81_FR_1272 81 FR 1266 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delay of Implementation of Kill Switch

81 FR 1266 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delay of Implementation of Kill Switch

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 6 (January 11, 2016)

Page Range1266-1268
FR Document2016-00252

Federal Register, Volume 81 Issue 6 (Monday, January 11, 2016)
[Federal Register Volume 81, Number 6 (Monday, January 11, 2016)]
[Notices]
[Pages 1266-1268]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-00252]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76830; File No. SR-NASDAQ-2015-163]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Delay of Implementation of Kill Switch

January 5, 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 December 23, 2015, The NASDAQ Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend the implementation timeframe for 
adopting an optional Kill Switch protection.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaq.cchwallstreet.com, at the principal office of 
the Exchange, 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 the proposal is to extend the implementation of the 
timeframe to adopt a new risk protection, a Kill Switch, applicable to 
all NOM Participants. In its rule change adopting this new risk 
protection in Chapter VI, Section 6, the Exchange stated, ``The 
Exchange proposes to implement this rule within ninety (90) days of the 
implementation date.'' \3\ The Exchange stated that it will issue an 
Options Trader Alert in advance to inform market participants of such 
date. At this time, the Exchange desires to extend the implementation 
of this rule change to 120 days from the operative date. The Exchange 
will announce the date of implementation by issuing an Options Trader 
Alert.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 75743 (August 20, 
2015), 80 FR 51850 (August 26, 2015) (SR-NASDAQ-2015-096).
---------------------------------------------------------------------------

    By way of background, the Kill Switch will allow NOM Participants 
to remove quotes and cancel open orders and prevent new order 
submission. The NASDAQ Options Kill Switch will be an optional tool 
that enables

[[Page 1267]]

Participants to initiate a message(s) \4\ to the System to: (i) 
Promptly remove quotes; and/or (ii) promptly cancel orders. 
Participants may submit a request to the System to remove/cancel quotes 
and/or orders based on certain identifiers on either a user or group 
level. Participants may elect to remove quotes and cancel orders by 
Exchange account, port, and/or badge or mnemonic (``Identifier'') or by 
a group (one or more Identifier combinations),\5\ which are provided by 
such Participant to the Exchange.\6\ Participants may not remove 
quotes/orders by symbol. The System will send an automated message to 
the Participant when a Kill Switch request has been processed by the 
Exchange's System.
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    \4\ NOM Participants will be able to utilize an interface to 
send a message to the Exchange to initiate the Kill Switch or they 
may contact the Exchange directly.
    \5\ The type of group permissible would be within a broker-
dealer. For example, this could be including but not limited to all 
market maker accounts or all order entry ports.
    \6\ Orders submitted by NOM Market Makers over Ouch to Trade 
Options (OTTO) interface will be treated as quotes for purposes of 
this rule.
---------------------------------------------------------------------------

    If the Participant selects quotes to be cancelled utilizing the 
Kill Switch, the NOM Participant must send a message to the Exchange to 
request the removal of all quotes requested for the certain specified 
Identifier(s). The NOM Participant will be unable to enter any 
additional quotes for the affected Identifier(s) until re-entry has 
been enabled pursuant to proposed section (d)(iii).\7\ If the 
Participant selects orders to be cancelled utilizing the Kill Switch, 
the NOM Participant must send a message to the Exchange to request the 
cancellation of all orders requested for the certain specified 
Identifier(s). The NOM Participant will be unable to enter additional 
orders for the affected Identifier(s) until re-entry has been enabled 
pursuant to section (d)(iii). The NOM Participant will be unable to 
enter additional quotes and/or orders for the affected Identifier(s) 
until the NOM Participant has made a request to the Exchange and 
Exchange staff has set a re-entry indicator to enable re-entry.\8\ Once 
enabled for re-entry, the System will send a Re-entry Notification 
Message to the NOM Participant. The applicable Clearing Participant for 
that NOM Participant also will be notified of the re-entry into the 
System after quotes and/or orders are removed/cancelled as a result of 
the Kill Switch, provided the Clearing Participant has requested to 
receive such notification.
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    \7\ Sweeps will also be cancelled. A sweep is a one-sided 
electronic quote submitted over the Specialized Quote Feed, which is 
the market making quoting interface.
    \8\ The NOM Participant must directly and verbally contact the 
Exchange to request the re-set.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \9\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \10\ 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 enhancing the risk protections available to Exchange 
members. The proposal promotes policy goals of the Commission which has 
encouraged execution venues, exchange and non-exchange alike, to 
enhance risk protection tools and other mechanisms to decrease risk and 
increase stability.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The delay of the implementation of NOM Rules at Chapter VI, Section 
6 will permit the Exchange an additional thirty days within which to 
implement this risk protection that will be utilized by NOM 
Participants.

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. The proposal does not impose an 
undue burden on inter-market competition because all NOM Participants 
may avail themselves of the Kill Switch, which functionality will be 
optional. The proposed rule change is meant to protect NOM Participants 
in the event the NOM Participant is suffering from a systems issue or 
from the occurrence of unusual or unexpected market activity that would 
require them to withdraw from the market in order to protect investors. 
The ability to control risk at either the user or group level will 
permit the NOM Participant to protect itself from inadvertent exposure 
to excessive risk at the each level. Reducing such risk will enable NOM 
Participants to enter quotes and orders without any fear of inadvertent 
exposure to excessive risk, which in turn will benefit investors 
through increased liquidity for the execution of their orders. Such 
increased liquidity benefits investors because they receive better 
prices and because it lowers volatility in the options market. For 
these reasons, the Exchange does not believe this proposal imposes an 
undue burden on inter-market competition, rather, the proposed rule 
change will have no impact on competition.
    The delay of the implementation of NOM Rules at Chapter VII, 
Section 6(f) will permit the Exchange additional time to implement this 
risk protection that will be utilized by NOM Participants.

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 proposed rule change does not (i) significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) 
thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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.
---------------------------------------------------------------------------

    Nasdaq requested that the Commission waive the 30-day operative 
delay. The Commission believes that waiving the 30-day operative delay 
is consistent with the protection of investors and the public interest, 
because the extension will provide the Exchange with the additional 
time it requires to implement the Kill Switch program. The Commission 
further notes that Nasdaq's proposal to adopt the Kill Switch \13\ was 
approved by the Commission \14\ and that the extension of the 
implementation period does not affect the parameters of the Kill Switch 
program. For these reasons, the Commission designates the proposed rule 
change to be operative upon filing.\15\
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    \13\ See note 3.
    \14\ See Securities Exchange Act Release No. 76123 (Oct. 9, 
2015), 80 FR 62591 (Oct. 16, 2015) (SR-NASDAQ-2015-096).
    \15\ 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).

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[[Page 1268]]

    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 Comments

     Use 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-NASDAQ-2015-163 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-NASDAQ-2015-163. 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-NASDAQ-2015-163 and should 
be submitted on or before February 1, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12) and (59).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-00252 Filed 1-8-16; 8:45 am]
BILLING CODE 8011-01-P



                                                1266                           Federal Register / Vol. 81, No. 6 / Monday, January 11, 2016 / Notices

                                                4(f)(6) thereunder.16 The Exchange                      subject line if email is used. To help the             The Commission is publishing this
                                                provided the Commission with written                    Commission process and review your                     notice to solicit comments on the
                                                notice of its intent to file the proposed               comments more efficiently, please use                  proposed rule change from interested
                                                rule change, along with a brief                         only one method. The Commission will                   persons.
                                                description and text of the proposed                    post all comments on the Commissions
                                                                                                                                                               I. Self-Regulatory Organization’s
                                                rule change, at least five business days                Internet Web site (http://www.sec.gov/
                                                                                                                                                               Statement of the Terms of Substance of
                                                prior to the date of filing the proposed                rules/sro.shtml). Copies of the
                                                                                                                                                               the Proposed Rule Change
                                                rule change, or such shorter time as                    submission, all subsequent
                                                designated by the Commission, as                        amendments, all written statements                        The Exchange proposes to extend the
                                                required by Rule 19b–4(f)(6).                           with respect to the proposed rule                      implementation timeframe for adopting
                                                   The Exchange has requested that the                  change that are filed with the                         an optional Kill Switch protection.
                                                Commission waive the thirty-day                         Commission, and all written                               The text of the proposed rule change
                                                operative delay so that the proposal may                communications relating to the                         is available on the Exchange’s Web site
                                                become operative as of January 4, 2016.                 proposed rule change between the                       at http://nasdaq.cchwallstreet.com, at
                                                The Commission believes that waiving                    Commission and any person, other than                  the principal office of the Exchange, and
                                                the thirty day delay is consistent with                 those that may be withheld from the                    at the Commission’s Public Reference
                                                the protection of investors and the                     public in accordance with the                          Room.
                                                public interest, as it will enable the                  provisions of 5 U.S.C. 552, will be                    II. Self-Regulatory Organization’s
                                                Exchange to have the new requirements                   available for Web site viewing and                     Statement of the Purpose of, and
                                                in effect at the same time as the other                 printing in the Commission’s Public                    Statutory Basis for, the Proposed Rule
                                                SROs. Therefore, the Commission                         Reference Room. Copies of such filing                  Change
                                                hereby waives the thirty-day operative                  also will be available for inspection and
                                                delay and designates the proposal                       copying at the principal office of the                    In its filing with the Commission, the
                                                operative as of January 4, 2016.17                      ISE. All comments received will be                     Exchange included statements
                                                   At any time within 60 days of the                    posted without change; the Commission                  concerning the purpose of and basis for
                                                filing of such proposed rule change, the                does not edit personal identifying                     the proposed rule change and discussed
                                                Commission summarily may                                information from submissions. You                      any comments it received on the
                                                temporarily suspend such rule change if                 should submit only information that                    proposed rule change. The text of these
                                                it appears to the Commission that such                  you wish to make available publicly. All               statements may be examined at the
                                                action is necessary or appropriate in the               submissions should refer to File                       places specified in Item IV below. The
                                                public interest, for the protection of                  Number SR–ISE Gemini-2015–28 and                       Exchange has prepared summaries, set
                                                investors, or otherwise in furtherance of               should be submitted by February 1,                     forth in sections A, B, and C below, of
                                                the purposes of the Act. If the                         2016.                                                  the most significant aspects of such
                                                Commission takes such action, the                                                                              statements.
                                                                                                          For the Commission, by the Division of
                                                Commission shall institute proceedings                  Trading and Markets, pursuant to delegated             A. Self-Regulatory Organization’s
                                                to determine whether the proposed rule                  authority.18                                           Statement of the Purpose of, and
                                                should be approved or disapproved.                      Robert W. Errett,                                      Statutory Basis for, the Proposed Rule
                                                IV. Solicitation of Comments                            Deputy Secretary.                                      Change
                                                  Interested persons are invited to                     [FR Doc. 2016–00247 Filed 1–8–16; 8:45 am]
                                                                                                                                                               1. Purpose
                                                submit written data, views, and                         BILLING CODE 8011–01–P
                                                                                                                                                                  The purpose of the proposal is to
                                                arguments concerning the foregoing,                                                                            extend the implementation of the
                                                including whether the proposed rule                                                                            timeframe to adopt a new risk
                                                change is consistent with the Act.                      SECURITIES AND EXCHANGE
                                                                                                        COMMISSION                                             protection, a Kill Switch, applicable to
                                                Comments may be submitted by any of                                                                            all NOM Participants. In its rule change
                                                the following methods:                                  [Release No. 34–76830; File No. SR–
                                                                                                                                                               adopting this new risk protection in
                                                                                                        NASDAQ–2015–163]
                                                Electronic Comments                                                                                            Chapter VI, Section 6, the Exchange
                                                  • Use the Commission’s Internet                       Self-Regulatory Organizations; The                     stated, ‘‘The Exchange proposes to
                                                comment form http://www.sec.gov/                        NASDAQ Stock Market LLC; Notice of                     implement this rule within ninety (90)
                                                rules/sro.shtml; or                                     Filing and Immediate Effectiveness of                  days of the implementation date.’’ 3 The
                                                  • Send an Email to rule-                              Proposed Rule Change To Delay of                       Exchange stated that it will issue an
                                                comments@sec.gov. Please include File                   Implementation of Kill Switch                          Options Trader Alert in advance to
                                                No. SR–ISE Gemini–2015–28 on the                                                                               inform market participants of such date.
                                                                                                        January 5, 2016.                                       At this time, the Exchange desires to
                                                subject line.
                                                                                                           Pursuant to Section 19(b)(1) of the                 extend the implementation of this rule
                                                Paper Comments                                          Securities Exchange Act of 1934                        change to 120 days from the operative
                                                   • Send paper comments in triplicate                  (‘‘Act’’),1 and Rule 19b–4 thereunder,2                date. The Exchange will announce the
                                                to Brent J. Fields, Secretary, Securities               notice is hereby given that, on December               date of implementation by issuing an
                                                and Exchange Commission, 100 F Street                   23, 2015, The NASDAQ Stock Market                      Options Trader Alert.
                                                NE., Washington, DC 20549–1090.                         LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed                    By way of background, the Kill
                                                                                                        with the Securities and Exchange                       Switch will allow NOM Participants to
                                                All submissions should refer to File
ebenthall on DSK6SPTVN1PROD with NOTICES




                                                                                                        Commission (‘‘SEC’’ or ‘‘Commission’’)                 remove quotes and cancel open orders
                                                Number SR–ISE Gemini–2015–28. This
                                                                                                        the proposed rule change as described                  and prevent new order submission. The
                                                file number should be included on the
                                                                                                        in Items I and II below, which Items                   NASDAQ Options Kill Switch will be
                                                  16 17 CFR 240.19b–4(f)(6).
                                                                                                        have been prepared by the Exchange.                    an optional tool that enables
                                                  17 For purposes of waiving the 30-day operative
                                                                                                          18 17 CFR 200.30–3(a)(12).
                                                delay, the Commission has considered the proposed                                                                3 See Securities Exchange Act Release No. 75743
                                                                                                          1 15 U.S.C. 78s(b)(1).
                                                rule’s impact on efficiency, competition, and capital                                                          (August 20, 2015), 80 FR 51850 (August 26, 2015)
                                                formation. See 15 U.S.C. 78c(f).                          2 17 CFR 240.19b–4.                                  (SR–NASDAQ–2015–096).



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                                                                               Federal Register / Vol. 81, No. 6 / Monday, January 11, 2016 / Notices                                                           1267

                                                Participants to initiate a message(s) 4 to              Clearing Participant has requested to                    market competition, rather, the
                                                the System to: (i) Promptly remove                      receive such notification.                               proposed rule change will have no
                                                quotes; and/or (ii) promptly cancel                                                                              impact on competition.
                                                                                                        2. Statutory Basis
                                                orders. Participants may submit a                                                                                  The delay of the implementation of
                                                request to the System to remove/cancel                     The Exchange believes that its                        NOM Rules at Chapter VII, Section 6(f)
                                                quotes and/or orders based on certain                   proposal is consistent with Section 6(b)                 will permit the Exchange additional
                                                identifiers on either a user or group                   of the Act 9 in general, and furthers the                time to implement this risk protection
                                                level. Participants may elect to remove                 objectives of Section 6(b)(5) of the Act 10              that will be utilized by NOM
                                                quotes and cancel orders by Exchange                    in particular, in that it is designed to                 Participants.
                                                account, port, and/or badge or                          promote just and equitable principles of
                                                mnemonic (‘‘Identifier’’) or by a group                 trade, to remove impediments to and                      C. Self-Regulatory Organization’s
                                                (one or more Identifier combinations),5                 perfect the mechanism of a free and                      Statement on Comments on the
                                                which are provided by such Participant                  open market and a national market                        Proposed Rule Change Received From
                                                to the Exchange.6 Participants may not                  system, and, in general to protect                       Members, Participants, or Others
                                                remove quotes/orders by symbol. The                     investors and the public interest, by                      No written comments were either
                                                System will send an automated message                   enhancing the risk protections available                 solicited or received.
                                                to the Participant when a Kill Switch                   to Exchange members. The proposal
                                                request has been processed by the                       promotes policy goals of the                             III. Date of Effectiveness of the
                                                Exchange’s System.                                      Commission which has encouraged                          Proposed Rule Change and Timing for
                                                   If the Participant selects quotes to be              execution venues, exchange and non-                      Commission Action
                                                cancelled utilizing the Kill Switch, the                exchange alike, to enhance risk                             Because the proposed rule change
                                                NOM Participant must send a message                     protection tools and other mechanisms                    does not (i) significantly affect the
                                                to the Exchange to request the removal                  to decrease risk and increase stability.                 protection of investors or the public
                                                of all quotes requested for the certain                    The delay of the implementation of
                                                                                                                                                                 interest; (ii) impose any significant
                                                specified Identifier(s). The NOM                        NOM Rules at Chapter VI, Section 6 will
                                                                                                                                                                 burden on competition; and (iii) become
                                                Participant will be unable to enter any                 permit the Exchange an additional thirty
                                                                                                                                                                 operative for 30 days from the date on
                                                additional quotes for the affected                      days within which to implement this
                                                                                                                                                                 which it was filed, or such shorter time
                                                Identifier(s) until re-entry has been                   risk protection that will be utilized by
                                                                                                                                                                 as the Commission may designate if
                                                enabled pursuant to proposed section                    NOM Participants.
                                                                                                                                                                 consistent with the protection of
                                                (d)(iii).7 If the Participant selects orders            B. Self-Regulatory Organization’s                        investors and the public interest, the
                                                to be cancelled utilizing the Kill Switch,              Statement on Burden on Competition                       proposed rule change has become
                                                the NOM Participant must send a                            The Exchange does not believe that                    effective pursuant to Section 19(b)(3)(A)
                                                message to the Exchange to request the                  the proposed rule change will impose                     of the Act 11 and Rule 19b–4(f)(6)
                                                cancellation of all orders requested for                any burden on competition not                            thereunder.12
                                                the certain specified Identifier(s). The                necessary or appropriate in furtherance                     Nasdaq requested that the
                                                NOM Participant will be unable to enter                 of the purposes of the Act. The proposal                 Commission waive the 30-day operative
                                                additional orders for the affected                      does not impose an undue burden on                       delay. The Commission believes that
                                                Identifier(s) until re-entry has been                   inter-market competition because all                     waiving the 30-day operative delay is
                                                enabled pursuant to section (d)(iii). The               NOM Participants may avail themselves                    consistent with the protection of
                                                NOM Participant will be unable to enter                 of the Kill Switch, which functionality                  investors and the public interest,
                                                additional quotes and/or orders for the                 will be optional. The proposed rule                      because the extension will provide the
                                                affected Identifier(s) until the NOM                    change is meant to protect NOM                           Exchange with the additional time it
                                                Participant has made a request to the                   Participants in the event the NOM                        requires to implement the Kill Switch
                                                Exchange and Exchange staff has set a                   Participant is suffering from a systems                  program. The Commission further notes
                                                re-entry indicator to enable re-entry.8                 issue or from the occurrence of unusual                  that Nasdaq’s proposal to adopt the Kill
                                                Once enabled for re-entry, the System                   or unexpected market activity that                       Switch 13 was approved by the
                                                will send a Re-entry Notification                       would require them to withdraw from                      Commission 14 and that the extension of
                                                Message to the NOM Participant. The                     the market in order to protect investors.                the implementation period does not
                                                applicable Clearing Participant for that                The ability to control risk at either the                affect the parameters of the Kill Switch
                                                NOM Participant also will be notified of                user or group level will permit the NOM                  program. For these reasons, the
                                                the re-entry into the System after quotes               Participant to protect itself from                       Commission designates the proposed
                                                and/or orders are removed/cancelled as                  inadvertent exposure to excessive risk at                rule change to be operative upon
                                                a result of the Kill Switch, provided the               the each level. Reducing such risk will                  filing.15
                                                                                                        enable NOM Participants to enter quotes
                                                   4 NOM Participants will be able to utilize an                                                                   11 15  U.S.C. 78s(b)(3)(A).
                                                interface to send a message to the Exchange to
                                                                                                        and orders without any fear of                             12 17  CFR 240.19b–4(f)(6). In addition, Rule 19b–
                                                initiate the Kill Switch or they may contact the        inadvertent exposure to excessive risk,                  4(f)(6) requires a self-regulatory organization to give
                                                Exchange directly.                                      which in turn will benefit investors                     the Commission written notice of its intent to file
                                                   5 The type of group permissible would be within
                                                                                                        through increased liquidity for the                      the proposed rule change at least five business days
                                                a broker-dealer. For example, this could be             execution of their orders. Such                          prior to the date of filing of the proposed rule
                                                including but not limited to all market maker                                                                    change, or such shorter time as designated by the
                                                accounts or all order entry ports.                      increased liquidity benefits investors                   Commission. The Exchange has satisfied this
                                                                                                        because they receive better prices and
ebenthall on DSK6SPTVN1PROD with NOTICES




                                                   6 Orders submitted by NOM Market Makers over                                                                  requirement.
                                                Ouch to Trade Options (OTTO) interface will be          because it lowers volatility in the                        13 See note 3.

                                                treated as quotes for purposes of this rule.            options market. For these reasons, the                     14 See Securities Exchange Act Release No. 76123
                                                   7 Sweeps will also be cancelled. A sweep is a one-                                                            (Oct. 9, 2015), 80 FR 62591 (Oct. 16, 2015) (SR–
                                                                                                        Exchange does not believe this proposal
                                                sided electronic quote submitted over the                                                                        NASDAQ–2015–096).
                                                Specialized Quote Feed, which is the market             imposes an undue burden on inter-                          15 For purposes only of waiving the 30-day
                                                making quoting interface.                                                                                        operative delay, the Commission has also
                                                   8 The NOM Participant must directly and verbally       9 15   U.S.C. 78f(b).                                  considered the proposed rule’s impact on
                                                contact the Exchange to request the re-set.               10 15   U.S.C. 78f(b)(5).                                                                           Continued




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                                                1268                           Federal Register / Vol. 81, No. 6 / Monday, January 11, 2016 / Notices

                                                   At any time within 60 days of the                    office of the Exchange. All comments                   II. Self-Regulatory Organization’s
                                                filing of the proposed rule change, the                 received will be posted without change;                Statement of the Purpose of, and
                                                Commission summarily may                                the Commission does not edit personal                  Statutory Basis for, the Proposed Rule
                                                temporarily suspend such rule change if                 identifying information from                           Change
                                                it appears to the Commission that such                  submissions. You should submit only                       In its filing with the Commission, the
                                                action is necessary or appropriate in the               information that you wish to make                      Exchange included statements
                                                public interest, for the protection of                  available publicly. All submissions                    concerning the purpose of and basis for
                                                investors, or otherwise in furtherance of               should refer to File Number SR–                        the proposed rule change and discussed
                                                the purposes of the Act. If the                         NASDAQ–2015–163 and should be                          any comments it received on the
                                                Commission takes such action, the                       submitted on or before February 1, 2016.               proposed rule change. The text of these
                                                Commission shall institute proceedings                    For the Commission, by the Division of               statements may be examined at the
                                                to determine whether the proposed rule                  Trading and Markets, pursuant to delegated             places specified in Item IV below. The
                                                should be approved or disapproved.                      authority.16                                           Exchange has prepared summaries, set
                                                IV. Solicitation of Comments                            Robert W. Errett,                                      forth in sections A, B, and C below, of
                                                                                                                                                               the most significant aspects of such
                                                  Interested persons are invited to                     Deputy Secretary.
                                                                                                                                                               statements.
                                                submit written data, views and                          [FR Doc. 2016–00252 Filed 1–8–16; 8:45 am]
                                                arguments concerning the foregoing,                     BILLING CODE 8011–01–P                                 A. Self-Regulatory Organization’s
                                                including whether the proposed rule                                                                            Statement of the Purpose of, and
                                                change is consistent with the Act.                                                                             Statutory Basis for, the Proposed Rule
                                                Comments may be submitted by any of                     SECURITIES AND EXCHANGE                                Change
                                                the following methods:                                  COMMISSION                                             1. Purpose
                                                Electronic Comments                                                                                               The purpose of the proposed rule
                                                                                                        [Release No. 34–76828; File No. SR–CBOE–
                                                  • Use the Commission’s Internet                                                                              change is to amend fees for the BBO
                                                                                                        2015–115]                                              Data Feed and Book Depth Data Feed.
                                                comment form (http://www.sec.gov/
                                                rules/sro.shtml); or                                                                                           These data feeds are made available by
                                                                                                        Self-Regulatory Organizations;
                                                  • Send an email to rule-                              Chicago Board Options Exchange,
                                                                                                                                                               CBOE’s affiliate Market Data Express,
                                                comments@sec.gov. Please include File                                                                          LLC (‘‘MDX’’).3
                                                                                                        Incorporated; Notice of Filing and
                                                Number SR–NASDAQ–2015–163 on the                        Immediate Effectiveness of a Proposed                  BBO and Book Depth Data Feeds
                                                subject line.                                           Rule Change Relating to Fees for                          BBO Data Feed: The BBO Data Feed
                                                Paper Comments                                          Certain CBOE Real-Time Data Feeds                      is a real-time, low latency data feed that
                                                   • Send paper comments in triplicate                  January 5, 2016.
                                                                                                                                                               includes the following content: (i)
                                                to Secretary, Securities and Exchange                                                                          Outstanding quotes and standing orders
                                                Commission, 100 F Street NE.,                              Pursuant to Section 19(b)(1) of the                 at the best available price level on each
                                                Washington, DC 20549–1090.                              Securities Exchange Act of 1934                        side of the market, with aggregate size
                                                All submissions should refer to File                    (‘‘Act’’),1 and Rule 19b–4 thereunder,2                (‘‘BBO data’’), and last sale data; 4 (ii)
                                                Number SR–NASDAQ–2015–163. This                         notice is hereby given that, on December               totals of customer versus non-customer
                                                file number should be included on the                   22, 2015, Chicago Board Options                        contracts at the BBO, (iii) All-or-None
                                                subject line if email is used. To help the              Exchange, Incorporated (the ‘‘Exchange’’               contingency orders priced better than or
                                                Commission process and review your                      or ‘‘CBOE’’) filed with the Securities                 equal to the BBO, (iv) BBO and last sale
                                                comments more efficiently, please use                   and Exchange Commission                                data for complex strategies (e.g.,
                                                only one method. The Commission will                    (‘‘Commission’’) the proposed rule                     spreads, straddles, buy-writes, etc.); (v)
                                                post all comments on the Commission’s                   change as described in Items I, II, and                expected opening price (‘‘EOP’’) and
                                                Internet Web site (http://www.sec.gov/                  III below, which Items have been                       expected opening size (‘‘EOS’’)
                                                rules/sro.shtml). Copies of the                         prepared by the Exchange. The                          information that is disseminated prior to
                                                submission, all subsequent                              Commission is publishing this notice to                the opening of the market and during
                                                amendments, all written statements                      solicit comments on the proposed rule                  trading rotations, (vi) end-of-day
                                                with respect to the proposed rule                       change from interested persons.                        (‘‘EOD’’) summary messages that are
                                                                                                                                                               disseminated after the close of a trading
                                                change that are filed with the                          I. Self-Regulatory Organization’s                      session that include summary
                                                Commission, and all written                             Statement of the Terms of Substance of
                                                communications relating to the                          the Proposed Rule Change                                  3 MDX also offers real-time Complex Order Book
                                                proposed rule change between the                                                                               (‘‘COB’’) and Flexible Exchange (‘‘FLEX’’) Options
                                                Commission and any person, other than                      Chicago Board Options Exchange,                     Data Feeds. The COB Data Feed includes data
                                                those that may be withheld from the                     Incorporated (the ‘‘Exchange’’ or                      regarding the Exchange’s Complex Order Book and
                                                                                                        ‘‘CBOE’’) proposes to amend fees for                   related complex order information. The COB Data
                                                public in accordance with the                                                                                  Feed includes BBO, Book Depth and last sale data
                                                provisions of 5 U.S.C. 552, will be                     certain CBOE real-time data feeds. The                 for all CBOE-traded complex order strategies and
                                                available for Web site viewing and                      text of the proposed rule change is                    identifies customer orders and trades. The
                                                printing in the Commission’s Public                     available on the Exchange’s Web site                   Exchange is not proposing to amend fees for the
                                                                                                        (http://www.cboe.com/AboutCBOE/                        COB Data Feed at this time. The FLEX Options Data
                                                Reference Room, 100 F Street NE.,                                                                              Feed includes BBO and last sale data for FLEX
                                                                                                        CBOELegalRegulatoryHome.aspx), at
ebenthall on DSK6SPTVN1PROD with NOTICES




                                                Washington, DC 20549, on official                                                                              options traded on the CBOE FLEX Hybrid Trading
                                                business days between the hours of                      the Exchange’s Office of the Secretary,                System, including BBO and last sale data for FLEX
                                                10:00 a.m. and 3:00 p.m. Copies of the                  and at the Commission’s Public                         complex strategies. The FLEX Options Data Feed is
                                                                                                        Reference Room.                                        currently made available at no charge. The
                                                filing also will be available for                                                                              Exchange is not proposing to establish fees for the
                                                inspection and copying at the principal                                                                        FLEX Options Data Feed at this time.
                                                                                                          16 17 CFR 200.30–3(a)(12) and (59).                     4 ‘‘Best bid and offer’’ or ‘‘BBO’’ data is sometimes
                                                                                                          1 15 U.S.C. 78s(b)(1).
                                                efficiency, competition, and capital formation. See                                                            referred to as ‘‘top-of-book’’ data. Data with respect
                                                15 U.S.C. 78c(f).                                         2 17 CFR 240.19b–4.                                  to executed trades is referred to as ‘‘last sale’’ data.



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Document Created: 2016-01-16 01:04:30
Document Modified: 2016-01-16 01:04:30
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation81 FR 1266 

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