81 FR 14910 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule To Amend the Fees Schedule
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 53 (March 18, 2016)
Federal Register Volume 81, Issue 53 (March 18, 2016)
| Page Range | 14910-14912 | |
| FR Document | 2016-06092 |
[Federal Register Volume 81, Number 53 (Friday, March 18, 2016)] [Notices] [Pages 14910-14912] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-06092] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77365; File No. SR-CBOE-2016-018] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule To Amend the Fees Schedule March 14, 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 March 11, 2016, Chicago Board Options Exchange, Incorporated (``Exchange'' or ``CBOE'') filed with the Securities and Exchange Commission (``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 the Fees Schedule. 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 Exchange proposes to amend the Fees Schedule.\3\ --------------------------------------------------------------------------- \3\ The Exchange initially filed the proposed fee changes on February 29, 2016 (SR-CBOE-2016-015). On March 11, 2016, the Exchange withdrew that filing and submitted this filing. --------------------------------------------------------------------------- On March 2, 2015 and March 9, 2015, the Exchange commenced Extended Trading Hours \4\ (``ETH'') for VIX and SPX/SPXW options, respectively. The Exchange also established fees for the ETH session as well as adopted a rebate for Lead Market-Markers (``LMMs'').\5\ --------------------------------------------------------------------------- \4\ The Extended Trading Hours session is from 2:00 a.m. to 8:15 a.m. Chicago time, Monday through Friday. \5\ Pursuant to subparagraph (e)(iii)(A) of Rule 6.1A (Extended Trading Hours), the Exchange may approve one or more Market-Makers to act as LMMs in each class during Extended Trading Hours in accordance with Rule 8.15A for terms of at least one month. On September 22, 2014, the Exchange issued Regulatory Circular RG14- 134, which announced that the Exchange had appointed 3 LMMs in SPX options and 3 LMMs in VIX options during ETH. The LMM appointments are effective for a one-year period and began on the launch date for ETH trading of the applicable class. On February 24, 2016, the Exchange issued Regulatory Circular RG16-038, which announced that the Exchange made new LMM appointments for a one-year period beginning after the current one-year period ends. --------------------------------------------------------------------------- By way of background, ETH LMMs, like any ETH Market-Maker, must maintain continuous two-sided quotes in 60% of the series with less than nine months to expiration in their appointed products for at least 90% of the time they are quoting during ETH (to be determined on a monthly basis) and satisfy all other Market-Maker obligations set forth in Rule 8.7 during ETH (see CBOE Rule 8.7). Additionally, for SPX and VIX, if an LMM (1) provides continuous electronic quotes in at least the lesser of 99% of the non-adjusted series or 100% of the non- adjusted series minus one call-put pair in an ETH allocated class (excluding intra-day add-on series on the day during which such series are added for trading) during ETH in a given month and (2) ensures an opening of the same percentage of series by 2:05 a.m. for at least 90% of the trading days during ETH in a given month, the LMM will receive a rebate for that month and will receive a pro-rata share of a compensation pool equal to $25,000 times the number of LMMs in that class. For example, if three LMMs are appointed in SPX, a compensation pool will be established each month totaling $75,000. If each LMM meets the heightened continuous quoting standard in SPX during a month, each will [[Page 14911]] receive $25,000. If two LMMs meet the heightened continuous quoting standard in SPX during a month, those two LMMs would each receive $37,500 and the third LMM would receive nothing. If only one LMM meets the heightened continuous quoting standard in SPX during a month, that LMM would receive $75,000 and the other two would receive nothing. The Exchange proposes to reduce the rebate that the LMMs would receive if they meet the heighted quoting standard effective March 2, 2016 for VIX LMMs and March 9, 2016 for SPX LMMs (which dates correspond to the beginning of the new appointment term for LMMs). Specifically, the Exchange proposes to provide that if an LMM meets the heightened quoting standard in a month, the LMM will receive a pro-rata share of a compensation pool equal to $15,000 times the number of LMMs in that class.\6\ Accordingly, under the proposed new rebate amount, if three LMMs are appointed in SPX, a compensation pool will be established each month totaling $45,000. If each LMM meets the heightened continuous quoting standard in SPX during a month, each will receive $15,000. If two LMMs meet the heightened continuous quoting standard in SPX during a month, those two LMMs would each receive $22,500 and the third LMM would receive nothing. If only one LMM meets the heightened continuous quoting standard in SPX during a month, that LMM would receive $45,000 and the other two would receive nothing. The Exchange proposes to replace the current example in Footnote 38 with the example described above. The Exchange notes that although it is reducing the rebate, it still believes the amount provided will incent appointed LMMs to increase liquidity during ETH. --------------------------------------------------------------------------- \6\ The compensation pool equal to $25,000 times the number of LMMs in a class remained in effect through March 1, 2016 for VIX and March 8, 2016 for SPX, which dates correspond to the end of the current appointment term. In other words, the three previous LMMs were eligible to receive a share of a $75,000 compensation pool, prorated through the end of their appointment, and the three new LMMs are eligible to receive a share of a $45,000 compensation pool (which will be prorated for the month of March 2016). --------------------------------------------------------------------------- Additionally, the Exchange proposes, if an appointment begins after the first [sic] day of the month or ends prior to the last [sic] day of the month, the amount of the rebate will be prorated for that month.\7\ For example, the appointments for the original LMMs in SPX ended on March 8, 2016, and the new appointments began on March 9, 2016. If the three previous LMMs each satisfied the heightened continuous quoting standard through March 8, they will each receive a pro-rata share of a $75,000 compensation pool, which pool will be prorated based on the number of trading days through March 8. Similarly, if the three new LMMs (whose appointments began on March 9) each satisfy the heightened continuous quoting standard during the period of March 9 through March 31, they will each receive a pro-rata share of a $45,000 compensation pool, which pool will be prorated based on the remaining trading days in March. --------------------------------------------------------------------------- \7\ If an appointment begins after the first trading day of the month, the compensation pool will be prorated based on the remaining trading days in the calendar month. If an appointment ends prior to the last trading day of the month, the compensation pool will be prorated based on the number of trading days in the calendar month the appointment was in effect. --------------------------------------------------------------------------- The proposed rule change also makes nonsubstantive changes to delete two apostrophes inadvertently included in this fee provision. 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.\8\ Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \9\ 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 Section 6(b)(4) of the Act,\10\ which requires that Exchange rules provide for the equitable allocation of reasonable dues, fees, and other charges among its Trading Permit Holders and other persons using its facilities. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78f(b). \9\ 15 U.S.C. 78f(b)(5). \10\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- The Exchange believes it is reasonable, equitable and not unfairly discriminatory to offer LMMs that meet a certain heightened quoting standard (described above) a pro-rata share of a compensation pool equal to $15,000 times the number of LMMs in that class given the potential added costs that an LMM may undertake in order to satisfy that heightened quoting standard. Additionally, the Exchange believes that the proposed amount is reasonable, because although it is less than previously offered, appointed LMMs that meet the heightened quoting standard still receive a rebate for doing so. The Exchange also notes that if an LMM does not satisfy the heightened quoting standard, then it will not receive the proposed rebate. The Exchange believes it is equitable and not unfairly discriminatory to only offer the rebate to LMMs because it benefits all market participants in ETH to encourage LMMs to satisfy the heightened quoting standards, which may increase liquidity during those hours and provide more trading opportunities and tighter spreads. The Exchange believes it is reasonable for the previous rebate amount to have remained in place through the end of the appointment term for the previous LMMs so that the same rebate amount applied through the entire term for those LMMs. Additionally, the Exchange believes it is reasonable to prorate the amount of the compensation pool if an LMM appointment only covered part of a month so that the amount of any rebate made to LMMs corresponds to the number of trading days on which it was quoting during that month. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule changes will impose any burden on competition that are not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because, while the LMM rebate is offered only to certain market participants (i.e., LMMs that meet a heightened quoting standard), those market participants must meet heightened quoting standards and the rebate encourages those market participants to bring liquidity to the Exchange during ETH (which benefits all market participants). The Exchange does not believe that the proposed rule changes will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because SPX/SPXW and VIX, are proprietary products that will only be traded on CBOE. To the extent that the proposed changes make CBOE a more attractive marketplace for market [[Page 14912]] participants at other exchanges, such market participants are welcome to become CBOE market participants. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Other The Exchange neither solicited nor received comments on the proposed rule change. II. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \11\ and paragraph (f) of Rule 19b-4 \12\ thereunder. 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 will institute proceedings to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \11\ 15 U.S.C. 78s(b)(3)(A). \12\ 17 CFR 240.19b-4(f). --------------------------------------------------------------------------- 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-CBOE-2016-018 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CBOE-2016-018. 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-CBOE-2016-018, and should be submitted on or before April 8, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\13\ Robert W. Errett, Deputy Secretary. --------------------------------------------------------------------------- \13\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- [FR Doc. 2016-06092 Filed 3-17-16; 8:45 am] BILLING CODE 8011-01-P
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IV. Solicitation of Comments For the Commission, pursuant to delegated A. Self-Regulatory Organization’s
authority.22 Statement of the Purpose of, and
Interested persons are invited to Robert W. Errett, Statutory Basis for, the Proposed Rule
submit written data, views, and Deputy Secretary. Change
arguments concerning the foregoing, [FR Doc. 2016–06091 Filed 3–17–16; 8:45 am]
including whether the proposed rule 1. Purpose
BILLING CODE 8011–01–P
change is consistent with the Act. The Exchange proposes to amend the
Comments may be submitted by any of Fees Schedule.3
the following methods: SECURITIES AND EXCHANGE On March 2, 2015 and March 9, 2015,
COMMISSION the Exchange commenced Extended
Electronic Comments Trading Hours 4 (‘‘ETH’’) for VIX and
[Release No. 34–77365; File No. SR–CBOE– SPX/SPXW options, respectively. The
• Use the Commission’s Internet 2016–018] Exchange also established fees for the
comment form (http://www.sec.gov/ ETH session as well as adopted a rebate
rules/sro.shtml); or Self-Regulatory Organizations; for Lead Market-Markers (‘‘LMMs’’).5
Chicago Board Options Exchange,
• Send an email to rule-comments@ By way of background, ETH LMMs,
Incorporated; Notice of Filing and like any ETH Market-Maker, must
sec.gov. Please include File Number SR–
Immediate Effectiveness of a Proposed maintain continuous two-sided quotes
MSRB–2016–04 on the subject line. Rule To Amend the Fees Schedule in 60% of the series with less than nine
Paper Comments March 14, 2016. months to expiration in their appointed
Pursuant to Section 19(b)(1) of the products for at least 90% of the time
• Send paper comments in triplicate they are quoting during ETH (to be
to Secretary, Securities and Exchange Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 determined on a monthly basis) and
Commission, 100 F Street NE., satisfy all other Market-Maker
Washington, DC 20549. notice is hereby given that on March 11,
2016, Chicago Board Options Exchange, obligations set forth in Rule 8.7 during
All submissions should refer to File Incorporated (‘‘Exchange’’ or ‘‘CBOE’’) ETH (see CBOE Rule 8.7). Additionally,
Number SR–MSRB–2016–04. This file filed with the Securities and Exchange for SPX and VIX, if an LMM (1)
number should be included on the Commission (‘‘Commission’’) the provides continuous electronic quotes
subject line if email is used. To help the proposed rule change as described in in at least the lesser of 99% of the non-
Commission process and review your Items I, II, and III below, which Items adjusted series or 100% of the non-
comments more efficiently, please use have been prepared by the Exchange. adjusted series minus one call-put pair
The Commission is publishing this in an ETH allocated class (excluding
only one method. The Commission will
notice to solicit comments on the intra-day add-on series on the day
post all comments on the Commission’s
proposed rule change from interested during which such series are added for
Internet Web site (http://www.sec.gov/ trading) during ETH in a given month
rules/sro.shtml). Copies of the persons.
and (2) ensures an opening of the same
submission, all subsequent I. Self-Regulatory Organization’s percentage of series by 2:05 a.m. for at
amendments, all written statements Statement of the Terms of Substance of least 90% of the trading days during
with respect to the proposed rule the Proposed Rule Change ETH in a given month, the LMM will
change that are filed with the The Exchange proposes to amend the receive a rebate for that month and will
Commission, and all written Fees Schedule. The text of the proposed receive a pro-rata share of a
communications relating to the rule change is available on the compensation pool equal to $25,000
proposed rule change between the Exchange’s Web site (http:// times the number of LMMs in that class.
Commission and any person, other than www.cboe.com/AboutCBOE/ For example, if three LMMs are
those that may be withheld from the CBOELegalRegulatoryHome.aspx), at appointed in SPX, a compensation pool
public in accordance with the the Exchange’s Office of the Secretary, will be established each month totaling
provisions of 5 U.S.C. 552, will be and at the Commission’s Public $75,000. If each LMM meets the
available for Web site viewing and Reference Room. heightened continuous quoting standard
printing in the Commission’s Public in SPX during a month, each will
II. Self-Regulatory Organization’s
Reference Room, 100 F Street NE.,
Statement of the Purpose of, and 3 The Exchange initially filed the proposed fee
Washington, DC 20549 on official
Statutory Basis for, the Proposed Rule changes on February 29, 2016 (SR–CBOE–2016–
business days between the hours of Change 015). On March 11, 2016, the Exchange withdrew
10:00 a.m. and 3:00 p.m. Copies of the that filing and submitted this filing.
filing also will be available for In its filing with the Commission, the 4 The Extended Trading Hours session is from
inspection and copying at the principal Exchange included statements 2:00 a.m. to 8:15 a.m. Chicago time, Monday
concerning the purpose of and basis for through Friday.
office of the MSRB. All comments 5 Pursuant to subparagraph (e)(iii)(A) of Rule 6.1A
received will be posted without change; the proposed rule change and discussed
(Extended Trading Hours), the Exchange may
any comments it received on the
the Commission does not edit personal approve one or more Market-Makers to act as LMMs
proposed rule change. The text of these in each class during Extended Trading Hours in
identifying information from
statements may be examined at the accordance with Rule 8.15A for terms of at least one
submissions. You should submit only
asabaliauskas on DSK3SPTVN1PROD with NOTICES
places specified in Item IV below. The month. On September 22, 2014, the Exchange
information that you wish to make Exchange has prepared summaries, set
issued Regulatory Circular RG14–134, which
available publicly. All submissions announced that the Exchange had appointed 3
forth in sections A, B, and C below, of LMMs in SPX options and 3 LMMs in VIX options
should refer to File Number SR–MSRB– the most significant aspects of such during ETH. The LMM appointments are effective
2016–04 and should be submitted on or statements. for a one-year period and began on the launch date
before April 8, 2016. for ETH trading of the applicable class. On February
24, 2016, the Exchange issued Regulatory Circular
22 17 CFR 200.30–3(a)(12). RG16–038, which announced that the Exchange
1 15 U.S.C. 78s(b)(1). made new LMM appointments for a one-year period
2 17 CFR 240.19b–4. beginning after the current one-year period ends.
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receive $25,000. If two LMMs meet the appointments for the original LMMs in given the potential added costs that an
heightened continuous quoting standard SPX ended on March 8, 2016, and the LMM may undertake in order to satisfy
in SPX during a month, those two new appointments began on March 9, that heightened quoting standard.
LMMs would each receive $37,500 and 2016. If the three previous LMMs each Additionally, the Exchange believes that
the third LMM would receive nothing. satisfied the heightened continuous the proposed amount is reasonable,
If only one LMM meets the heightened quoting standard through March 8, they because although it is less than
continuous quoting standard in SPX will each receive a pro-rata share of a previously offered, appointed LMMs
during a month, that LMM would $75,000 compensation pool, which pool that meet the heightened quoting
receive $75,000 and the other two will be prorated based on the number of standard still receive a rebate for doing
would receive nothing. trading days through March 8. so. The Exchange also notes that if an
The Exchange proposes to reduce the Similarly, if the three new LMMs LMM does not satisfy the heightened
rebate that the LMMs would receive if (whose appointments began on March 9) quoting standard, then it will not
they meet the heighted quoting standard each satisfy the heightened continuous receive the proposed rebate. The
effective March 2, 2016 for VIX LMMs quoting standard during the period of Exchange believes it is equitable and not
and March 9, 2016 for SPX LMMs March 9 through March 31, they will unfairly discriminatory to only offer the
(which dates correspond to the each receive a pro-rata share of a rebate to LMMs because it benefits all
beginning of the new appointment term $45,000 compensation pool, which pool market participants in ETH to encourage
for LMMs). Specifically, the Exchange will be prorated based on the remaining LMMs to satisfy the heightened quoting
proposes to provide that if an LMM trading days in March. standards, which may increase liquidity
meets the heightened quoting standard The proposed rule change also makes during those hours and provide more
in a month, the LMM will receive a pro- nonsubstantive changes to delete two trading opportunities and tighter
rata share of a compensation pool equal apostrophes inadvertently included in spreads. The Exchange believes it is
to $15,000 times the number of LMMs this fee provision. reasonable for the previous rebate
in that class.6 Accordingly, under the amount to have remained in place
proposed new rebate amount, if three 2. Statutory Basis through the end of the appointment
LMMs are appointed in SPX, a The Exchange believes the proposed term for the previous LMMs so that the
compensation pool will be established rule change is consistent with the same rebate amount applied through the
each month totaling $45,000. If each Securities Exchange Act of 1934 (the entire term for those LMMs.
LMM meets the heightened continuous ‘‘Act’’) and the rules and regulations Additionally, the Exchange believes it is
quoting standard in SPX during a thereunder applicable to the Exchange reasonable to prorate the amount of the
month, each will receive $15,000. If two and, in particular, the requirements of compensation pool if an LMM
LMMs meet the heightened continuous Section 6(b) of the Act.8 Specifically, appointment only covered part of a
quoting standard in SPX during a the Exchange believes the proposed rule month so that the amount of any rebate
month, those two LMMs would each change is consistent with the Section made to LMMs corresponds to the
receive $22,500 and the third LMM 6(b)(5) 9 requirements that the rules of number of trading days on which it was
would receive nothing. If only one LMM an exchange be designed to prevent quoting during that month.
meets the heightened continuous fraudulent and manipulative acts and
quoting standard in SPX during a B. Self-Regulatory Organization’s
practices, to promote just and equitable Statement on Burden on Competition
month, that LMM would receive principles of trade, to foster cooperation
$45,000 and the other two would and coordination with persons engaged The Exchange does not believe that
receive nothing. The Exchange proposes in regulating, clearing, settling, the proposed rule changes will impose
to replace the current example in processing information with respect to, any burden on competition that are not
Footnote 38 with the example described and facilitating transactions in necessary or appropriate in furtherance
above. The Exchange notes that securities, to remove impediments to of the purposes of the Act. The
although it is reducing the rebate, it still and perfect the mechanism of a free and Exchange does not believe that the
believes the amount provided will open market and a national market proposed rule change will impose any
incent appointed LMMs to increase system, and, in general, to protect burden on intramarket competition that
liquidity during ETH. investors and the public interest. is not necessary or appropriate in
Additionally, the Exchange proposes, Additionally, the Exchange believes the furtherance of the purposes of the Act
if an appointment begins after the first because, while the LMM rebate is
proposed rule change is consistent with
[sic] day of the month or ends prior to offered only to certain market
Section 6(b)(4) of the Act,10 which
the last [sic] day of the month, the participants (i.e., LMMs that meet a
requires that Exchange rules provide for
amount of the rebate will be prorated for heightened quoting standard), those
the equitable allocation of reasonable
that month.7 For example, the market participants must meet
dues, fees, and other charges among its
heightened quoting standards and the
Trading Permit Holders and other
6 The compensation pool equal to $25,000 times rebate encourages those market
the number of LMMs in a class remained in effect persons using its facilities.
participants to bring liquidity to the
through March 1, 2016 for VIX and March 8, 2016 The Exchange believes it is
Exchange during ETH (which benefits
for SPX, which dates correspond to the end of the reasonable, equitable and not unfairly
current appointment term. In other words, the three all market participants).
discriminatory to offer LMMs that meet The Exchange does not believe that
previous LMMs were eligible to receive a share of
a $75,000 compensation pool, prorated through the a certain heightened quoting standard the proposed rule changes will impose
asabaliauskas on DSK3SPTVN1PROD with NOTICES
end of their appointment, and the three new LMMs (described above) a pro-rata share of a any burden on intermarket competition
are eligible to receive a share of a $45,000 compensation pool equal to $15,000 that is not necessary or appropriate in
compensation pool (which will be prorated for the times the number of LMMs in that class
month of March 2016). furtherance of the purposes of the Act
7 If an appointment begins after the first trading because SPX/SPXW and VIX, are
day of the month, the compensation pool will be trading days in the calendar month the appointment
was in effect. proprietary products that will only be
prorated based on the remaining trading days in the
calendar month. If an appointment ends prior to the
8 15 U.S.C. 78f(b). traded on CBOE. To the extent that the
last trading day of the month, the compensation 9 15 U.S.C. 78f(b)(5). proposed changes make CBOE a more
pool will be prorated based on the number of 10 15 U.S.C. 78f(b)(4). attractive marketplace for market
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participants at other exchanges, such amendments, all written statements solicit comments on the proposed rule
market participants are welcome to with respect to the proposed rule change from interested persons.
become CBOE market participants. change that are filed with the
I. Self-Regulatory Organization’s
Commission, and all written
C. Self-Regulatory Organization’s Statement of the Terms of Substance of
communications relating to the
Statement on Comments on the the Proposed Rule Change
proposed rule change between the
Proposed Rule Change Received From The Exchange proposes to extend the
Commission and any person, other than
Members, Participants, or Other deadline for implementing Rule
those that may be withheld from the
The Exchange neither solicited nor public in accordance with the 6.61(a)(2) and (3) until July 31, 2016.
received comments on the proposed provisions of 5 U.S.C. 552, will be The proposed rule change is available
rule change. available for Web site viewing and on the Exchange’s Web site at
printing in the Commission’s Public www.nyse.com, at the principal office of
II. Date of Effectiveness of the Proposed
Reference Room, 100 F Street NE., the Exchange, and at the Commission’s
Rule Change and Timing for
Washington, DC 20549 on official Public Reference Room.
Commission Action
business days between the hours of II. Self-Regulatory Organization’s
The foregoing rule change has become 10:00 a.m. and 3:00 p.m. Copies of such
effective pursuant to Section 19(b)(3)(A) Statement of the Purpose of, and
filing also will be available for Statutory Basis for, the Proposed Rule
of the Act 11 and paragraph (f) of Rule inspection and copying at the principal
19b–4 12 thereunder. At any time within Change
office of the Exchange. All comments
60 days of the filing of the proposed rule received will be posted without change; In its filing with the Commission, the
change, the Commission summarily may the Commission does not edit personal self-regulatory organization included
temporarily suspend such rule change if identifying information from statements concerning the purpose of,
it appears to the Commission that such submissions. You should submit only and basis for, the proposed rule change
action is necessary or appropriate in the information that you wish to make and discussed any comments it received
public interest, for the protection of available publicly. All submissions on the proposed rule change. The text
investors, or otherwise in furtherance of should refer to File Number SR–CBOE– of those statements may be examined at
the purposes of the Act. If the 2016–018, and should be submitted on the places specified in Item IV below.
Commission takes such action, the or before April 8, 2016. The Exchange has prepared summaries,
Commission will institute proceedings set forth in sections A, B, and C below,
to determine whether the proposed rule For the Commission, by the Division of of the most significant parts of such
Trading and Markets, pursuant to delegated
change should be approved or authority.13
statements.
disapproved.
Robert W. Errett, A. Self-Regulatory Organization’s
IV. Solicitation of Comments Deputy Secretary. Statement of the Purpose of, and the
Interested persons are invited to [FR Doc. 2016–06092 Filed 3–17–16; 8:45 am] Statutory Basis for, the Proposed Rule
submit written data, views, and BILLING CODE 8011–01–P
Change
arguments concerning the foregoing, 1. Purpose
including whether the proposed rule
SECURITIES AND EXCHANGE The Exchange is proposing to extend
change is consistent with the Act.
COMMISSION the deadline for implementing Rule
Comments may be submitted by any of
6.61(a)(2) and (3) until July 31, 2016.
the following methods:
The current implementation deadline is
Electronic Comments [Release No. 34–77357; File No. SR– March 4, 2016.
NYSEARCA–2016–41]
• Use the Commission’s Internet In March 2015, the Commission
comment form (http://www.sec.gov/ Self-Regulatory Organizations; NYSE approved Rule 6.61, which provides a
rules/sro.shtml); or Arca, Inc.; Notice of Filing and price protection risk mechanism for
• Send an email to rule-comments@ Immediate Effectiveness of Proposed Market Maker quotes.4 Rule 6.61
sec.gov. Please include File Number SR– Rule Change Extending the Deadline provides two layers of price protection
CBOE–2016–018 on the subject line. for Implementing Rule 6.61(a)(2) and to incoming Market Maker quotes,
(3) rejecting those Market Maker quotes that
Paper Comments exceed certain parameters, as a risk
• Send paper comments in triplicate March 14, 2016. mitigation tool.5 The Exchange has
to Brent J. Fields, Secretary, Securities Pursuant to Section 19(b)(1) 1 of the 4 See Securities Exchange Act Release No. 74441
and Exchange Commission, 100 F Street Securities Exchange Act of 1934 (the (March 4, 2015), 80 FR 12664 (March 10, 2015) (SR–
NE., Washington, DC 20549–1090. ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 NYSEArca–2014–150) (Approval Order); see also
All submissions should refer to File notice is hereby given that, on March 4, Securities Exchange Act Release No. 74018 (January
Number SR–CBOE–2016–018. This file 2016, NYSE Arca, Inc. (the ‘‘Exchange’’ 8, 2015), 80 FR 1982 (January 14, 2015) (SR–
NYSEArca–2014–150) (Notice).
number should be included on the or ‘‘NYSE Arca’’) filed with the 5 The first layer of price protection assesses
subject line if email is used. To help the Securities and Exchange Commission incoming sell quotes against the NBB and incoming
Commission process and review your (the ‘‘Commission’’) the proposed rule buy quotes against the NBO (the ‘‘NBBO Price
asabaliauskas on DSK3SPTVN1PROD with NOTICES
comments more efficiently, please use change as described in Items I and II Reasonability Check’’). Specifically, per Rule
6.61(a)(1), provided that an NBBO is available, a
only one method. The Commission will below, which Items have been prepared Market Maker quote would be rejected if it is priced
post all comments on the Commission’s by the self-regulatory organization. The a specified dollar amount or percentage through the
Internet Web site (http://www.sec.gov/ Commission is publishing this notice to contra-side NBBO. The second layer of price
rules/sro.shtml). Copies of the protection assesses the price of call or put bids
against a specified benchmark (the ‘‘Underlying
submission, all subsequent 13 17 CFR 200.30–3(a)(12). Stock Price/Strike Price Check’’), per Rule 6.61(a)(2)
1 15 U.S.C. 78s(b)(1). and (3). This second layer of protection applies to
11 15 U.S.C. 78s(b)(3)(A). 2 15 U.S.C. 78a.
bids in call options or put options when (1) there
12 17 CFR 240.19b–4(f). 3 17 CFR 240.19b–4. is no NBBO available, for example, during pre-
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Document Created: 2018-02-02 15:13:56
Document Modified: 2018-02-02 15:13:56
| 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 14910 |
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