80 FR 43497 - Self-Regulatory Organizations; OneChicago, LLC; Notice of Filing of Proposed Rule Change Relating to Decimal Pricing for Spread Transactions

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 140 (July 22, 2015)

Page Range		43497-43498
FR Document		2015-17896
Federal Register, Volume 80 Issue 140 (Wednesday, July 22, 2015)
[Federal Register Volume 80, Number 140 (Wednesday, July 22, 2015)]
[Notices]
[Pages 43497-43498]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-17896]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75464; File No. SR-OC-2015-02]


Self-Regulatory Organizations; OneChicago, LLC; Notice of Filing 
of Proposed Rule Change Relating to Decimal Pricing for Spread 
Transactions

July 16, 2015.
    Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ notice is hereby given that on July 1, 2015, 
OneChicago, LLC (``OneChicago,'' ``OCX,'' or the ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``Commission'') 
the proposed rule change described in Items I, II, and III below, which 
Items have been prepared by the self-regulatory organization. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons. OneChicago has also filed 
this rule change with the Commodity Futures Trading Commission 
(``CFTC''). OneChicago filed a written certification with the CFTC 
under Section 5c(c) of the Commodity Exchange Act (``CEA'') on July 1, 
2015.
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    \1\ 15 U.S.C. 78s(b)(7).
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I. Self-Regulatory Organization's Description of the Proposed Rule 
Change

    OneChicago is proposing to amend OCX Rule 905 (Form of 
Specifications Supplement) to add spreads to the types of transactions 
to which four (4) decimal pricing applies.\2\ This expansion will allow 
these trades to be more efficiently priced because the interest rate 
component of Single Stock Futures (``SSFs'') spreads can be more 
accurately expressed in sub-penny increments. Currently, the minimum 
price fluctuation is set at $0.01 for non-block and non-EFP trades, and 
$0.0001 for block and EFP trades. In other words, block and EFP trades 
are already traded in four decimals. Upon amending Rule 905, outright 
SSF trades (non-spread, non-block, and non-EFP trades) will continue to 
trade with minimum fluctuations of $0.01, while spread, block, and EFP 
transactions will trade in minimum fluctuations of $0.0001.
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    \2\ A spread transaction involves buying (selling) a stated 
number of contracts of a particular expiry month and simultaneously 
selling (buying) the same number of those contracts of a different 
expiry month.
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    OneChicago is concurrently issuing NTM 2015-23. The NTM informs 
market participants that OneChicago is amending OCX Rule 905 and that 
the Exchange is reducing the minimum price fluctuation for spread 
transactions to $0.0001.
    The text of the proposed rule change is attached as Exhibit 4 to 
the filing submitted by the Exchange but is not attached to the 
published notice of the filing.

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

    In its filing with the Commission, OneChicago 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 self-regulatory organization has prepared a summary 
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
    OneChicago is proposing to amend OCX Rule 905 (Form of 
Specifications Supplement) to decrease the minimum fluctuation for 
spreads to $0.0001 from $0.01. In 2011, OneChicago similarly amended 
the pricing of block and EFP transactions to allow for four decimal 
point trade prices.\3\ This expansion allowed these trades to be more 
efficiently priced because the interest rate component of these trades 
is more accurately expressed in sub-penny increments.\4\
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    \3\ See Securities Exchange Act Release No. 65053 (August 8, 
2011) (SR-OC-2011-01). Block spreads, which are simply block-sized 
calendar spreads, have been trading in four decimal places since 
this rule change in 2011. OneChicago is now adding regular calendar 
spreads (of any size) to those transaction types that are traded in 
four decimal places. On July 20, 2015, block spreads will no longer 
be distinguished as a separate trade type on the Exchange.
    \4\ The difference in price between the front month and back 
month of a spread generally reflects the interest rate component of 
the trade.
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    OneChicago is now adding spreads to the types of trades to which 
four decimal pricing applies. OneChicago believes that this change will 
also allow spreads to be more efficiently priced, consistent with how 
blocks and EFPs are currently priced. The additional precision will aid 
in aligning these trades with the appropriate implied interest rate 
desired by market participants.
2. Statutory Basis
    OneChicago believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\5\ in general, and furthers the 
objectives of Section 6(b)(5) \6\ in particular. The proposed rule 
change furthers the objectives of Section 6(b)(5) because it is 
designed to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons facilitating transactions, 
and will remove impediments to and help perfect the mechanism of a free 
and open market.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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    The proposed rule change will allow all market participants to 
price their spread trades more accurately. Since the price difference 
between the buy and the sell in a spread trade reflects the interest 
rate component of the trade, the pricing of this component in four 
decimal places allows market participants to tailor their trade prices 
to their desired interest rate levels.
    The Exchange believes that the proposed rule change and associated 
NTM are equitable and not unfairly discriminatory because they would 
apply equally to all market participants. The ability to trade spreads 
in four decimal places will not be limited to any class of market 
participant.

B. Self-Regulatory Organization's Statement on Burden on Competition

    OneChicago does not believe that the rule change and associated NTM 
will impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act, in that the rule change and 
associated NTM simply allow an additional type of transaction to be 
priced in four decimal places. This change will allow all market 
participants to more accurately price the interest rate component of 
their spread transactions.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

[[Page 43498]]

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

    The rule amendment and NTM will become operative on July 20, 2015.
    At any time within 60 days of the date of effectiveness of the 
proposed rule change, the Commission, after consultation with the CFTC, 
may summarily abrogate the proposed rule change and require that the 
proposed rule change be refiled in accordance with the provisions of 
Section 19(b)(1) of the Act.\7\
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    \7\ 15 U.S.C. 78s(b)(1).
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 IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-OC-2015-02 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-OC-2015-02. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal offices 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-OC-2015-02, 
and should be submitted on or before August 12, 2015.
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    \8\ 17 CFR 200.30-3(a)(73).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-17896 Filed 7-21-15; 8:45 am]
BILLING CODE 8011-01-P
43498 Federal Register / Vol. 80, No. 140 / Wednesday, July 22, 2015 / Notices

III. Date of Effectiveness of the offices of the Exchange. All comments Participant would be able to elect to
Proposed Rule Change and Timing for received will be posted without change; receive either one or both of two new
Commission Action the Commission does not edit personal files containing its: (A) transactional
The rule amendment and NTM will identifying information from information (‘‘Transactional
become operative on July 20, 2015. submissions. You should submit only Information’’) 7 in one file
information that you wish to make (‘‘Transactional Information File’’), and
At any time within 60 days of the date
available publicly. All submissions (B) settlement balance information
of effectiveness of the proposed rule
should refer to File Number SR–OC– (‘‘Settlement Balance Information’’) 8 in
change, the Commission, after
2015–02, and should be submitted on or the other file (‘‘Settlement Balance
consultation with the CFTC, may
before August 12, 2015. Information File’’) (each a ‘‘File’’, and
summarily abrogate the proposed rule
change and require that the proposed For the Commission, by the Division of collectively, ‘‘Files’’), and (ii) amend the
rule change be refiled in accordance Trading and Markets, pursuant to delegated DTC Fee Schedule (‘‘Fee Schedule’’) to
with the provisions of Section 19(b)(1) authority.8 add Participant fees relating to the Files,
of the Act.7 Robert W. Errett, as more fully described below.
Deputy Secretary. II. Clearing Agency’s Statement of the
IV. Solicitation of Comments [FR Doc. 2015–17896 Filed 7–21–15; 8:45 am] Purpose of, and Statutory Basis for, the
Interested persons are invited to BILLING CODE 8011–01–P Proposed Rule Change
submit written data, views, and
In its filing with the Commission,
arguments concerning the foregoing,
SECURITIES AND EXCHANGE DTC included statements concerning
including whether the proposed rule
COMMISSION the purpose of, and basis for, the
change is consistent with the Act.
proposed rule change and discussed any
Comments may be submitted by any of [Release No. 34–75463; File No. SR–DTC– comments it received on the proposed
the following methods: 2015–008] rule change. The text of these statements
Electronic Comments Self-Regulatory Organizations; The may be examined at the places specified
• Use the Commission’s Internet Depository Trust Company; Notice of in Item IV below. DTC has prepared
comment form (http://www.sec.gov/ Filing and Immediate Effectiveness of summaries, set forth in sections A, B,
rules/sro.shtml); or Proposed Rule Change To Amend the and C below, of the most significant
• Send an email to rule-comments@ DTC Settlement Service Guide To aspects of such statements.
sec.gov. Please include File Number SR– Allow Participants To Elect To Receive (A) Clearing Agency’s Statement of the
OC–2015–02 on the subject line. Certain New Transactional and Purpose of, and Statutory Basis for, the
Settlement Balance Files and Effect a Proposed Rule Change
Paper Comments Related Amendment to the DTC Fee
• Send paper comments in triplicate Schedule 1. Purpose
to Brent J. Fields, Secretary, Securities The purpose of the proposed rule
July 16, 2015.
and Exchange Commission, 100 F Street filing is to amend: (i) The Guide so that
NE., Washington, DC 20549–1090. Pursuant to Section 19(b)(1) 1 of the Participants would be able to elect to
Securities Exchange Act of 1934 (‘‘Act’’) receive one or both of the Files and (ii)
All submissions should refer to File and Rule 19b–4 2 thereunder, notice is
Number SR–OC–2015–02. This file the Fee Schedule to add Participant fees
hereby given that on July 1, 2015, The
number should be included on the relating to the Files, as set forth below.
Depository Trust Company (‘‘DTC’’)
subject line if email is used. To help the filed with the Securities and Exchange Background
Commission process and review your Commission (‘‘Commission’’) the
comments more efficiently, please use Transactional Information and
proposed rule change as described in Settlement Balance Information are
only one method. The Commission will Items I, II, and III below, which Items
post all comments on the Commission’s available to Participants in real-time via
have been prepared primarily by DTC. DTC’s Settlement User Interface
Internet Web site (http://www.sec.gov/ DTC filed the proposed rule change
rules/sro.shtml). Copies of the (‘‘Interface’’).9 Participants that wish to
pursuant to Section 19(b)(3)(A) 3 of the access Transactional Information and
submission, all subsequent Act, and Rule 19b–4(f)(2) 4 and (f)(4)(i) 5
amendments, all written statements Settlement Balance Information outside
thereunder. The proposed rule change of the Interface may incur expense in
with respect to the proposed rule was effective upon filing with the
change that are filed with the Commission. The Commission is (the ‘‘Rules’’), available at http://www.dtcc.com/
Commission, and all written publishing this notice to solicit legal/rules-and-procedures.aspx, and the DTC
communications relating to the comments on the proposed rule change Settlement Service Guide (‘‘Guide’’), available at
proposed rule change between the from interested persons. http://www.dtcc.com/∼/media/Files/Downloads/
Commission and any person, other than legal/service-guides/Settlement.pdf.
those that may be withheld from the I. Clearing Agency’s Statement of the 7 Transactional Information for this purpose is

Terms of Substance of the Proposed defined as information relating to the Participant’s
public in accordance with the daily settlement transaction activity, as provided by
provisions of 5 U.S.C. 552, will be Rule Change DTC from time to time.
available for Web site viewing and The proposed rule change 6 would: (i) 8 Settlement Balance Information for this purpose

printing in the Commission’s Public Amend the Guide so that each is defined as the Participant’s Net Debit Balance or
Net Credit Balance, as applicable (‘‘DTC Net
Reference Room, 100 F Street NE., Settlement Balance’’). Where a Participant is a
tkelley on DSK3SPTVN1PROD with NOTICES

8 17
CFR 200.30–3(a)(73).
Washington, DC 20549, on official common member of DTC and National Securities
1 15
U.S.C. 78s(b)(1).
business days between the hours of 2 17 CFR 240.19b–4.
Clearing Corporation (‘‘NSCC’’), Settlement Balance
10:00 a.m. and 3:00 p.m. Copies of such Information would include the net of the
3 15 U.S.C. 78s(b)(3)(A).
Participant’s DTC Net Settlement Balance and its
filing also will be available for 4 17 CFR 240.19b–4(f)(2). NSCC net settlement balance (i.e., the net amount
inspection and copying at the principal 5 17 CFR 240.19b–4(f)(4)(i). of its gross settlement debits and credits at NSCC).
6 Each term not otherwise defined herein has its 9 The Interface allows for Participant input and
7 15 U.S.C. 78s(b)(1). respective meaning as set forth in the DTC Rules inquiry into the DTC Settlement System.

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Document Created: 2015-12-15 12:54:51
Document Modified: 2015-12-15 12:54:51
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 43497