80 FR 66089 - Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Exchange Rule 6.15
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 208 (October 28, 2015)
Federal Register Volume 80, Issue 208 (October 28, 2015)
| Page Range | 66089-66092 | |
| FR Document | 2015-27342 |
[Federal Register Volume 80, Number 208 (Wednesday, October 28, 2015)] [Notices] [Pages 66089-66092] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-27342] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76221; File No. SR-C2-2015-029] Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Exchange Rule 6.15 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 21, 2015, C2 Options Exchange, Incorporated (the ``Exchange'' or ``C2'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to extend a pilot program related to Rule 6.15 (Nullification and Adjustment of Options Transactions including Obvious Errors) and to clarify that the pilot program does not prevent the nullification or adjustment of electronic transactions arising from a ``verifiable disruption or malfunction.'' The text of the proposed rule change is available on the Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the Secretary, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed [[Page 66090]] any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Pilot Extension The purpose of this filing is to extend the effectiveness of the Exchange's current rule applicable to obvious errors Interpretation and Policy .01 to Rule 6.15, explained in further detail below, is currently operating on a pilot program set to expire on October 23, 2015. The Exchange proposes to extend the pilot program so that it coincides with the pilot period for the Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS under the Act (``Limit Up-Limit Down Plan'' or ``Plan''), including any extensions to the pilot period for the Plan. Currently the Plan Participants have proposed the 9th amendment to the Plan which, if approved, would extend the pilot period of the Plan to April 22, 2016.\3\ --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 75917 (September 14, 2015), 80 FR 56515 (September 18, 2015) (File No. 4-631). --------------------------------------------------------------------------- On April 8, 2013, the Commission approved, on a pilot basis, amendments to Exchange Rule 6.15 that stated that options executions will not be adjusted or nullified if the execution occurs while the underlying security is in a limit or straddle state as defined by the Plan.\4\ Under the terms of this current pilot program, though options executions will generally not be subject to review as an Obvious Error or Catastrophic Error while the underlying security is in a limit or straddle state, such executions may be reviewed by the Exchange should the Exchange decide to do so under its own motion pursuant to sub- paragraph (c)(3) of Rule 6.15, or a bust or adjust pursuant to paragraphs (e) through (j) of Rule 6.15.\5\ --------------------------------------------------------------------------- \4\ Securities Exchange Act Release No. 69345 (April 8, 2013), 78 FR 21985 (April 12, 2013) (SR-C2-2013-013). See also Exchange Rule 6.15.01. \5\ Id. --------------------------------------------------------------------------- Pursuant to a comment letter filed in connection with the order approving the establishment of the pilot, the Exchange committed to submit monthly data regarding the program.\6\ In addition, the Exchange agreed to submit an overall analysis of the pilot in conjunction with the data submitted under the Plan and any other data as requested by the Commission.\7\ Pursuant to a rule filing, approved on April 3, 2014, each month, the Exchange committed to provide the Commission, and the public, a dataset containing the data for each straddle and limit state in optionable stocks that had at least one trade on the Exchange.\8\ The Exchange will continue to provide the Commission with this data on a monthly basis from October 2015 through the end of the pilot. For each trade on the Exchange, the Exchange will provide (a) 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, and (b) for the trades on the Exchange, 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 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), and 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. --------------------------------------------------------------------------- \6\ See letter from Angelo Evangelou, Associate General Counsel, Chicago Board Options Exchange, Incorporated, date April 4, 2013. \7\ Id. \8\ Securities Exchange Act Release No. 71856 (April 3, 2014), 79 FR 19676 (April 9, 2014) (SR-C2-2014-008). --------------------------------------------------------------------------- In addition, the Exchange will 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 including: (1) An evaluation of the statistical and economic impact of limit and straddle states on liquidity and market quality in the options markets, and (2) an assessment of 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 expiration of the pilot program, including any extensions. If the Plan extension is approved, the next data assessment will be submitted no later than December 18, 2015. The Exchange is now proposing to extend the pilot period so that it coincides with the pilot period for the Plan, including any extensions to the pilot period for the Plan. The pilot will no longer have a fixed expiration date. The Exchange believes the benefits to market participants from this provision should continue on a pilot basis to coincide with the Plan. 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 provisions of Rule 6.15 would likely apply in many instances during limit and straddle states. The Exchange believes that continuing the pilot will protect against any unanticipated consequences in the options markets during a limit or straddle state. Thus, the Exchange believes that the protections of current Rule should continue while the industry gains further experience operating the Plan. Verifiable Disruptions or Malfunctions The Exchange is also proposing to clarify that the pilot program outlined in Interpretation and Policy .01 to Rule 6.15 does not prevent the nullification or adjustment of electronic transactions arising from a verifiable disruption or malfunction. Interpretation and Policy .06 to Rule 6.15 specifies that electronic transactions arising out of a verifiable disruption or malfunction in the use or operation of any Exchange automated quotation, dissemination, execution or communication system will either be nullified or adjusted by an Official. The Exchange believes the provisions of Interpretation and Policy .06 would apply regardless of whether an underlying security to a transaction was in a limit state or straddle state. However, because Interpretation and Policy .01 specifies the other instances in which executions may be reviewed and nullified or adjusted (regardless of the pilot program), the Exchange believes adding a reference to Interpretation and Policy .06 will promote clarity in the Rule. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ``Act'') and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of [[Page 66091]] Section 6(b) of the Act.\9\ Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \10\ requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \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 the Exchange Rule 6.15. The Exchange believes the application of the current rule will be impracticable given the lack of a reliable NBBO in the options market during limit and straddle states, and that the resulting actions (i.e., nullified trades or adjusted prices) may not be appropriate given market conditions. The Exchange now proposes to extend the pilot program so that it coincides with the pilot period for the Plan, including any extensions to the pilot period for the Plan. Extension of this pilot 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 proposed rule change relating to verifiable disruptions or malfunctions is consistent with these provisions as it will more accurately reflect the intentions of the Exchange regarding adjustments and nullifications while an underlying security is in a limit or straddle state. The purpose of the proposed change is to add clarity to the rule text, however, the current practices of the Exchange will remain the same. The Exchange believes the proposed rule change will help avoid confusion, thereby removing impediments to and perfecting the mechanism of a free and open market and national market system. B. Self-Regulatory Organization's Statement on Burden on Competition C2 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 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 \12\ and Rule 19b- 4(f)(6)(iii) thereunder.\13\ --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(3)(A). \13\ 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.\14\ --------------------------------------------------------------------------- \14\ 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 commentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to rule-comments@sec.gov. Please include File Number SR-C2-2015-029 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-C2-2015-029. 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 [[Page 66092]] 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-C2-2015-029, and should be submitted on or before November 18, 2015. --------------------------------------------------------------------------- \15\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\15\ Brent J. Fields, Secretary. [FR Doc. 2015-27342 Filed 10-27-15; 8:45 am] BILLING CODE 8011-01-P
![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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![66092 Federal Register / Vol. 80, No. 208 / Wednesday, October 28, 2015 / Notices
provisions of 5 U.S.C. 552, will be how the Exchange treats obvious and The Exchange extended the operation
available for Web site viewing and catastrophic options errors in of Chapter V, Section 3(d)(iv), which
printing in the Commission’s Public response to the Plan to Address provides that trades are not subject to an
Reference Room, 100 F Street NE., Extraordinary Market Volatility obvious error or catastrophic error
Washington, DC 20549 on official Pursuant to Rule 608 of Regulation review pursuant to Chapter V, Sections
business days between the hours of NMS under the Act (the ‘‘Limit Up- 6(c) or 6(d) during a Limit State or
10:00 a.m. and 3:00 p.m. Copies of such Limit Down Plan’’ or the ‘‘Plan’’).3 Straddle State in 2014,6 and again in
filing also will be available for The Exchange proposes to extend the 2015.7 The current pilot period expires
inspection and copying at the principal pilot period to coincide with the pilot October 23, 2015. Currently, the pilot
office of the Exchange. All comments period for the Limit Up-Limit Down period for the Plan is proposed to be
received will be posted without change; Plan, including any extensions to the extended until April 22, 2016.8 The
the Commission does not edit personal pilot period for the Plan. Exchange now proposes to extend the
identifying information from The text of the proposed rule change pilot program for an additional pilot
submissions. You should submit only is available on the Exchange’s Web site period to coincide with the pilot period
information that you wish to make at http://nasdaq.cchwallstreet.com, at for the Limit Up-Limit Down Plan,
available publicly. All submissions the principal office of the Exchange, and including any extensions to the pilot
should refer to File Number SR–C2– at the Commission’s Public Reference period for the Plan. The Exchange
2015–029, and should be submitted on Room. believes conducting an obvious error or
or before November 18, 2015. catastrophic error review is
For the Commission, by the Division of
II. Self-Regulatory Organization’s impracticable given the lack of a reliable
Trading and Markets, pursuant to delegated Statement of the Purpose of, and National Best Bid/Offer (‘‘NBBO’’) in the
authority.15 Statutory Basis for, the Proposed Rule options market during Limit States and
Brent J. Fields, Change Straddle States, and that the resulting
Secretary. actions (i.e., nullified trades or adjusted
In its filing with the Commission, the
[FR Doc. 2015–27342 Filed 10–27–15; 8:45 am]
prices) may not be appropriate given
Exchange included statements
market conditions. Under the pilot,
BILLING CODE 8011–01–P concerning the purpose of and basis for limit orders that are filled during a
the proposed rule change and discussed Limit State or Straddle State have
any comments it received on the certainty of execution in a manner that
SECURITIES AND EXCHANGE proposed rule change. The text of these
COMMISSION promotes just and equitable principles
statements may be examined at the of trade, and removes impediments to,
[Release No. 34–76226; File No. SR– places specified in Item IV below. The and perfects the mechanism of a free
NASDAQ–2015–125] Exchange has prepared summaries, set and open market and a national market
forth in sections A, B, and C below, of system. Moreover, given that options
Self-Regulatory Organizations; The the most significant aspects of such
NASDAQ Stock Market LLC; Notice of prices during brief Limit States or
statements. Straddle States may deviate
Filing and Immediate Effectiveness of
Proposed Rule Change Regarding the A. Self-Regulatory Organization’s substantially from those available
Obvious Error Pilot Program Statement of the Purpose of, and shortly following the Limit State or
Statutory Basis for, the Proposed Rule Straddle State, the Exchange believes
October 22, 2015. Change giving market participants time to re-
Pursuant to Section 19(b)(1) of the evaluate a transaction would create an
Securities Exchange Act of 1934 1. Purpose unreasonable adverse selection
(‘‘Act’’), 1 and Rule 19b–4 thereunder,2 In April 2013, the Commission opportunity that would discourage
notice is hereby given that, on October approved a proposal, on a one year pilot participants from providing liquidity
20, 2015, The NASDAQ Stock Market basis, to adopt Chapter V, Section during Limit States or Straddle States.
LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed 3(d)(iv) to provide for how the Exchange On balance, the Exchange believes that
with the Securities and Exchange will treat obvious and catastrophic removing the potential inequity of
Commission (‘‘SEC’’ or ‘‘Commission’’) options errors in response to the Plan, nullifying or adjusting executions
the proposed rule change as described which is applicable to all NMS stocks, occurring during Limit States or
in Items I and II below, which Items as defined in Regulation NMS Rule Straddle States outweighs any potential
have been prepared by the Exchange. 600(b)(47).4 The Plan is designed to benefits from applying those provisions
The Commission is publishing this prevent trades in individual NMS stocks during such unusual market conditions.
notice to solicit comments on the from occurring outside of specified The Exchange believes the benefits to
proposed rule change from interested Price Bands.5 The requirements of the market participants from the pilot
persons. Plan are coupled with Trading Pauses to program should continue on a pilot
accommodate more fundamental price basis to coincide with the operation of
I. Self-Regulatory Organization’s
moves (as opposed to erroneous trades the Limit Up-Limit Down Plan. The
Statement of the Terms of the Substance
or momentary gaps in liquidity). Exchange believes that continuing the
of the Proposed Rule Change
pilot will protect against any
The Exchange is filing a proposal by 3 Securities Exchange Act Release No. 69341 unanticipated consequences and permit
The NASDAQ Options Market LLC (April 8, 2013), 78 FR 21996 (April 12, 2013) (SR–
mstockstill on DSK4VPTVN1PROD with NOTICES
(‘‘NOM’’) to amend Chapter V, NASDAQ–2013–048). 6 Securities Exchange Act Release No. 71902
Regulation of Trading on NOM, to 4 The Plan was extended until February 20, 2015. (April 8, 2014), 79 FR 20946 (April 14, 2014) (SR–
extend the pilot program under The Plan was initially approved for a one-year pilot NASDAQ–2014–033).
period, which began on April 8, 2013. Securities 7 Securities Exchange Act Release No. 74336
Section 3(d)(iv), which provides for Exchange Act Release No. 71649 (March 5, 2014), (February 20, 2015), 80 FR 10551 (February 26,
79 FR 13696 (March 11, 2014). 2015) (SR–NASDAQ–2015–016).
15 17 CFR 200.30–3(a)(12). 5 Unless otherwise specified, capitalized terms 8 Securities Exchange Act Release No. 75917
1 15 U.S.C. 78s(b)(1). used in this rule filing are based on the defined (September 14, 2015), 80 FR 56515 (September 18,
2 17 CFR 240.19b–4. terms of the Plan. 2015).
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Document Created: 2018-02-27 08:58:15
Document Modified: 2018-02-27 08:58:15
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 80 FR 66089 |
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