80_FR_66295 80 FR 66087 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Interpretive Material 1 to Rule 7170 To Extend the Pilot Program That Suspends Certain Obvious Error Provisions During Limit Up-Limit Down States in Securities That Underlie Options Traded on the Exchange

80 FR 66087 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Interpretive Material 1 to Rule 7170 To Extend the Pilot Program That Suspends Certain Obvious Error Provisions During Limit Up-Limit Down States in Securities That Underlie Options Traded on the Exchange

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 208 (October 28, 2015)

Page Range66087-66089
FR Document2015-27353

Federal Register, Volume 80 Issue 208 (Wednesday, October 28, 2015)
[Federal Register Volume 80, Number 208 (Wednesday, October 28, 2015)]
[Notices]
[Pages 66087-66089]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-27353]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76233; File No. SR-BOX-2015-34]


Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Interpretive Material 1 to Rule 7170 To Extend the Pilot Program 
That Suspends Certain Obvious Error Provisions During Limit Up-Limit 
Down States in Securities That Underlie Options Traded on the Exchange

October 22, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on October 21, 2015, BOX Options Exchange LLC (the ``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the self-regulatory organization. The Commission 
is publishing this notice to solicit comments on the proposed rule from 
interested persons.
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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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend Interpretive Material 1 to Rule 7170 
to extend the pilot program that suspends certain obvious error 
provisions during limit up-limit down states in securities that 
underlie options traded on the Exchange. The text of the proposed rule 
change is available from the principal office of the Exchange, at the 
Commission's Public Reference Room and also on the Exchange's Internet 
Web site at http://boxexchange.com.

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

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
has prepared summaries, set forth in Sections A, B, and C below, of the 
most significant aspects of such statements.

[[Page 66088]]

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

1. Purpose
    The purpose of this filing is to extend the effectiveness of the 
pilot that permits the Exchange to suspend certain provisions in BOX 
Rule 7170 (Obvious and Catastrophic Errors) during limit up-limit down 
states in securities that underlie options traded on the Exchange 
(``Pilot''). The Pilot is currently scheduled to expire on October 23, 
2015. BOX proposes to extend the pilot program to coincide with the 
pilot period for the Plan to Address Extraordinary Market Volatility 
Pursuant to Rule 608 of Regulation NMS under the Act (the ``Limit Up- 
Limit Down Plan'' or the ``Plan''), including any extensions to the 
pilot period for the Plan.\3\
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    \3\ See Securities Exchange Act Release No. 75917 (September 14, 
2015), 80 FR 56515 (September 18, 2015)(Joint Industry Plan; Notice 
of Filing of the Ninth Amendment to the National Market System Plan 
to Address Extraordinary Market Volatility). The pilot period for 
the Plan is proposed to be extended through April 22, 2016.
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    The Pilot allows the Exchange to exclude transactions executed 
during a Limit State or Straddle State from provisions in BOX Rule 
7170. This does not prevent the execution from being reviewed on the 
Official's own motion pursuant to sub-paragraph (c)(3) of Rule 7170, or 
a bust or adjust pursuant to paragraphs (e) through (k) of Rule 7170.
    The remaining provisions in BOX Rule 7170 provide a process by 
which a transaction may be busted or adjusted when the execution price 
of a transaction deviates from the option's theoretical price by a 
certain amount. Under these provisions, the theoretical price is the 
national best bid price for the option with respect to a sell order and 
the national best offer for the option with respect to a buy order. 
During a Limit State or Straddle State, options prices may deviate 
substantially from those available prior to or following the limit 
state. Consequently, the Exchange believed that these provisions would 
be impracticable given the lack of a reliable national best bid or 
offer in the options market during Limit States and Straddle States, 
and could produce undesirable effects.
    The Exchange proposes to extend the operation of this Pilot to 
coincide with the pilot period for the Limit Up-Limit Down Plan, 
including any extensions to the pilot period for the Plan so that it 
may continue to analyze the impact of the Limit and Straddle States. 
The Exchange will also continue to evaluate whether adopting a 
provision for reviewing trades on its own motion during Limit and 
Straddle States is necessary and appropriate.
    Additionally, the Exchange represents that it will conduct its own 
analysis concerning the elimination of the obvious error rule during 
Limit and Straddle States and agrees to provide the Commission with 
relevant data to assess the impact of the Pilot. 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 elimination of the obvious error rule, including data relevant to 
assessing the various analyses noted above. Specifically, the Exchange 
agrees to an assessment that evaluates the statistical and economic 
impact of Straddle States on liquidity and market quality in the 
options markets; and assess whether the lack of obvious error rules in 
effect during the Straddle and Limit States is problematic.
    The Exchange agrees to provide the analysis and data to the 
Commission to help evaluate the impact of the Pilot 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 
December 18th, 2015. On a monthly basis, the Exchange shall provide 
both the Commission and public a dataset containing the data for each 
Straddle and Limit State in optionable stocks.\4\
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    \4\ The dataset will include the options for each underlying 
security that reaches a limit or straddle state and has at least one 
(1) trade on the Exchange during the straddle or limit state. For 
each of those options affected the data record will contain the 
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 the data record will contain the 
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 or limit states, an indicator variable for whether those 
options outlined above have a price change exceeding 30% during the 
underlying stock's straddle or limit state compared to the last 
available option price as reported by OPRA before the start of the 
straddle or limit state (1 if observe 30% and 0 otherwise), and 
another indicator variable for whether the option price within five 
minutes of the underlying stock leaving straddle or limit state (or 
halt if applicable) is 30% away from the price before the start of 
the straddle or limit state.
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    Finally, the Exchange proposes to remove subparagraph (d) to IM-
7080-1. The Exchange believes this provision is no longer necessary and 
doing so will further harmonize the Exchange's Obvious Error rules with 
the rules of other options exchanges also on the pilot.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\5\ in general, and Section 
6(b)(5) of the Act,\6\ in particular, in that it is designed 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 for a free and open market and a national market 
system and, in general, to protect investors and the public interest. 
In particular, the proposal to make the pilot period coincide with the 
pilot period for the Limit Up-Limit Down Plan, including any extensions 
to the pilot period for the Plan, will allow the Pilot to remain in 
effect until the end of the pilot period of the Plan to Address 
Extraordinary Market Volatility (``Plan'').\7\ The Exchange believes 
that it continues to be necessary and appropriate in the interest of 
promoting fair and orderly markets to exclude transactions executed 
during a Limit State or Straddle State from the provision of BOX Rule 
7170. Specifically 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., busted trades or adjusted 
prices) may not be appropriate given market conditions.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ See supra, note 3.
---------------------------------------------------------------------------

    Finally, the Exchange removing subparagraph (d) to IM-7080-1 will 
add clarity to market participants by harmonizing the Exchange's 
Obvious Error rules with the rules of other options exchanges also on 
the pilot.

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

    Because the proposed rule change does not impose any new or 
additional burden on BOX Options Participants, and only amends the 
current Pilot to coincide with the pilot period for the Limit-up Limit 
Down Plan, the Exchange does not believe that the proposed rule change 
will impose any burden on competition not necessary or

[[Page 66089]]

appropriate in furtherance of the purposes of the Act.

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

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

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

    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\8\ and Rule 19b-4(f)(6)(iii) 
thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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.\10\
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    \10\ 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-BOX-2015-34 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-BOX-2015-34. 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-BOX-2015-34, and should be 
submitted on or before November 18, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2015-27353 Filed 10-27-15; 8:45 am]
 BILLING CODE 8011-01-P



                                                                            Federal Register / Vol. 80, No. 208 / Wednesday, October 28, 2015 / Notices                                          66087

                                                  C. Self-Regulatory Organization’s                         • Send an email to rule-comments@                   SECURITIES AND EXCHANGE
                                                  Statement on Comments on the                            sec.gov. Please include File Number SR–               COMMISSION
                                                  Proposed Rule Change Received From                      NYSEArca-2015–94 on the subject line.
                                                  Members, Participants, or Others                                                                              [Release No. 34–76233; File No. SR–BOX–
                                                                                                          Paper Comments
                                                    No written comments were solicited                                                                          2015–34]
                                                  or received with respect to the proposed                  • Send paper comments in triplicate
                                                  rule change.                                            to Brent J. Fields, Secretary, Securities             Self-Regulatory Organizations; BOX
                                                                                                          and Exchange Commission, 100 F Street                 Options Exchange LLC; Notice of
                                                  III. Date of Effectiveness of the                                                                             Filing and Immediate Effectiveness of
                                                  Proposed Rule Change and Timing for                     NE., Washington, DC 20549–1090.
                                                                                                                                                                a Proposed Rule Change To Amend
                                                  Commission Action                                       All submissions should refer to File                  Interpretive Material 1 to Rule 7170 To
                                                     Because the proposed rule change                     Number SR–NYSEArca–2015–94. This                      Extend the Pilot Program That
                                                  does not (i) significantly affect the                   file number should be included on the                 Suspends Certain Obvious Error
                                                  protection of investors or the public                   subject line if email is used. To help the            Provisions During Limit Up-Limit Down
                                                  interest; (ii) impose any significant                   Commission process and review your                    States in Securities That Underlie
                                                  burden on competition; and (iii) become                 comments more efficiently, please use                 Options Traded on the Exchange
                                                  operative for 30 days from the date on                  only one method. The Commission will                  October 22, 2015.
                                                  which it was filed, or such shorter time                post all comments on the Commission’s
                                                  as the Commission may designate, the                    Internet Web site (http://www.sec.gov/                   Pursuant to Section 19(b)(1) of the
                                                  proposed rule change has become                         rules/sro.shtml). Copies of the                       Securities Exchange Act of 1934
                                                  effective pursuant to Section 19(b)(3)(A)                                                                     (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                                                                          submission, all subsequent
                                                  of the Act 10 and Rule 19b–4(f)(6)                                                                            notice is hereby given that on October
                                                                                                          amendments, all written statements
                                                  thereunder.11                                                                                                 21, 2015, BOX Options Exchange LLC
                                                                                                          with respect to the proposed rule
                                                     The Exchange has asked the                                                                                 (the ‘‘Exchange’’) filed with the
                                                                                                          change that are filed with the                        Securities and Exchange Commission
                                                  Commission to waive the 30-day                          Commission, and all written
                                                  operative delay so that the proposal may                                                                      (‘‘Commission’’) the proposed rule
                                                                                                          communications relating to the                        change as described in Items I and II
                                                  become operative immediately upon                       proposed rule change between the
                                                  filing. The Exchange states that an                                                                           below, which Items have been prepared
                                                                                                          Commission and any person, other than                 by the self-regulatory organization. The
                                                  increase in the number of companies                     those that may be withheld from the
                                                  typically included in the Fund’s                                                                              Commission is publishing this notice to
                                                                                                          public in accordance with the                         solicit comments on the proposed rule
                                                  portfolio from 30 to 40 would further
                                                                                                          provisions of 5 U.S.C. 552, will be                   from interested persons.
                                                  diversify the Fund’s investments and
                                                  may decrease the susceptibility to                      available for Web site viewing and
                                                                                                                                                                I. Self-Regulatory Organization’s
                                                  manipulation of the Shares’ price. For                  printing in the Commission’s Public
                                                                                                                                                                Statement of the Terms of the Substance
                                                  that reason, the Commission believes                    Reference Section, 100 F Street NE.,
                                                                                                                                                                of the Proposed Rule Change
                                                  that waiver of the 30-day operative                     Washington, DC 20549 on official
                                                  delay is consistent with the protection                 business days between 10 a.m. and 3                      The Exchange proposes to amend
                                                  of investors and the public interest.                   p.m. Copies of the filing will also be                Interpretive Material 1 to Rule 7170 to
                                                  Therefore, the Commission designates                    available for inspection and copying at               extend the pilot program that suspends
                                                  the proposed rule change to be operative                the NYSE’s principal office and on its                certain obvious error provisions during
                                                  upon filing.12                                          Internet Web site at www.nyse.com. All                limit up-limit down states in securities
                                                                                                          comments received will be posted                      that underlie options traded on the
                                                                                                          without change; the Commission does                   Exchange. The text of the proposed rule
                                                  IV. Solicitation of Comments                            not edit personal identifying                         change is available from the principal
                                                                                                          information from submissions. You                     office of the Exchange, at the
                                                    Interested persons are invited to
                                                                                                          should submit only information that                   Commission’s Public Reference Room
                                                  submit written data, views, and
                                                                                                          you wish to make available publicly. All              and also on the Exchange’s Internet Web
                                                  arguments concerning the foregoing,
                                                                                                          submissions should refer to File                      site at http://boxexchange.com.
                                                  including whether the proposed rule
                                                  change is consistent with the Act.                      Number SR–NYSEArca–2015–94 and                        II. Self-Regulatory Organization’s
                                                  Comments may be submitted by any of                     should be submitted on or before                      Statement of the Purpose of, and
                                                  the following methods:                                  November 18, 2015.                                    Statutory Basis for, the Proposed Rule
                                                                                                            For the Commission, by the Division of              Change
                                                  Electronic Comments
                                                                                                          Trading and Markets, pursuant to delegated              In its filing with the Commission, the
                                                    • Use the Commission’s Internet                       authority.13
                                                  comment form (http://www.sec.gov/                                                                             self-regulatory organization included
                                                                                                          Brent J. Fields,                                      statements concerning the purpose of,
                                                  rules/sro.shtml); or
                                                                                                          Secretary.                                            and basis for, the proposed rule change
                                                    10 15  U.S.C. 78s(b)(3)(A).                           [FR Doc. 2015–27344 Filed 10–27–15; 8:45 am]          and discussed any comments it received
                                                    11 17  CFR 240.19b–4(f)(6). As required under Rule    BILLING CODE 8011–01–P
                                                                                                                                                                on the proposed rule change. The text
                                                  19b–4(f)(6)(iii), the Exchange provided the                                                                   of these statements may be examined at
                                                  Commission with written notice of its intent to file
mstockstill on DSK4VPTVN1PROD with NOTICES




                                                                                                                                                                the places specified in Item IV below.
                                                  the proposed rule change, along with a brief
                                                  description and the text of the proposed rule                                                                 The self-regulatory organization has
                                                  change, at least five business days prior to the date                                                         prepared summaries, set forth in
                                                  of filing of the proposed rule change, or such                                                                Sections A, B, and C below, of the most
                                                  shorter time as designated by the Commission.                                                                 significant aspects of such statements.
                                                    12 For purposes only of waiving the 30-day

                                                  operative delay, the Commission has considered the
                                                                                                                                                                  1 15   U.S.C. 78s(b)(1).
                                                  proposed rule’s impact on efficiency, competition,
                                                  and capital formation. See 15 U.S.C. 78c(f).              13 17   CFR 200.30–3(a)(12).                          2 17   CFR 240.19b–4.



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                                                  66088                     Federal Register / Vol. 80, No. 208 / Wednesday, October 28, 2015 / Notices

                                                  A. Self-Regulatory Organization’s                       whether adopting a provision for                         The Exchange believes this provision is
                                                  Statement of the Purpose of, and                        reviewing trades on its own motion                       no longer necessary and doing so will
                                                  Statutory Basis for, the Proposed Rule                  during Limit and Straddle States is                      further harmonize the Exchange’s
                                                  Change                                                  necessary and appropriate.                               Obvious Error rules with the rules of
                                                                                                             Additionally, the Exchange represents                 other options exchanges also on the
                                                  1. Purpose                                              that it will conduct its own analysis                    pilot.
                                                     The purpose of this filing is to extend              concerning the elimination of the
                                                  the effectiveness of the pilot that                     obvious error rule during Limit and                      2. Statutory Basis
                                                  permits the Exchange to suspend certain                 Straddle States and agrees to provide                       The Exchange believes that the
                                                  provisions in BOX Rule 7170 (Obvious                    the Commission with relevant data to                     proposal is consistent with the
                                                  and Catastrophic Errors) during limit                   assess the impact of the Pilot. As part of               requirements of Section 6(b) of the Act,5
                                                  up-limit down states in securities that                 its analysis, the Exchange will evaluate                 in general, and Section 6(b)(5) of the
                                                  underlie options traded on the Exchange                 (1) the options market quality during                    Act,6 in particular, in that it is designed
                                                  (‘‘Pilot’’). The Pilot is currently                     Limit and Straddle States, (2) assess the                to foster cooperation and coordination
                                                  scheduled to expire on October 23,                      character of incoming order flow and                     with persons engaged in regulating,
                                                  2015. BOX proposes to extend the pilot                  transactions during Limit and Straddle                   clearing, settling, processing
                                                  program to coincide with the pilot                      States, and (3) review any complaints                    information with respect to, and
                                                  period for the Plan to Address                          from members and their customers                         facilitating transactions in securities, to
                                                  Extraordinary Market Volatility                         concerning executions during Limit and                   remove impediments to and perfect the
                                                  Pursuant to Rule 608 of Regulation NMS                  Straddle States. The Exchange also                       mechanism for a free and open market
                                                  under the Act (the ‘‘Limit Up- Limit                    agrees to provide to the Commission                      and a national market system and, in
                                                  Down Plan’’ or the ‘‘Plan’’), including                 data requested to evaluate the impact of                 general, to protect investors and the
                                                  any extensions to the pilot period for                  the elimination of the obvious error                     public interest. In particular, the
                                                  the Plan.3                                              rule, including data relevant to                         proposal to make the pilot period
                                                     The Pilot allows the Exchange to                     assessing the various analyses noted                     coincide with the pilot period for the
                                                  exclude transactions executed during a                  above. Specifically, the Exchange agrees                 Limit Up-Limit Down Plan, including
                                                  Limit State or Straddle State from                      to an assessment that evaluates the                      any extensions to the pilot period for
                                                  provisions in BOX Rule 7170. This does                  statistical and economic impact of                       the Plan, will allow the Pilot to remain
                                                  not prevent the execution from being                    Straddle States on liquidity and market                  in effect until the end of the pilot period
                                                  reviewed on the Official’s own motion                   quality in the options markets; and                      of the Plan to Address Extraordinary
                                                  pursuant to sub-paragraph (c)(3) of Rule                assess whether the lack of obvious error                 Market Volatility (‘‘Plan’’).7 The
                                                  7170, or a bust or adjust pursuant to                   rules in effect during the Straddle and
                                                                                                                                                                   Exchange believes that it continues to be
                                                  paragraphs (e) through (k) of Rule 7170.                Limit States is problematic.
                                                                                                                                                                   necessary and appropriate in the
                                                     The remaining provisions in BOX                         The Exchange agrees to provide the
                                                                                                          analysis and data to the Commission to                   interest of promoting fair and orderly
                                                  Rule 7170 provide a process by which
                                                                                                          help evaluate the impact of the Pilot no                 markets to exclude transactions
                                                  a transaction may be busted or adjusted
                                                                                                          later than five months prior to the pilot                executed during a Limit State or
                                                  when the execution price of a
                                                                                                          expiration, including any extensions. If                 Straddle State from the provision of
                                                  transaction deviates from the option’s
                                                                                                          the plan extension is approved the next                  BOX Rule 7170. Specifically the
                                                  theoretical price by a certain amount.
                                                                                                          data assessment will be due December                     Exchange believes the application of the
                                                  Under these provisions, the theoretical
                                                                                                          18th, 2015. On a monthly basis, the                      current rule will be impracticable given
                                                  price is the national best bid price for
                                                                                                          Exchange shall provide both the                          the lack of a reliable national best bid
                                                  the option with respect to a sell order
                                                                                                          Commission and public a dataset                          or offer in the options market during
                                                  and the national best offer for the option
                                                                                                          containing the data for each Straddle                    Limit States and Straddle States, and
                                                  with respect to a buy order. During a
                                                                                                          and Limit State in optionable stocks.4                   that the resulting actions (i.e., busted
                                                  Limit State or Straddle State, options
                                                                                                             Finally, the Exchange proposes to                     trades or adjusted prices) may not be
                                                  prices may deviate substantially from
                                                                                                          remove subparagraph (d) to IM–7080–1.                    appropriate given market conditions.
                                                  those available prior to or following the
                                                  limit state. Consequently, the Exchange                                                                             Finally, the Exchange removing
                                                  believed that these provisions would be                    4 The dataset will include the options for each       subparagraph (d) to IM–7080–1 will add
                                                                                                          underlying security that reaches a limit or straddle     clarity to market participants by
                                                  impracticable given the lack of a reliable              state and has at least one (1) trade on the Exchange
                                                  national best bid or offer in the options               during the straddle or limit state. For each of those
                                                                                                                                                                   harmonizing the Exchange’s Obvious
                                                  market during Limit States and Straddle                 options affected the data record will contain the        Error rules with the rules of other
                                                  States, and could produce undesirable                   stock symbol, option symbol, time at the start of the    options exchanges also on the pilot.
                                                                                                          straddle or limit state, an indicator for whether it
                                                  effects.                                                is a straddle or limit state. For activity on the        B. Self-Regulatory Organization’s
                                                     The Exchange proposes to extend the                  Exchange the data record will contain the executed       Statement on Burden on Competition
                                                  operation of this Pilot to coincide with                volume, time-weighted quoted bid-ask spread, time-
                                                  the pilot period for the Limit Up-Limit                 weighted average quoted depth at the bid, time-            Because the proposed rule change
                                                                                                          weighted average quoted depth at the offer, high         does not impose any new or additional
                                                  Down Plan, including any extensions to                  execution price, low execution price, number of
                                                  the pilot period for the Plan so that it                trades for which a request for review for error was      burden on BOX Options Participants,
                                                  may continue to analyze the impact of                   received during straddle or limit states, an indicator   and only amends the current Pilot to
                                                  the Limit and Straddle States. The                      variable for whether those options outlined above        coincide with the pilot period for the
                                                                                                          have a price change exceeding 30% during the
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                                                  Exchange will also continue to evaluate                                                                          Limit-up Limit Down Plan, the
                                                                                                          underlying stock’s straddle or limit state compared
                                                                                                          to the last available option price as reported by        Exchange does not believe that the
                                                    3 See Securities Exchange Act Release No. 75917       OPRA before the start of the straddle or limit state     proposed rule change will impose any
                                                  (September 14, 2015), 80 FR 56515 (September 18,        (1 if observe 30% and 0 otherwise), and another          burden on competition not necessary or
                                                  2015)(Joint Industry Plan; Notice of Filing of the      indicator variable for whether the option price
                                                  Ninth Amendment to the National Market System           within five minutes of the underlying stock leaving
                                                                                                                                                                    5 15 U.S.C. 78f(b).
                                                  Plan to Address Extraordinary Market Volatility).       straddle or limit state (or halt if applicable) is 30%
                                                                                                                                                                    6 15 U.S.C. 78f(b)(5).
                                                  The pilot period for the Plan is proposed to be         away from the price before the start of the straddle
                                                  extended through April 22, 2016.                        or limit state.                                           7 See supra, note 3.




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                                                                             Federal Register / Vol. 80, No. 208 / Wednesday, October 28, 2015 / Notices                                               66089

                                                  appropriate in furtherance of the                       Commission shall institute proceedings                  For the Commission, by the Division of
                                                  purposes of the Act.                                    to determine whether the proposed rule                Trading and Markets, pursuant to delegated
                                                                                                          should be approved or disapproved.                    authority.11
                                                  C. Self-Regulatory Organization’s                                                                             Brent J. Fields,
                                                  Statement on Comments on the                            IV. Solicitation of Comments                          Secretary.
                                                  Proposed Rule Change Received From
                                                                                                                                                                [FR Doc. 2015–27353 Filed 10–27–15; 8:45 am]
                                                  Members, Participants, or Others                          Interested persons are invited to
                                                                                                          submit written data, views, and                       BILLING CODE 8011–01–P
                                                    The Exchange has neither solicited
                                                  nor received comments on the proposed                   arguments concerning the foregoing,
                                                  rule change.                                            including whether the proposed rule
                                                                                                                                                                SECURITIES AND EXCHANGE
                                                                                                          change is consistent with the Act.
                                                  III. Date of Effectiveness of the                                                                             COMMISSION
                                                                                                          Comments may be submitted by any of
                                                  Proposed Rule Change and Timing for                     the following methods:                                [Release No. 34–76221; File No. SR–C2–
                                                  Commission Action                                                                                             2015–029]
                                                                                                          Electronic Comments
                                                     Because the proposed rule change                                                                           Self-Regulatory Organizations; C2
                                                  does not (i) significantly affect the                     • Use the Commission’s Internet                     Options Exchange, Incorporated;
                                                  protection of investors or the public                   comment form (http://www.sec.gov/                     Notice of Filing and Immediate
                                                  interest; (ii) impose any significant                   rules/sro.shtml); or                                  Effectiveness of a Proposed Rule
                                                  burden on competition; and (iii) become
                                                                                                            • Send an email to rule-comments@                   Change Relating to Exchange Rule
                                                  operative for 30 days from the date on                                                                        6.15
                                                                                                          sec.gov. Please include File Number SR–
                                                  which it was filed, or such shorter time
                                                  as the Commission may designate if                      BOX–2015–34 on the subject line.                      October 22, 2015.
                                                  consistent with the protection of                       Paper Comments                                           Pursuant to Section 19(b)(1) of the
                                                  investors and the public interest, the                                                                        Securities Exchange Act of 1934 (the
                                                  proposed rule change has become                           • Send paper comments in triplicate                 ‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                  effective pursuant to Section 19(b)(3)(A)               to Secretary, Securities and Exchange                 notice is hereby given that on October
                                                  of the Act8 and Rule 19b–4(f)(6)(iii)                   Commission, 100 F Street NE.,                         21, 2015, C2 Options Exchange,
                                                  thereunder.9                                            Washington, DC 20549–1090.                            Incorporated (the ‘‘Exchange’’ or ‘‘C2’’)
                                                     The Exchange has asked the                                                                                 filed with the Securities and Exchange
                                                                                                          All submissions should refer to File
                                                  Commission to waive the 30-day                                                                                Commission (the ‘‘Commission’’) the
                                                                                                          Number SR–BOX–2015–34. This file
                                                  operative delay so that the proposal may                                                                      proposed rule change as described in
                                                  become operative immediately upon                       number should be included on the
                                                                                                                                                                Items I and II below, which Items have
                                                  filing. The Commission believes that                    subject line if email is used. To help the
                                                                                                                                                                been prepared by the Exchange. The
                                                  waiving the 30-day operative delay is                   Commission process and review your                    Commission is publishing this notice to
                                                  consistent with the protection of                       comments more efficiently, please use                 solicit comments on the proposed rule
                                                  investors and the public interest, as it                only one method. The Commission will                  change from interested persons.
                                                  will allow the obvious error pilot                      post all comments on the Commission’s
                                                                                                          Internet Web site (http://www.sec.gov/                I. Self-Regulatory Organization’s
                                                  program to continue uninterrupted
                                                                                                          rules/sro.shtml). Copies of the                       Statement of the Terms of the Substance
                                                  while the industry gains further
                                                                                                          submission, all subsequent                            of the Proposed Rule Change
                                                  experience operating under the Plan,
                                                  and avoid any investor confusion that                   amendments, all written statements                       The Exchange proposes to extend a
                                                  could result from a temporary                           with respect to the proposed rule                     pilot program related to Rule 6.15
                                                  interruption in the pilot program. For                  change that are filed with the                        (Nullification and Adjustment of
                                                  this reason, the Commission designates                  Commission, and all written                           Options Transactions including Obvious
                                                  the proposed rule change to be operative                communications relating to the                        Errors) and to clarify that the pilot
                                                  upon filing.10                                          proposed rule change between the                      program does not prevent the
                                                     At any time within 60 days of the                    Commission and any person, other than                 nullification or adjustment of electronic
                                                  filing of the proposed rule change, the                 those that may be withheld from the                   transactions arising from a ‘‘verifiable
                                                  Commission summarily may                                public in accordance with the                         disruption or malfunction.’’ The text of
                                                  temporarily suspend such rule change if                 provisions of 5 U.S.C. 552, will be                   the proposed rule change is available on
                                                  it appears to the Commission that such                  available for Web site viewing and                    the Exchange’s Web site (http://
                                                  action is necessary or appropriate in the               printing in the Commission’s Public                   www.cboe.com/AboutCBOE/
                                                  public interest, for the protection of                  Reference Room, 100 F Street NE.,                     CBOELegalRegulatoryHome.aspx), at
                                                  investors, or otherwise in furtherance of               Washington, DC 20549 on official                      the Exchange’s Office of the Secretary,
                                                  the purposes of the Act. If the                         business days between the hours of                    and at the Commission’s Public
                                                  Commission takes such action, the                       10:00 a.m. and 3:00 p.m. Copies of such               Reference Room.
                                                                                                          filing also will be available for                     II. Self-Regulatory Organization’s
                                                    8 15  U.S.C. 78s(b)(3)(A).                            inspection and copying at the principal               Statement of the Purpose of, and
                                                     9 17 CFR 240.19b–4(f)(6)(iii). As required under
                                                                                                          office of the Exchange. All comments                  Statutory Basis for, the Proposed Rule
                                                  Rule 19b–4(f)(6)(iii), the Exchange provided the
                                                  Commission with written notice of its intent to file    received will be posted without change;               Change
                                                  the proposed rule change, along with a brief            the Commission does not edit personal
mstockstill on DSK4VPTVN1PROD with NOTICES




                                                  description and the text of the proposed rule           identifying information from                            In its filing with the Commission, the
                                                  change, at least five business days prior to the date
                                                                                                          submissions. You should submit only                   Exchange included statements
                                                  of filing of the proposed rule change, or such                                                                concerning the purpose of and basis for
                                                  shorter time as designated by the Commission.           information that you wish to make
                                                                                                                                                                the proposed rule change and discussed
                                                     10 For purposes only of waiving the 30-day           available publicly. All submissions
                                                  operative delay, the Commission has also                should refer to File Number SR–BOX–                     11 17 CFR 200.30–3(a)(12).
                                                  considered the proposed rule’s impact on
                                                  efficiency, competition, and capital formation. See
                                                                                                          2015–34, and should be submitted on or                  1 15 U.S.C. 78s(b)(1).
                                                  15 U.S.C. 78c(f).                                       before November 18, 2015.                               2 17 CFR 240.19b–4.




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Document Created: 2018-02-27 08:58:04
Document Modified: 2018-02-27 08:58:04
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation80 FR 66087 

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