proposed rule [FR Doc. 2015–16084 Filed 6–30–15; 8:45 am]
Exchange included statements
change is consistent with the Act. BILLING CODE 8011–01–P concerning the purpose of and basis for
Comments may be submitted by any of the proposed rule change and discussed
the following methods: any comments it received on the
SECURITIES AND EXCHANGE proposed rule change. The text of these
Electronic Comments
COMMISSION statements may be examined at the
• Use the Commission’s Internet places specified in Item IV below. The
comment form (http://www.sec.gov/ [Release No. 34–75296; File No. SR–CBOE– Exchange has prepared summaries, set
rules/sro.shtml); or 2015–052] forth in sections A, B, and C below, of
• Send an email to rule-comments@
the most significant aspects of such
sec.gov. Please include File Number SR– Self-Regulatory Organizations; statements.
BOX–2015–23 on the subject line. Chicago Board Options Exchange,
A. Self-Regulatory Organization’s
Paper Comments Incorporated; Notice of Filing and
Statement of the Purpose of, and
• Send paper comments in triplicate Immediate Effectiveness of a Proposed Statutory Basis for, the Proposed Rule
to Secretary, Securities and Exchange Rule Change To Amend Rule 5.3.06 Change
Commission, 100 F Street NE., June 25, 2015.
Washington, DC 20549–1090. 1. Purpose
All submissions should refer to File Pursuant to Section 19(b)(1) of the The Exchange proposes to amend
Number SR–BOX–2015–23. This file Securities Exchange Act of 1934 (the Rule 5.3.06 to allow the listing of
number should be included on the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 options overlying ETFs (referred to as
subject line if email is used. To help the notice is hereby given that on June 15, ‘‘Units’’ in Rule 5.3.06) that are listed
Commission process and review your 2015, Chicago Board Options Exchange, pursuant to generic listing standards on
comments more efficiently, please use Incorporated (the ‘‘Exchange’’ or equities exchanges for series of portfolio
only one method. The Commission will ‘‘CBOE’’) filed with the Securities and depositary receipts and index fund
post all comments on the Commission’s Exchange Commission (the shares based on international or global
Internet Web site (http://www.sec.gov/ ‘‘Commission’’) the proposed rule indexes under which a comprehensive
rules/sro.shtml). Copies of the change as described in Items I and II surveillance sharing agreement
submission, all subsequent below, which Items have been prepared (‘‘comprehensive surveillance
amendments, all written statements agreement’’ or ‘‘CSSA’’) is not required.5
by the Exchange. The Exchange filed the
with respect to the proposed rule This proposal will enable the Exchange
proposal as a ‘‘non-controversial’’
change that are filed with the to list and trade options on ETFs
proposed rule change pursuant to
Commission, and all written without a CSSA provided that the ETF
Section 19(b)(3)(A) of the Act 3 and Rule is listed on an equities exchange
communications relating to the
19b–4(f)(6) thereunder.4 The pursuant to the generic listings
proposed rule change between the
Commission and any person, other than Commission is publishing this notice to standards that do not require a CSSA
those that may be withheld from the solicit comments on the proposed rule pursuant to Rule 19b–4(e) 6 of the
change from interested persons. Exchange Act. Rule 19b–4(e) provides
tkelley on DSK3SPTVN1PROD with NOTICES
public in accordance with the
provisions of 5 U.S.C. 552, will be that the listing and trading of a new
11 17 CFR 200.30–3(a)(12).
10 For 5 See e.g., NYSE MKT Rule 1000 Commentary
purposes only of waiving the operative 1 15 U.S.C. 78s(b)(1).
delay for this proposal, the Commission has .03(a)(B); NYSE Arca Equities Rule 5.2(j)(3)
2 17 CFR 240.19b–4.
considered the proposed rule’s impact on Commentary .01(a)(B); NASDAQ Rule
3 15 U.S.C. 78s(b)(3)(A).
efficiency, competition, and capital formation. See 5705(a)(3)(A)(ii); and BATS Rule 14.11(b)(3)(A)(ii).
15 U.S.C. 78c(f). 4 17 CFR 240.19b–4(f)(6). 6 17 CFR 240.19b–4(e).
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Document Created: 2015-12-15 13:20:02
Document Modified: 2015-12-15 13:20:02
| 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 37690 |
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