80 FR 78799 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Accelerated Approval of a Proposed Rule Change To Trade Expiring MSCI EAFE Index Options Until 3:00 p.m.
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 242 (December 17, 2015)
Federal Register Volume 80, Issue 242 (December 17, 2015)
| Page Range | 78799-78800 | |
| FR Document | 2015-31678 |
[Federal Register Volume 80, Number 242 (Thursday, December 17, 2015)] [Notices] [Pages 78799-78800] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-31678] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76632; File No. SR-CBOE-2015-104] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Accelerated Approval of a Proposed Rule Change To Trade Expiring MSCI EAFE Index Options Until 3:00 p.m. December 11, 2015. I. Introduction On November 13, 2015, the Chicago Board Options Exchange, Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange Commission (the ``Commission''), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to change the trading hours for expiring MSCI EAFE Index (``EAFE'') options. This proposal was published for comment in the Federal Register on November 25, 2015.\3\ The Commission received no comments regarding the proposal. This order approves the proposed rule change on an accelerated basis. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 76482 (November 19, 2015), 80 FR 73839 (``Notice''). --------------------------------------------------------------------------- II. Description of the Proposed Rule Change The Exchange proposes to change the trading hours for expiring EAFE options from 10:00 a.m. (Chicago time) on their expiration date to 3:00 p.m. (Chicago time) on their expiration date. When the Exchange first listed EAFE options, the MSCI EAFE Index was not calculated and disseminated during the entire time period during which EAFE options were traded on the Exchange. Accordingly, the Exchange set the initial trading hours for expiring EAFE options to align with expiring EAFE futures contracts traded on the Intercontinental Exchange, Inc. (``ICE''), which stopped trading at 10:00 a.m. (Chicago time) on the third Friday of the futures contracts month.\4\ --------------------------------------------------------------------------- \4\ See Notice, supra note 3, at 73840. The Exchange established listing criteria that permits the trading of EAFE options ``after trading in all component securities has closed for the day and the index level is no longer widely disseminated at least once every fifteen (15) seconds by one or more major market data vendors, provided that EAFE futures contracts are trading and prices for those contract may be used as a proxy for the current index value.'' See CBOE Rule 24.2.01(a)(8). --------------------------------------------------------------------------- The MSCI EAFE Index, however, will now be calculated and disseminated through the close of trading on U.S. [[Page 78800]] markets at 3:00 p.m. (Chicago time). As such, the Exchange understands that ICE is changing the trading hours for expiring EAFE futures contracts listed on ICE from 10:00 a.m. (Chicago time) to 3:15 p.m. (Chicago time).\5\ Because the MSCI EAFE Index will now be calculated and disseminated through the close of trading on U.S. markets (until 3:00 p.m. (Chicago time)) and because ICE is also changing the trading hours for expiring EAFE futures (to close at 3:15 p.m. (Chicago time)), the Exchange proposes to change the closing time for trading in expiring EAFE options from 10:00 a.m. (Chicago time) to 3:00 p.m. (Chicago time) on their expiration date. --------------------------------------------------------------------------- \5\ See Notice, supra note 3, at 73840. --------------------------------------------------------------------------- The Exchange proposes to close trading at 3:00 p.m. (Chicago time)--rather than at 3:15 p.m. (Chicago time), the time ICE ceases trading for expiring EAFE futures contracts--because, according to the Exchange, on the last day of trading, the closing prices of the component stocks, which are used to derive the exercise settlement value of the EAFE options, are known at 3:00 p.m. (Chicago time) (or shortly thereafter).\6\ The Exchange further notes that this proposed rule change is consistent with the closing times for other expiring P.M.-settled contracts that underlie indexes that close when the U.S. equity markets close at 3:00 p.m. (Chicago time).\7\ --------------------------------------------------------------------------- \6\ Id. \7\ Id. --------------------------------------------------------------------------- The Exchange proposes to change the trading hours for expiring EAFE options beginning with the December 2015 expiration, which occurs on December 18, 2015. The Exchange is proposing to have this change apply to all EAFE options listed on or before the effective date of this filing and all EAFE options listed afterward. III. Discussion and Findings After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.\8\ In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,\9\ which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, 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. --------------------------------------------------------------------------- \8\ In approving this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). \9\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Commission believes that it is consistent with the Act for the Exchange to change the trading hours for expiring EAFE options from a close of 10:00 a.m. (Chicago time) to 3:00 p.m. (Chicago time), because the MSCI EAFE Index will now be calculated and disseminated through the close of trading at 3:00 p.m. (Chicago time) and thus the current index value should be widely available to market participants throughout the entire trading day. Further, the proposed rule change will allow the trading hours of EAFE options to continue to closely align with the trading hours of expiring EAFE futures contracts, which the Commission believes will afford investors and market participants the ability to continue to hedge across markets. The Commission also notes that the trading hours are consistent with the closing times of other P.M.- settled contracts listed on the Exchange that underlie indexes that close when the U.S. equity markets close at 3:00 p.m. (Chicago time).\10\ --------------------------------------------------------------------------- \10\ See CBOE Rules 24.6.01, 24.6.03, 24.6.04 and 24.9(e). --------------------------------------------------------------------------- In addition, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act,\11\ for approving the proposed rule change prior to the 45th day after publication of notice in the Federal Register. The proposed rule change to modify the trading hours of EAFE options was published for a 15-day comment period to ensure that the public had an opportunity to review the proposal and no comments were received. The proposed rule change will increase the trading hours during which EAFE options may be traded, which the Commission believes should broaden the trading and hedging opportunities for investors. Further, the Commission notes that the Exchange represents that the change to the trading hours for EAFE futures will be implemented with the December 2015 expiration. Accordingly, the Commission believes that accelerated approval will maintain consistency in the trading hours of EAFE options and EAFE futures contracts, which should enable cross- market competition and facilitate hedging opportunities. For these reasons, the Commission finds that good cause exists for approving the proposed rule change on an accelerated basis. --------------------------------------------------------------------------- \11\ 15 U.S.C. 78s(b)(2). --------------------------------------------------------------------------- IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\12\ that the proposed rule change (File No. SR-CBOE-2015-104) be, and hereby is, approved on an accelerated basis. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\13\ --------------------------------------------------------------------------- \13\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-31678 Filed 12-16-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 242 / Thursday, December 17, 2015 / Notices 78799
In this instance, the changes to • Send an email to rule-comments@ SECURITIES AND EXCHANGE
charges and credits do not impose a sec.gov. Please include File Number SR– COMMISSION
burden on competition because the Phlx–2015–98 on the subject line.
[Release No. 34–76632; File No. SR–CBOE–
Exchange membership is optional and is 2015–104]
the subject of competition from other Paper Comments
exchanges. The increased credits and • Send paper comments in triplicate Self-Regulatory Organizations;
charges are reflective of the intent to to Secretary, Securities and Exchange Chicago Board Options Exchange,
increase the order flow on the Exchange. Incorporated; Order Granting
Commission, 100 F Street NE.,
For these reasons, the Exchange does Accelerated Approval of a Proposed
Washington, DC 20549–1090.
not believe that any of the proposed Rule Change To Trade Expiring MSCI
changes will impair the ability of All submissions should refer to File EAFE Index Options Until 3:00 p.m.
members or competing order execution Number SR–Phlx–2015–98. This file
venues to maintain their competitive number should be included on the December 11, 2015.
standing in the financial markets. subject line if email is used. To help the I. Introduction
Moreover, because there are numerous Commission process and review your
competitive alternatives to the use of the On November 13, 2015, the Chicago
comments more efficiently, please use
Exchange, it is likely that the Exchange Board Options Exchange, Incorporated
only one method. The Commission will (the ‘‘Exchange’’ or ‘‘CBOE’’) filed with
will lose market share as a result of the post all comments on the Commission’s
changes if they are unattractive to the Securities and Exchange
Internet Web site (https://www.sec.gov/ Commission (the ‘‘Commission’’),
market participants. rules/sro-shtml). Copies of the
Accordingly, the Exchange does not pursuant to Section 19(b)(1) of the
submission, all subsequent Securities Exchange Act of 1934 (the
believe that the proposed rule changes
amendments, all written statements ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
will impair the ability of members or
competing order execution venues to with respect to the proposed rule proposed rule change to change the
maintain their competitive standing in change that are filed with the trading hours for expiring MSCI EAFE
the financial markets. Commission, and all written Index (‘‘EAFE’’) options. This proposal
communications relating to the was published for comment in the
C. Self-Regulatory Organization’s proposed rule change between the Federal Register on November 25,
Statement on Comments on the Commission and any person, other than 2015.3 The Commission received no
Proposed Rule Change Received From those that may be withheld from the comments regarding the proposal. This
Members, Participants, or Others public in accordance with the order approves the proposed rule
No written comments were either provisions of 5 U.S.C. 552, will be change on an accelerated basis.
solicited or received. available for Web site viewing and II. Description of the Proposed Rule
III. Date of Effectiveness of the printing in the Commission’s Public Change
Proposed Rule Change and Timing for Reference Room, 100 F Street NE.,
Washington, DC 20549, on official The Exchange proposes to change the
Commission Action trading hours for expiring EAFE options
business days between the hours of
The foregoing rule change has become from 10:00 a.m. (Chicago time) on their
10:00 a.m. and 3:00 p.m. Copies of the
effective pursuant to Section expiration date to 3:00 p.m. (Chicago
filing also will be available for
19(b)(3)(A)(ii) of the Act.10 At any time time) on their expiration date. When the
within 60 days of the filing of the inspection and copying at the principal Exchange first listed EAFE options, the
proposed rule change, the Commission office of the Exchange. All comments MSCI EAFE Index was not calculated
summarily may temporarily suspend received will be posted without change; and disseminated during the entire time
such rule change if it appears to the the Commission does not edit personal period during which EAFE options were
Commission that such action is identifying information from traded on the Exchange. Accordingly,
necessary or appropriate in the public submissions. You should submit only the Exchange set the initial trading
interest, for the protection of investors, information that you wish to make hours for expiring EAFE options to align
or otherwise in furtherance of the available publicly. All submissions with expiring EAFE futures contracts
purposes of the Act. If the Commission should refer to File Number SR–Phlx– traded on the Intercontinental
takes such action, the Commission shall 2015–98 and should be submitted on or Exchange, Inc. (‘‘ICE’’), which stopped
institute proceedings to determine before January 7, 2016. trading at 10:00 a.m. (Chicago time) on
whether the proposed rule should be For the Commission, by the Division of the third Friday of the futures contracts
approved or disapproved. Trading and Markets, pursuant to delegated month.4
authority.11 The MSCI EAFE Index, however, will
IV. Solicitation of Comments
now be calculated and disseminated
Interested persons are invited to through the close of trading on U.S.
submit written data, views, and Robert W. Errett,
arguments concerning the foregoing, Deputy Secretary. 1 15 U.S.C. 78s(b)(1).
including whether the proposed rule [FR Doc. 2015–31687 Filed 12–16–15; 8:45 am] 2 17 CFR 240.19b–4.
change is consistent with the Act. BILLING CODE 8011–01–P
3 See Securities Exchange Act Release No. 76482
(November 19, 2015), 80 FR 73839 (‘‘Notice’’).
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Comments may be submitted by any of 4 See Notice, supra note 3, at 73840. The
the following methods: Exchange established listing criteria that permits
Electronic Comments the trading of EAFE options ‘‘after trading in all
component securities has closed for the day and the
• Use the Commission’s Internet index level is no longer widely disseminated at
comment form (http://www.sec.gov/ least once every fifteen (15) seconds by one or more
major market data vendors, provided that EAFE
rules/sro.shtml); or futures contracts are trading and prices for those
contract may be used as a proxy for the current
10 15 U.S.C. 78s(b)(3)(A)(ii). 11 17 CFR 200.30–3(a)(12). index value.’’ See CBOE Rule 24.2.01(a)(8).
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![78800 Federal Register / Vol. 80, No. 242 / Thursday, December 17, 2015 / Notices
markets at 3:00 p.m. (Chicago time). As trade, to remove impediments to and IV. Conclusion
such, the Exchange understands that perfect the mechanism of a free and It is therefore ordered, pursuant to
ICE is changing the trading hours for open market and a national market Section 19(b)(2) of the Act,12 that the
expiring EAFE futures contracts listed system, and, in general, to protect proposed rule change (File No. SR–
on ICE from 10:00 a.m. (Chicago time) investors and the public interest. CBOE–2015–104) be, and hereby is,
to 3:15 p.m. (Chicago time).5 Because The Commission believes that it is approved on an accelerated basis.
the MSCI EAFE Index will now be
consistent with the Act for the Exchange For the Commission, by the Division of
calculated and disseminated through
to change the trading hours for expiring Trading and Markets, pursuant to delegated
the close of trading on U.S. markets authority.13
EAFE options from a close of 10:00 a.m.
(until 3:00 p.m. (Chicago time)) and
(Chicago time) to 3:00 p.m. (Chicago Robert W. Errett,
because ICE is also changing the trading
hours for expiring EAFE futures (to time), because the MSCI EAFE Index Deputy Secretary.
close at 3:15 p.m. (Chicago time)), the will now be calculated and [FR Doc. 2015–31678 Filed 12–16–15; 8:45 am]
Exchange proposes to change the disseminated through the close of BILLING CODE 8011–01–P
closing time for trading in expiring trading at 3:00 p.m. (Chicago time) and
EAFE options from 10:00 a.m. (Chicago thus the current index value should be
time) to 3:00 p.m. (Chicago time) on widely available to market participants SECURITIES AND EXCHANGE
their expiration date. throughout the entire trading day. COMMISSION
The Exchange proposes to close Further, the proposed rule change will [Release No. 34–76623; File No. SR–BATS–
trading at 3:00 p.m. (Chicago time)— allow the trading hours of EAFE options 2015–112]
rather than at 3:15 p.m. (Chicago time), to continue to closely align with the
the time ICE ceases trading for expiring trading hours of expiring EAFE futures Self-Regulatory Organizations; BATS
EAFE futures contracts—because, contracts, which the Commission Exchange, Inc.; Notice of Filing and
according to the Exchange, on the last believes will afford investors and Immediate Effectiveness of a Proposed
day of trading, the closing prices of the market participants the ability to Rule Change to Rules 11.13(b)(4)(A)
component stocks, which are used to continue to hedge across markets. The and 21.9(a)(3)(A), Amending
derive the exercise settlement value of Commission also notes that the trading Aggressive Re-Route Instruction
the EAFE options, are known at 3:00 hours are consistent with the closing December 11, 2015.
p.m. (Chicago time) (or shortly times of other P.M.-settled contracts Pursuant to Section 19(b)(1) of the
thereafter).6 The Exchange further notes listed on the Exchange that underlie Securities Exchange Act of 1934 (the
that this proposed rule change is indexes that close when the U.S. equity ‘‘Act’’),1 and Rule 19b–4 thereunder,2
consistent with the closing times for markets close at 3:00 p.m. (Chicago notice is hereby given that on December
other expiring P.M.-settled contracts time).10 2, 2015, BATS Exchange, Inc. (the
that underlie indexes that close when
In addition, the Commission finds ‘‘Exchange’’ or ‘‘BATS’’) filed with the
the U.S. equity markets close at 3:00
good cause, pursuant to Section 19(b)(2) Securities and Exchange Commission
p.m. (Chicago time).7
of the Act,11 for approving the proposed (‘‘Commission’’) the proposed rule
The Exchange proposes to change the
rule change prior to the 45th day after change as described in Items I and II
trading hours for expiring EAFE options
publication of notice in the Federal below, which Items have been prepared
beginning with the December 2015
Register. The proposed rule change to by the Exchange. The Exchange has
expiration, which occurs on December
modify the trading hours of EAFE designated this proposal as a ‘‘non-
18, 2015. The Exchange is proposing to
options was published for a 15-day controversial’’ proposed rule change
have this change apply to all EAFE
comment period to ensure that the pursuant to Section 19(b)(3)(A) of the
options listed on or before the effective
public had an opportunity to review the Act 3 and Rule 19b–4(f)(6) thereunder,4
date of this filing and all EAFE options
proposal and no comments were which renders it effective upon filing
listed afterward.
received. The proposed rule change will with the Commission. The Commission
III. Discussion and Findings increase the trading hours during which is publishing this notice to solicit
After careful review, the Commission EAFE options may be traded, which the comments on the proposed rule change
finds that the proposed rule change is Commission believes should broaden from interested persons.
consistent with the requirements of the the trading and hedging opportunities I. Self-Regulatory Organization’s
Act and the rules and regulations for investors. Further, the Commission Statement of the Terms of the Substance
thereunder applicable to a national notes that the Exchange represents that of the Proposed Rule Change
securities exchange.8 In particular, the the change to the trading hours for
The Exchange is proposing to amend
Commission finds that the proposed EAFE futures will be implemented with
the Aggressive Re-Route instruction
rule change is consistent with Section the December 2015 expiration.
under Exchange Rule 11.13(b)(4)(A) to
6(b)(5) of the Act,9 which requires, Accordingly, the Commission believes route such orders where that order has
among other things, that the rules of a that accelerated approval will maintain been locked or crossed by other Trading
national securities exchange be consistency in the trading hours of Centers on the Exchange’s cash equities
designed to prevent fraudulent and EAFE options and EAFE futures trading platform (‘‘BATS Equities’’).
manipulative acts and practices, to contracts, which should enable cross- Consistent with its practice of offering
promote just and equitable principles of
asabaliauskas on DSK5VPTVN1PROD with NOTICES
market competition and facilitate similar functionality for the Exchange’s
hedging opportunities. For these equity options trading platform (‘‘BATS
5 See Notice, supra note 3, at 73840. reasons, the Commission finds that good
6 Id.
7 Id.
cause exists for approving the proposed 12 15 U.S.C. 78s(b)(2).
8 In
rule change on an accelerated basis. 13 17 CFR 200.30–3(a)(12).
approving this proposal, the Commission has
1 15 U.S.C. 78s(b)(1).
considered the proposed rule’s impact on
2 17 CFR 240.19b–4.
efficiency, competition, and capital formation. See 10 See CBOE Rules 24.6.01, 24.6.03, 24.6.04 and
15 U.S.C. 78c(f). 24.9(e). 3 15 U.S.C. 78s(b)(3)(A).
9 15 U.S.C. 78f(b)(5). 11 15 U.S.C. 78s(b)(2). 4 17 CFR 240.19b–4(f)(6).
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Document Created: 2018-03-02 09:18:42
Document Modified: 2018-03-02 09:18:42
| 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 78799 |
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