81 FR 39308 - Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Extension of the Exchange's Penny Pilot Program and Replacement of Penny Pilot Issues That Have Been Delisted

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 116 (June 16, 2016)

Page Range		39308-39310
FR Document		2016-14207
Federal Register, Volume 81 Issue 116 (Thursday, June 16, 2016)
[Federal Register Volume 81, Number 116 (Thursday, June 16, 2016)]
[Notices]
[Pages 39308-39310]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-14207]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78036; File No. SR-BX-2016-021]


Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change Relating to 
Extension of the Exchange's Penny Pilot Program and Replacement of 
Penny Pilot Issues That Have Been Delisted

June 10, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on June 8, 2016, NASDAQ BX, Inc. (``BX'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``Commission'') 
the proposed rule change as described in Items I and II, below, which 
Items have been prepared by the Exchange. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    BX is filing with the Commission a proposal to amend Chapter VI, 
Section 5 (Minimum Increments),\3\ to extend through December 31, 2016 
or the date of permanent approval, if earlier, the Penny Pilot Program 
in options classes in certain issues (``Penny Pilot'' or ``Pilot''), 
and to change the date when delisted classes may be replaced in the 
Penny Pilot.\4\
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    \3\ References herein to Chapter and Series refer to rules of 
the BX Options Market (``BX Options''), unless otherwise noted.
    \4\ The Penny Pilot was established in June 2012 and extended in 
2014. See Securities Exchange Act Release Nos. 67256 (June 26, 
2012), 77 FR 39277 (July 2, 2012) (SR-BX-2012-030) (order approving 
BX option rules and establishing Penny Pilot); and 75326 (June 29, 
2015), 80 FR 38481 (July 6, 2015) (SR-BX-2015-037) (notice of filing 
and immediate effectiveness extending the Penny Pilot through June 
30, 2016).

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[[Page 39309]]

    The text of the amended Exchange rule is set forth immediately 
below.
    Proposed new language is underlined and proposed deleted language 
is [bracketed].

NASDAQ BX Rules

Options Rules

* * * * *

Chapter VI Trading Systems

* * * * *

Sec. 5 Minimum Increments

(a) The Board may establish minimum quoting increments for options 
contracts traded on BX Options. Such minimum increments established by 
the Board will be designated as a stated policy, practice, or 
interpretation with respect to the administration of this Section 
within the meaning of Section 19 of the Exchange Act and will be filed 
with the SEC as a rule change for effectiveness upon filing. Until such 
time as the Board makes a change in the increments, the following 
principles shall apply:
    (1)-(2) No Change.
    (3) For a pilot period scheduled to expire on [June 30]December 31, 
2016 or the date of permanent approval, if earlier, if the options 
series is trading pursuant to the Penny Pilot program one (1) cent if 
the options series is trading at less than $3.00, five (5) cents if the 
options series is trading at $3.00 or higher, unless for QQQQs, SPY and 
IWM where the minimum quoting increment will be one cent for all series 
regardless of price. A list of such options shall be communicated to 
membership via an Options Trader Alert (``OTA'') posted on the 
Exchange's Web site.
    The Exchange may replace any pilot issues that have been delisted 
with the next most actively traded multiply listed options classes that 
are not yet included in the pilot, based on trading activity in the 
previous six months. The replacement issues may be added to the pilot 
on the second trading day following July 1, [2015]2016[ and January 1, 
2016].
    (4) No Change.
    (b) No Change.
* * * * *
    The text of the proposed rule change is also available on the 
Exchange's Web site at http://nasdaqomxbx.cchwallstreet.com, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this filing is to amend Chapter VI, Section 5, to 
extend the Penny Pilot through December 31, 2016 or the date of 
permanent approval, if earlier,\5\ and to change the date when delisted 
classes may be replaced in the Penny Pilot. The Exchange believes that 
extending the Penny Pilot will allow for further analysis of the Penny 
Pilot and a determination of how the program should be structured in 
the future.
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    \5\ The options exchanges in the U.S. that have pilot programs 
similar to the Penny Pilot (together ``pilot programs'') are 
currently working on a proposal for permanent approval of the 
respective pilot programs.
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    Under the Penny Pilot, the minimum price variation for all 
participating options classes, except for the Nasdaq-100 Index Tracking 
Stock (``QQQQ''), the SPDR S&P 500 Exchange Traded Fund (``SPY'') and 
the iShares Russell 2000 Index Fund (``IWM''), is $0.01 for all 
quotations in options series that are quoted at less than $3 per 
contract and $0.05 for all quotations in options series that are quoted 
at $3 per contract or greater. QQQQ, SPY and IWM are quoted in $0.01 
increments for all options series. The Penny Pilot is currently 
scheduled to expire on June 30, 2016.
    The Exchange proposes to extend the time period of the Penny Pilot 
through December 31, 2016 or the date of permanent approval, if 
earlier, and to provide a revised date for adding replacement issues to 
the Penny Pilot. The Exchange proposes that any Penny Pilot Program 
issues that have been delisted may be replaced on the second trading 
day following July 1, 2016. The replacement issues will be selected 
based on trading activity in the previous six months.\6\
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    \6\ The replacement issues will be announced to the Exchange's 
membership via an Options Trader Alert (OTA) posted on the 
Exchange's Web site. The Exchange proposes in its Penny Pilot rule 
that replacement issues will be selected based on trading activity 
in the previous six months. The replacement issues would be 
identified based on The Options Clearing Corporation's trading 
volume data. For example, for the July replacement, trading volume 
from December 1, 2015 through May 30, 2016 would be analyzed. The 
month immediately preceding the replacement issues' addition to the 
Pilot Program (i.e., June) would not be used for purposes of the 
six-month analysis.
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    This filing does not propose any substantive changes to the Penny 
Pilot Program; all classes currently participating in the Penny Pilot 
will remain the same and all minimum increments will remain unchanged. 
The Exchange believes the benefits to public customers and other market 
participants who will be able to express their true prices to buy and 
sell options have been demonstrated to outweigh the potential increase 
in quote traffic.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\7\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\8\ in particular, in that it is 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 facilitating transactions in securities, and 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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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    In particular, the proposed rule change, which extends the Penny 
Pilot for an additional six months through December 31, 2016 or the 
date of permanent approval, if earlier, and changes the date for 
replacing Penny Pilot issues that were delisted to the second trading 
day following July 1, 2016, will enable public customers and other 
market participants to express their true prices to buy and sell 
options for the benefit of all market participants. This is consistent 
with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. To the contrary, this proposal 
is pro-

[[Page 39310]]

competitive because it allows Penny Pilot issues to continue trading on 
the Exchange.
    Moreover, the Exchange believes that the proposed rule change will 
allow for further analysis of the Pilot and a determination of how the 
Pilot should be structured in the future; and will serve to promote 
regulatory clarity and consistency, thereby reducing burdens on the 
marketplace and facilitating investor protection.
    The Pilot is an industry-wide initiative supported by all other 
option exchanges. The Exchange believes that extending the Pilot will 
allow for continued competition between market participants on the 
Exchange trading similar products as their counterparts on other 
exchanges, while at the same time allowing the Exchange to continue to 
compete for order flow with other exchanges in option issues trading as 
part of the Pilot.

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

    No written comments were either solicited or received.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\ 
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 prior to 
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 and Rule 19b-
4(f)(6)(iii) thereunder.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally 
does not become operative prior to 30 days after the date of the 
filing.\12\ However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the 
Commission may 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 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because doing so will allow the Pilot Program to continue without 
interruption in a manner that is consistent with the Commission's prior 
approval of the extension and expansion of the Pilot Program and will 
allow the Exchange and the Commission additional time to analyze the 
impact of the Pilot Program. Accordingly, the Commission designates the 
proposed rule change as operative upon filing with the Commission.\14\
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6). 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 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. The 
Exchange has satisfied this pre-filing requirement.
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ For purposes only of waiving the operative delay for this 
proposal, the Commission has 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 such 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 under 
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \15\ 15 U.S.C. 78s(b)(2)(B).
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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-BX-2016-021 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street NE., Washington, DC 20549-9303.

All submissions should refer to File Number SR-BX-2016-021. 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 BX. 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-BX-2016-021 and 
should be submitted on or before July 7, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
 Deputy Secretary.
[FR Doc. 2016-14207 Filed 6-15-16; 8:45 am]
 BILLING CODE 8011-01-P
39308 Federal Register / Vol. 81, No. 116 / Thursday, June 16, 2016 / Notices

III. Date of Effectiveness of the At any time within 60 days of the office of the Exchange. All comments
Proposed Rule Change and Timing for filing of the proposed rule change, the received will be posted without change;
Commission Action Commission summarily may the Commission does not edit personal
temporarily suspend such rule change if identifying information from
The Exchange has filed the proposed it appears to the Commission that such submissions. You should submit only
rule change pursuant to Section action is necessary or appropriate in the information that you wish to make
19(b)(3)(A)(iii) of the Act 8 and Rule public interest, for the protection of available publicly. All submissions
19b–4(f)(6) thereunder.9 Because the investors, or otherwise in furtherance of should refer to File Number SR–
proposed rule change does not: (i) the purposes of the Act. If the BatsBZX–2016–23 and should be
Significantly affect the protection of Commission takes such action, the submitted on or before July 7, 2016.
investors or the public interest; (ii) Commission shall institute proceedings
impose any significant burden on For the Commission, by the Division of
under Section 19(b)(2)(B) 15 of the Act to Trading and Markets, pursuant to delegated
competition; and (iii) become operative determine whether the proposed rule authority.16
prior to 30 days from the date on which change should be approved or Robert W. Errett,
it was filed, or such shorter time as the disapproved. Deputy Secretary.
Commission may designate if consistent
with the protection of investors and the IV. Solicitation of Comments [FR Doc. 2016–14204 Filed 6–15–16; 8:45 am]
public interest, the proposed rule BILLING CODE 8011–01–P
Interested persons are invited to
change has become effective pursuant to submit written data, views, and
Section 19(b)(3)(A) of the Act 10 and arguments concerning the foregoing,
Rule 19b–4(f)(6)(iii) thereunder. SECURITIES AND EXCHANGE
including whether the proposed rule
COMMISSION
A proposed rule change filed under change is consistent with the Act.
Rule 19b–4(f)(6) normally does not Comments may be submitted by any of [Release No. 34–78036; File No. SR–BX–
become operative prior to 30 days after the following methods: 2016–021]
the date of the filing.11 However, Electronic Comments Self-Regulatory Organizations;
pursuant to Rule 19b–4(f)(6)(iii),12 the
Commission may designate a shorter • Use the Commission’s Internet NASDAQ BX, Inc.; Notice of Filing and
comment form (http://www.sec.gov/ Immediate Effectiveness of a Proposed
time if such action is consistent with the
rules/sro.shtml); or Rule Change Relating to Extension of
protection of investors and the public
interest. The Exchange has asked the • Send an email to rule-comments@ the Exchange’s Penny Pilot Program
sec.gov. Please include File Number SR– and Replacement of Penny Pilot Issues
Commission to waive the 30-day That Have Been Delisted
operative delay so that the proposal may BatsBZX–2016–23 on the subject line.
become operative immediately upon Paper Comments June 10, 2016.
filing. The Commission believes that • Send paper comments in triplicate Pursuant to Section 19(b)(1) of the
waiving the 30-day operative delay is to Secretary, Securities and Exchange Securities Exchange Act of 1934
consistent with the protection of Commission, 100 F Street NE., (‘‘Act’’),1 and Rule 19b–4 2 thereunder,
investors and the public interest Washington, DC 20549–1090. notice is hereby given that on June 8,
because doing so will allow the Pilot 2016, NASDAQ BX, Inc. (‘‘BX’’ or
All submissions should refer to File ‘‘Exchange’’) filed with the Securities
Program to continue without
Number SR–BatsBZX–2016–23. This file and Exchange Commission (‘‘SEC’’ or
interruption in a manner that is
number should be included on the ‘‘Commission’’) the proposed rule
consistent with the Commission’s prior
subject line if email is used. To help the change as described in Items I and II,
approval of the extension and expansion
Commission process and review your below, which Items have been prepared
of the Pilot Program and will allow the
comments more efficiently, please use by the Exchange. The Commission is
Exchange and the Commission
only one method. The Commission will publishing this notice to solicit
additional time to analyze the impact of
post all comments on the Commission’s comments on the proposed rule change
the Pilot Program.13 Accordingly, the
Internet Web site (http://www.sec.gov/ from interested persons.
Commission designates the proposed
rules/sro.shtml.) Copies of the
rule change as operative upon filing I. Self-Regulatory Organization’s
submission, all subsequent
with the Commission.14 Statement of the Terms of Substance of
amendments, all written statements
with respect to the proposed rule the Proposed Rule Change
8 15 U.S.C. 78s(b)(3)(A)(iii).
9 17 CFR 240.19b–4(f)(6).
change that are filed with the BX is filing with the Commission a
10 15 U.S.C. 78s(b)(3)(A). Commission, and all written proposal to amend Chapter VI, Section
11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– communications relating to the 5 (Minimum Increments),3 to extend
4(f)(6)(iii) requires the Exchange to give the proposed rule change between the through December 31, 2016 or the date
Commission written notice of the Exchange’s intent Commission and any person, other than of permanent approval, if earlier, the
to file the proposed rule change along with a brief
description and the text of the proposed rule
those that may be withheld from the Penny Pilot Program in options classes
change, at least five business days prior to the date public in accordance with the in certain issues (‘‘Penny Pilot’’ or
of filing of the proposed rule change, or such provisions of 5 U.S.C. 552, will be ‘‘Pilot’’), and to change the date when
shorter time as designated by the Commission. The available for Web site viewing and delisted classes may be replaced in the
Exchange has satisfied this pre-filing requirement.
printing in the Commission’s Public
asabaliauskas on DSK3SPTVN1PROD with NOTICES

12 17 CFR 240.19b–4(f)(6)(iii).
Penny Pilot.4
13 See Securities Exchange Act Release No. 61061
Reference Room, 100 F Street NE.,
(November 24, 2009), 74 FR 62857 (December 1, Washington, DC 20549, on official 16 17 CFR 200.30–3(a)(12).
2009) (SR–NYSEArca–2009–44). See also supra business days between the hours of 1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
note 5. 10:00 a.m. and 3:00 p.m. Copies of the
14 For purposes only of waiving the operative 3 References herein to Chapter and Series refer to
filing also will be available for rules of the BX Options Market (‘‘BX Options’’),
delay for this proposal, the Commission has
considered the proposed rule’s impact on inspection and copying at the principal unless otherwise noted.
efficiency, competition, and capital formation. See 4 The Penny Pilot was established in June 2012

15 U.S.C. 78c(f). 15 15 U.S.C. 78s(b)(2)(B). and extended in 2014. See Securities Exchange Act

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The text of the amended Exchange principal office of the Exchange, and at replacement issues will be selected
rule is set forth immediately below. the Commission’s Public Reference based on trading activity in the previous
Proposed new language is underlined Room. six months.6
and proposed deleted language is This filing does not propose any
[bracketed]. II. Self-Regulatory Organization’s substantive changes to the Penny Pilot
Statement of the Purpose of, and Program; all classes currently
NASDAQ BX Rules Statutory Basis for, the Proposed Rule participating in the Penny Pilot will
Options Rules Change remain the same and all minimum
* * * * * In its filing with the Commission, the increments will remain unchanged. The
Exchange included statements Exchange believes the benefits to public
Chapter VI Trading Systems concerning the purpose of and basis for customers and other market participants
* * * * * the proposed rule change and discussed who will be able to express their true
any comments it received on the prices to buy and sell options have been
Sec. 5 Minimum Increments proposed rule change. The text of these demonstrated to outweigh the potential
(a) The Board may establish minimum statements may be examined at the increase in quote traffic.
quoting increments for options contracts places specified in Item IV below. The 2. Statutory Basis
traded on BX Options. Such minimum Exchange has prepared summaries, set
increments established by the Board forth in sections A, B, and C below, of The Exchange believes that its
will be designated as a stated policy, the most significant aspects of such proposal is consistent with Section 6(b)
practice, or interpretation with respect statements. of the Act,7 in general, and furthers the
to the administration of this Section objectives of Section 6(b)(5) of the Act,8
within the meaning of Section 19 of the A. Self-Regulatory Organization’s in particular, in that it is designed to
Exchange Act and will be filed with the Statement of the Purpose of, and prevent fraudulent and manipulative
SEC as a rule change for effectiveness Statutory Basis for, the Proposed Rule acts and practices, to promote just and
upon filing. Until such time as the Change equitable principles of trade, to foster
Board makes a change in the 1. Purpose cooperation and coordination with
increments, the following principles persons engaged in facilitating
The purpose of this filing is to amend transactions in securities, and to remove
shall apply: Chapter VI, Section 5, to extend the
(1)–(2) No Change. impediments to and perfect the
(3) For a pilot period scheduled to Penny Pilot through December 31, 2016 mechanism of a free and open market
expire on [June 30]December 31, 2016 or or the date of permanent approval, if and a national market system and, in
the date of permanent approval, if earlier,5 and to change the date when general, to protect investors and the
earlier, if the options series is trading delisted classes may be replaced in the public interest.
pursuant to the Penny Pilot program one Penny Pilot. The Exchange believes that In particular, the proposed rule
(1) cent if the options series is trading extending the Penny Pilot will allow for change, which extends the Penny Pilot
at less than $3.00, five (5) cents if the further analysis of the Penny Pilot and for an additional six months through
options series is trading at $3.00 or a determination of how the program December 31, 2016 or the date of
higher, unless for QQQQs, SPY and should be structured in the future. permanent approval, if earlier, and
Under the Penny Pilot, the minimum changes the date for replacing Penny
IWM where the minimum quoting
price variation for all participating Pilot issues that were delisted to the
increment will be one cent for all series
options classes, except for the Nasdaq- second trading day following July 1,
regardless of price. A list of such
100 Index Tracking Stock (‘‘QQQQ’’), 2016, will enable public customers and
options shall be communicated to
the SPDR S&P 500 Exchange Traded other market participants to express
membership via an Options Trader Alert
Fund (‘‘SPY’’) and the iShares Russell their true prices to buy and sell options
(‘‘OTA’’) posted on the Exchange’s Web
2000 Index Fund (‘‘IWM’’), is $0.01 for for the benefit of all market participants.
site.
The Exchange may replace any pilot all quotations in options series that are This is consistent with the Act.
issues that have been delisted with the quoted at less than $3 per contract and
$0.05 for all quotations in options series B. Self-Regulatory Organization’s
next most actively traded multiply Statement on Burden on Competition
listed options classes that are not yet that are quoted at $3 per contract or
greater. QQQQ, SPY and IWM are The Exchange does not believe that
included in the pilot, based on trading
quoted in $0.01 increments for all the proposed rule change will impose
activity in the previous six months. The
options series. The Penny Pilot is any burden on competition not
replacement issues may be added to the
currently scheduled to expire on June necessary or appropriate in furtherance
pilot on the second trading day
30, 2016. of the purposes of the Act. To the
following July 1, [2015]2016[ and
The Exchange proposes to extend the contrary, this proposal is pro-
January 1, 2016].
(4) No Change. time period of the Penny Pilot through
(b) No Change. December 31, 2016 or the date of 6 The replacement issues will be announced to

permanent approval, if earlier, and to the Exchange’s membership via an Options Trader
* * * * * Alert (OTA) posted on the Exchange’s Web site. The
The text of the proposed rule change provide a revised date for adding Exchange proposes in its Penny Pilot rule that
is also available on the Exchange’s Web replacement issues to the Penny Pilot. replacement issues will be selected based on
The Exchange proposes that any Penny trading activity in the previous six months. The
asabaliauskas on DSK3SPTVN1PROD with NOTICES

site at http:// replacement issues would be identified based on
nasdaqomxbx.cchwallstreet.com, at the Pilot Program issues that have been
The Options Clearing Corporation’s trading volume
delisted may be replaced on the second data. For example, for the July replacement, trading
Release Nos. 67256 (June 26, 2012), 77 FR 39277 trading day following July 1, 2016. The volume from December 1, 2015 through May 30,
(July 2, 2012) (SR–BX–2012–030) (order approving 2016 would be analyzed. The month immediately
BX option rules and establishing Penny Pilot); and 5 The options exchanges in the U.S. that have preceding the replacement issues’ addition to the
75326 (June 29, 2015), 80 FR 38481 (July 6, 2015) pilot programs similar to the Penny Pilot (together Pilot Program (i.e., June) would not be used for
(SR–BX–2015–037) (notice of filing and immediate ‘‘pilot programs’’) are currently working on a purposes of the six-month analysis.
7 15 U.S.C. 78f(b).
effectiveness extending the Penny Pilot through proposal for permanent approval of the respective
June 30, 2016). pilot programs. 8 15 U.S.C. 78f(b)(5).

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39310 Federal Register / Vol. 81, No. 116 / Thursday, June 16, 2016 / Notices

competitive because it allows Penny pursuant to Rule 19b–4(f)(6)(iii),13 the Place, 100 F Street NE., Washington, DC
Pilot issues to continue trading on the Commission may designate a shorter 20549–9303.
Exchange. time if such action is consistent with the All submissions should refer to File
Moreover, the Exchange believes that protection of investors and the public Number SR–BX–2016–021. This file
the proposed rule change will allow for interest. The Exchange has asked the number should be included on the
further analysis of the Pilot and a Commission to waive the 30-day subject line if email is used. To help the
determination of how the Pilot should operative delay so that the proposal may Commission process and review your
be structured in the future; and will become operative immediately upon comments more efficiently, please use
serve to promote regulatory clarity and filing. The Commission believes that only one method. The Commission will
consistency, thereby reducing burdens waiving the 30-day operative delay is post all comments on the Commission’s
on the marketplace and facilitating consistent with the protection of Internet Web site http://www.sec.gov/
investor protection. investors and the public interest rules/sro.shtml.
The Pilot is an industry-wide because doing so will allow the Pilot Copies of the submission, all
initiative supported by all other option Program to continue without subsequent amendments, all written
exchanges. The Exchange believes that interruption in a manner that is statements with respect to the proposed
extending the Pilot will allow for consistent with the Commission’s prior rule change that are filed with the
continued competition between market approval of the extension and expansion Commission, and all written
participants on the Exchange trading of the Pilot Program and will allow the communications relating to the
similar products as their counterparts Exchange and the Commission proposed rule change between the
on other exchanges, while at the same additional time to analyze the impact of Commission and any person, other than
time allowing the Exchange to continue the Pilot Program. Accordingly, the those that may be withheld from the
to compete for order flow with other Commission designates the proposed public in accordance with the
exchanges in option issues trading as rule change as operative upon filing provisions of 5 U.S.C. 552, will be
part of the Pilot. with the Commission.14 available for Web site viewing and
At any time within 60 days of the printing in the Commission’s Public
C. Self-Regulatory Organization’s Reference Room, 100 F Street NE.,
filing of such proposed rule change, the
Statement on Comments on the Washington, DC 20549, on official
Commission summarily may
Proposed Rule Change Received From business days between the hours of
temporarily suspend such rule change if
Members, Participants, or Others 10:00 a.m. and 3:00 p.m. Copies of the
it appears to the Commission that such
No written comments were either action is necessary or appropriate in the filing also will be available for
solicited or received. public interest, for the protection of inspection and copying at the principal
investors, or otherwise in furtherance of office of BX. All comments received will
III. Date of Effectiveness of the be posted without change; the
Proposed Rule Change and Timing for the purposes of the Act. If the
Commission takes such action, the Commission does not edit personal
Commission Action identifying information from
Commission shall institute proceedings
The Exchange has filed the proposed under Section 19(b)(2)(B) 15 of the Act to submissions. You should submit only
rule change pursuant to Section determine whether the proposed rule information that you wish to make
19(b)(3)(A)(iii) of the Act 9 and Rule change should be approved or available publicly.
19b–4(f)(6) thereunder.10 Because the All submissions should refer to File
disapproved.
proposed rule change does not: (i) Number SR–BX–2016–021 and should
Significantly affect the protection of IV. Solicitation of Comments be submitted on or before July 7, 2016.
investors or the public interest; (ii) Interested persons are invited to For the Commission, by the Division of
impose any significant burden on submit written data, views, and Trading and Markets, pursuant to delegated
competition; and (iii) become operative authority.16
arguments concerning the foregoing,
prior to 30 days from the date on which including whether the proposed rule Robert W. Errett,
it was filed, or such shorter time as the change is consistent with the Act. Deputy Secretary.
Commission may designate, if Comments may be submitted by any [FR Doc. 2016–14207 Filed 6–15–16; 8:45 am]
consistent with the protection of of the following methods: BILLING CODE 8011–01–P
investors and the public interest, the
proposed rule change has become Electronic Comments
effective pursuant to Section 19(b)(3)(A) • Use the Commission’s Internet SECURITIES AND EXCHANGE
of the Act and Rule 19b–4(f)(6)(iii) comment form (http://www.sec.gov/ COMMISSION
thereunder. rules/sro.shtml); or [Release No. 34–78039; File No. SR–
A proposed rule change filed under • Send an email to rule-comments@ BatsEDGX–2016–24]
Rule 19b–4(f)(6) 11 normally does not sec.gov. Please include File Number SR–
become operative prior to 30 days after BX–2016–021 on the subject line. Self-Regulatory Organizations; Bats
the date of the filing.12 However, EDGX Exchange, Inc.; Notice of Filing
Paper Comments and Immediate Effectiveness of a
9 15 U.S.C. 78s(b)(3)(A)(iii). • Send paper comments in triplicate Proposed Rule Change to Rule 11.7,
10 17 CFR 240.19b–4(f)(6).
to Brent J. Fields, Secretary, Securities Opening Process
asabaliauskas on DSK3SPTVN1PROD with NOTICES

11 17 CFR 240.19b–4(f)(6).
and Exchange Commission, Station June 10, 2016.
12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–

4(f)(6)(iii) requires the Exchange to give the Pursuant to Section 19(b)(1) of the
13 17 CFR 240.19b–4(f)(6)(iii).
Commission written notice of the Exchange’s intent Securities Exchange Act of 1934 (the
14 For purposes only of waiving the operative
to file the proposed rule change along with a brief ‘‘Act’’),1 and Rule 19b–4 thereunder,2
description and the text of the proposed rule delay for this proposal, the Commission has
change, at least five business days prior to the date considered the proposed rule’s impact on
16 17 CFR 200.30–3(a)(12).
of filing of the proposed rule change, or such efficiency, competition, and capital formation. See
shorter time as designated by the Commission. The 15 U.S.C. 78c(f). 1 15 U.S.C. 78s(b)(1).
Exchange has satisfied this pre-filing requirement. 15 15 U.S.C. 78s(b)(2)(B). 2 17 CFR 240.19b–4.

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Document Created: 2016-06-16 00:37:17
Document Modified: 2016-06-16 00:37:17
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 39308