81 FR 1980 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Limit Order Price Protections for Stock-Option Orders
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 9 (January 14, 2016)
Federal Register Volume 81, Issue 9 (January 14, 2016)
| Page Range | 1980-1983 | |
| FR Document | 2016-00568 |
[Federal Register Volume 81, Number 9 (Thursday, January 14, 2016)] [Notices] [Pages 1980-1983] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-00568] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76857; File No. SR-CBOE-2016-003] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Limit Order Price Protections for Stock-Option Orders January 8, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on January 5, 2016, Chicago Board Options Exchange, Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a ``non-controversial'' proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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. \3\ 15 U.S.C. 78s(b)(3)(A)(iii). \4\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange seeks to amend Exchange rules related to limit order price protections for stock-option orders. The text of the proposed rule change is provided below. (additions are italicized; deletions are [bracketed]) * * * * * Chicago Board Options Exchange, Incorporated Rules * * * * * Rule 6.12. CBOE Hybrid Order Handling System This rule describes the process for routing orders through the Exchange's order handling system in classes designated for trading on the CBOE Hybrid System. The order handling system is a feature within the Hybrid System to route orders for automatic execution, book entry, open outcry, or further handling by a broker, agent, or PAR Official, in a manner consistent with Exchange Rules and the Act (e.g., resubmit the order to the Hybrid System for automatic execution, route the order from a booth to a PAR workstation, cancel the order, contact the customer for further instructions, and/or otherwise handle the order in accordance with Exchange Rules and the order's terms.). (a) Orders may route through the order handling system for electronic processing in the Hybrid System or to a designated order management terminal or PAR Workstation in any of the circumstances described below. Routing designations may be established based on various parameters defined by the Exchange, order entry firm or Trading Permit Holder, as applicable. * * * * * (5) Limit Order Price Parameter for Stock-Option Orders: Limit orders received after a series is opened will be cancelled if the order is priced at a net debit that is more than an acceptable tick distance above the opposite side derived net market using the Exchange's best bid or offer in the individual series leg and the national best bid or offer of the stock component comprising the stock-option order or the order is priced at a net credit that is more than an acceptable tick distance below the opposite side derived net market based on the Exchange's best bid or offer in the individual series leg and the national best bid or offer of the stock component comprising the stock- option order. For purposes of this subparagraph (a)(5): An ``acceptable tick distance'' (which is also referred to as an ``ATD''), as determined by the Exchange on a class by class and net premium basis and announced to the Trading Permit Holders via Regulatory Circular, shall be no less than 5 minimum net price increment ticks for stock-option orders. The Exchange may determine on a class by class basis and announce via Regulatory Circular whether to apply paragraph (a)(5) to immediate-or- cancel complex orders. The limit order price parameter will take precedence over another routing parameter to the extent that both are applicable to an incoming limit order. [(5)] (6) Direct Routing: Orders may route directly from an order entry firm for electronic processing or to an order management terminal or a PAR workstation based on parameters prescribed by the order entry firm. [(6)] (7) System Disruptions or Malfunctions: Orders will route to an order management terminal designated by the order entry firm or Trading Permit Holder, or a terminal designated and maintained by the Exchange as a [[Page 1981]] back-up to order entry firms' and Trading Permit Holders' designated order management terminals, in the event of certain system disruptions or malfunctions that affect the ability of orders to reach or be processed at their intended designation. * * * * * . . . Interpretations and Policies: .01 For purposes of subparagraphs (a)(3), [and] (4) and (5): the senior official on the Exchange Help Desk or two Floor Officials may grant intra-day relief by widening or inactivating one or more of the applicable ATD parameter settings in the interest of a fair and orderly market. * * * * * The text of the proposed rule change is also 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 is proposing to amend Rule 6.12--CBOE Hybrid Order Handling System in order to institute limit order price protections for stock-option orders. Background The CBOE Hybrid System \5\ is a trading platform that allows automatic executions to occur electronically and open outcry trades to occur on the floor of the Exchange. To operate in this ``hybrid'' environment, the Exchange has made available to Trading Permit Holders (``TPHs'') a dynamic order handling system, also referred herein as OHS, that has the capability to route orders to the Hybrid System for automatic execution and book entry, to PAR workstations located in the trading crowds for open outcry and other manual handling by TPHs and Exchange PAR Officials, and/or to other order management terminals generally located in booths on the trading floor for manual handling. Where an order is routed for processing by the Exchange order handling system depends on various parameters configured by the Exchange and the order entry firm itself. Thus, the OHS provides TPHs with some flexibility to determine how to process their orders in the CBOE Hybrid System. --------------------------------------------------------------------------- \5\ The CBOE ``Hybrid System'' or ``Hybrid Trading System'' refers to the Exchange's trading platform that allows Market-Makers to submit electronic quotes in their appointed classes. The ``Hybrid 3.0 Platform'' is an electronic trading platform on the Hybrid Trading System that allows one or more quoters to submit electronic quotes which represent the aggregate Market-Maker quoting interest in a series for the trading crowd. Classes authorized by the Exchange for trading on the Hybrid Trading System shall be referred to as Hybrid classes. Classes authorized by the Exchange for trading on the Hybrid 3.0 Platform shall be referred to as Hybrid 3.0 classes. References to ``Hybrid,'' ``Hybrid System,'' or ``Hybrid Trading System'' in the Exchange's Rules shall include all platforms unless otherwise provided by rule. See, e.g., Rule 1.1(aaa). --------------------------------------------------------------------------- In February 2015, the Exchange adopted Rule 6.12 to, among other things, describe existing OHS operations.\6\ One of the operations described in Rule 6.12 is the Exchange's limit order price parameter for complex orders.\7\ The limit order price parameter is a price protection parameter that helps mitigate potential risks associated with orders executing at potentially erroneous prices. However, the limit order price parameter applied to complex orders does not apply to stock-option orders.\8\ --------------------------------------------------------------------------- \6\ Securities Exchange Act Release No. 74351 (February 23, 2015), 80 FR 10738 (February 27, 2015) (SR-CBOE-2015-021). \7\ See Rule 6.12(a)(4). \8\ Rule 6.12(4)(i) and (ii) explicitly excludes stock-option orders from the limit order price protections applicable to complex orders. --------------------------------------------------------------------------- Proposal The Exchange seeks to adopt limit order price protections applicable to stock-option orders. To that end, the Exchange proposes to add the following provisions to Rule 6.12:Limit Order Price Parameter for Stock-Option Orders: Limit orders received after a series is opened will be cancelled \9\ if the order is priced at a net debit that is more than an acceptable tick distance above the opposite side derived net market using the Exchange's best bid or offer in the individual series leg and the national best bid or offer of the stock component comprising the stock- option order or the order is priced at a net credit that is more than an acceptable tick distance below the opposite side derived net market based on the Exchange's best bid or offer in the individual series leg and the national best bid or offer of the stock component comprising the stock-option order.\10\ For purposes of this subparagraph (a)(5): An ``acceptable tick distance'' (which is also referred to as an ``ATD''), as determined by the Exchange on a class by class and net premium basis and announced to the Trading Permit Holders via Regulatory Circular, shall be no less than 5 minimum net price increment ticks for stock-option orders.\11\ The Exchange may determine on a class by class basis and announce via Regulatory Circular whether to apply paragraphs (a)(5) to immediate-or-cancel complex orders. The limit order price parameter will take precedence over another routing parameter to the extent that both are applicable to an incoming limit order. In addition, the senior official on the Exchange Help Desk or two Floor [[Page 1982]] Officials may widen or inactivate the applicable ATD parameter settings on an intra-day basis in the interest of a fair and orderly market. --------------------------------------------------------------------------- \9\ Although the current limit order price check parameter for simple and complex orders provides that orders not meeting the price check parameter are routed to an order management terminal (``OMT''), the Exchange believes market participants prefer such orders not be routed to an OMT. The Exchange also believes order entry firms have sophisticated technology that allows the firms to manage their orders, including orders rejected or cancelled by the Exchange. The proposal essentially provides that an order may be cancelled and sent back to the order entry firm's order management system instead of the Exchange's order management system (i.e., OMT). \10\ The Exchange notes that this proposal does not affect stock-option orders entered prior to the opening of a series (including before a series is opened following a halt). Stock-option orders entered prior to the opening of a series (including before a series is opened following a halt) are entered into the complex order book and do not flow through this limit order price protection after the series is opened. \11\ See CBOE Regulatory Circular RG13-145 for the current price check parameters, which is available at http://www.cboe.com/publish/RegCir/RG13-145.pdf. The senior official in the Help Desk or two Floor Officials may also widen or inactivate one or more of these price check parameters on an intra-day basis in the interest of a fair and orderly market. For example, if an underlying stock is high priced or volatile and is experiencing significant price movement and the existing parameters would result in an inordinate number of limit orders not being accepted, the senior official in the Help Desk may determine to widen the parameters on an intra-day basis in the overlying or related options series. As another example, if the overall market is experiencing significant volatility, the senior official in the Help Desk or two Floor Officials may determine to widen the parameters for a group of series or classes. The Exchange notes that these examples are non-exhaustive and for illustrative purposes only. (For example, see also CBOE Regulatory Circular RG14- 019, which is available at http://www.cboe.com/publish/RegCir/RG14-019.pdf and which sets forth limit order price parameters settings for certain option classes on volatility index product settlement days.) The Exchange also notes that it may determine for the parameters to differ among classes and between pre-open and intra- day. --------------------------------------------------------------------------- The Exchange believes this proposal will help the maintenance of fair and orderly markets and help to mitigate potential risks associated with orders executing at potentially erroneous prices. 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.\12\ Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \13\ requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \14\ requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78f(b). \13\ 15 U.S.C. 78f(b)(5). \14\ Id. --------------------------------------------------------------------------- In particular, the Exchange believes these routing parameters assist with the maintenance of fair and orderly markets and help to mitigate potential risks associated with orders executing at potentially erroneous prices. Furthermore, the Exchange believes the proposed rule change furthers the objective of Section 6(b)(5) of the Act in that it permits the Exchange to address the entry stock-option limit orders that are priced significantly away from the market that may likely have resulted from human or operational error. By being able to quickly and efficiently address orders that likely resulted from such error, the proposed use of the limit order price parameter checks would promote a fair and orderly market. Additionally, by having the flexibility to determine the series or classes where the limit order price parameter checks would be applied (or not applied) and the levels at which the ATD settings would be applied, and to grant relief on an intra-day basis, the Exchange is able to effectively structure and efficiently react to particular option characteristics and market conditions--including (without limitation) price, volatility, and significant price movements--which contributes to its ability to maintain a fair and orderly market. Accordingly, the Exchange believes that this proposal is designed to promote just and equity principles of trade, remove impediments to, and perfect the mechanism of, a free and open market. B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed rule change will promote competition in that the routing parameters assist with the maintenance of a fair and orderly market and help to mitigate potential risks associated with orders executing at potentially erroneous prices. The Exchange believes this, again, promotes fair and orderly markets, as well as assists the Exchange in its ability to effectively attract order flow and liquidity to its market, and ultimately benefits all CBOE TPHs and all investors. Thus, the Exchange does not believe the proposal creates any significant impact on competition. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: A. Significantly affect the protection of investors or the public interest; B. impose any significant burden on competition; and C. become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-4(f)(6) \16\ 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. --------------------------------------------------------------------------- \15\ 15 U.S.C. 78s(b)(3)(A). \16\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- 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-CBOE-2016-003 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-2016-003. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 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 [[Page 1983]] should refer to File Number SR-CBOE-2016-003 and should be submitted on or before February 4, 2016. --------------------------------------------------------------------------- \17\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\17\ Robert W. Errett, Deputy Secretary. [FR Doc. 2016-00568 Filed 1-13-16; 8:45 am] BILLING CODE 8011-01-P
![1980 Federal Register / Vol. 81, No. 9 / Thursday, January 14, 2016 / Notices
Comments may be submitted by any of SECURITIES AND EXCHANGE resubmit the order to the Hybrid System
the following methods: COMMISSION for automatic execution, route the order
[Release No. 34–76857; File No. SR–CBOE– from a booth to a PAR workstation,
Electronic Comments cancel the order, contact the customer
2016–003]
• Use the Commission’s Internet for further instructions, and/or
comment form (http://www.sec.gov/ Self-Regulatory Organizations; otherwise handle the order in
rules/sro.shtml); or Chicago Board Options Exchange, accordance with Exchange Rules and
Incorporated; Notice of Filing and the order’s terms.).
• Send an email to rule-comments@ Immediate Effectiveness of a Proposed (a) Orders may route through the
sec.gov. Please include File Number SR– Rule Change Related to Limit Order order handling system for electronic
Phlx–2015–109 on the subject line. Price Protections for Stock-Option processing in the Hybrid System or to a
Paper Comments Orders designated order management terminal
January 8, 2016. or PAR Workstation in any of the
• Send paper comments in triplicate circumstances described below. Routing
Pursuant to Section 19(b)(1) of the
to Secretary, Securities and Exchange designations may be established based
Securities Exchange Act of 1934 (the
Commission, 100 F Street NE., on various parameters defined by the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
Washington, DC 20549–1090. notice is hereby given that on January 5, Exchange, order entry firm or Trading
All submissions should refer to File 2016, Chicago Board Options Exchange, Permit Holder, as applicable.
Number SR–Phlx–2015–109. This file Incorporated (the ‘‘Exchange’’ or * * * * *
number should be included on the ‘‘CBOE’’) filed with the Securities and (5) Limit Order Price Parameter for
subject line if email is used. To help the Exchange Commission (the Stock-Option Orders: Limit orders
Commission process and review your ‘‘Commission’’) the proposed rule received after a series is opened will be
comments more efficiently, please use change as described in Items I, II, and cancelled if the order is priced at a net
only one method. The Commission will III below, which Items have been debit that is more than an acceptable
post all comments on the Commission’s prepared by the Exchange. The tick distance above the opposite side
Internet Web site (http://www.sec.gov/ Exchange filed the proposal as a ‘‘non- derived net market using the Exchange’s
controversial’’ proposed rule change best bid or offer in the individual series
rules/sro.shtml). Copies of the
pursuant to Section 19(b)(3)(A)(iii) of leg and the national best bid or offer of
submission, all subsequent the Act 3 and Rule 19b–4(f)(6) the stock component comprising the
amendments, all written statements thereunder.4 The Commission is stock-option order or the order is priced
with respect to the proposed rule publishing this notice to solicit at a net credit that is more than an
change that are filed with the comments on the proposed rule change acceptable tick distance below the
Commission, and all written from interested persons. opposite side derived net market based
communications relating to the on the Exchange’s best bid or offer in
proposed rule change between the I. Self-Regulatory Organization’s
Statement of the Terms of Substance of the individual series leg and the
Commission and any person, other than national best bid or offer of the stock
those that may be withheld from the the Proposed Rule Change
component comprising the stock-option
public in accordance with the The Exchange seeks to amend order.
provisions of 5 U.S.C. 552, will be Exchange rules related to limit order
price protections for stock-option For purposes of this subparagraph
available for Web site viewing and (a)(5): An ‘‘acceptable tick distance’’
printing in the Commission’s Public orders. The text of the proposed rule
change is provided below. (which is also referred to as an ‘‘ATD’’),
Reference Room, 100 F Street, NE., as determined by the Exchange on a
Washington, DC 20549 on official (additions are italicized; deletions are
class by class and net premium basis
business days between the hours of [bracketed])
and announced to the Trading Permit
10:00 a.m. and 3:00 p.m. Copies of such * * * * * Holders via Regulatory Circular, shall be
filing also will be available for Chicago Board Options Exchange, no less than 5 minimum net price
inspection and copying at the principal Incorporated increment ticks for stock-option orders.
office of the Exchange. All comments The Exchange may determine on a class
Rules
received will be posted without change; by class basis and announce via
the Commission does not edit personal * * * * * Regulatory Circular whether to apply
identifying information from Rule 6.12. CBOE Hybrid Order Handling paragraph (a)(5) to immediate-or-cancel
submissions. You should submit only System complex orders. The limit order price
information that you wish to make parameter will take precedence over
This rule describes the process for another routing parameter to the extent
available publicly. All submissions routing orders through the Exchange’s
should refer to File Number SR–Phlx– that both are applicable to an incoming
order handling system in classes limit order.
2015–109, and should be submitted on designated for trading on the CBOE
or before February 4, 2016. [(5)] (6) Direct Routing: Orders may
Hybrid System. The order handling
route directly from an order entry firm
For the Commission, by the Division of system is a feature within the Hybrid
for electronic processing or to an order
Trading and Markets, pursuant to delegated System to route orders for automatic
management terminal or a PAR
authority.36 execution, book entry, open outcry, or
workstation based on parameters
mstockstill on DSK4VPTVN1PROD with NOTICES
Robert W. Errett, further handling by a broker, agent, or
prescribed by the order entry firm.
Deputy Secretary.
PAR Official, in a manner consistent
with Exchange Rules and the Act (e.g., [(6)] (7) System Disruptions or
[FR Doc. 2016–00569 Filed 1–13–16; 8:45 am] Malfunctions: Orders will route to an
BILLING CODE 8011–01–P 1 15 U.S.C. 78s(b)(1). order management terminal designated
2 17 CFR 240.19b–4. by the order entry firm or Trading
3 15 U.S.C. 78s(b)(3)(A)(iii). Permit Holder, or a terminal designated
36 17 CFR 200.30–3(a)(12). 4 17 CFR 240.19b–4(f)(6). and maintained by the Exchange as a
VerDate Sep<11>2014 18:58 Jan 13, 2016 Jkt 238001 PO 00000 Frm 00044 Fmt 4703 Sfmt 4703 E:\FR\FM\14JAN1.SGM 14JAN1](https://thefederalregister.org/doc/81_FR_1989/page/1.svg)
![Federal Register / Vol. 81, No. 9 / Thursday, January 14, 2016 / Notices 1981
back-up to order entry firms’ and executions to occur electronically and debit that is more than an acceptable
Trading Permit Holders’ designated open outcry trades to occur on the floor tick distance above the opposite side
order management terminals, in the of the Exchange. To operate in this derived net market using the Exchange’s
event of certain system disruptions or ‘‘hybrid’’ environment, the Exchange best bid or offer in the individual series
malfunctions that affect the ability of has made available to Trading Permit leg and the national best bid or offer of
orders to reach or be processed at their Holders (‘‘TPHs’’) a dynamic order the stock component comprising the
intended designation. handling system, also referred herein as stock-option order or the order is priced
* * * * * OHS, that has the capability to route at a net credit that is more than an
. . . Interpretations and Policies: orders to the Hybrid System for acceptable tick distance below the
.01 For purposes of subparagraphs automatic execution and book entry, to opposite side derived net market based
(a)(3), [and] (4) and (5): the senior PAR workstations located in the trading on the Exchange’s best bid or offer in
official on the Exchange Help Desk or crowds for open outcry and other the individual series leg and the
two Floor Officials may grant intra-day manual handling by TPHs and Exchange national best bid or offer of the stock
relief by widening or inactivating one or PAR Officials, and/or to other order component comprising the stock-option
more of the applicable ATD parameter management terminals generally located order.10 For purposes of this
settings in the interest of a fair and in booths on the trading floor for subparagraph (a)(5): An ‘‘acceptable tick
orderly market. manual handling. Where an order is distance’’ (which is also referred to as
routed for processing by the Exchange an ‘‘ATD’’), as determined by the
* * * * *
order handling system depends on Exchange on a class by class and net
The text of the proposed rule change
various parameters configured by the premium basis and announced to the
is also available on the Exchange’s Web
Exchange and the order entry firm itself. Trading Permit Holders via Regulatory
site (http://www.cboe.com/AboutCBOE/
Thus, the OHS provides TPHs with Circular, shall be no less than 5
CBOELegalRegulatoryHome.aspx), at minimum net price increment ticks for
the Exchange’s Office of the Secretary, some flexibility to determine how to
process their orders in the CBOE Hybrid stock-option orders.11 The Exchange
and at the Commission’s Public may determine on a class by class basis
Reference Room. System.
In February 2015, the Exchange and announce via Regulatory Circular
II. Self-Regulatory Organization’s adopted Rule 6.12 to, among other whether to apply paragraphs (a)(5) to
Statement of the Purpose of, and things, describe existing OHS immediate-or-cancel complex orders.
Statutory Basis for, the Proposed Rule operations.6 One of the operations The limit order price parameter will
Change described in Rule 6.12 is the Exchange’s take precedence over another routing
limit order price parameter for complex parameter to the extent that both are
In its filing with the Commission, the
orders.7 The limit order price parameter applicable to an incoming limit order. In
Exchange included statements
is a price protection parameter that addition, the senior official on the
concerning the purpose of and basis for
helps mitigate potential risks associated Exchange Help Desk or two Floor
the proposed rule change and discussed
any comments it received on the with orders executing at potentially
cancelled by the Exchange. The proposal essentially
proposed rule change. The text of these erroneous prices. However, the limit provides that an order may be cancelled and sent
statements may be examined at the order price parameter applied to back to the order entry firm’s order management
places specified in Item IV below. The complex orders does not apply to stock- system instead of the Exchange’s order management
option orders.8 system (i.e., OMT).
Exchange has prepared summaries, set 10 The Exchange notes that this proposal does not
forth in sections A, B, and C below, of Proposal affect stock-option orders entered prior to the
the most significant aspects of such opening of a series (including before a series is
statements. The Exchange seeks to adopt limit opened following a halt). Stock-option orders
order price protections applicable to entered prior to the opening of a series (including
A. Self-Regulatory Organization’s stock-option orders. To that end, the before a series is opened following a halt) are
Statement of the Purpose of, and entered into the complex order book and do not
Exchange proposes to add the following flow through this limit order price protection after
Statutory Basis for, the Proposed Rule provisions to Rule 6.12: the series is opened.
Change • Limit Order Price Parameter for 11 See CBOE Regulatory Circular RG13–145 for
Stock-Option Orders: Limit orders the current price check parameters, which is
1. Purpose available at http://www.cboe.com/publish/RegCir/
received after a series is opened will be RG13-145.pdf. The senior official in the Help Desk
The Exchange is proposing to amend cancelled 9 if the order is priced at a net or two Floor Officials may also widen or inactivate
Rule 6.12—CBOE Hybrid Order one or more of these price check parameters on an
Handling System in order to institute the Hybrid 3.0 Platform shall be referred to as intra-day basis in the interest of a fair and orderly
limit order price protections for stock- Hybrid 3.0 classes. References to ‘‘Hybrid,’’ ‘‘Hybrid market. For example, if an underlying stock is high
System,’’ or ‘‘Hybrid Trading System’’ in the priced or volatile and is experiencing significant
option orders. price movement and the existing parameters would
Exchange’s Rules shall include all platforms unless
Background otherwise provided by rule. See, e.g., Rule 1.1(aaa). result in an inordinate number of limit orders not
6 Securities Exchange Act Release No. 74351 being accepted, the senior official in the Help Desk
The CBOE Hybrid System 5 is a (February 23, 2015), 80 FR 10738 (February 27, may determine to widen the parameters on an intra-
day basis in the overlying or related options series.
trading platform that allows automatic 2015) (SR–CBOE–2015–021).
As another example, if the overall market is
7 See Rule 6.12(a)(4).
experiencing significant volatility, the senior
5 The CBOE ‘‘Hybrid System’’ or ‘‘Hybrid Trading 8 Rule 6.12(4)(i) and (ii) explicitly excludes stock-
official in the Help Desk or two Floor Officials may
System’’ refers to the Exchange’s trading platform option orders from the limit order price protections determine to widen the parameters for a group of
that allows Market-Makers to submit electronic applicable to complex orders.
mstockstill on DSK4VPTVN1PROD with NOTICES
series or classes. The Exchange notes that these
quotes in their appointed classes. The ‘‘Hybrid 3.0 9 Although the current limit order price check
examples are non-exhaustive and for illustrative
Platform’’ is an electronic trading platform on the parameter for simple and complex orders provides purposes only. (For example, see also CBOE
Hybrid Trading System that allows one or more that orders not meeting the price check parameter Regulatory Circular RG14–019, which is available at
quoters to submit electronic quotes which represent are routed to an order management terminal http://www.cboe.com/publish/RegCir/RG14-019.pdf
the aggregate Market-Maker quoting interest in a (‘‘OMT’’), the Exchange believes market and which sets forth limit order price parameters
series for the trading crowd. Classes authorized by participants prefer such orders not be routed to an settings for certain option classes on volatility index
the Exchange for trading on the Hybrid Trading OMT. The Exchange also believes order entry firms product settlement days.) The Exchange also notes
System shall be referred to as Hybrid classes. have sophisticated technology that allows the firms that it may determine for the parameters to differ
Classes authorized by the Exchange for trading on to manage their orders, including orders rejected or among classes and between pre-open and intra-day.
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![Federal Register / Vol. 81, No. 9 / Thursday, January 14, 2016 / Notices 1983
should refer to File Number SR–CBOE– Liberation Tigers of Tamil Eelam as a BDHH from interchanging traffic with a
2016–003 and should be submitted on Foreign Terrorist Organization. In third party or that limits BDHH’s ability
or before February 4, 2016. making its determination, the to interchange with a third party.
For the Commission, by the Division of Department of State will accept a BDHH certifies that its projected
Trading and Markets, pursuant to delegated written statement or other documentary annual revenues as a result of this
authority.17 materials submitted on behalf of transaction will not exceed those that
Robert W. Errett, interested parties and the above-named would qualify it as a Class III rail carrier
Deputy Secretary. organization by its representatives. Such and states that its projected annual
[FR Doc. 2016–00568 Filed 1–13–16; 8:45 am] materials must be submitted February 1, revenues will not exceed $5 million.
2016, to: The Coordinator for The transaction is expected to be
BILLING CODE 8011–01–P
Counterterrorism, United States consummated on or after January 28,
Department of State, 2201 C Street NW., 2016, the effective date of the exemption
Washington, DC 20520. (30 days after the verified notice was
DEPARTMENT OF STATE This notice shall be published in the filed).
[Public Notice: 9406] Federal Register. If the verified notice contains false or
Dated: January 7, 2016.
misleading information, the exemption
In the Matter of the Designation of ISIL is void ab initio. Petitions to revoke the
Tina Kaidanow,
Khorasan also known as Islamic exemption under 49 U.S.C. 10502(d)
State’s Khorasan Province also known Coordinator for Counterterrorism.
may be filed at any time. The filing of
as ISIS Wilayat Khorasan also known [FR Doc. 2016–00615 Filed 1–13–16; 8:45 am] a petition to revoke will not
as ISIL’s South Asia Branch also BILLING CODE 4710–AD–P automatically stay the effectiveness of
known as South Asian Chapter of ISIL the exemption. Petitions to stay must be
as a Foreign Terrorist Organization filed no later than January 21, 2016 (at
Pursuant to Section 219 of the SURFACE TRANSPORTATION BOARD least seven days before the exemption
Immigration and Nationality Act, as [Docket No. FD 35987] becomes effective).
Amended An original and 10 copies of all
BD Highspire Holdings, LLC— pleadings, referring to Docket No. FD
Based upon a review of the
Acquisition and Operation 35987, must be filed with the Surface
Administrative Record assembled in
Exemption—Mittal Steel USA-Railways Transportation Board, 395 E Street SW.,
this matter, and in consultation with the
Inc. Washington, DC 20423–0001. In
Attorney General and the Secretary of
addition, a copy of each pleading must
the Treasury, I conclude that there is a BD Highspire Holdings, LLC (BDHH),1 be served on William A. Mullins, Baker
sufficient factual basis to find that the a noncarrier, has filed a verified notice & Miller PLLC, 2401 Pennsylvania Ave.
relevant circumstances described in of exemption under 49 CFR 1150.31 to NW., Suite 300, Washington, DC 20037.
section 219 of the Immigration and acquire, from Mittal Steel USA-Railways According to BDHH, this action is
Nationality Act, as amended (hereinafter Inc. (Mittal Railways), and to operate categorically excluded from
‘‘INA’’) (8 U.S.C. 1189), exist with approximately 47 miles of rail line, environmental review under 49 CFR
respect to ISIL Khorasan also known as which includes all of the rail assets that 1105.6(c).
Islamic State’s Khorasan Province also formerly comprised the Steelton & Board decisions and notices are
known as ISIS Wilayat Khorasan also Highspire Railroad Company, LLC (the available on our Web site at
known as ISIL’s South Asia Branch also Line).2 BDHH states that the Line WWW.STB.DOT.GOV.
known as South Asian chapter of ISIL. consists mainly of yard and switching
Therefore, I hereby designate the Decided: January 11, 2016.
tracks that do not have any designated
aforementioned organization and its mileposts. The Line connects at the east By the Board, Rachel D. Campbell,
aliases as a foreign terrorist organization Director, Office of Proceedings.
end with the Norfolk Southern Railway
pursuant to section 219 of the INA. Company (NSR) at the NSR/Highspire Raina S. Contee,
This determination shall be published Interchange, and on the west end with Clearance Clerk.
in the Federal Register. NSR at the NSR/Steelton Interchange, [FR Doc. 2016–00613 Filed 1–13–16; 8:45 am]
Dated: December 31, 2015. all located within Dauphin County, Pa. BILLING CODE 4915–01–P
John F. Kerry, According to BDHH, BDCM and
Secretary of State. ArcelorMittal USA LLC, the parent
[FR Doc. 2016–00614 Filed 1–13–16; 8:45 am]
company of Mittal Railways, have DEPARTMENT OF TRANSPORTATION
reached an agreement which, when
BILLING CODE 4710–AD–P
consummated, will result in BDHH Federal Aviation Administration
purchasing the Line from Mittal
Railways and operating it. BDHH states Commercial Space Transportation
DEPARTMENT OF STATE Advisory Committee—Public
that a letter of intent covering the
[Public Notice 9407] transaction was signed on November 13, Teleconference
2015, and the parties expect to finalize AGENCY: Federal Aviation
Review of Foreign Terrorist
a sale and purchase agreement shortly. Administration (FAA), DOT.
Organizations Designation for BDHH states that the proposed
Liberation Tigers of Tamil Eelam ACTION: Notice of Commercial Space
mstockstill on DSK4VPTVN1PROD with NOTICES
transaction does not include any Transportation Advisory Committee
Pursuant to section 219(a)(4)(C) of the interchange commitment that prohibits Teleconference.
Immigration and Nationality Act, as
amended (8 U.S.C. 1189(a)(4)(C)), the 1 BDHH is owned and controlled by BDCM
SUMMARY: Pursuant to Section 10(a)(2) of
Opportunity Fund IV, L.P. (BDCM), a noncarrier the Federal Advisory Committee Act
Department of State is undertaking a holding company.
review of the designation of the 2 See Steelton & Highspire R.R. Co., LLC—Acquis. (Pub. L. 92–463, 5 U.S.C. App. 2), notice
and Operation Exemption—Steelton & Highspire is hereby given of a teleconference of
17 17 CFR 200.30–3(a)(12). R.R. Co., FD 34158 (STB served Jan. 10, 2002). the Commercial Space Transportation
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Document Created: 2016-01-14 02:50:29
Document Modified: 2016-01-14 02:50:29
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 81 FR 1980 |
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