81 FR 31283 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Add Subparagraph (5) to Rule 21.1(h) Modifying the Operation of Orders Subject to the Display Price Sliding Process When a Contra-Side Post Only Order Is Received by the Bats BZX Exchange Options Platform
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 96 (May 18, 2016)
Federal Register Volume 81, Issue 96 (May 18, 2016)
| Page Range | 31283-31286 | |
| FR Document | 2016-11641 |
[Federal Register Volume 81, Number 96 (Wednesday, May 18, 2016)] [Notices] [Pages 31283-31286] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-11641] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77818; File No. SR-BatsBZX-2016-16] Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Add Subparagraph (5) to Rule 21.1(h) Modifying the Operation of Orders Subject to the Display Price Sliding Process When a Contra-Side Post Only Order Is Received by the Bats BZX Exchange Options Platform May 12, 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 May 3, 2016, Bats BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') 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 Exchange has designated this proposal as a ``non-controversial'' proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b- 4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with the Commission. 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). \4\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to add subparagraph (5) to Rule 21.1(h) modifying the operation of orders subject to the display price sliding process when a contra-side Post Only Order \5\ is received by the Exchange's options platform (``BZX Options''). --------------------------------------------------------------------------- \5\ See Exchange Rule 21.1(d)(8). --------------------------------------------------------------------------- The text of the proposed rule change is available at the Exchange's Web site at www.batstrading.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts 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 add subparagraph (5) to Rule 21.1(h) modifying the operation of orders subject to the display price sliding process when a contra-side Post Only Order is received by BZX Options. Under current Exchange Rule 21.1(h), an order subject to the display price sliding process that, at the time of entry, would lock or cross a Protected Quotation of another options exchange will be ranked at the locking price in the BZX Options Book \6\ and displayed by the System at one minimum price variation below the current National [[Page 31284]] Best Offer (``NBO'') \7\ (for bids) or to one minimum price variation above the current National Best Bid (``NBB'') \8\ (for offers). Post Only Orders are orders that are to be ranked and executed on the Exchange pursuant to Rule 21.8 (Order Display and Book Processing) or cancelled, as appropriate, without routing away to another trading center.\9\ Currently, a Post Only Order will not remove liquidity from the BZX Options Book unless the value of price improvement associated with such execution equals or exceeds the sum of fees charged for such execution and the value of any rebate that would be provided if the order posted to the BZX Options Book and subsequently provided liquidity. In order to prevent circumstances on the BZX Options Book where an order is ranked at the displayed price of a resting contra- side order, which could result in apparent violations of the Exchange's priority rule, an incoming Post Only Order is currently rejected if it would be posted at the locking price of a contra-side order subject to the display price sliding process. In particular, accepting such order would result in a situation where an order is displayed on the Exchange and a contra-side order is ranked at the same price as such order. In turn, if an execution at that price is reported by the Exchange, the Exchange believes a User \10\ representing the order displayed on the Exchange might believe that an incoming order was received by the Exchange and then bypassed such order (i.e., removing some other liquidity on the same side of the market as the displayed order). As described in further detail below, the proposal will avoid the possibility of an execution of an order subject to display-price sliding at the same price as an order displayed on the Exchange. The Exchange notes that the circumstance described above, where an incoming Post Only Order is rejected by the Exchange, is limited to times when the Exchange is not already quoting at the NBBO and a Post Only Order is seeking to join either the NBB or NBO but there is a resting display-price slid order on the contra-side of the Exchange's order book. --------------------------------------------------------------------------- \6\ ``BZX Options Book'' is defined as ``the electronic book of options orders maintained by the Trading System.'' See Exchange Rule 16.1(a)(9). \7\ See Exchange Rule 16.1(a)(29) (defining the terms ``NBB'', ``NBO'', and ``NBBO''). \8\ Id. \9\ See Exchange Rule 21.1(d)(8). \10\ ``User'' is defined as ``any Options Member or Sponsored Participant who is authorized to obtain access to the System pursuant to Rule 11.3 (Access).'' See Exchange Rule 16.1(a)(63). --------------------------------------------------------------------------- In order to facilitate the entry of orders priced at the National Best Bid or Offer (``NBBO''), the Exchange proposes to add subparagraph (5) to Rule 21.1(h) modifying the operation of orders subject to the display price sliding process when a contra-side Post Only Order is received by BZX Options. Under proposed subparagraph (5), to the extent an incoming Post Only Order would be ranked and displayed at a price equal to the ranked price of a contra-side order subject to display- price sliding (i.e., the locking price) the order subject to display- price sliding would be re-ranked at one (1) cent above the current NBB (for offers) or one (1) cent below the current NBO (for bids). An order subject to display price sliding that is re-ranked pursuant to proposed subparagraph (5) of Rule 21.1(h) would be re-ranked at the locking price in the event there is no longer displayed contra-side interest at the locking price. In both cases, the order would remain displayed by the System at one minimum price variation below the current NBO (for bids) or to one minimum price variation above the current NBB (for offers). The below examples describe the operation of orders subject to display price sliding under proposed subparagraph (5) to Rule 21.1(h). Example 1: Securities Quoted in Penny Increments--Proposed Operation. Assume the NBBO is $1.00 x $1.01 and that the Exchange's displayed best bid and offer (``BBO'') is $1.00 x $1.02. Also assume that a non-routable order to buy at $1.01 subject to display price sliding is resting on the BZX Options Book, ranked at $1.01 and displayed at $1.00. Assume a Post Only Order to sell at $1.01 is entered and, under current functionality, would be rejected because it is executable at the locking price of the order to buy subject to display price sliding resting on the BZX Options Book. As proposed, the order to buy subject to display price sliding would be re-ranked and would remain displayed at $1.00, one (1) cent below the current NBO. The Post Only Order to sell would be posted to the BZX Options Book, ranked and displayed at $1.01 (i.e., allowing the Exchange to join the NBBO of $1.00 x $1.01). If the Post Only Order to sell is executed or cancelled, the order to buy subject to display price sliding would be re-ranked at $1.01, its original ranked price, and would remain displayed at $1.00. Example 2: Securities Quoted in Non-Penny Increments--Proposed Operation. Assume the NBBO is $1.00 x $1.05 and that the Exchange's BBO is $1.00 x $1.10. Also assume that a non-routable order to buy at $1.05 subject to display price sliding is resting on the BZX Options Book, ranked at $1.05 and displayed at $1.00. Assume a Post Only Order to sell at $1.05 is entered and, under current functionality, would be rejected because it is executable at the locking price of the order to buy subject to display price sliding resting on the BZX Options Book. As proposed, the order to buy subject to display price sliding would be re-ranked at $1.04, one (1) cent below the NBO, and would remain displayed at $1.00. The Post Only Order to sell would be posted to the BZX Options Book, ranked and displayed at $1.05 (i.e., allowing the Exchange to join the NBBO of $1.00 x $1.01). If the Post Only Order to sell is executed or cancelled, the order to buy subject to display price sliding would be re-ranked at $1.05, its original ranked price, and would remain displayed at $1.00. The Exchange notes that similar behavior currently exists on its equities platform that permits an order to buy(sell) subject to display price sliding to be executed at one-half minimum price variation more(less) than the price of a contra-side displayed BZX Post Only Order.\11\ Specifically, under Exchange Rule 11.9(g)(1)(E), BZX Post Only Orders are permitted to post and be displayed opposite the ranked price of orders subject to display-price sliding. In the event an order subject to display-price sliding is ranked on the BZX Book \12\ at a price equal to an opposite side order displayed by the Exchange, it cannot be executed at that price and instead will be subject to processing as set forth in Rule 11.13(a)(4)(D). Under Exchange Rule 11.13(a)(4)(D), in the event that an incoming order is a market order or is a limit order priced more aggressively than the displayed order, the Exchange will execute the incoming order at, in the case of an incoming sell order, one-half minimum price variation less than the price of the displayed order, and, in the case of an incoming buy order, at one-half minimum price variation more than the price of the displayed order. This behavior is designed to avoid an apparent priority issue. In particular, in such a situation the Exchange believes a User representing an order that is displayed on the Exchange might believe that an incoming order was received by the Exchange and then bypassed such displayed order, removing some other non-displayed liquidity on the same side of the market as such displayed order. Similar to what the Exchange proposes for BZX Options, the above described functionality on its equites platform also effectively changes the ranked price of the order subject to display price sliding. Although the underlying solution is intended to solve the same circumstance, because half-penny executions are not permitted with respect to options transactions, on BZX Options the Exchange proposes to adjust the ranked price of the display-price slid order when a contra-side Post Only order is received by BZX and posted at the locking price. --------------------------------------------------------------------------- \11\ See Exchange Rule 11.9(c)(6). \12\ See BZX Rule 1.5(e). --------------------------------------------------------------------------- [[Page 31285]] 2. Statutory Basis The Exchange believes that its proposal is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.\13\ In particular, the proposal is consistent with Section 6(b)(5) of the Act \14\ because it is designed to encourage displayed liquidity and offer market participants greater flexibility to post liquidity on the BZX Options Book, thereby promoting just and equitable principles of trade, fostering cooperation and coordination with persons engaged in facilitating transactions in securities, removing impediments to, and perfecting the mechanism of, a free and open market and a national market system. --------------------------------------------------------------------------- \13\ 15 U.S.C. 78f(b). \14\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Under current functionality, an incoming Post Only Order would be rejected if it is executable at the locking price of a contra-side order subject to display price sliding resting on the BZX Options Book. This, at times, inhibits market participants, including Market Makers \15\ from utilizing Post Only Orders to quote at the NBBO. Post Only Orders allow Users to post aggressively priced liquidity, as such Users have certainty as to the fee or rebate they will receive from the Exchange if their order is executed. Without such ability and by rejecting such Post Only Orders in scenarios described herein, the Exchange believes that certain Users would simply post less aggressively priced liquidity, and prices available for market participants, including retail investors, would deteriorate. Accordingly, the Exchange believes that the proposed rule change promotes just and equitable principles of trade by enhancing the liquidity available to all market participants by allowing Market Makers and other liquidity providers to add liquidity to the Exchange at the NBBO without fear that their order would be rejected. In addition, the proposed rule change would assist Market Makers in satisfying their two-sided quoting obligations under Exchange Rules 22.5(a)(1) and 22.6(d)(1). The proposed rule change should increase displayed liquidity at the NBBO on the Exchange, resulting in improved market quality and price discovery for all participants. The Exchange also notes that similar behavior currently exists on its equities platform that permits an order to buy(sell) subject to display price sliding to be executed at one-half minimum price variation more(less) than the price of a contra-side displayed BZX Post Only Order.\16\ --------------------------------------------------------------------------- \15\ See Exchange Rule 16.1(a)(37). \16\ See Exchange Rules 11.9(g)(1)(E) and 11.13(a)(4)(D). See also Securities Exchange Act Release No. 64754 (June 27, 2011), 76 FR 38712 (July 1, 2011) (SR-BATS-2011-015) (Order Approving a Proposed Rule Change to Amend BATS Rule 11.9, Entitled ``Orders and Modifiers'' and BATS Rule 11.13, Entitled ``Order Execution''). --------------------------------------------------------------------------- (B) Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the Exchange believes the proposed rule change would enhance competition by enabling market participants to post liquidity at the NBBO, thereby increasing the liquidity on the Exchange at the NBBO. For all the reasons stated above, the Exchange does not believe that the proposed rule changes will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act, and believes the proposed change will enhance competition. (C) Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has neither solicited nor received written comments on the proposed rule change. The Exchange has not received any written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \17\ and Rule 19b-4(f)(6) thereunder.\18\ Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \19\ and Rule 19b- 4(f)(6) thereunder.\20\ --------------------------------------------------------------------------- \17\ 15 U.S.C. 78s(b)(3)(A)(iii). \18\ 17 CFR 240.19b-4(f)(6). \19\ 15 U.S.C. 78s(b)(3)(A). \20\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange's intent to file the proposed rule change, along with a brief description and 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. The Exchange has satisfied this requirement. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) under the Act \21\ normally does not become operative for 30 days after the date of filing. However, Rule 19b-4(f)(6)(iii) \22\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange states that the proposed rule change will benefit market participants by enhancing their ability to post liquidity at the NBBO, and that waiver of the operative delay may increase displayed liquidity at the NBBO on the Exchange, resulting in improved market quality and price discovery for all participants in a timely manner. Further, the Exchange notes that the proposed rule change will not require any systems changes by Exchange Users that would necessitate a delay, as the Exchange will now accept and no longer reject Post Only Orders in the situations described herein. Based on the foregoing, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest.\23\ The Commission hereby grants the Exchange's request and designates the proposal operative upon filing. --------------------------------------------------------------------------- \21\ 17 CFR 240.19b-4(f)(6). \22\ 17 CFR 240.19b-4(f)(6)(iii). \23\ 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). --------------------------------------------------------------------------- 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. [[Page 31286]] 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 rule-comments@sec.gov. Please include File Number SR-BatsBZX-2016-16 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-BatsBZX-2016-16. 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 will also 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-BatsBZX-2016-16 and should be submitted on or before June 8, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\24\ --------------------------------------------------------------------------- \24\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-11641 Filed 5-17-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 96 / Wednesday, May 18, 2016 / Notices 31283
Washington, DC 20549 on official filed by approximately 6 respondents pursuant to Section 19(b)(3)(A) of the
business days between the hours of annually for a total reporting burden of Act 3 and Rule 19b–4(f)(6)(iii)
10:00 a.m. and 3:00 p.m. Copies of such 12 hours (2 hours per response × 6 thereunder,4 which renders it effective
filing also will be available for responses). upon filing with the Commission. The
inspection and copying at the principal An agency may not conduct or Commission is publishing this notice to
office of the Exchange. All comments sponsor, and a person is not required to solicit comments on the proposed rule
received will be posted without change; respond to, a collection of information change from interested persons.
the Commission does not edit personal unless it displays a currently valid
identifying information from I. Self-Regulatory Organization’s
control number.
submissions. You should submit only Statement of the Terms of Substance of
The public may view the background
information that you wish to make the Proposed Rule Change
documentation for this information
available publicly. All submissions collection at the following Web site, The Exchange filed a proposal to add
should refer to File Number SR–CBOE– www.reginfo.gov. Comments should be subparagraph (5) to Rule 21.1(h)
2016–034, and should be submitted on directed to: (i) Desk Officer for the modifying the operation of orders
or before June 8, 2016. Securities and Exchange Commission, subject to the display price sliding
For the Commission, by the Division of Office of Information and Regulatory process when a contra-side Post Only
Trading and Markets, pursuant to delegated Affairs, Office of Management and Order 5 is received by the Exchange’s
authority.18 Budget, Room 10102, New Executive options platform (‘‘BZX Options’’).
Robert W. Errett, Office Building, Washington, DC 20503, The text of the proposed rule change
Deputy Secretary. or by sending an email to: Shagufta_ is available at the Exchange’s Web site
[FR Doc. 2016–11652 Filed 5–17–16; 8:45 am] Ahmed@omb.eop.gov; and (ii) Pamela at www.batstrading.com, at the
BILLING CODE 8011–01–P Dyson, Director/Chief Information principal office of the Exchange, and at
Officer, Securities and Exchange the Commission’s Public Reference
Commission, c/o Remi Pavlik-Simon, Room.
SECURITIES AND EXCHANGE 100 F Street NE., Washington, DC 20549 II. Self-Regulatory Organization’s
COMMISSION or send an email to: PRA_Mailbox@ Statement of the Purpose of, and
sec.gov. Comments must be submitted to Statutory Basis for, the Proposed Rule
Submission for OMB Review; OMB within 30 days of this notice. Change
Comment Request
Dated: May 12, 2016. In its filing with the Commission, the
Upon Written Request Copies Available Robert W. Errett, Exchange included statements
From: Securities and Exchange Deputy Secretary. concerning the purpose of and basis for
Commission, Office of FOIA Services, [FR Doc. 2016–11640 Filed 5–17–16; 8:45 am] the proposed rule change and discussed
100 F Street NE., Washington, DC BILLING CODE 8011–01–P any comments it received on the
20549–2736 proposed rule change. The text of these
Extension: Schedule 14D–9F statements may be examined at the
SEC File No. 270–339, OMB Control No. SECURITIES AND EXCHANGE places specified in Item IV below. The
3235–0382 COMMISSION Exchange has prepared summaries, set
Notice is hereby given that, pursuant forth in Sections A, B, and C below, of
[Release No. 34–77818; File No. SR–
to the Paperwork Reduction Act of 1995 BatsBZX–2016–16] the most significant parts of such
(44 U.S.C. 3501 et seq.), the Securities statements.
and Exchange Commission Self-Regulatory Organizations; Bats
(‘‘Commission’’) has submitted to the (A) Self-Regulatory Organization’s
BZX Exchange, Inc.; Notice of Filing
Office of Management and Budget this Statement of the Purpose of, and
and Immediate Effectiveness of a
request for extension of the previously Statutory Basis for, the Proposed Rule
Proposed Rule Change To Add
approved collection of information Change
Subparagraph (5) to Rule 21.1(h)
discussed below. Modifying the Operation of Orders 1. Purpose
Schedule 14D–9F (17 CFR 240.14d– Subject to the Display Price Sliding
103) under the Securities Exchange Act The Exchange is proposing to add
Process When a Contra-Side Post Only subparagraph (5) to Rule 21.1(h)
of 1934 (15 U.S.C. 78 et seq.) is used by Order Is Received by the Bats BZX
any foreign private issuer incorporated modifying the operation of orders
Exchange Options Platform subject to the display price sliding
or organized under the laws of Canada
or by any director or officer of such May 12, 2016. process when a contra-side Post Only
issuer, where the issuer is the subject of Pursuant to Section 19(b)(1) of the Order is received by BZX Options.
a cash tender or exchange offer for a Securities Exchange Act of 1934 (the Under current Exchange Rule 21.1(h),
class of securities filed on Schedule ‘‘Act’’),1 and Rule 19b–4 thereunder,2 an order subject to the display price
14D–1F. The information required to be notice is hereby given that on May 3, sliding process that, at the time of entry,
filed with the Commission is intended 2016, Bats BZX Exchange, Inc. (the would lock or cross a Protected
to permit verification of compliance ‘‘Exchange’’ or ‘‘BZX’’) filed with the Quotation of another options exchange
with the securities law requirements Securities and Exchange Commission will be ranked at the locking price in the
and assures the public availability of (‘‘Commission’’) the proposed rule BZX Options Book 6 and displayed by
such information. The information the System at one minimum price
sradovich on DSK3TPTVN1PROD with NOTICES
change as described in Items I and II
provided is mandatory and all below, which Items have been prepared variation below the current National
information is made available to the by the Exchange. The Exchange has 3 15 U.S.C. 78s(b)(3)(A).
public upon request. We estimate that designated this proposal as a ‘‘non- 4 17 CFR 240.19b–4(f)(6)(iii).
Schedule 14D–9F takes approximately 2 controversial’’ proposed rule change 5 See Exchange Rule 21.1(d)(8).
hours per response to prepare and is 6 ‘‘BZX Options Book’’ is defined as ‘‘the
1 15 U.S.C. 78s(b)(1). electronic book of options orders maintained by the
18 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4. Trading System.’’ See Exchange Rule 16.1(a)(9).
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![31286 Federal Register / Vol. 81, No. 96 / Wednesday, May 18, 2016 / Notices
IV. Solicitation of Comments For the Commission, by the Division of the most significant aspects of such
Trading and Markets, pursuant to delegated statements.
Interested persons are invited to authority.24
submit written data, views, and Robert W. Errett, A. Self-Regulatory Organization’s
arguments concerning the foregoing, Deputy Secretary.
Statement of the Purpose of, and
including whether the proposed rule Statutory Basis for, the Proposed Rule
[FR Doc. 2016–11641 Filed 5–17–16; 8:45 am]
change is consistent with the Act. Change
BILLING CODE 8011–01–P
Comments may be submitted by any of 1. Purpose
the following methods: The Exchange proposes to amend
SECURITIES AND EXCHANGE Exchange Rule 612, Aggregate Risk
Electronic Comments COMMISSION Manager (‘‘ARM’’), to modify the
• Use the Commission’s Internet [Release No. 34–77817; File No. SR–MIAX– minimum Allowable Engagement
comment form (http://www.sec.gov/ 2016–10] Percentage (as described below)
rules/sro.shtml); or determined by Exchange Market
Self-Regulatory Organizations; Miami Makers, and to codify the Exchange’s
• Send an email to rule- International Securities Exchange LLC;
comments@sec.gov. Please include File existing practice of establishing default
Notice of Filing and Immediate ARM settings, as described below. The
Number SR–BatsBZX–2016–16 on the Effectiveness of a Proposed Rule Exchange is also proposing two minor
subject line. Change To Amend Exchange Rule 612, technical amendments to Rule 612(a), as
Paper Comments Aggregate Risk Manager (‘‘ARM’’) described below.
May 12, 2016.
ARM protects MIAX Market Makers 3
• Send paper comments in triplicate and assists them in managing risk by
to Secretary, Securities and Exchange Pursuant to the provisions of Section
limiting the number of contracts they
Commission, 100 F Street NE., 19(b)(1) of the Securities Exchange Act
execute in an option class on the
of 1934 (the ‘‘Act’’) 1 and Rule 19b–4
Washington, DC 20549–1090. Exchange within a specified time period
thereunder,2 notice is hereby given that
that has been established by the Market
All submissions should refer to File on April 29, 2016, Miami International
Maker (a ‘‘specified time period’’).
Number SR–BatsBZX–2016–16. This file Securities Exchange LLC (‘‘MIAX’’ or
MIAX Market Makers establish a
number should be included on the the ‘‘Exchange’’) filed with the
percentage of their quotations (the
subject line if email is used. To help the Securities and Exchange Commission
‘‘Allowable Engagement Percentage’’ or
Commission process and review your (the ‘‘Commission’’) a proposed rule
‘‘AEP’’) and the specified time period
comments more efficiently, please use change as described in Items I, II, and
for each option class in which they are
only one method. The Commission will III below, which Items have been
appointed.4 The System activates the
post all comments on the Commission’s prepared by the Exchange. The
Aggregate Risk Manager when it has
Internet Web site (http://www.sec.gov/ Commission is publishing this notice to
determined that a Market Maker has
rules/sro.shtml). Copies of the solicit comments on the proposed rule
traded a number of contracts equal to or
submission, all subsequent change from interested persons.
above their AEP during the specified
amendments, all written statements I. Self-Regulatory Organization’s time period. When an execution against
with respect to the proposed rule Statement of the Terms of Substance of a Market Maker’s Standard quote 5 or
change that are filed with the the Proposed Rule Change Day eQuote (as defined below) occurs,
Commission, and all written The Exchange is filing a proposal to the System looks back over the specified
communications relating to the amend Exchange Rule 612, Aggregate time period to determine whether the
proposed rule change between the Risk Manager (‘‘ARM’’). execution is of sufficient size to trigger
Commission and any person, other than The text of the proposed rule change the Aggregate Risk Manager. The
those that may be withheld from the is available on the Exchange’s Web site Aggregate Risk Manager then
public in accordance with the at http://www.miaxoptions.com/filter/ 3 The term ‘‘Market Maker’’ refers to a ‘‘Lead
provisions of 5 U.S.C. 552, will be wotitle/rule_filing, at MIAX’s principal Market Maker,’’ ‘‘Primary Lead Market Maker’’ and
available for Web site viewing and office, and at the Commission’s Public ‘‘Registered Market Maker’’ collectively. A Lead
printing in the Commission’s Public Reference Room. Market Maker is a Member registered with the
Reference Room, 100 F Street NE., Exchange for the purpose of making markets in
II. Self-Regulatory Organization’s securities traded on the Exchange and that is vested
Washington, DC 20549, on official Statement of the Purpose of, and with the rights and responsibilities specified in
business days between the hours of Statutory Basis for, the Proposed Rule Chapter VI of these Rules with respect to Lead
10:00 a.m. and 3:00 p.m. Copies of such Market Makers. A Primary Lead Market Maker is a
Change Lead Market Maker appointed by the Exchange to
filing will also be available for act as the Primary Lead Market Maker for the
inspection and copying at the principal In its filing with the Commission, the
purpose of making markets in securities traded on
office of the Exchange. All comments Exchange included statements the Exchange. A Registered Market Maker is a
concerning the purpose of and basis for Member registered with the Exchange for the
received will be posted without change;
the proposed rule change and discussed purpose of making markets in securities traded on
the Commission does not edit personal the Exchange, who is not a Lead Market Maker. See
any comments it received on the
identifying information from proposed rule change. The text of these
Exchange Rule 100.
4 The Exchange’s Board or designated committee
submissions. You should submit only
sradovich on DSK3TPTVN1PROD with NOTICES
statements may be examined at the appoints one Primary Lead Market Maker and other
information that you wish to make places specified in Item IV below. The Market Makers to each options class traded on the
available publicly. All submissions Exchange has prepared summaries, set Exchange. For a complete description of the
should refer to File Number SR– forth in sections A, B, and C below, of Exchange’s appointment process, see Exchange
BatsBZX–2016–16 and should be Rule 602.
5 A Standard quote is a quote submitted by a
submitted on or before June 8, 2016. 24 17 CFR 200.30–3(a)(12). Market Maker that cancels and replaces the Market
1 15 U.S.C. 78s(b)(1). Maker’s previous Standard quote, if any. See
2 17 CFR 240.19b–4. Exchange Rule 517(a)(1).
VerDate Sep<11>2014 17:10 May 17, 2016 Jkt 238001 PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 E:\FR\FM\18MYN1.SGM 18MYN1](https://thefederalregister.org/doc/81_FR_31379/page/4.svg)
Document Created: 2016-05-18 00:06:40
Document Modified: 2016-05-18 00:06:40
| 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 31283 |
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