80 FR 56522 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To List Two Additional Products During Extended Trading Hours

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 181 (September 18, 2015)

Page Range		56522-56525
FR Document		2015-23395

Federal Register, Volume 80 Issue 181 (Friday, September 18, 2015)

[Federal Register Volume 80, Number 181 (Friday, September 18, 2015)]
[Notices]
[Pages 56522-56525]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-23395]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75914; File No. SR-CBOE-2015-079]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To List Two Additional Products During Extended
Trading Hours

September 14, 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 September 10, 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 and II 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 list two additional products during
extended trading hours (``ETH''). The text of the proposed rule change
is provided below.

(additions are italicized; deletions are [bracketed])
* * * * *

Chicago Board Options Exchange, Incorporated

Rules

* * * * *

Rule 6.1A. Extended Trading Hours

(a)-(b) No change.
(c) Eligibility. The Exchange may designate as eligible for
trading during Extended Trading Hours any exclusively listed index
option designated for trading under Rules 24.2 and 24.9. The
following options are approved for trading on the Exchange during
Extended Trading Hours:
(i) Standard & Poor's 500 Stock Index (SPX)
(ii) CBOE Volatility Index[supreg] (VIX[supreg])
(iii) Standard & Poor's 500 Stock Index (P.M.-Settled) (SPXPM)
(iv) Mini-SPX Index (XSP)
Any series in these classes that are expected to be open for
trading during Regular Trading Hours will be open for trading during
Extended Trading Hours on that same trading day (subject to Rules
6.2B and 24.13, Interpretation and Policy .03). FLEX options
(pursuant to Chapters XXIVA and XXIVB) will not be eligible for
trading during Extended Trading Hours.
(d) No change.
(e) Market-Makers.
(i) Appointments. A Market-Maker's appointment to a class during
Regular Trading Hours does not apply during Extended Trading Hours.
Market-Makers may request appointments for Extended Trading Hours in
accordance with Rule 8.3 and this subparagraph (i). Notwithstanding
Rule 8.3(c), a Market-Maker can create a Virtual Trading Crowd
(``VTC'') appointment, which confers the right to quote
electronically during Extended Trading Hours in the appropriate
number of classes selected from the Extended Trading Hours tier and
related appointment costs as follows:

------------------------------------------------------------------------
Appointment
Tier Classes cost
------------------------------------------------------------------------
Extended Trading Hours........... Options on the [.5].4
CBOE Volatility Index
(VIX).
Options on the [.5].4
Standard & Poor's 500
(SPX).
Options on the .1
Standard & Poor's 500
Stock Index (P.M.-
Settled) (SPXPM).
Options on the .1
Mini-SPX Index (XSP).
------------------------------------------------------------------------

[[Page 56523]]

Each Extended Trading Hours Trading Permit held by a Market-
Maker has an appointment credit of 1.0. A Market-Maker may select
for each Extended Trading Hours Trading Permit the Market-Maker
holds any combination of Extended Trading Hours classes, whose
aggregate appointment cost does not exceed 1.0.
(ii)-(iv) No change.
(f)-(k) No change.
* * * * *

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
In March 2015, the Exchange launched Extended Trading Hours
(``ETH'') for options on the S&P 500 Index (``SPX'') and CBOE
Volatility Index[supreg] (``VIX''), two of the Exchange's exclusively
listed options,\3\ as alternatives for hedging and other investment
purposes, particularly as a complementary investment tool to VIX
futures.\4\ Rule 6.1A(c) provides that the Exchange may designate as
eligible for trading during ETH any exclusively listed index option
designated for trading under Rules 24.2 and 24.9. In response to
customer demand for additional options to trade during ETH for similar
purposes, the Exchange has designated Mini-SPX Index Options (``XSP'')
and p.m.-settled options on the Standard & Poor's 500 Stock Index
(``SPXpm'') to be eligible for trading during ETH. The proposed rule
change amends Rule 6.1A(c) to add these two products to the list of
products the Exchange has approved for trading on the Exchange during
ETH. CBOE currently lists XSP and SPXpm options during Regular Trading
Hours (``RTH''); the proposed rule change merely extends the hours
during which these options will trade on the Exchange. The Exchange
notes that the S&P 500 Stock Index underlies both of these options, as
it does for SPX options, which currently trade during ETH. During ETH,
XSP and SPXpm options would trade in accordance with Rule 6.1A as VIX
and SPX options currently do.\5\ The proposed rule change makes no
changes to the trading rules applicable to ETH.
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\3\ An ``exclusively listed option'' is an option that trades
exclusively on an exchange because the exchange has an exclusive
license to list and trade the option or has the proprietary rights
in the interest underlying the option. An exclusively listed option
is different than a ``singly listed option,'' which is an option
that is not an ``exclusively listed option'' but that is listed by
one exchange and not by any other national securities exchange.
\4\ See Securities Exchange Act Release No. 34-73704 (November
28, 2014), 79 FR 72044 (December 4, 2014) (SR-CBOE-2014-062) (order
granting accelerated approval of proposed rule change to adopt
Extended Trading Hours for SPX and VIX).
\5\ Rule 6.1A(a) states that all CBOE Rules apply to trading
during ETH except as set forth in Rule 6.1A and for Rules that by
their terms are inapplicable during ETH or where the context
otherwise requires.
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The Exchange lists SPXpm options and p.m.-settled XSP options
pursuant to a pilot program.\6\ Pursuant to the pilot program, CBOE
submits annual reports to the Commission that contain analyses of
volume, open interest and trading patterns, as well as interim reports
that contain some of the information that is included in the annual
reports. The Exchange will include in those annual and interim reports
the applicable information regarding SPXpm and p.m.-settled XSP options
that trade during ETH.
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\6\ See Securities Exchange Act Release No. 34-73338 (October
10, 2014), 79 FR 62502 (October 17, 2014) (SR-CBOE-2014-076) (notice
of filing and immediate effectiveness of extension of pilot program
to May 3, 2016).
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The Exchange also proposes to amend Rule 6.1A(e)(i) to change the
current appointment cost for each of SPX and VIX from .5 to .4 and add
an appointment cost of .1 for each of XSP and SPXpm. The Exchange
believes these appointment costs are consistent with an analysis of
various factors based on which the Exchange determines appointment
costs, including competitive forces and trading volume. Because each
ETH Trading Permit has an appointment credit of 1.0, a Market-Maker
will continue to need to hold only one ETH Trading Permit if it wants
to quote in all four products approved for trading during ETH.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\7\ Specifically, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \8\ 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) \9\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ Id.
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In particular, the Exchange believes the proposed rule change will
further improve the Exchange's marketplace for the benefit of
investors. The listing of two additional products for trading during
ETH will provide more hedging and other investment opportunities within
the options trading industry that is consistent with the continued
globalization of the securities markets. The proposed rule change also
allows the Exchange to more effectively compete with exchanges located
outside of the United States. The Exchange proposes to make two more
products available during ETH in response to demand by investors to
have access to these products outside of RTH. During ETH, XSP and SPXpm
options would trade in accordance with Rule 6.1A as VIX and SPX options
currently do. The proposed rule change makes no changes to the trading
rules applicable to ETH; it merely approves for trading during ETH two
products that already trade on the Exchange during RTH. Additionally,
the S&P 500 index underlies both of these options, as it does for SPX
options, which are currently approved for trading during ETH.
The Exchange believes the appointment costs for the four classes
approved for trading during ETH are appropriate given various factors
considered by the Exchange, including competitive forces and trading
volume.

[[Page 56524]]

The Exchange believes that allowing ETH Market-Makers to trade all four
available products during ETH while holding only one ETH Trading Permit
may encourage Trading Permit Holders to become ETH Market-Makers, as
they can quote in more classes for the same cost. Additionally, current
ETH Market-Makers can obtain appointments in these two additional
classes without having to obtain an additional ETH Trading Permit. This
may increase liquidity and result in more competitive pricing in these
products during ETH, which will promote just and equitable principles
of trade and ultimately benefit investors. The proposed rule change
does not result in unfair discrimination, as the appointment costs for
these products during ETH will apply to all ETH Market-Makers.

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. If CBOE lists XSP and SPXpm
options for trading during ETH, all ETH Trading Permit Holders may
trade these options during ETH. Additionally, non-ETH Trading Permit
Holders may trade these options during ETH through a broker that is an
ETH Trading Permit Holder. The proposed rule change is merely extending
the trading hours of two products that currently trade on CBOE. The
appointment costs for the four products approved for trading during ETH
will apply to all ETH Market-Makers. Additionally, ETH Market-Makers
will not need to obtain additional ETH Trading Permits to have
appointments in the two additional products.
CBOE does not believe the proposed rule change will detriment
market participants on other exchanges, as it relates to options listed
solely on CBOE and to trading hours during which no other U.S. options
exchange is currently open for trading. Market participants on other
exchanges are welcome to become ETH Trading Permit Holders, or engage a
broker that is an ETH Trading Permit Holder, and trade at CBOE if they
determine that this proposed rule change has made CBOE more attractive
or favorable.
CBOE believes that the proposed rule change will relieve any burden
on, or otherwise promote, competition. As discussed above, listing two
additional products for trading during ETH will provide more hedging
and other investment opportunities within the options trading industry.
The Exchange also believes the proposed rule change could increase its
competitive position outside of the United States by providing
investors with an additional investment vehicles with respect to their
global trading strategies during times that correspond with RTH outside
of the United States. The Exchange proposes to make two more products
available during ETH in response to demand by investors to have access
to these products outside of RTH. Additionally, the Exchange believes
the appointment costs for the four products available for trading
during ETH, which allow ETH Market-Makers to have appointments in all
four products with only one ETH Trading Permit, may increase liquidity
and enhance competition in those products during those hours.

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

Because the foregoing 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 for 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
\10\ and Rule 19b-4(f)(6) thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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 requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange requests that the Commission waive
the 30-day operative delay to allow the proposed rule change to become
effective immediately. In its proposal, the Exchange stated that its
proposal does not raise any new or unique issues, and only makes
available for trading during ETH two additional exclusively-listed
products that the Exchange currently lists and trades during RTH. In
addition, the Exchange stated that the proposed changes to the
appointment costs for these products is intended to allow Market-Makers
to have appointments in all four ETH products without having to obtain
an additional ETH Trading Permit. The Commission believes that waiving
the 30-day operative delay is consistent with the protection of
investors and the public interest.\12\ Among other things, the proposed
rule change makes no changes to the trading rules applicable to ETH,
and the Exchange states that XSP and SPXpm will trade during ETH in the
same manner as VIX and SPX currently do during ETH. The Commission
notes that the Exchange will include in its annual and interim reports
to the Commission the applicable information regarding SPXpm and p.m.-
settled XSP options that trade during ETH. Because the proposed rule
change involves two exclusively-listed products that already trade
during RTH, does not alter the trading rules applicable to ETH, and
does not raise any novel or unique regulatory issues, the Commission
designates the proposed rule change as operative upon filing.
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\12\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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.

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-2015-079 on the subject line.

[[Page 56525]]

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-2015-079. 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-2015-079 and should be
submitted on or before October 9, 2015.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-23395 Filed 9-17-15; 8:45 am]
BILLING CODE 8011-01-P

56522 Federal Register / Vol. 80, No. 181 / Friday, September 18, 2015 / Notices

SBS Entity to make an application to the to a statutory disqualification who were by the Exchange. The Commission is
Commission to allow an associated associated with an SBS Entity as of July publishing this notice to solicit
person who is subject to a statutory 16, 2011, and who effect or are involved comments on the proposed rule change
disqualification to effect or be involved in effecting SB swaps on behalf of such from interested persons.
in effecting security-based swaps on the SBS Entity until the Registration
Compliance Date. I. Self-Regulatory Organization’s
SBS Entity’s behalf. Accordingly, the
It is hereby further ordered, pursuant Statement of the Terms of Substance of
Commission is extending the temporary
to Section 36 of the Exchange Act, that the Proposed Rule Change
and limited exception from the
requirements of Section 15F(b)(6) until no SB swap contract entered into on or The Exchange proposes to list two
the Registration Compliance Date. after July 16, 2011 shall be void or additional products during extended
As discussed in the Temporary considered voidable by reason of trading hours (‘‘ETH’’). The text of the
Exemptions Order, the Commission Section 29(b) of the Exchange Act proposed rule change is provided
does not believe that Section 29(b) of because any person that is a party to the below.
the Exchange Act would apply to the contract violated Section 3E(f) of the
Exchange Act prior to the Registration (additions are italicized; deletions are
provisions of Title VII for which the [bracketed])
Commission has taken the view that Compliance Date.
compliance will either be triggered by It is hereby further ordered, pursuant * * * * *
registration of a person or by adoption to Section 36 of the Exchange Act, that Chicago Board Options Exchange,
of final rules by the Commission, or for no SB swap contract entered into on or Incorporated
which the Commission has provided an after July 16, 2011 shall be void or Rules
exception or exemption in that order. considered voidable by reason of
* * * * *
For the avoidance of doubt and to avoid Section 29(b) of the Exchange Act
because any person that is a party to the Rule 6.1A. Extended Trading Hours
possible legal uncertainty or market
disruption, the Temporary Exemptions contract violated Section 15F(b)(6) of (a)–(b) No change.
Order granted a temporary exemption the Exchange Act prior to the (c) Eligibility. The Exchange may designate
Registration Compliance. as eligible for trading during Extended
from Section 29(b) until such date as the Trading Hours any exclusively listed index
Commission specifies.26 The By the Commission. option designated for trading under Rules
Commission believes that the exemption Brent J. Fields, 24.2 and 24.9. The following options are
from Section 29(b) provided under the Secretary. approved for trading on the Exchange during
Temporary Exemptions Order with [FR Doc. 2015–23464 Filed 9–17–15; 8:45 am] Extended Trading Hours:
respect to Sections 3E(f) and 15F(b)(6) of (i) Standard & Poor’s 500 Stock Index
BILLING CODE 8011–01–P
the Exchange Act will continue to apply (SPX)
during the period of time covered by the (ii) CBOE Volatility Index® (VIX®)
extensions in this Order. However, to (iii) Standard & Poor’s 500 Stock Index
SECURITIES AND EXCHANGE (P.M.-Settled) (SPXPM)
avoid any doubt or possible legal COMMISSION (iv) Mini-SPX Index (XSP)
uncertainty regarding the continuing Any series in these classes that are
availability of the temporary exemption [Release No. 34–75914; File No. SR–CBOE–
2015–079] expected to be open for trading during
from Section 29(b) with respect to Regular Trading Hours will be open for
Sections 3E(f) and 15(b)(6), the Self-Regulatory Organizations; trading during Extended Trading Hours on
Commission is exercising its authority Chicago Board Options Exchange, that same trading day (subject to Rules 6.2B
under Section 36 of the Exchange Act to and 24.13, Interpretation and Policy .03).
Incorporated; Notice of Filing and FLEX options (pursuant to Chapters XXIVA
continue the exemption from Section Immediate Effectiveness of a Proposed
29(b) with respect to Sections 3E(f) and and XXIVB) will not be eligible for trading
Rule Change To List Two Additional during Extended Trading Hours.
15(b)(6) until the Registration Products During Extended Trading (d) No change.
Compliance Date. Hours (e) Market-Makers.
IV. Conclusion (i) Appointments. A Market-Maker’s
September 14, 2015. appointment to a class during Regular
It is hereby ordered, pursuant to Pursuant to Section 19(b)(1) of the Trading Hours does not apply during
Section 36 of the Exchange Act, that Securities Exchange Act of 1934 (the Extended Trading Hours. Market-Makers may
SBS Entities are exempt from the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 request appointments for Extended Trading
requirements of Section 3E(f) of the notice is hereby given that on Hours in accordance with Rule 8.3 and this
Exchange Act until the Registration September 10, 2015, Chicago Board subparagraph (i). Notwithstanding Rule
Compliance Date. Options Exchange, Incorporated (the 8.3(c), a Market-Maker can create a Virtual
Trading Crowd (‘‘VTC’’) appointment, which
It is hereby further ordered, pursuant ‘‘Exchange’’ or ‘‘CBOE’’) filed with the confers the right to quote electronically
to Section 15F(b)(6) of the Exchange Securities and Exchange Commission during Extended Trading Hours in the
Act, that SBS Entities are temporarily (the ‘‘Commission’’) the proposed rule appropriate number of classes selected from
excepted from the prohibition of Section change as described in Items I and II the Extended Trading Hours tier and related
15F(b)(6) with respect to persons subject below, which Items have been prepared appointment costs as follows:

Appointment
Tier Classes cost
tkelley on DSK3SPTVN1PROD with NOTICES

Extended Trading Hours ............................ • Options on the CBOE Volatility Index (VIX) ............................................................... [.5].4
• Options on the Standard & Poor’s 500 (SPX) ............................................................ [.5].4
• Options on the Standard & Poor’s 500 Stock Index (P.M.-Settled) (SPXPM) ........... .1
• Options on the Mini-SPX Index (XSP) ........................................................................ .1

26 See Temporary Exemptions Order at 36305–06. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4.

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Federal Register / Vol. 80, No. 181 / Friday, September 18, 2015 / Notices 56523

Each Extended Trading Hours Trading response to customer demand for 2. Statutory Basis
Permit held by a Market-Maker has an additional options to trade during ETH
appointment credit of 1.0. A Market-Maker The Exchange believes the proposed
for similar purposes, the Exchange has rule change is consistent with the Act
may select for each Extended Trading Hours
Trading Permit the Market-Maker holds any designated Mini-SPX Index Options and the rules and regulations
combination of Extended Trading Hours (‘‘XSP’’) and p.m.-settled options on the thereunder applicable to the Exchange
classes, whose aggregate appointment cost Standard & Poor’s 500 Stock Index and, in particular, the requirements of
does not exceed 1.0. (‘‘SPXpm’’) to be eligible for trading Section 6(b) of the Act.7 Specifically,
(ii)–(iv) No change. during ETH. The proposed rule change the Exchange believes the proposed rule
(f)–(k) No change.
amends Rule 6.1A(c) to add these two change is consistent with the Section
* * * * * products to the list of products the 6(b)(5) 8 requirements that the rules of
The text of the proposed rule change Exchange has approved for trading on an exchange be designed to prevent
is also available on the Exchange’s Web the Exchange during ETH. CBOE fraudulent and manipulative acts and
site (http://www.cboe.com/AboutCBOE/ currently lists XSP and SPXpm options practices, to promote just and equitable
CBOELegalRegulatoryHome.aspx), at during Regular Trading Hours (‘‘RTH’’); principles of trade, to foster cooperation
the Exchange’s Office of the Secretary, the proposed rule change merely and coordination with persons engaged
and at the Commission’s Public extends the hours during which these in regulating, clearing, settling,
Reference Room. options will trade on the Exchange. The processing information with respect to,
Exchange notes that the S&P 500 Stock and facilitating transactions in
II. Self-Regulatory Organization’s securities, to remove impediments to
Statement of the Purpose of, and Index underlies both of these options, as
it does for SPX options, which currently and perfect the mechanism of a free and
Statutory Basis for, the Proposed Rule open market and a national market
Change trade during ETH. During ETH, XSP and
SPXpm options would trade in system, and, in general, to protect
In its filing with the Commission, the investors and the public interest.
accordance with Rule 6.1A as VIX and
Exchange included statements Additionally, the Exchange believes the
SPX options currently do.5 The
concerning the purpose of and basis for proposed rule change is consistent with
the proposed rule change and discussed proposed rule change makes no changes
the Section 6(b)(5) 9 requirement that
any comments it received on the to the trading rules applicable to ETH.
the rules of an exchange not be designed
proposed rule change. The text of these The Exchange lists SPXpm options to permit unfair discrimination between
statements may be examined at the and p.m.-settled XSP options pursuant customers, issuers, brokers, or dealers.
places specified in Item IV below. The to a pilot program.6 Pursuant to the pilot In particular, the Exchange believes
Exchange has prepared summaries, set program, CBOE submits annual reports the proposed rule change will further
forth in sections A, B, and C below, of to the Commission that contain analyses improve the Exchange’s marketplace for
the most significant aspects of such of volume, open interest and trading the benefit of investors. The listing of
statements. patterns, as well as interim reports that two additional products for trading
contain some of the information that is during ETH will provide more hedging
A. Self-Regulatory Organization’s
included in the annual reports. The and other investment opportunities
Statement of the Purpose of, and
Exchange will include in those annual within the options trading industry that
Statutory Basis for, the Proposed Rule
and interim reports the applicable is consistent with the continued
Change
information regarding SPXpm and p.m.- globalization of the securities markets.
1. Purpose settled XSP options that trade during The proposed rule change also allows
In March 2015, the Exchange ETH. the Exchange to more effectively
launched Extended Trading Hours compete with exchanges located outside
The Exchange also proposes to amend of the United States. The Exchange
(‘‘ETH’’) for options on the S&P 500 Rule 6.1A(e)(i) to change the current
Index (‘‘SPX’’) and CBOE Volatility proposes to make two more products
appointment cost for each of SPX and available during ETH in response to
Index® (‘‘VIX’’), two of the Exchange’s VIX from .5 to .4 and add an
exclusively listed options,3 as demand by investors to have access to
appointment cost of .1 for each of XSP these products outside of RTH. During
alternatives for hedging and other and SPXpm. The Exchange believes
investment purposes, particularly as a ETH, XSP and SPXpm options would
these appointment costs are consistent trade in accordance with Rule 6.1A as
complementary investment tool to VIX
with an analysis of various factors based VIX and SPX options currently do. The
futures.4 Rule 6.1A(c) provides that the
on which the Exchange determines proposed rule change makes no changes
Exchange may designate as eligible for
appointment costs, including to the trading rules applicable to ETH;
trading during ETH any exclusively
competitive forces and trading volume. it merely approves for trading during
listed index option designated for
Because each ETH Trading Permit has ETH two products that already trade on
trading under Rules 24.2 and 24.9. In
an appointment credit of 1.0, a Market- the Exchange during RTH. Additionally,
3 An ‘‘exclusively listed option’’ is an option that Maker will continue to need to hold the S&P 500 index underlies both of
trades exclusively on an exchange because the only one ETH Trading Permit if it wants these options, as it does for SPX
exchange has an exclusive license to list and trade to quote in all four products approved options, which are currently approved
the option or has the proprietary rights in the for trading during ETH. for trading during ETH.
interest underlying the option. An exclusively The Exchange believes the
listed option is different than a ‘‘singly listed
option,’’ which is an option that is not an 5 Rule 6.1A(a) states that all CBOE Rules apply to appointment costs for the four classes
‘‘exclusively listed option’’ but that is listed by one trading during ETH except as set forth in Rule 6.1A approved for trading during ETH are
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exchange and not by any other national securities and for Rules that by their terms are inapplicable appropriate given various factors
exchange. during ETH or where the context otherwise considered by the Exchange, including
4 See Securities Exchange Act Release No. 34– requires.
73704 (November 28, 2014), 79 FR 72044 6 See Securities Exchange Act Release No. 34–
competitive forces and trading volume.
(December 4, 2014) (SR–CBOE–2014–062) (order 73338 (October 10, 2014), 79 FR 62502 (October 17,
7 15 U.S.C. 78f(b).
granting accelerated approval of proposed rule 2014) (SR–CBOE–2014–076) (notice of filing and
8 15 U.S.C. 78f(b)(5).
change to adopt Extended Trading Hours for SPX immediate effectiveness of extension of pilot
and VIX). program to May 3, 2016). 9 Id.

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56524 Federal Register / Vol. 80, No. 181 / Friday, September 18, 2015 / Notices

The Exchange believes that allowing also believes the proposed rule change proposal does not raise any new or
ETH Market-Makers to trade all four could increase its competitive position unique issues, and only makes available
available products during ETH while outside of the United States by for trading during ETH two additional
holding only one ETH Trading Permit providing investors with an additional exclusively-listed products that the
may encourage Trading Permit Holders investment vehicles with respect to Exchange currently lists and trades
to become ETH Market-Makers, as they their global trading strategies during during RTH. In addition, the Exchange
can quote in more classes for the same times that correspond with RTH outside stated that the proposed changes to the
cost. Additionally, current ETH Market- of the United States. The Exchange appointment costs for these products is
Makers can obtain appointments in proposes to make two more products intended to allow Market-Makers to
these two additional classes without available during ETH in response to have appointments in all four ETH
having to obtain an additional ETH demand by investors to have access to products without having to obtain an
Trading Permit. This may increase these products outside of RTH. additional ETH Trading Permit. The
liquidity and result in more competitive Additionally, the Exchange believes the Commission believes that waiving the
pricing in these products during ETH, appointment costs for the four products 30-day operative delay is consistent
which will promote just and equitable available for trading during ETH, which with the protection of investors and the
principles of trade and ultimately allow ETH Market-Makers to have public interest.12 Among other things,
benefit investors. The proposed rule appointments in all four products with the proposed rule change makes no
change does not result in unfair only one ETH Trading Permit, may changes to the trading rules applicable
discrimination, as the appointment increase liquidity and enhance to ETH, and the Exchange states that
costs for these products during ETH will competition in those products during XSP and SPXpm will trade during ETH
apply to all ETH Market-Makers. those hours. in the same manner as VIX and SPX
B. Self-Regulatory Organization’s currently do during ETH. The
C. Self-Regulatory Organization’s
Statement on Burden on Competition Commission notes that the Exchange
Statement on Comments on the
will include in its annual and interim
CBOE does not believe that the Proposed Rule Change Received From
reports to the Commission the
proposed rule change will impose any Members, Participants, or Others
applicable information regarding
burden on competition that is not The Exchange neither solicited nor SPXpm and p.m.-settled XSP options
necessary or appropriate in furtherance received comments on the proposed that trade during ETH. Because the
of the purposes of the Act. If CBOE lists rule change. proposed rule change involves two
XSP and SPXpm options for trading
III. Date of Effectiveness of the exclusively-listed products that already
during ETH, all ETH Trading Permit
Proposed Rule Change and Timing for trade during RTH, does not alter the
Holders may trade these options during
Commission Action trading rules applicable to ETH, and
ETH. Additionally, non-ETH Trading
does not raise any novel or unique
Permit Holders may trade these options Because the foregoing proposed rule regulatory issues, the Commission
during ETH through a broker that is an change does not: (i) Significantly affect designates the proposed rule change as
ETH Trading Permit Holder. The the protection of investors or the public operative upon filing.
proposed rule change is merely interest; (ii) impose any significant
extending the trading hours of two At any time within 60 days of the
burden on competition; and (iii) become
products that currently trade on CBOE. filing of the proposed rule change, the
operative for 30 days from the date on
The appointment costs for the four Commission summarily may
which it was filed, or such shorter time
products approved for trading during temporarily suspend such rule change if
as the Commission may designate, if
ETH will apply to all ETH Market- it appears to the Commission that such
consistent with the protection of
Makers. Additionally, ETH Market- action is necessary or appropriate in the
investors and the public interest, the
Makers will not need to obtain public interest, for the protection of
proposed rule change has become
additional ETH Trading Permits to have investors, or otherwise in furtherance of
effective pursuant to Section 19(b)(3)(A)
appointments in the two additional the purposes of the Act.
of the Act 10 and Rule 19b–4(f)(6)
products. thereunder.11 IV. Solicitation of Comments
CBOE does not believe the proposed
A proposed rule change filed under
rule change will detriment market Interested persons are invited to
Rule 19b–4(f)(6) normally does not
participants on other exchanges, as it submit written data, views, and
become operative for 30 days after the
relates to options listed solely on CBOE arguments concerning the foregoing,
date of filing. However, Rule 19b–
and to trading hours during which no including whether the proposed rule
4(f)(6)(iii) permits the Commission to
other U.S. options exchange is currently change is consistent with the Act.
designate a shorter time if such action
open for trading. Market participants on Comments may be submitted by any of
is consistent with the protection of
other exchanges are welcome to become the following methods:
investors and the public interest. The
ETH Trading Permit Holders, or engage
Exchange requests that the Commission Electronic Comments
a broker that is an ETH Trading Permit
waive the 30-day operative delay to
Holder, and trade at CBOE if they • Use the Commission’s Internet
allow the proposed rule change to
determine that this proposed rule comment form (http://www.sec.gov/
become effective immediately. In its
change has made CBOE more attractive rules/sro.shtml); or
proposal, the Exchange stated that its
or favorable.
CBOE believes that the proposed rule • Send an email to rule-comments@
10 15 U.S.C. 78s(b)(3)(A). sec.gov. Please include File Number SR–
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change will relieve any burden on, or 11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
otherwise promote, competition. As CBOE–2015–079 on the subject line.
4(f)(6) requires a self-regulatory organization to give
discussed above, listing two additional the Commission written notice of its intent to file
products for trading during ETH will the proposed rule change at least five business days 12 For purposes only of waiving the 30-day

prior to the date of filing of the proposed rule operative delay, the Commission has also
provide more hedging and other change, or such shorter time as designated by the considered the proposed rule’s impact on
investment opportunities within the Commission. The Exchange has satisfied this efficiency, competition, and capital formation. See
options trading industry. The Exchange requirement. 15 U.S.C. 78c(f).

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Federal Register / Vol. 80, No. 181 / Friday, September 18, 2015 / Notices 56525

Paper Comments SECURITIES AND EXCHANGE proposed rule change not later than 180
COMMISSION days after the date of publication of
• Send paper comments in triplicate notice of filing of the proposed rule
to Secretary, Securities and Exchange [Release No. 34–75908; File No. SR–CBOE–
change. The Commission may extend
Commission, 100 F Street NE., 2015–026]
the period for issuing an order
Washington, DC 20549–1090. Self-Regulatory Organizations; approving or disapproving the proposed
All submissions should refer to File Chicago Board Options Exchange, rule change, however, by not more than
Incorporated; Notice of Designation of 60 days if the Commission determines
Number SR–CBOE-2015–079. This file
a Longer Period for Commission that a longer period is appropriate and
number should be included on the
Action on Proceedings To Determine publishes the reasons for such
subject line if email is used. To help the determination. In this case, the
Commission process and review your Whether To Approve or Disapprove a
Proposed Rule Change Relating to proposed rule change was published for
comments more efficiently, please use notice and comment in the Federal
only one method. The Commission will Rules 6.74A and 6.74B
Register on March 23, 2015.9 September
post all comments on the Commission’s September 14, 2015. 19, 2015, is 180 days from that date, and
Internet Web site (http://www.sec.gov/ On March 6, 2015, Chicago Board November 18, 2015, is 240 days from
rules/sro.shtml). Copies of the Options Exchange, Incorporated (the that date.
submission, all subsequent ‘‘Exchange’’ or ‘‘CBOE’’) filed with the The Commission finds it appropriate
amendments, all written statements Securities and Exchange Commission to designate a longer period within
with respect to the proposed rule (the ‘‘Commission’’), pursuant to which to issue an order approving or
change that are filed with the Section 19(b)(1) of the Securities disapproving the proposed rule change
Commission, and all written Exchange Act of 1934 (the ‘‘Act’’),1 and so that it has sufficient time to consider
communications relating to the Rule 19b–4 thereunder,2 a proposed rule the proposed rule change and the
proposed rule change between the change to amend its rules regarding the comment letters submitted in response
Commission and any person, other than solicitation of Market-Makers as the to the Order Instituting Proceedings.
those that may be withheld from the contra party to an agency order entered Accordingly, the Commission,
public in accordance with the into the Exchange’s Automated pursuant to Section 19(b)(2) of the
provisions of 5 U.S.C. 552, will be Improvement Mechanism (‘‘AIM’’) and Act,10 designates November 18, 2015 as
available for Web site viewing and Solicitation Auction Mechanism the date by which the Commission shall
(‘‘SAM’’) auctions. The proposed rule either approve or disapprove the
printing in the Commission’s Public
change was published for comment in proposed rule change (File No. SR–
Reference Room, 100 F Street NE.,
the Federal Register on March 23, CBOE–2015–026).
Washington, DC 20549 on official
2015.3 On May 4, 2015, the Commission For the Commission, by the Division of
business days between the hours of
extended the time period within which Trading and Markets, pursuant to delegated
10:00 a.m. and 3:00 p.m. Copies of the to approve the proposed rule change, authority.11
filing also will be available for disapprove the proposed rule change, or Brent J. Fields,
inspection and copying at the principal institute proceedings to determine Secretary.
office of the Exchange. All comments whether to disapprove the proposed [FR Doc. 2015–23401 Filed 9–17–15; 8:45 am]
received will be posted without change; rule change, to June 21, 2015.4 On June BILLING CODE 8011–01–P
the Commission does not edit personal 18, 2015, the Commission instituted
identifying information from proceedings to determine whether to
submissions. You should submit only approve or disapprove the proposed SECURITIES AND EXCHANGE
information that you wish to make rule change.5 On July 21, 2015, the COMMISSION
available publicly. All submissions Commission received a letter from the
[Release No. 34–75913; File No. SR–CBOE–
should refer to File Number SR–CBOE– Exchange responding to the Order 2015–076]
2015–079 and should be submitted on Instituting Proceedings.6 Subsequently,
or before October 9, 2015. the Commission received one other Self-Regulatory Organizations;
For the Commission, by the Division of
comment letter on the proposed rule Chicago Board Options Exchange,
Trading and Markets, pursuant to delegated
change.7 Incorporated; Notice of Filing and
Section 19(b)(2) of the Act 8 provides Immediate Effectiveness of a Proposed
authority.13
that, after initiating disapproval Rule Change To Amend the Fees
Brent J. Fields, proceedings, the Commission shall issue Schedule
Secretary. an order approving or disapproving the
[FR Doc. 2015–23395 Filed 9–17–15; 8:45 am] September 14, 2015.
BILLING CODE 8011–01–P
1 15 U.S.C. 78s(b)(1). Pursuant to Section 19(b)(1) of the
2 17 CFR 240.19b–4.
Securities Exchange Act of 1934 (the
3 See Securities Exchange Act Release No. 74519
‘‘Act’’),1 and Rule 19b–4 thereunder,2
(March 17, 2015), 80 FR 15264 (‘‘Notice’’).
4 See Securities Exchange Act Release No. 74862
notice is hereby given that on
(May 4, 2015), 80 FR 26599 (May 8, 2015). September 1, 2015, Chicago Board
5 See Securities Exchange Act Release No. 75245 Options Exchange, Incorporated (the
(June 18, 2015), 80 FR 36386 (June 24, 2015) ‘‘Exchange’’ or ‘‘CBOE’’) filed with the
(‘‘Order Instituting Proceedings’’). Securities and Exchange Commission
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6 See Letter to Brent J. Fields, Secretary,
(the ‘‘Commission’’) the proposed rule
Commission, from Kyle Edwards, Attorney, CBOE,
dated July 21, 2015 (‘‘CBOE Letter’’).
9 See supra note 3.
7 See Letter to Brent J. Fields, Secretary,
10 15 U.S.C. 78s(b)(2).
Commission, from Gavin Rowe, Senior Director,
11 17 CFR 200.30–3(a)(57).
Dash Financial LLC, dated August 11, 2015 (‘‘Dash
Financial Letter’’). 1 15 U.S.C. 78s(b)(1).
13 17 CFR 200.30–3(a)(12). 8 15 U.S.C. 78s(b)(2). 2 17 CFR 240.19b–4.

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Document Created: 2015-12-15 09:27:58
Document Modified: 2015-12-15 09:27:58

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		80 FR 56522