80 FR 66099 - Joint Industry Plan; Order Approving the Ninth Amendment to the National Market System Plan to Address Extraordinary Market Volatility by BATS Exchange, Inc., BATS Y-Exchange, Inc., Chicago Board Options Exchange, Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC, The Nasdaq Stock Market LLC, National Stock Exchange, Inc., New York Stock Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc.

SECURITIES AND EXCHANGE COMMISSION

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

Page Range		66099-66100
FR Document		2015-27396

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

[Federal Register Volume 80, Number 208 (Wednesday, October 28, 2015)]
[Notices]
[Pages 66099-66100]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-27396]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76244; File No. 4-631]

Joint Industry Plan; Order Approving the Ninth Amendment to the
National Market System Plan to Address Extraordinary Market Volatility
by BATS Exchange, Inc., BATS Y-Exchange, Inc., Chicago Board Options
Exchange, Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange,
Inc., EDGX Exchange, Inc., Financial Industry Regulatory Authority,
Inc., NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC, The Nasdaq Stock Market
LLC, National Stock Exchange, Inc., New York Stock Exchange LLC, NYSE
MKT LLC, and NYSE Arca, Inc.

October 22, 2015.

I. Introduction

On July 31, 2015, New York Stock Exchange LLC (``NYSE''), on behalf
of the following parties to the National Market System Plan to Address
Extraordinary Market Volatility (``Plan''): BATS Exchange, Inc., BATS
Y-Exchange, Inc., Chicago Board Options Exchange, Incorporated, Chicago
Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc.,
Financial Industry Regulatory Authority, Inc., NASDAQ OMX BX, Inc.,
NASDAQ OMX PHLX LLC, the Nasdaq Stock Market LLC, National Stock
Exchange, Inc., NYSE MKT LLC, and NYSE Arca, Inc. (collectively with
NYSE, the ``Participants''), filed with the Securities and Exchange
Commission (``Commission'') pursuant to Section 11A of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 608 thereunder,\2\ a
proposal to amend the Plan.\3\ The proposal represents the ninth
amendment to the Plan, and reflects proposed changes unanimously
approved by the Participants. The amendment was published for comment
in the Federal Register on September 18, 2015.\4\ The Commission
received one comment letter regarding the amendment.\5\ This order
approves the amendment to the Plan.
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\1\ 15 U.S.C. 78k-1.
\2\ 17 CFR 242.608.
\3\ See Letter from Elizabeth King, General Counsel, NYSE, to
Brent Fields, Secretary, Commission, dated July 31, 2015
(``Transmittal Letter'').
\4\ See Securities Exchange Act Release No. 75917 (September 14,
2015), 80 FR 56515 (``Notice'').
\5\ See Letter from Donald Bollerman, Head of Markets and Sales,
IEX, to Brent Fields, Secretary, Commission, dated October 16, 2015
(``IEX Letter''). IEX did not comment on the proposals set forth in
the proposed amendment. In its comment letter, IEX suggested that
the Commission evaluate the operation of the Plan and the experience
of trading on August 24, 2015 prior to making the Plan permanent. In
addition, IEX identified other areas for the Commission to consider,
such as SRO opening procedures, floor-based rules, and imbalance
information, in relation to trading on August 24, 2015.
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II. Description of the Proposal

The amendment proposes to extend the pilot period of the Plan from
October 23, 2015 to April 22, 2016. In addition, on March 30, 2015,
Chicago Board Options Exchange, Incorporated (``CBOE'') provided
written notice to the Participants of CBOE's intent to withdraw from
the Plan. Notice of withdrawal was made pursuant to Section IX of the
Plan. CBOE became a Participant due to the operation of its facility,
the CBOE Stock Exchange, LLC (``CBSX''), which engaged in NMS stock
transactions. The last day of trading on CBSX was April 30, 2014.
Therefore, because CBOE no longer operates a facility engaged in NMS
stock transactions, CBOE would have no additional NMS stock data to
provide nor any reason to avail itself of any further right under the
Plan. Accordingly, CBOE proposes to be removed from the Plan.

III. Discussion and Commission Findings

The Commission finds that the amendment is consistent with the
requirements of the Act and the rules and regulations thereunder.
Specifically, the Commission finds that the amendment is consistent
with Section 11A of the Act \6\ and Rule 608 thereunder \7\ in that it
is appropriate in the public interest, for the protection of investors
and the maintenance of fair and orderly markets, and that it removes
impediments to, and perfects the mechanism of, a national market
system.
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\6\ 15 U.S.C. 78k-1.
\7\ 17 CFR 242.608.
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Pursuant to the Plan, the Participants are required to provide the
Commission with certain assessments relating to the impact of the Plan
and the calibration of the Percentage Parameters.\8\ On September 29,
2014, the Participants submitted a Participant Impact Assessment,\9\
which provided the Commission with the Participants' initial
observations in each area required to be addressed under Appendix B to
the Plan. On May 28, 2015, the Participants submitted a Supplemental
Joint Assessment, in which the Participants provided additional
analysis required under

[[Page 66100]]

Appendix B and recommended that the Plan be adopted on a permanent
basis with certain modifications.\10\
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\8\ See Appendix B.III of the Plan.
\9\ See Joint SROs letter to Brent J. Fields, Secretary, SEC,
dated September 29, 2014 (``Participant Impact Assessment'').
\10\ See Letter from Christopher B. Stone, Vice President,
FINRA, to Brent J. Fields, Secretary, SEC, dated May 28, 2015. The
Supplemental Joint Assessment is available at http://www.sec.gov/comments/4-631/4631-39.pdf.
The areas of analysis in Appendix B are intended to capture the
key measures necessary to assess the impact of the Plan and to
support recommendations relating to the calibration of the
Percentage Parameters to help ensure that the stated objectives of
the Plan are achieved--particularly: liquidity when approaching
price bands; clearly erroneous trades; the appropriateness of the
percentage parameters; the attributes of limit states; the impact of
limit states on the options markets; whether process adjustments are
needed when entering/exiting a limit state; and the length of
trading pauses.
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The Participants propose to amend Section VIII(C) of the Plan to
extend the pilot period through April 22, 2016, to allow the
Participants to conduct, and the Commission to consider, further
analysis of data in support of the recommendations made in the
Supplemental Joint Assessment. The Participants note that an extension
of the pilot period would allow the Participants to finalize and file
with the Commission any proposed amendments to the Plan resulting from
such recommendations and further analysis.\11\
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\11\ See Notice, supra note 4 at 56516.
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The Commission believes that it is appropriate in the public
interest, for the protection of investors and the maintenance of a fair
and orderly market to approve the amendment to extend the pilot period
to April 22, 2016 so that the Participants can conduct further analysis
to support any recommendations to amend the Plan.\12\ In addition,
because CBOE no longer operates a facility for NMS Stocks, the
Commission believes it is appropriate for CBOE to be removed from the
Plan.
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\12\ Extending the pilot period will allow the Participants time
to consider various substantive issues regarding the operation of
the Plan, such as those raised in the IEX Letter, supra note 5.
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For the reasons noted above, the Commission finds that the
amendment to the Plan is consistent with Section 11A of the Act \13\
and Rule 608 thereunder.\14\ The Commission reiterates its expectation
that the Participants will continue to monitor the scope and operation
of the Plan and study the data produced, and will propose any
modifications to the Plan that may be necessary or appropriate.\15\
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\13\ 15 U.S.C. 78k-1.
\14\ 17 CFR 242.608.
\15\ See Securities Exchange Act Release No. 67091 (May 31,
2012), 77 FR 33498 (June 6, 2012).
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IV. Conclusion

It is therefore ordered, pursuant to Section 11A of the Act \16\
and Rule 608 thereunder,\17\ that the Ninth Amendment to the Plan (File
No. 4-631) be, and it hereby is approved.
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\16\ 15 U.S.C. 78k-1.
\17\ 17 CFR 242.608.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(29).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-27396 Filed 10-27-15; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 80, No. 208 / Wednesday, October 28, 2015 / Notices 66099

only one method. The Commission will SECURITIES AND EXCHANGE II. Description of the Proposal
post all comments on the Commission’s COMMISSION The amendment proposes to extend
Internet Web site (http://www.sec.gov/ [Release No. 34–76244; File No. 4–631] the pilot period of the Plan from
rules/sro.shtml). Copies of the October 23, 2015 to April 22, 2016. In
submission, all subsequent Joint Industry Plan; Order Approving addition, on March 30, 2015, Chicago
amendments, all written statements the Ninth Amendment to the National Board Options Exchange, Incorporated
with respect to the proposed rule Market System Plan to Address (‘‘CBOE’’) provided written notice to the
change that are filed with the Extraordinary Market Volatility by Participants of CBOE’s intent to
Commission, and all written BATS Exchange, Inc., BATS Y- withdraw from the Plan. Notice of
communications relating to the Exchange, Inc., Chicago Board withdrawal was made pursuant to
proposed rule change between the Options Exchange, Incorporated, Section IX of the Plan. CBOE became a
Commission and any person, other than Chicago Stock Exchange, Inc., EDGA Participant due to the operation of its
those that may be withheld from the Exchange, Inc., EDGX Exchange, Inc., facility, the CBOE Stock Exchange, LLC
public in accordance with the Financial Industry Regulatory (‘‘CBSX’’), which engaged in NMS stock
provisions of 5 U.S.C. 552, will be Authority, Inc., NASDAQ OMX BX, Inc., transactions. The last day of trading on
available for Web site viewing and NASDAQ OMX PHLX LLC, The Nasdaq CBSX was April 30, 2014. Therefore,
Stock Market LLC, National Stock because CBOE no longer operates a
printing in the Commission’s Public
Exchange, Inc., New York Stock facility engaged in NMS stock
Reference Room, 100 F Street NE.,
Exchange LLC, NYSE MKT LLC, and transactions, CBOE would have no
Washington, DC 20549, on official NYSE Arca, Inc.
business days between the hours of additional NMS stock data to provide
nor any reason to avail itself of any
10:00 a.m. and 3:00 p.m. Copies of such October 22, 2015.
further right under the Plan.
filing will also be available for I. Introduction Accordingly, CBOE proposes to be
inspection and copying at the principal removed from the Plan.
office of the Exchange. All comments On July 31, 2015, New York Stock
received will be posted without change; Exchange LLC (‘‘NYSE’’), on behalf of III. Discussion and Commission
the following parties to the National Findings
the Commission does not edit personal
Market System Plan to Address
identifying information from The Commission finds that the
Extraordinary Market Volatility
submissions. You should submit only (‘‘Plan’’): BATS Exchange, Inc., BATS Y- amendment is consistent with the
information that you wish to make Exchange, Inc., Chicago Board Options requirements of the Act and the rules
available publicly. All submissions Exchange, Incorporated, Chicago Stock and regulations thereunder.
should refer to File Number SR–EDGX– Exchange, Inc., EDGA Exchange, Inc., Specifically, the Commission finds that
2015–47 and should be submitted on or EDGX Exchange, Inc., Financial the amendment is consistent with
before November 18, 2015. Industry Regulatory Authority, Inc., Section 11A of the Act 6 and Rule 608
NASDAQ OMX BX, Inc., NASDAQ thereunder 7 in that it is appropriate in
For the Commission, by the Division of
OMX PHLX LLC, the Nasdaq Stock the public interest, for the protection of
Trading and Markets, pursuant to delegated
Market LLC, National Stock Exchange, investors and the maintenance of fair
authority.22
Inc., NYSE MKT LLC, and NYSE Arca, and orderly markets, and that it removes
Brent J. Fields, impediments to, and perfects the
Inc. (collectively with NYSE, the
Secretary. mechanism of, a national market
‘‘Participants’’), filed with the Securities
[FR Doc. 2015–27354 Filed 10–27–15; 8:45 am]
and Exchange Commission system.
BILLING CODE 8011–01–P (‘‘Commission’’) pursuant to Section Pursuant to the Plan, the Participants
11A of the Securities Exchange Act of are required to provide the Commission
1934 (‘‘Act’’) 1 and Rule 608 with certain assessments relating to the
impact of the Plan and the calibration of
thereunder,2 a proposal to amend the
the Percentage Parameters.8 On
Plan.3 The proposal represents the ninth
September 29, 2014, the Participants
amendment to the Plan, and reflects
submitted a Participant Impact
proposed changes unanimously
Assessment,9 which provided the
approved by the Participants. The
amendment was published for comment Commission with the Participants’
in the Federal Register on September initial observations in each area
18, 2015.4 The Commission received required to be addressed under
Appendix B to the Plan. On May 28,
one comment letter regarding the
2015, the Participants submitted a
amendment.5 This order approves the
Supplemental Joint Assessment, in
amendment to the Plan.
which the Participants provided
1 15 U.S.C. 78k–1. additional analysis required under
2 17 CFR 242.608.
3 See Letter from Elizabeth King, General Counsel, on August 24, 2015 prior to making the Plan
NYSE, to Brent Fields, Secretary, Commission, permanent. In addition, IEX identified other areas
dated July 31, 2015 (‘‘Transmittal Letter’’). for the Commission to consider, such as SRO
mstockstill on DSK4VPTVN1PROD with NOTICES

4 See Securities Exchange Act Release No. 75917 opening procedures, floor-based rules, and
(September 14, 2015), 80 FR 56515 (‘‘Notice’’). imbalance information, in relation to trading on
5 See Letter from Donald Bollerman, Head of August 24, 2015.
6 15 U.S.C. 78k–1.
Markets and Sales, IEX, to Brent Fields, Secretary,
7 17 CFR 242.608.
Commission, dated October 16, 2015 (‘‘IEX Letter’’).
8 See Appendix B.III of the Plan.
IEX did not comment on the proposals set forth in
the proposed amendment. In its comment letter, 9 See Joint SROs letter to Brent J. Fields,

IEX suggested that the Commission evaluate the Secretary, SEC, dated September 29, 2014
22 17 CFR 200.30–3(a)(12). operation of the Plan and the experience of trading (‘‘Participant Impact Assessment’’).

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66100 Federal Register / Vol. 80, No. 208 / Wednesday, October 28, 2015 / Notices

Appendix B and recommended that the IV. Conclusion at http://www.miaxoptions.com/filter/
Plan be adopted on a permanent basis It is therefore ordered, pursuant to wotitle/rule_filing, at MIAX’s principal
with certain modifications.10 Section 11A of the Act 16 and Rule 608 office, and at the Commission’s Public
The Participants propose to amend thereunder,17 that the Ninth Reference Room.
Section VIII(C) of the Plan to extend the Amendment to the Plan (File No. 4–631) II. Self-Regulatory Organization’s
pilot period through April 22, 2016, to be, and it hereby is approved. Statement of the Purpose of, and
allow the Participants to conduct, and For the Commission, by the Division of Statutory Basis for, the Proposed Rule
the Commission to consider, further Trading and Markets, pursuant to delegated Change
analysis of data in support of the authority.18
In its filing with the Commission, the
recommendations made in the Brent J. Fields,
Exchange included statements
Supplemental Joint Assessment. The Secretary. concerning the purpose of and basis for
Participants note that an extension of [FR Doc. 2015–27396 Filed 10–27–15; 8:45 am] the proposed rule change and discussed
the pilot period would allow the BILLING CODE 8011–01–P any comments it received on the
Participants to finalize and file with the proposed rule change. The text of these
Commission any proposed amendments statements may be examined at the
to the Plan resulting from such SECURITIES AND EXCHANGE places specified in Item IV below. The
COMMISSION Exchange has prepared summaries, set
recommendations and further
analysis.11 [Release No. 34–76237; File No. SR–MIAX– forth in sections A, B, and C below, of
The Commission believes that it is
2015–60] the most significant aspects of such
statements.
appropriate in the public interest, for Self-Regulatory Organizations; Miami
the protection of investors and the International Securities Exchange LLC; A. Self-Regulatory Organization’s
maintenance of a fair and orderly Notice of Filing and Immediate Statement of the Purpose of, and
market to approve the amendment to Effectiveness of a Proposed Rule Statutory Basis for, the Proposed Rule
extend the pilot period to April 22, 2016 Change to Extend the Pilot Period Change
so that the Participants can conduct Applicable to Rule 521 and Rule 530 1. Purpose
further analysis to support any Relating To Limit Up/Limit Down
recommendations to amend the Plan.12 The Exchange proposes to amend
October 22, 2015. Rule 530 (Limit Up-Limit Down) in
In addition, because CBOE no longer
Pursuant to Section 19(b)(1) of the order to extend the pilot period for the
operates a facility for NMS Stocks, the Securities Exchange Act of 1934 (the treatment of erroneous transactions that
Commission believes it is appropriate ‘‘Act’’),1 and Rule 19b–4 thereunder,2 occur in a Limit or Straddle State to
for CBOE to be removed from the Plan. notice is hereby given that on October coincide with the proposed extension of
For the reasons noted above, the 20, 2015, Miami International Securities the pilot period for the LULD Plan (as
Commission finds that the amendment Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’) defined below), including any
to the Plan is consistent with Section filed with the Securities and Exchange extensions to the pilot period for the
11A of the Act 13 and Rule 608 Commission (‘‘Commission’’) the LULD Plan.
thereunder.14 The Commission proposed rule change as described in Exchange Rule 530(j) provides for the
reiterates its expectation that the Items I and II below, which Items have treatment of erroneous transactions
Participants will continue to monitor been prepared by the Exchange. The occurring during Limit and Straddle
the scope and operation of the Plan and Commission is publishing this notice to States. Specifically, once an NMS Stock
study the data produced, and will solicit comments on the proposed rule has entered a Limit or Straddle State,
change from interested persons. the Exchange will nullify a transaction
propose any modifications to the Plan
that may be necessary or appropriate.15 I. Self-Regulatory Organization’s in an option overlying such an NMS
Statement of the Terms of the Substance Stock as provided in Rule 530(j). This
10 See Letter from Christopher B. Stone, Vice of the Proposed Rule Change provision was adopted for a one year
President, FINRA, to Brent J. Fields, Secretary, SEC, pilot period beginning on the date of the
dated May 28, 2015. The Supplemental Joint
The Exchange is filing a proposal to implementation of the Plan to Address
Assessment is available at http://www.sec.gov/ amend (i) Exchange Rule 530 (Limit Up- Extraordinary Market Volatility
comments/4-631/4631-39.pdf. Limit Down) to extend the pilot period Pursuant to Rule 608 of Regulation
The areas of analysis in Appendix B are intended for the treatment of erroneous NMS, April 8, 2013 (the ‘‘LULD Plan’’).3
to capture the key measures necessary to assess the transactions during a Limit or Straddle
impact of the Plan and to support recommendations The Exchange previously extended the
relating to the calibration of the Percentage
State and (ii) Interpretations and pilot period for Rule 530(j) until October
Parameters to help ensure that the stated objectives Policies .01 to Rule 521 (Nullification 23, 2015.4 The Exchange now proposes
of the Plan are achieved—particularly: liquidity and Adjustment of Options Transactions to extend the pilot period for Rule 530(j)
when approaching price bands; clearly erroneous Including Obvious Errors) to clarify that
trades; the appropriateness of the percentage to coincide with the proposed extension
the pilot period during which an of the pilot period for the LULD Plan,
parameters; the attributes of limit states; the impact
of limit states on the options markets; whether execution will not be subject to review including any extensions to the pilot
process adjustments are needed when entering/ as an Obvious Error or Catastrophic
exiting a limit state; and the length of trading Error will coincide with the pilot period 3 See Exchange Rule 503(j). See also Securities
pauses. for the LULD Plan (as defined below). Exchange Act Release Nos. 69210 (March 22, 2013),
mstockstill on DSK4VPTVN1PROD with NOTICES

11 See Notice, supra note 4 at 56516.

12 Extending the pilot period will allow the
The text of the proposed rule change 78 FR 18637 (March 27, 2013) (SR–MIAX–2013–
is available on the Exchange’s Web site 12); 69342 (April 8, 2013), 78 FR 22017 (April 12,
Participants time to consider various substantive 2013) (SR–MIAX–2013–12); 69234 (March 25,
issues regarding the operation of the Plan, such as 2013), 78 FR 19344 (March 29, 2013) (SR–MIAX–
16 15 U.S.C. 78k–1.
those raised in the IEX Letter, supra note 5. 2013–15); 69354 (April 9, 2013), 78 FR 22357 (April
13 15 U.S.C. 78k–1. 17 17 CFR 242.608. 15, 2013) (SR–MIAX–2013–15).
14 17 CFR 242.608. 18 17 CFR 200.30–3(a)(29). 4 See Securities Exchange Act Release No. 74307
15 See Securities Exchange Act Release No. 67091 1 15 U.S.C. 78s(b)(1).
(February 19, 2015), 80 FR 10196 (February 25,
(May 31, 2012), 77 FR 33498 (June 6, 2012). 2 17 CFR 240.19b–4. 2015) (SR–MIAX–2015–11).

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Document Created: 2018-02-27 08:57:42
Document Modified: 2018-02-27 08:57:42

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		80 FR 66099