80 FR 9803 - 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 36 (February 24, 2015)
Federal Register Volume 80, Issue 36 (February 24, 2015)
| Page Range | 9803-9805 | |
| FR Document | 2015-03821 |
[Federal Register Volume 80, Number 36 (Tuesday, February 24, 2015)] [Notices] [Pages 9803-9805] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-03821] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74313; File No. SR-C2-2015-003] Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Exchange Rule 6.15 February 19, 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 February 19, 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 (Obvious Error and Catastrophic Errors). 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 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 The purpose of this filing is to extend the effectiveness of the Exchange's [[Page 9804]] current rule applicable to obvious errors. Interpretation and Policy .08 to Rule 6.15, explained in further detail below, is currently operating on a pilot program set to expire on February, 20 2015. The Exchange proposes to extend the pilot program to October 23, 2015. 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. Under the terms of this current pilot program, though options executions will generally not be adjusted or nullified 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 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. 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. 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. The Exchange will continue to provide the Commission with this data on a monthly basis from February 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. In addition, the Exchange will provide to the Commission and the public, no later than May 29, 2015, 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 is now proposing to extend the pilot period to October 23, 2015. The Exchange believes the benefits to market participants from this provision should continue on a pilot basis. The Exchange continues to believe that adding certainty to the execution of orders in limit or straddle states will encourage market participants to continue to provide liquidity to the Exchange, and, thus, promote a fair and orderly market during these periods. Barring this provision, the 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. 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 Section 6(b) of the Act.\3\ Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \4\ 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) \5\ requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \3\ 15 U.S.C. 78f(b). \4\ 15 U.S.C. 78f(b)(5). \5\ 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. 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. 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 [[Page 9805]] 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 \6\ and Rule 19b-4(f)(6)(iii) thereunder.\7\ --------------------------------------------------------------------------- \6\ 15 U.S.C. 78s(b)(3)(A). \7\ 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 to Address Extraordinary Market Volatility, 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.\8\ --------------------------------------------------------------------------- \8\ 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-C2-2015-003 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-C2-2015-003. 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-C2-2015-003, and should be submitted on or before March 17, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\9\ --------------------------------------------------------------------------- \9\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-03821 Filed 2-23-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 36 / Tuesday, February 24, 2015 / Notices 9803
III. Date of Effectiveness of the • Send an email to rule-comments@ SECURITIES AND EXCHANGE
Proposed Rule Change and Timing for sec.gov. Please include File No. SR– COMMISSION
Commission Action EDGA–2015–11 on the subject line. [Release No. 34–74313; File No. SR–C2–
Because the foregoing proposed rule Paper Comments 2015–003]
change does not: (i) Significantly affect
the protection of investors or the public • Send paper comments in triplicate Self-Regulatory Organizations; C2
interest; (ii) impose any significant to Brent J. Fields, Secretary, Securities Options Exchange, Incorporated;
burden on competition; and (iii) become and Exchange Commission, 100 F Street Notice of Filing and Immediate
operative for 30 days from the date on NE., Washington, DC 20549–1090. Effectiveness of a Proposed Rule
which it was filed, or such shorter time Change Relating to Exchange Rule
as the Commission may designate, it has All submissions should refer to File No. 6.15
become effective pursuant to Section SR–EDGA–2015–11. This file number
should be included on the subject line February 19, 2015.
19(b)(3)(A) of the Act 11 and paragraph
if email is used. To help the Pursuant to Section 19(b)(1) of the
of Rule 19b–4(f)(6) thereunder.12
The Exchange has asked the Securities Exchange Act of 1934 (the
Commission process and review your
Commission to waive the 30-day ‘‘Act’’),1 and Rule 19b–4 thereunder,2
comments more efficiently, please use
operative delay so that the proposal may notice is hereby given that, on February
only one method. The Commission will 19, 2015, C2 Options Exchange,
become operative immediately upon post all comments on the Commission’s
filing. The Exchange stated that waiver Incorporated (the ‘‘Exchange’’ or ‘‘C2’’)
Internet Web site (http://www.sec.gov/ filed with the Securities and Exchange
of this requirement is consistent with rules/sro.shtml). Copies of the
the protection of investors and the Commission (the ‘‘Commission’’) the
submission, all subsequent proposed rule change as described in
public interest because it will allow the amendments, all written statements
Exchange to have consistent rules Items I and II below, which Items have
with respect to the proposed rule been prepared by the Exchange. The
related to minor violations across each
change that are filed with the Commission is publishing this notice to
of the BGM Affiliated Exchanges, which
it believes will both more consistently Commission, and all written solicit comments on the proposed rule
and effectively regulate members of the communications relating to the change from interested persons.
BGM Affiliated Exchanges as well as proposed rule change between the I. Self-Regulatory Organization’s
reduce the regulatory burden on Commission and any person, other than Statement of the Terms of the Substance
Members of the Exchange that are also those that may be withheld from the of the Proposed Rule Change
members of EDGX, BYX and/or BZX. public in accordance with the
provisions of 5 U.S.C. 552, will be The Exchange proposes to extend a
The Commission believes that the pilot program related to Rule 6.15
proposed rule change presents no novel available for Web site viewing and
(Obvious Error and Catastrophic Errors).
issues and that waiver of the 30-day printing in the Commission’s Public The text of the proposed rule change is
operative delay is consistent with the Reference Room, 100 F Street NE., available on the Exchange’s Web site
protection of investors and the public Washington, DC 20549, on official (http://www.cboe.com/AboutCBOE/
interest. Therefore, the Commission business days between the hours of CBOELegalRegulatoryHome.aspx), at
designates the proposed rule change to 10:00 a.m. and 3:00 p.m. Copies of such the Exchange’s Office of the Secretary,
be operative upon filing.13 filing will also be available for and at the Commission’s Public
At any time within 60 days of the inspection and copying at the principal Reference Room.
filing of the proposed rule change, the office of the Exchange. All comments
Commission summarily may II. Self-Regulatory Organization’s
received will be posted without change;
temporarily suspend such rule change if Statement of the Purpose of, and
the Commission does not edit personal
it appears to the Commission that such Statutory Basis for, the Proposed Rule
action is necessary or appropriate in the identifying information from Change
public interest, for the protection of submissions. You should submit only
information that you wish to make In its filing with the Commission, the
investors, or otherwise in furtherance of Exchange included statements
the purposes of the Act. available publicly. All submissions
should refer to File No. SR–EDGA– concerning the purpose of and basis for
IV. Solicitation of Comments 2015–11 and should be submitted on or the proposed rule change and discussed
any comments it received on the
Interested persons are invited to before March 17, 2015.
submit written data, views and proposed rule change. The text of these
For the Commission, by the Division of statements may be examined at the
arguments concerning the foregoing, Trading and Markets, pursuant to delegated
including whether the proposal is places specified in Item IV below. The
authority.14 Exchange has prepared summaries, set
consistent with the Act. Comments may
be submitted by any of the following Brent J. Fields, forth in sections A, B, and C below, of
methods: Secretary. the most significant aspects of such
[FR Doc. 2015–03668 Filed 2–23–15; 8:45 am] statements.
Electronic Comments
BILLING CODE 8011–01–P A. Self-Regulatory Organization’s
• Use the Commission’s Internet Statement of the Purpose of, and
comment form (http://www.sec.gov/ Statutory Basis for, the Proposed Rule
rules/sro.shtml); or Change
tkelley on DSK3SPTVN1PROD with NOTICES
11 15 U.S.C. 78s(b)(3)(A). 1. Purpose
12 17 CFR 240.19b–4. The purpose of this filing is to extend
13 For purposes only of waiving the 30-day
operative delay, the Commission has also
the effectiveness of the Exchange’s
considered the proposed rule’s impact on
1 15 U.S.C. 78s(b)(1).
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f). 14 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4.
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![Federal Register / Vol. 80, No. 36 / Tuesday, February 24, 2015 / Notices 9805
burden on competition; and (iii) become • Send an email to rule-comments@ SECURITIES AND EXCHANGE
operative for 30 days from the date on sec.gov. Please include File Number SR– COMMISSION
which it was filed, or such shorter time C2–2015–003 on the subject line.
as the Commission may designate if [Release No. 34–74293; File No. SR–BATS–
consistent with the protection of Paper Comments
2015–12]
investors and the public interest, the • Send paper comments in triplicate
proposed rule change has become to Secretary, Securities and Exchange Self-Regulatory Organizations; BATS
effective pursuant to Section 19(b)(3)(A) Exchange, Inc.; Notice of Filing and
Commission, 100 F Street NE.,
of the Act 6 and Rule 19b–4(f)(6)(iii) Immediate Effectiveness of a Proposed
Washington, DC 20549–1090.
thereunder.7 Rule Change To Amend Rule 8.15
The Exchange has asked the All submissions should refer to File Entitled ‘‘Imposition of Fines for Minor
Commission to waive the 30-day Number SR–C2–2015–003. This file Violation(s) of Rules’’
operative delay so that the proposal may number should be included on the
become operative immediately upon February 18, 2015.
subject line if email is used. To help the
filing. The Commission believes that Commission process and review your Pursuant to Section 19(b)(1) of the
waiving the 30-day operative delay is comments more efficiently, please use Securities Exchange Act of 1934 (the
consistent with the protection of only one method. The Commission will ‘‘Act’’),1 and Rule 19b–4 thereunder,2
investors and the public interest, as it post all comments on the Commission’s notice is hereby given that on February
will allow the obvious error pilot Internet Web site (http://www.sec.gov/ 5, 2015, BATS Exchange, Inc. (the
program to continue uninterrupted rules/sro.shtml). Copies of the ‘‘Exchange’’ or ‘‘BATS’’) filed with the
while the industry gains further Securities and Exchange Commission
submission, all subsequent
experience operating under the Plan to (‘‘Commission’’) the proposed rule
amendments, all written statements
Address Extraordinary Market change as described in Items I and II
with respect to the proposed rule
Volatility, and avoid any investor below, which Items have been prepared
confusion that could result from a change that are filed with the
by the Exchange. The Exchange has
temporary interruption in the pilot Commission, and all written designated this proposal as a ‘‘non-
program. For this reason, the communications relating to the controversial’’ proposed rule change
Commission designates the proposed proposed rule change between the pursuant to Section 19(b)(3)(A) of the
rule change to be operative upon filing.8 Commission and any person, other than Act 3 and Rule 19b–4(f)(6)(iii)
At any time within 60 days of the those that may be withheld from the thereunder,4 which renders it effective
filing of the proposed rule change, the public in accordance with the upon filing with the Commission. The
Commission summarily may provisions of 5 U.S.C. 552, will be Commission is publishing this notice to
temporarily suspend such rule change if available for Web site viewing and solicit comments on the proposed rule
it appears to the Commission that such printing in the Commission’s Public change from interested persons.
action is necessary or appropriate in the Reference Room, 100 F Street NE.,
public interest, for the protection of I. Self-Regulatory Organization’s
Washington, DC 20549 on official
investors, or otherwise in furtherance of Statement of the Terms of Substance of
business days between the hours of
the purposes of the Act. If the the Proposed Rule Change
10:00 a.m. and 3:00 p.m. Copies of such
Commission takes such action, the filing also will be available for The Exchange filed a proposal to
Commission shall institute proceedings inspection and copying at the principal amend Rule 8.15 entitled ‘‘Imposition of
to determine whether the proposed rule office of the Exchange. All comments Fines for Minor Violation(s) of Rules.’’
should be approved or disapproved. received will be posted without change; The text of the proposed rule change is
IV. Solicitation of Comments the Commission does not edit personal available at the Exchange’s Web site at
identifying information from www.batstrading.com, at the principal
Interested persons are invited to office of the Exchange, and at the
submit written data, views, and submissions. You should submit only
information that you wish to make Commission’s Public Reference Room.
arguments concerning the foregoing,
including whether the proposed rule available publicly. All submissions II. Self-Regulatory Organization’s
change is consistent with the Act. should refer to File Number SR–C2– Statement of the Purpose of, and
Comments may be submitted by any of 2015–003, and should be submitted on Statutory Basis for, the Proposed Rule
the following methods: or before March 17, 2015. Change
Electronic Comments For the Commission, by the Division of
In its filing with the Commission, the
Trading and Markets, pursuant to delegated
• Use the Commission’s Internet Exchange included statements
authority.9
comment form (http://www.sec.gov/ concerning the purpose of and basis for
Brent J. Fields, the proposed rule change and discussed
rules/sro.shtml); or
Secretary. any comments it received on the
6 15 U.S.C. 78s(b)(3)(A). [FR Doc. 2015–03821 Filed 2–23–15; 8:45 am] proposed rule change. The text of these
7 17 CFR 240.19b–4(f)(6)(iii). As required under BILLING CODE 8011–01–P statements may be examined at the
Rule 19b–4(f)(6)(iii), the Exchange provided the places specified in Item IV below. The
Commission with written notice of its intent to file Exchange has prepared summaries, set
the proposed rule change, along with a brief
description and the text of the proposed rule forth in Sections A, B, and C below, of
tkelley on DSK3SPTVN1PROD with NOTICES
change, at least five business days prior to the date the most significant parts of such
of filing of the proposed rule change, or such statements.
shorter time as designated by the Commission.
8 For purposes only of waiving the 30-day
1 15 U.S.C. 78s(b)(1).
operative delay, the Commission has also
2 17 CFR 240.19b–4.
considered the proposed rule’s impact on
3 15 U.S.C. 78s(b)(3)(A).
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f). 9 17 CFR 200.30–3(a)(12). 4 17 CFR 240.19b–4(f)(6)(iii).
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Document Created: 2015-12-18 13:22:40
Document Modified: 2015-12-18 13:22:40
| 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 9803 |
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