80 FR 66069 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 20.6, Nullification and Adjustment of Options Transactions Including Obvious Errors
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 208 (October 28, 2015)
Federal Register Volume 80, Issue 208 (October 28, 2015)
| Page Range | 66069-66072 | |
| FR Document | 2015-27351 |
[Federal Register Volume 80, Number 208 (Wednesday, October 28, 2015)] [Notices] [Pages 66069-66072] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-27351] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76231; File No. SR-BATS-2015-91] Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 20.6, Nullification and Adjustment of Options Transactions Including Obvious Errors October 22, 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 October 20, 2015, BATS Exchange, Inc. (the ``Exchange'' or ``BATS'') 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 Exchange. The Exchange has designated this proposal as a ``non-controversial'' proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b- 4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ 15 U.S.C. 78s(b)(3)(A). \4\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The Exchange filed a proposal for the Exchange's equity options platform (``BATS Options'') to extend the pilot program that suspends certain obvious error provisions of Rule 20.6 during limit up-limit down states in securities that underlie options traded on the Exchange. The text of the proposed rule change is available at the Exchange's Web site at www.batstrading.com, at the principal office of the Exchange, 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 parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Earlier this year, the Exchange adopted new Rule 20.6 related to the adjustment and nullification of transactions that occur on the Exchange's equity options platform (``BATS Options'').\5\ Interpretation and Policy .01 to Rule 20.6 is designed to address certain issues related to the Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 of [[Page 66070]] Regulation NMS under the Act (the ``Limit Up-Limit Down Plan'' or the ``Plan'').\6\ Specifically, pursuant to a pilot program set forth in Interpretation and Policy .01 to Rule 20.6, the Exchange excludes from certain provisions of Rule 20.6 transactions executed during a ``Limit State'' or ``Straddle State,'' as such terms are defined in the Plan. --------------------------------------------------------------------------- \5\ See Securities Exchange Act Release No. 74556 (March 20, 2015), 80 FR 16031 (March 26, 2015) (SR-BATS-2014-067). \6\ See Securities Exchange Act Release No. 67091 (May 31, 2012), 77 FR 33498 (June 6, 2012) (the ``Limit Up-Limit Down Release''). --------------------------------------------------------------------------- The purpose of this filing is to extend the effectiveness of the pilot program of Interpretation and Policy .01 of Rule 20.6 to coincide with the pilot period for the Limit Up-Limit Down Plan, including any extensions to the pilot period for the Plan. The Exchange also proposes to amend a cross-reference contained within Interpretation and Policy .01, as described below. The Exchange believes the benefits to market participants from Interpretation and Policy .01 should continue on a pilot basis. The Exchange continues to believe that adding certainty to the execution of orders in Limit or Straddle States will encourage market participants to continue to provide liquidity to the Exchange, and, thus, promote a fair and orderly market during these periods. Barring this provision, the obvious error provisions of Rule 20.6 would likely apply in many instances during Limit States and Straddle States. The Exchange believes that continuing the pilot will protect against any unanticipated consequences in the options markets during a Limit State or Straddle State. Thus, the Exchange believes that the protections of the current rule should continue while the industry gains further experience operating the Plan. Rather than extending the pilot program to a specific date, the Exchange proposes to extend the pilot to coincide with the operation of the Plan, which is also a pilot program.\7\ --------------------------------------------------------------------------- \7\ Currently, the pilot period for the Plan is proposed to be extended to April 22, 2016. See Securities Exchange Act Release No. 75917 (September 14, 2015), 80 FR 56515 (September 18, 2015). --------------------------------------------------------------------------- The Exchange represents that it will conduct its own analysis concerning the elimination of the Obvious Error and Catastrophic Error provisions during Limit and Straddle States and agrees to provide the Commission with relevant data to assess the impact of this proposed rule change. As part of its analysis, the Exchange will evaluate (1) the options market quality during Limit and Straddle States, (2) assess the character of incoming order flow and transactions during Limit and Straddle States, and (3) review any complaints from Members and their customers concerning executions during Limit and Straddle States. The Exchange also agrees to provide to the Commission data requested to evaluate the impact of the inapplicability of the Obvious Error and Catastrophic Error provisions, including data relevant to assessing the various analyses noted above. In connection with this proposal, each month the Exchange will provide to the Commission and the public a dataset containing the data for each Straddle State and Limit State in NMS Stocks underlying options traded on the Exchange, limited to those option classes that have at least one (1) trade on the Exchange during a Straddle State or Limit State. For each of those option classes affected, each data record will contain the following information:Stock symbol, option symbol, time at the start of the Straddle or Limit State, an indicator for whether it is a Straddle or Limit State. For activity on the Exchange: executed volume, time-weighted quoted bid-ask spread, time-weighted average quoted depth at the bid, time-weighted average quoted depth at the offer; high execution price, low execution price; number of trades for which a request for review for error was received during Straddle and Limit States; an indicator variable for whether those options outlined above have a price change exceeding 30% during the underlying stock's Limit or Straddle State compared to the last available option price as reported by OPRA before the start of the Limit or Straddle State (1 if observe 30% and 0 otherwise). Another indicator variable for whether the option price within five minutes of the underlying stock leaving the Limit or Straddle state (or halt if applicable) is 30% away from the price before the start of the Limit or Straddle State. In addition, the Exchange shall provide to the Commission and the public assessments relating to the impact of the operation of the Obvious Error rules during Limit and Straddle States as follows: (1) Evaluate the statistical and economic impact of Limit and Straddle States on liquidity and market quality in the options markets; and (2) Assess whether the lack of Obvious Error rules in effect during the Straddle and Limit States are problematic. The Exchange agrees to provide the analysis and data to the Commission to help evaluate the impact of the pilot program no later than five months prior to the pilot expiration, including any extensions. If the Plan extension is approved, the next data assessment will be due on December 18, 2015. As noted above, pursuant to the pilot program, the Exchange excludes from certain provisions of Rule 20.6 transactions executed during a Limit State or Straddle State, as such terms are defined in the Plan. The Exchange, however, retains authority to review transactions on an Official's own motion pursuant to sub-paragraph (c)(3) of Rule 20.6 and to bust or adjust transactions pursuant to provisions governing Significant Market Events, as defined in the Rule, trading halts, erroneous prints and quotes in the underlying security, and in connection with stop and stop limit orders that have been triggered by an erroneous execution. The Exchange believes that these safeguards will provide the Exchange with the flexibility to act when necessary and appropriate to nullify or adjust a transaction, while also providing market participants with certainty that, under normal circumstances, the trades they affect with quotes and/or orders having limit prices will stand irrespective of subsequent moves in the underlying security. Subsequent to the adoption of new Rule 20.6, the Exchange adopted a provision, paragraph (k), which governs erroneous trades occurring from disruptions and/or malfunctions of Exchange systems. The Exchange proposes to extend the authority to nullify transactions pursuant to paragraph (k) even in the event of a Limit State or Straddle State for the underlying security, thereby excluding such provision from the pilot program. The Exchange notes that other options exchanges that have a provision governing erroneous trades occurring from disruptions and/or malfunctions of Exchange systems have also excluded such provision from the pilot program.\8\ --------------------------------------------------------------------------- \8\ See, e.g., NYSE MKT Rule 975NY, Interpretation and Policy .03, which excludes paragraph (l) of Rule 975NY from the pilot program; see also, CBOE Rule 6.25, Interpretation and Policy .01, which excludes Interpretation and Policy .05 from the pilot program. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that its proposal is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.\9\ In particular, the proposal is consistent with Section 6(b)(5) of the Act \10\ because it would promote just and equitable principles of trade, remove [[Page 66071]] impediments to, and perfect the mechanism of, a free and open market and a national market system. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \11\ requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78f(b). \10\ 15 U.S.C. 78f(b)(5). \11\ Id. --------------------------------------------------------------------------- In particular, the Exchange further believes that it is necessary and appropriate in the interest of promoting fair and orderly markets to exclude transactions executed during a Limit or Straddle State from certain aspects of Rule 20.6. The Exchange believes the application of the current rule will be impracticable given the lack of a reliable national best bid or offer in the options market during Limit States and Straddle States, and that the resulting actions (i.e., nullified trades or adjusted prices) may not be appropriate given market conditions. Extension of this pilot to coincide with the pilot period for the Limit Up-Limit Down Plan would ensure that limit orders that are filled during a Limit or Straddle State would have certainty of execution in a manner that promotes just and equitable principles of trade, removes impediments to, and perfects the mechanism of a free and open market and a national market system. Thus, the Exchange believes that the protections of the pilot should continue while the industry gains further experience operating the Plan. The Exchange also believes it is necessary and appropriate in the interest of promoting fair and orderly markets to retain authority to nullify erroneous trades occurring from disruptions and/or malfunctions of Exchange systems without regard to whether the underlying security was in a Limit State or Straddle State. As noted above, this will ensure consistency with the rules of other options exchanges.\12\ --------------------------------------------------------------------------- \12\ See supra note 7. --------------------------------------------------------------------------- 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 that is not necessary or appropriate in furtherance of the purposes of the Act. Specifically, the Exchange believes that, by extending the expiration of the pilot, the proposed rule change will allow for further analysis of the pilot and a determination of how the pilot shall be structured in the future. In doing so, the proposed rule change will also serve to promote regulatory clarity and consistency, thereby reducing burdens on the marketplace and facilitating investor protection. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 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 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 \13\ and Rule 19b- 4(f)(6)(iii) thereunder.\14\ --------------------------------------------------------------------------- \13\ 15 U.S.C. 78s(b)(3)(A). \14\ 17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19b- 4(f)(6)(iii), the Exchange provided the Commission with written notice of its 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 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, as it will allow the obvious error pilot program to continue uninterrupted while the industry gains further experience operating under the Plan, and avoid any investor confusion that could result from a temporary interruption in the pilot program. For this reason, the Commission designates the proposed rule change to be operative upon filing.\15\ --------------------------------------------------------------------------- \15\ 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). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule 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 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-BATS-2015-91 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-BATS-2015-91. 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 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-BATS-2015-91, and should be submitted on or before November 18, 2015. [[Page 66072]] For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\16\ --------------------------------------------------------------------------- \16\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-27351 Filed 10-27-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 208 / Wednesday, October 28, 2015 / Notices 66069
specified in the Plan, of which other only one method. The Commission will change as described in Items I and II
equities exchanges are also Participants. post all comments on the Commission’s below, which Items have been prepared
Other competing national securities Internet Web site (http://www.sec.gov/ by the Exchange. The Exchange has
exchanges are subject to the same rules/sro.shtml). Copies of the designated this proposal as a ‘‘non-
trading and quoting requirements submission, all subsequent controversial’’ proposed rule change
specified in the Plan. Therefore, the amendments, all written statements pursuant to Section 19(b)(3)(A) of the
proposed changes would not impose with respect to the proposed rule Act 3 and Rule 19b–4(f)(6)(iii)
any burden on competition, while change that are filed with the thereunder,4 which renders it effective
providing certainty of treatment and Commission, and all written upon filing with the Commission. The
execution of trading interests on the communications relating to the Commission is publishing this notice to
Exchange to market participants in NMS proposed rule change between the solicit comments on the proposed rule
Stocks that are acting in compliance Commission and any person, other than change from interested persons.
with the requirements specified in the those that may be withheld from the
public in accordance with the I. Self-Regulatory Organization’s
Plan.
provisions of 5 U.S.C. 552, will be Statement of the Terms of the Substance
C. Self-Regulatory Organization’s available for Web site viewing and of the Proposed Rule Change
Statement on Comments on the printing in the Commission’s Public The Exchange filed a proposal for the
Proposed Rule Change Received From Reference Section, 100 F Street NE., Exchange’s equity options platform
Members, Participants, or Others Washington, DC 20549–1090 on official (‘‘BATS Options’’) to extend the pilot
No written comments were solicited business days between the hours of program that suspends certain obvious
or received with respect to the proposed 10:00 a.m. and 3:00 p.m. Copies of the error provisions of Rule 20.6 during
rule change. filing will also be available for limit up-limit down states in securities
inspection and copying at the NYSE’s that underlie options traded on the
III. Date of Effectiveness of the principal office and on its Internet Web Exchange.
Proposed Rule Change and Timing for site at www.nyse.com. All comments The text of the proposed rule change
Commission Action received will be posted without change; is available at the Exchange’s Web site
Within 45 days of the date of the Commission does not edit personal at www.batstrading.com, at the
publication of this notice in the Federal identifying information from principal office of the Exchange, and at
Register or up to 90 days (i) as the submissions. You should submit only the Commission’s Public Reference
Commission may designate if it finds information that you wish to make Room.
such longer period to be appropriate available publicly.
All submissions should refer to File II. Self-Regulatory Organization’s
and publishes its reasons for so finding
Number SR–NYSE–2015–46 and should Statement of the Purpose of, and
or (ii) as to which the self-regulatory
be submitted on or before November 18, Statutory Basis for, the Proposed Rule
organization consents, the Commission
2015. Change
will:
(A) By order approve or disapprove For the Commission, by the Division of In its filing with the Commission, the
the proposed rule change, or Trading and Markets, pursuant to delegated Exchange included statements
(B) institute proceedings to determine authority.34 concerning the purpose of and basis for
whether the proposed rule change Brent J. Fields, the proposed rule change and discussed
should be disapproved. Secretary. any comments it received on the
[FR Doc. 2015–27349 Filed 10–27–15; 8:45 am]
proposed rule change. The text of these
IV. Solicitation of Comments
BILLING CODE 8011–01–P
statements may be examined at the
Interested persons are invited to places specified in Item IV below. The
submit written data, views, and Exchange has prepared summaries, set
arguments concerning the foregoing, SECURITIES AND EXCHANGE forth in Sections A, B, and C below, of
including whether the proposed rule COMMISSION the most significant parts of such
change is consistent with the Act. statements.
Comments may be submitted by any of [Release No. 34–76231; File No. SR–BATS–
the following methods: 2015–91] A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Electronic Comments Self-Regulatory Organizations; BATS Statutory Basis for, the Proposed Rule
• Use the Commission’s Internet Exchange, Inc.; Notice of Filing and Change
comment form (http://www.sec.gov/ Immediate Effectiveness of a Proposed
Rule Change to Rule 20.6, Nullification 1. Purpose
rules/sro.shtml); or
• Send an email to rule-comments@ and Adjustment of Options Earlier this year, the Exchange
sec.gov. Please include File Number SR– Transactions Including Obvious Errors adopted new Rule 20.6 related to the
NYSE–2015–46 on the subject line. adjustment and nullification of
October 22, 2015.
transactions that occur on the
Paper Comments Pursuant to Section 19(b)(1) of the Exchange’s equity options platform
Securities Exchange Act of 1934 (the
• Send paper comments in triplicate ‘‘Act’’),1 and Rule 19b–4 thereunder,2
(‘‘BATS Options’’).5 Interpretation and
to Brent J. Fields, Secretary, Securities Policy .01 to Rule 20.6 is designed to
notice is hereby given that on October address certain issues related to the Plan
and Exchange Commission, 100 F Street
mstockstill on DSK4VPTVN1PROD with NOTICES
20, 2015, BATS Exchange, Inc. (the to Address Extraordinary Market
NE., Washington, DC 20549–1090. ‘‘Exchange’’ or ‘‘BATS’’) filed with the
All submissions should refer to File Volatility Pursuant to Rule 608 of
Securities and Exchange Commission
Number SR–NYSE–2015–46. This file (‘‘Commission’’) the proposed rule 3 15 U.S.C. 78s(b)(3)(A).
number should be included on the 4 17 CFR 240.19b–4(f)(6)(iii).
subject line if email is used. To help the 34 17 CFR 200.30–3(a)(12). 5 See Securities Exchange Act Release No. 74556
Commission process and review your 1 15 U.S.C. 78s(b)(1). (March 20, 2015), 80 FR 16031 (March 26, 2015)
comments more efficiently, please use 2 17 CFR 240.19b–4. (SR–BATS–2014–067).
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![66072 Federal Register / Vol. 80, No. 208 / Wednesday, October 28, 2015 / Notices
For the Commission, by the Division of and to incorporate the functions and that provision, CBOE has developed
Trading and Markets, pursuant to delegated associated tasks currently performed by examinations that are designed to
authority.16 a Registered Options Principal. In establish that persons associated with
Brent J. Fields, addition, CBOE is proposing to make CBOE TPHs have attained specified
Secretary. changes to the format of the content levels of competence and knowledge,
[FR Doc. 2015–27351 Filed 10–27–15; 8:45 am] outline. CBOE is not proposing any consistent with applicable registration
BILLING CODE 8011–01–P textual changes to the By-Laws, requirements under CBOE rules. CBOE
Schedules to the By-Laws or Rules of periodically reviews the content of the
CBOE. CBOE is proposing these examinations to determine whether
SECURITIES AND EXCHANGE revisions to adopt the revised Series 4 revisions are necessary or appropriate in
COMMISSION examination program of the Financial view of changes pertaining to the
Industry Regulatory Authority, Inc. subject matter covered by the
[Release No. 34–76235; File No. SR–CBOE–
2015–095] (‘‘FINRA’’). FINRA currently examinations.
administers Series 4 examinations on CBOE Rule 9.2 states that no TPH
Self-Regulatory Organizations; behalf of CBOE. organization shall be approved to
Chicago Board Options Exchange, The revised content outline is transact options business with the
Incorporated; Notice of Filing and attached.6 The Series 4 selection public until those persons associated
Immediate Effectiveness of a Proposed specifications were submitted to the with it who are designated as Options
Rule Change Relating to Revisions to Commission under separate cover by Principals have been approved by and
the Registered Options Principal FINRA. FINRA submitted the Series 4
registered with the Exchange. Rule 9.2
Examination selection specifications in connection
states that persons engaged in the
with a FINRA filing to revise its Series
supervision of options sales practices or
October 22, 2015. 4 Examination Program.7 CBOE is in
a person to who the designated general
Pursuant to Section 19(b)(1) of the agreement with the selection
partner or executive officer or another
Securities Exchange Act of 1934 (the specifications submitted by FINRA.
The text of the [sic] proposed rule Registered Options Principal delegates
‘‘Act’’),1 and Rule 19b–4 thereunder,2
change is available on the Exchange’s the authority to supervise options sales
notice is hereby given that on October
Web site (http://www.cboe.com/ practices shall be designated as Options
16, 2015, Chicago Board Options
AboutCBOE/ Principals. CBOE Rule 9.2 further
Exchange, Incorporated (the ‘‘Exchange’’
CBOELegalRegulatoryHome.aspx), at requires successful completion of an
or ‘‘CBOE’’) filed with the Securities
the Exchange’s Office of the Secretary, examination prescribed by the Exchange
and Exchange Commission (the
and at the Commission’s Public in order to qualify for registration as an
‘‘Commission’’) the proposed rule
Reference Room. Options Principal. The Series 4
change as described in Items I, II, and
examination, an industry-wide
III below, which Items have been II. Self-Regulatory Organization’s examination, has been designed for this
prepared by the CBOE. CBOE has Statement of the Purpose of, and purpose, and tests a candidate’s
designated the proposed rule change as Statutory Basis for, the Proposed Rule knowledge of options trading generally,
‘‘constituting a stated policy, practice, Change the industry rules applicable to trading
or interpretation with respect to the
In its filing with the Commission, the of option contracts, and the rules of
meaning, administration, or
Exchange included statements registered clearing agencies for options.
enforcement of an existing rule’’ under
concerning the purpose of and basis for The Series 4 examination covers, among
Section 19(b)(3)(A)(i) of the Act 3 and
the proposed rule change and discussed other things, equity options, foreign
Rule19b–4(f)(1) thereunder,4 which
any comments it received on the currency options, and index options.
renders the proposal effective upon
proposed rule change. The text of these In consultation with a committee of
receipt of this filing by the Commission.
statements may be examined at the industry representatives, including
The Commission is publishing this
places specified in Item IV below. The representatives from CBOE, FINRA
notice to solicit comments on the
Exchange has prepared summaries, set recently undertook a review of the
proposed rule change from interested
forth in sections A, B, and C below, of Series 4 examination program. As a
persons.
the most significant aspects of such result of this review, FINRA filed
I. Self-Regulatory Organization’s statements. revisions to the content outline to reflect
Statement of the Terms of Substance of changes to the laws, rules and
A. Self-Regulatory Organization’s
the Proposed Rule Change regulations covered by the examination
Statement of the Purpose of, and
CBOE is filing revisions to the content Statutory Basis for, the Proposed Rule and to incorporate the functions and
outline and selection specifications for Change associated tasks currently performed by
the Registered Options Principal (Series a Registered Options Principal. FINRA
4) examination program.5 The proposed 1. Purpose also made changes to the format of the
revisions update the material to reflect Section 6(c)(3) of the Act 8 authorizes content outline.9 CBOE is filing these
changes to the laws, rules and CBOE to prescribe standards of training, changes to adopt FINRA’s revised Series
regulations covered by the examination experience, and competence for persons 4 examination program.
associated with CBOE Trading Permit
Current Content Outline
16 17 CFR 200.30–3(a)(12). Holders (‘‘TPH’’). In accordance with
mstockstill on DSK4VPTVN1PROD with NOTICES
1 15 U.S.C. 78s(b)(1). The current content outline is divided
2 17 CFR 240.19b–4. 6 The Commission notes that the revised content into three sections. The following are
3 15 U.S.C. 78s(b)(3)(A)(i). outline is attached to the filing, not to this Notice. the three sections and the number of
4 17 CFR 240.19b–4(f)(1). The content outline is available as part of the filing
5 CBOE is also proposing corresponding revisions on CBOE’s Web site. questions associated with each of the
7 See Securities Exchange Act Release No. 75246
to the Series 4 question bank. CBOE is submitting
this filing for immediate effectiveness pursuant to (June 18, 2015), 80 FR 36388 (June 24, 2015) (SR– 9 See Securities Exchange Act Release No. 75246
Section 19(b)(3)(A) of the act and Rule 19b–4(f)(1) FINRA–2015–018). (June 18, 2015), 80 FR 36388 (June 24, 2015) (SR–
thereunder. 8 15 U.S.C. 78f(c)(3). FINRA–2015–018).
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Document Created: 2018-02-27 08:57:57
Document Modified: 2018-02-27 08:57:57
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| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| FR Citation | 80 FR 66069 |
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