81 FR 22138 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Rule 6.1A

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 72 (April 14, 2016)

Page Range		22138-22140
FR Document		2016-08557

Federal Register, Volume 81 Issue 72 (Thursday, April 14, 2016)

[Federal Register Volume 81, Number 72 (Thursday, April 14, 2016)]
[Notices]
[Pages 22138-22140]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-08557]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77570; File No. SR-CBOE-2016-028]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change Relating to Rule 6.1A

April 8, 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 April 4, 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 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 proposed to amend Rule 6.1A related to Extended
Trading Hours. The text of the proposed rule change is provided below.

(additions are italicized; deletions are [bracketed])
* * * * *

Chicago Board Options Exchange, Incorporated Rules

* * * * *

Rule 6.1A. Extended Trading Hours

(a)-(j) No change.
(k) Index Values. While it may not be calculated and disseminated
at all times during Extended Trading Hours, current values of VIX will
be widely disseminated at least once every fifteen

[[Page 22139]]

(15) seconds by the Options Price Reporting Authority or one or more
major market vendors during that trading session. [The Exchange will
not report a]No current index value [of an index ]underlying any other
index option trading during Extended Trading Hours[, because the value
of the underlying index] will [not be recalculated]be disseminated
during or at the close of [Extended Trading Hours]that trading session.
* * * * *
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 proposes to amend Rule 6.1A regarding Extended Trading
Hours.\3\ Current Rule 6.1A(k) states the Exchange will not report a
value of an index underlying an index option trading during Extended
Trading Hours, because the value of the underlying index will not be
recalculated during or at the close of Extended Trading Hours.
Currently, there are two indexes underlying options approved for
trading during Extended Trading Hours: the Standard & Poor's 500 (``S&P
500'') (underlying options on the S&P 500 (SPX), p.m.-settled options
on the S&P 500 (SPXPM) and options on the mini-SPX index (XSP)), and
the CBOE Volatility Index (``VIX'') (underlying options on the VIX).\4\
The reporting authorities for these indexes currently do not calculate
index values during Extended Trading Hours, and thus the Exchange
determined it would not be useful or efficient to disseminate to
Trading Permit Holders the same value repeatedly at frequent intervals.
However, it is possible that one or more reporting authorities may
begin to calculate and disseminate index values during these hours.
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\3\ Currently, Extended Trading Hours are 2:00 a.m. to 8:15 a.m.
Central time.
\4\ Currently, SPX, SPXPM and VIX options are listed for trading
during Extended Trading Hours (no XSP series are currently listed).
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CBOE, in its capacity as reporting authority for VIX, recently
announced plans to calculate and make available current values of VIX
every 15 seconds during Extended Trading Hours in March 2016. In order
to contemplate this Extended Trading Hours index calculation, the
proposed rule change amends Rule 6.1A(k) to provide while it may not be
calculated and disseminated at all times during Extended Trading
Hours,\5\ current values of VIX will be widely disseminated at least
once every fifteen (15) seconds by the Options Price Reporting
Authority (``OPRA'') \6\ or one or more major market vendors during
that trading session.\7\ To the extent the reporting authority for an
index underlying an index option trading during Extended Trading Hours
does not calculate or make available current values of that index
during that trading session (or part thereof), no current index value
will be disseminated during Extended Trading Hours (which is the case
today).
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\5\ There may be times when a current value is not available,
such as if CBOE (as reporting authority) does not begin making
current index values available until after a certain amount of time
has passed following the open of the Extended Trading Hours trading
session (for example, to ensure sufficient quotes in series used to
calculate the index values) or if there are technical issues
preventing CBOE (as reporting authority) from calculating index
values. During the times the current value of VIX is not available
(and thus not disseminated) during Extended Trading Hours, VIX
options may continue to be listed for trading during that trading
session (as they are today).
\6\ CBOE does not expect to disseminate current VIX values
during Extended Trading Hours through OPRA; however, this proposed
reference is included to accommodate the possibility that changes in
the future.
\7\ Similarly, during Regular Trading Hours, Rule 24.2(f)(11),
which describes listing standards for broad-based indexes (including
VIX), states the current index value for an index must be widely
disseminated at least once every 15 seconds by OPRA, CTA/CQ, NIDS,
or one or more major market data vendors during the time options on
the index are traded on the Exchange. CBOE understands that one or
more major market data vendors (e.g. Bloomberg and Reuters) will
widely disseminate current VIX values during Extended Trading Hours,
as is the case during Regular Trading Hours.
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The Exchange notes, pursuant to Rule 6.1A(j)(vi), Trading Permit
Holders must continue to disclose to customers the risks associated
with trading during Extended Trading Hours, including among other
things the possibility of the absence of an updated underlying index
and lack of regular trading in the securities underlying the index. No
current index value underlying any other index option trading during
Extended Trading Hours will be disseminated during or at the close of
that trading session, as is the case today.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
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 the Section 6(b)(5)\10\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ Id.
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In particular, the proposed rule change does not modify trading
rules applicable to Extended Trading Hours. The proposed rule change
contemplates the expected calculation of current values of VIX during
Extended Trading Hours, which additional information regarding options
trading during that trading session removes impediments to and perfect
the mechanism of a free and open market and a national market system.
The proposed rule change states that the current values of indexes
underlying other options trading during Extended Trading Hours will
continue to not be disseminated, and thus has no impact on those
options.

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. This proposed rule change has
no impact on the trading rules applicable to Extended Trading Hours;
there will just be

[[Page 22140]]

additional information available to market participants regarding one
product that trades during that trading session. The proposed rule
change merely reflects CBOE's plans (as reporting authority for VIX) to
calculate and disseminate the current values of VIX during Extended
Trading Hours. CBOE understands that one or more major market data
vendors (e.g. Bloomberg and Reuters) will widely disseminate the
current VIX values during Extended Trading Hours, providing Trading
Permit Holders and other market participants with access to those
values through those vendors. As CBOE is currently the only U.S.
options exchange with Extended Trading Hours, and the only U.S. options
exchange on which VIX options are listed for trading, the proposed rule
change has no impact on intermarket competition.

B. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

The Exchange neither solicited nor received comments on the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

Because the proposed rule change does not (i) significantly affect
the protection of investors or the public interest; (ii) impose any
significant 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, 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). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission.
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The Exchange has asked the Commission to waive the 30-day operative
delay so that the proposal may become operative on the date that VIX
values may become available during Extended Trading Hours, which is
expected to be April 15, 2016. The Commission believes that waiving the
30-day operative delay is consistent with the protection of investors
and the public interest. The Commission notes that the proposed rule
change merely allows VIX values to be disseminated during Extended
Trading Hours in the same manner as during Regular Trading Hours and
therefore, does not raise any unique or novel issues. Accordingly, the
Commission designates the proposed rule change to be operative as of
April 15, 2016.\13\
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\13\ 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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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 rule-comments@sec.gov. Please include
File Number SR-CBOE-2016-028 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-CBOE-2016-028. 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-CBOE-2016-028 and should be
submitted on or before May 5, 2016.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-08557 Filed 4-13-16; 8:45 am]
BILLING CODE 8011-01-P

22140 Federal Register / Vol. 81, No. 72 / Thursday, April 14, 2016 / Notices

additional information available to same manner as during Regular Trading printing in the Commission’s Public
market participants regarding one Hours and therefore, does not raise any Reference Room, 100 F Street NE.,
product that trades during that trading unique or novel issues. Accordingly, the Washington, DC 20549, on official
session. The proposed rule change Commission designates the proposed business days between the hours of
merely reflects CBOE’s plans (as rule change to be operative as of April 10:00 a.m. and 3:00 p.m. Copies of the
reporting authority for VIX) to calculate 15, 2016.13 filing also will be available for
and disseminate the current values of At any time within 60 days of the inspection and copying at the principal
VIX during Extended Trading Hours. filing of the proposed rule change, the office of the Exchange. All comments
CBOE understands that one or more Commission summarily may received will be posted without change;
major market data vendors (e.g. temporarily suspend such rule change if the Commission does not edit personal
Bloomberg and Reuters) will widely it appears to the Commission that such identifying information from
disseminate the current VIX values action is necessary or appropriate in the submissions. You should submit only
during Extended Trading Hours, public interest, for the protection of information that you wish to make
providing Trading Permit Holders and investors, or otherwise in furtherance of available publicly. All submissions
other market participants with access to the purposes of the Act. If the should refer to File Number SR–CBOE–
those values through those vendors. As Commission takes such action, the 2016–028 and should be submitted on
CBOE is currently the only U.S. options Commission shall institute proceedings or before May 5, 2016.
exchange with Extended Trading Hours, to determine whether the proposed rule
For the Commission, by the Division of
and the only U.S. options exchange on should be approved or disapproved.
Trading and Markets, pursuant to delegated
which VIX options are listed for trading, IV. Solicitation of Comments authority.14
the proposed rule change has no impact Robert W. Errett,
on intermarket competition. Interested persons are invited to
submit written data, views and Deputy Secretary.
B. Self-Regulatory Organization’s arguments concerning the foregoing, [FR Doc. 2016–08557 Filed 4–13–16; 8:45 am]
Statement on Comments on the including whether the proposed rule BILLING CODE 8011–01–P
Proposed Rule Change Received From change is consistent with the Act.
Members, Participants, or Others Comments may be submitted by any of
the following methods: SECURITIES AND EXCHANGE
The Exchange neither solicited nor COMMISSION
received comments on the proposed Electronic Comments
rule change. • Use the Commission’s Internet [Release No. 34–77569; File No. SR–
comment form (http://www.sec.gov/ ISEMercury–2016–07]
III. Date of Effectiveness of the
Proposed Rule Change and Timing for rules/sro.shtml); or Self-Regulatory Organizations; ISE
Commission Action • Send an email to rule-comments@
Mercury, LLC; Notice of Filing of
sec.gov. Please include File Number SR–
Because the proposed rule change Proposed Rule Change Related to
CBOE–2016–028 on the subject line.
does not (i) significantly affect the Market Wide Risk Protection
protection of investors or the public Paper Comments
April 8, 2016.
interest; (ii) impose any significant • Send paper comments in triplicate Pursuant to Section 19(b)(1) of the
burden on competition; and (iii) become to Secretary, Securities and Exchange
operative for 30 days from the date on Securities Exchange Act of 1934
Commission, 100 F Street NE.,
which it was filed, or such shorter time (‘‘Act’’),1 and Rule 19b–4 thereunder,2
Washington, DC 20549–1090.
as the Commission may designate, the notice is hereby given that, on March
All submissions should refer to File 29, 2016, ISE Mercury, LLC (the
proposed rule change has become Number SR–CBOE–2016–028. This file
effective pursuant to Section 19(b)(3)(A) ‘‘Exchange’’ or ‘‘ISE Mercury’’) filed
number should be included on the with the Securities and Exchange
of the Act 11 and Rule 19b–4(f)(6) subject line if email is used. To help the
thereunder.12 Commission (‘‘Commission’’) the
Commission process and review your proposed rule change, as described in
The Exchange has asked the comments more efficiently, please use
Commission to waive the 30-day Items I, II, and III below, which Items
only one method. The Commission will have been prepared by the self-
operative delay so that the proposal may post all comments on the Commission’s
become operative on the date that VIX regulatory organization. The
Internet Web site (http://www.sec.gov/ Commission is publishing this notice to
values may become available during rules/sro.shtml). Copies of the
Extended Trading Hours, which is solicit comments on the proposed rule
submission, all subsequent change from interested persons.
expected to be April 15, 2016. The amendments, all written statements
Commission believes that waiving the with respect to the proposed rule I. Self-Regulatory Organization’s
30-day operative delay is consistent change that are filed with the Statement of the Terms of Substance of
with the protection of investors and the Commission, and all written the Proposed Rule Change
public interest. The Commission notes communications relating to the The Exchange proposes to introduce
that the proposed rule change merely proposed rule change between the new activity based order protections as
allows VIX values to be disseminated Commission and any person, other than described in more detail below. The text
during Extended Trading Hours in the those that may be withheld from the of the proposed rule change is available
public in accordance with the
mstockstill on DSK4VPTVN1PROD with NOTICES

11 15 U.S.C. 78s(b)(3)(A).
on the Exchange’s Web site (http://
12 17
provisions of 5 U.S.C. 552, will be www.ise.com), at the principal office of
CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the available for Web site viewing and the Exchange, and at the Commission’s
Commission with written notice of its intent to file Public Reference Room.
the proposed rule change, along with a brief 13 For purposes only of waiving the 30-day

description and the text of the proposed rule operative delay, the Commission has also
14 17 CFR 200.30–3(a)(12).
change, at least five business days prior to the date considered the proposed rule’s impact on
1 15 U.S.C. 78s(b)(1).
of filing of the proposed rule change, or such efficiency, competition, and capital formation. See
shorter time as designated by the Commission. 15 U.S.C. 78c(f). 2 17 CFR 240.19b–4.

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Document Created: 2018-02-07 13:48:07
Document Modified: 2018-02-07 13:48:07

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 22138