81 FR 11634 - Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend BX Options Chapter VII, Section 6
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 43 (March 4, 2016)
Federal Register Volume 81, Issue 43 (March 4, 2016)
| Page Range | 11634-11635 | |
| FR Document | 2016-04709 |
[Federal Register Volume 81, Number 43 (Friday, March 4, 2016)] [Notices] [Pages 11634-11635] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-04709] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77252; File No. SR-BX-2016-012] Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend BX Options Chapter VII, Section 6 February 29, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on February 17, 2016, NASDAQ BX, Inc. (``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I, II, and III, 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 Substance of the Proposed Rule Change The Exchange proposes to amend BX Options Chapter VII, Section 6. The text of the proposed rule change is below; proposed new language is italicized; proposed deletions are in brackets. Sec. 6 Market Maker Quotations (a)-(c) No change. (d) Continuous Quotes. A Market Maker must enter continuous bids and offers for the options to which it is registered, as follows: i. No change. ii. Bid/ask Differentials (Quote Spread Parameters). Options on equities (including Exchange-Traded Fund Shares), and on index options must be quoted with a difference not to exceed $5 between the bid and offer regardless of the price of the bid, including before and during the opening. However, respecting in-the-money series where the market for the underlying security is wider than $5, the bid/ask differential may be as wide as the quotation for the underlying security on the primary market. The Exchange may establish differences other than the above for one or more series or classes of options. iii. No change. (e)-(f) No change. 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 the proposal is to harmonize BX Options Chapter VII, Section 6(d)(ii) with similar provisions of the Exchange's affiliated exchanges regarding bid/ask differentials (also known as quote spread parameters). Quote spread parameters establish the maximum permissible width between the bid and the offer in a particular option series. Quote spreads apply to quotes, not orders, and are thus only applicable to the BX Options Market Makers who are required to submit two-sided quotes.\3\ --------------------------------------------------------------------------- \3\ See Chapter I, Section (a)(9) and Chapter VII, Sections 5 and 6. --------------------------------------------------------------------------- Specifically, the Exchange proposes to add language to its rule regarding bid/ask differentials to permit the Exchange to establish bid/ask differentials other than what is specified in the rule. Both the NASDAQ Options Market and the [[Page 11635]] NASDAQ PHLX have this provision.\4\ Some of the circumstances that may result in wider quote spread parameters include volatility in the underlying, recent news affecting the underlying and heavy volume in the underlying or the overlying option. --------------------------------------------------------------------------- \4\ See NOM Chapter VII, Section 6 and PHLX Rule 1014(c)(i)(A)(1)(a). PHLX recently amended its rules to add the same language respecting U.S. dollar-settled foreign currency options. Securities Exchange Act Release No. 76966 (January 22, 2016), 81 FR 4724 (January 27, 2016) (SR-Phlx-2016-06). --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act \5\ in general, and furthers the objectives of Section 6(b)(5) of the Act \6\ in particular, in that it is designed 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, by permitting different quote spread parameters to be established by the Exchange to address specific requests as well as general market events. This should promote just and equitable principles of trade and protect investors by having quote spread parameters reflect potential volatility and activity in the underlying security, and thereby encourage robust market making that reflects current market conditions. --------------------------------------------------------------------------- \5\ 15 U.S.C. 78f(b). \6\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. With respect to intra-market competition, the proposed language will apply to all quoting market participants equally. With respect to inter-market competition, market participants who disagree with the quote spread parameters that the Exchange establishes may choose to trade on another options exchange. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing 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, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act \7\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\8\ --------------------------------------------------------------------------- \7\ 15 U.S.C. 78s(b)(3)(a)(iii) [sic]. \8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file 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 satisfied this requirement. --------------------------------------------------------------------------- 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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) 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 [email protected]. Please include File Number SR-BX-2016-012 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-BX-2016-012. 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 the 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-BX-2016-012 and should be submitted on or before March 25, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\9\ --------------------------------------------------------------------------- \9\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-04709 Filed 3-3-16; 8:45 am] BILLING CODE 8011-01-P
![11634 Federal Register / Vol. 81, No. 43 / Friday, March 4, 2016 / Notices
once an investment by a Fund of Funds 3(c)(1) or 3(c)(7) of the Act in excess of offers for the options to which it is
in the securities of the Self-Indexing the limits contained in section registered, as follows:
Fund exceeds the limit of section 12(d)(1)(A) of the Act, except to the i. No change.
12(d)(1)(A)(i) of the Act, setting forth extent (i) the Self-Indexing Fund, or its ii. Bid/ask Differentials (Quote Spread
from whom the securities were respective Master Fund, acquires Parameters). Options on equities
acquired, the identity of the securities of another investment (including Exchange-Traded Fund
underwriting syndicate’s members, the company pursuant to exemptive relief Shares), and on index options must be
terms of the purchase, and the from the Commission permitting the quoted with a difference not to exceed
information or materials upon which Self-Indexing Fund, or its respective $5 between the bid and offer regardless
the Board’s determinations were made. Master Fund, to acquire securities of of the price of the bid, including before
9. Before investing in a Self-Indexing one or more investment companies for and during the opening. However,
Fund in excess of the limit in section short-term cash management purposes respecting in-the-money series where
12(d)(1)(A), a Fund of Funds and the or (ii) the Self-Indexing Fund acquires the market for the underlying security is
Trust will execute a FOF Participation securities of the Master Fund pursuant wider than $5, the bid/ask differential
Agreement stating without limitation to the Master-Feeder Relief. may be as wide as the quotation for the
that their respective boards of directors
For the Commission, by the Division of underlying security on the primary
or trustees and their investment Investment Management, under delegated market. The Exchange may establish
advisers, or trustee and Sponsor, as authority. differences other than the above for one
applicable, understand the terms and
Robert W. Errett, or more series or classes of options.
conditions of the order, and agree to
Deputy Secretary. iii. No change.
fulfill their responsibilities under the
order. At the time of its investment in [FR Doc. 2016–04794 Filed 3–3–16; 8:45 am] (e)–(f) No change.
Shares of a Self-Indexing Fund in excess BILLING CODE 8011–01–P
II. Self-Regulatory Organization’s
of the limit in section 12(d)(1)(A)(i), a Statement of the Purpose of, and
Fund of Funds will notify the Self- Statutory Basis for, the Proposed Rule
Indexing Fund of the investment. At SECURITIES AND EXCHANGE
COMMISSION Change
such time, the Fund of Funds will also
transmit to the Self-Indexing Fund a list [Release No. 34–77252; File No. SR–BX– In its filing with the Commission, the
of the names of each Fund of Funds 2016–012] Exchange included statements
Affiliate and Underwriting Affiliate. The concerning the purpose of and basis for
Fund of Funds will notify the Self- Self-Regulatory Organizations; the proposed rule change and discussed
Indexing Fund of any changes to the list NASDAQ BX, Inc.; Notice of Filing and any comments it received on the
of the names as soon as reasonably Immediate Effectiveness of Proposed proposed rule change. The text of these
practicable after a change occurs. The Rule Change To Amend BX Options statements may be examined at the
Self-Indexing Fund and the Fund of Chapter VII, Section 6 places specified in Item IV below. The
Funds will maintain and preserve a Exchange has prepared summaries, set
copy of the order, the FOF Participation February 29, 2016. forth in sections A, B, and C below, of
Agreement, and the list with any Pursuant to Section 19(b)(1) of the the most significant aspects of such
updated information for the duration of Securities Exchange Act of 1934 statements.
the investment and for a period of not (‘‘Act’’),1 and Rule 19b–4 thereunder,2
less than six years thereafter, the first notice is hereby given that on February A. Self-Regulatory Organization’s
two years in an easily accessible place. 17, 2016, NASDAQ BX, Inc. Statement of the Purpose of, and
10. Before approving any advisory (‘‘Exchange’’) filed with the Securities Statutory Basis for, the Proposed Rule
contract under section 15 of the Act, the and Exchange Commission (‘‘SEC’’ or Change
board of directors or trustees of each ‘‘Commission’’) the proposed rule 1. Purpose
Investing Management Company change as described in Items I, II, and
including a majority of the disinterested III, below, which Items have been The purpose of the proposal is to
directors or trustees, will find that the prepared by the Exchange. The harmonize BX Options Chapter VII,
advisory fees charged under such Commission is publishing this notice to Section 6(d)(ii) with similar provisions
contract are based on services provided solicit comments on the proposed rule of the Exchange’s affiliated exchanges
that will be in addition to, rather than change from interested persons. regarding bid/ask differentials (also
duplicative of, the services provided known as quote spread parameters).
I. Self-Regulatory Organization’s Quote spread parameters establish the
under the advisory contract(s) of any
Statement of the Terms of Substance of maximum permissible width between
Self-Indexing Fund, or its respective
the Proposed Rule Change the bid and the offer in a particular
Master Fund, in which the Investing
Management Company may invest. The Exchange proposes to amend BX option series. Quote spreads apply to
These findings and their basis will be Options Chapter VII, Section 6. quotes, not orders, and are thus only
fully recorded in the minute books of The text of the proposed rule change applicable to the BX Options Market
the appropriate Investing Management is below; proposed new language is Makers who are required to submit two-
Company. italicized; proposed deletions are in sided quotes.3
11. Any sales charges and/or service brackets. Specifically, the Exchange proposes to
jstallworth on DSK7TPTVN1PROD with NOTICES
fees charged with respect to shares of a add language to its rule regarding bid/
Sec. 6 Market Maker Quotations
Fund of Funds will not exceed the ask differentials to permit the Exchange
limits applicable to a fund of funds as (a)–(c) No change. to establish bid/ask differentials other
set forth in NASD Conduct Rule 2830. (d) Continuous Quotes. A Market than what is specified in the rule. Both
12. No Self-Indexing Fund, or its Maker must enter continuous bids and the NASDAQ Options Market and the
respective Master Fund, will acquire
securities of any other investment 1 15 U.S.C. 78s(b)(1). 3 See Chapter I, Section (a)(9) and Chapter VII,
company or company relying on section 2 17 CFR 240.19b–4. Sections 5 and 6.
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![Federal Register / Vol. 81, No. 43 / Friday, March 4, 2016 / Notices 11635
NASDAQ PHLX have this provision.4 the protection of investors or the public Commission, and all written
Some of the circumstances that may interest; (ii) impose any significant communications relating to the
result in wider quote spread parameters burden on competition; and (iii) become proposed rule change between the
include volatility in the underlying, operative for 30 days from the date on Commission and any person, other than
recent news affecting the underlying which it was filed, or such shorter time those that may be withheld from the
and heavy volume in the underlying or as the Commission may designate, it has public in accordance with the
the overlying option. become effective pursuant to Section provisions of 5 U.S.C. 552, will be
19(b)(3)(A)(iii) of the Act 7 and available for Web site viewing and
2. Statutory Basis
subparagraph (f)(6) of Rule 19b–4 printing in the Commission’s Public
The Exchange believes that its thereunder.8 Reference Room, 100 F Street NE.,
proposal is consistent with Section 6(b) At any time within 60 days of the Washington, DC 20549, on official
of the Act 5 in general, and furthers the filing of the proposed rule change, the business days between the hours of
objectives of Section 6(b)(5) of the Act 6 Commission summarily may 10:00 a.m. and 3:00 p.m. Copies of the
in particular, in that it is designed to temporarily suspend such rule change if filing also will be available for
promote just and equitable principles of it appears to the Commission that such inspection and copying at the principal
trade, to remove impediments to and action is: (i) Necessary or appropriate in office of the Exchange. All comments
perfect the mechanism of a free and the public interest; (ii) for the protection received will be posted without change;
open market and a national market of investors; or (iii) otherwise in the Commission does not edit personal
system, and, in general to protect furtherance of the purposes of the Act. identifying information from
investors and the public interest, by If the Commission takes such action, the submissions. You should submit only
permitting different quote spread Commission shall institute proceedings information that you wish to make
parameters to be established by the to determine whether the proposed rule available publicly.
Exchange to address specific requests as should be approved or disapproved. All submissions should refer to File
well as general market events. This Number SR–BX–2016–012 and should
should promote just and equitable IV. Solicitation of Comments
be submitted on or before March 25,
principles of trade and protect investors Interested persons are invited to 2016.
by having quote spread parameters submit written data, views, and For the Commission, by the Division of
reflect potential volatility and activity in arguments concerning the foregoing, Trading and Markets, pursuant to delegated
the underlying security, and thereby including whether the proposed rule authority.9
encourage robust market making that change is consistent with the Act. Robert W. Errett,
reflects current market conditions. Comments may be submitted by any of Deputy Secretary.
the following methods:
B. Self-Regulatory Organization’s [FR Doc. 2016–04709 Filed 3–3–16; 8:45 am]
Statement on Burden on Competition Electronic Comments BILLING CODE 8011–01–P
The Exchange does not believe that • Use the Commission’s Internet
the proposed rule change will impose comment form (http://www.sec.gov/
any burden on competition not rules/sro.shtml); or SMALL BUSINESS ADMINISTRATION
necessary or appropriate in furtherance • Send an email to rule-comments@ [Disaster Declaration #14641]
of the purposes of the Act. With respect sec.gov. Please include File Number SR–
to intra-market competition, the BX–2016–012 on the subject line. California Disaster #CA–00245
proposed language will apply to all Declaration of Economic Injury
Paper Comments
quoting market participants equally.
With respect to inter-market • Send paper comments in triplicate AGENCY: U.S. Small Business
competition, market participants who to Secretary, Securities and Exchange Administration.
disagree with the quote spread Commission, 100 F Street NE., ACTION: Notice.
parameters that the Exchange Washington, DC 20549–1090.
SUMMARY: This is a notice of an
establishes may choose to trade on All submissions should refer to File Economic Injury Disaster Loan (EIDL)
another options exchange. Number SR–BX–2016–012. This file declaration for the State of California,
C. Self-Regulatory Organization’s number should be included on the dated 02/25/2016.
Statement on Comments on the subject line if email is used. To help the Incident: Hazardous Ocean
Proposed Rule Change Received From Commission process and review your Conditions and Rapid Displacement of
Members, Participants, or Others comments more efficiently, please use Sand Resulting in the Closure of
only one method. The Commission will Ventura Harbor.
No written comments were either post all comments on the Commission’s Incident Period: 01/22/2016 through
solicited or received. Internet Web site (http://www.sec.gov/ 02/20/2016.
III. Date of Effectiveness of the rules/sro.shtml). Effective Date: 02/25/2016.
Proposed Rule Change and Timing for Copies of the submission, all EIDL Loan Application Deadline Date:
Commission Action subsequent amendments, all written 11/25/2016.
statements with respect to the proposed ADDRESSES: Submit completed loan
Because the foregoing proposed rule rule change that are filed with the
change does not: (i) Significantly affect applications to: U.S. Small Business
Administration, Processing And
jstallworth on DSK7TPTVN1PROD with NOTICES
7 15 U.S.C. 78s(b)(3)(a)(iii) [sic].
4 See NOM Chapter VII, Section 6 and PHLX Rule 8 17
Disbursement Center, 14925 Kingsport
CFR 240.19b–4(f)(6). In addition, Rule 19b–
1014(c)(i)(A)(1)(a). PHLX recently amended its rules 4(f)(6) requires a self-regulatory organization to give Road, Fort Worth, TX 76155.
to add the same language respecting U.S. dollar- the Commission written notice of its intent to file FOR FURTHER INFORMATION CONTACT: A.
settled foreign currency options. Securities the proposed rule change at least five business days
Exchange Act Release No. 76966 (January 22, 2016), Escobar, Office of Disaster Assistance,
prior to the date of filing of the proposed rule
81 FR 4724 (January 27, 2016) (SR–Phlx–2016–06). change, or such shorter time as designated by the U.S. Small Business Administration,
5 15 U.S.C. 78f(b).
Commission. The Exchange has satisfied this
6 15 U.S.C. 78f(b)(5). requirement. 9 17 CFR 200.30–3(a)(12).
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Document Created: 2018-02-02 15:05:52
Document Modified: 2018-02-02 15:05:52
| 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 | 81 FR 11634 |
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