81_FR_42135 81 FR 42011 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend a Pilot Program that Eliminates Position and Exercise Limits for Physically-Settled SPDR S&P 500 ETF Trust (“SPY”) Options

81 FR 42011 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend a Pilot Program that Eliminates Position and Exercise Limits for Physically-Settled SPDR S&P 500 ETF Trust (“SPY”) Options

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 124 (June 28, 2016)

Page Range42011-42013
FR Document2016-15179

Federal Register, Volume 81 Issue 124 (Tuesday, June 28, 2016)
[Federal Register Volume 81, Number 124 (Tuesday, June 28, 2016)]
[Notices]
[Pages 42011-42013]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-15179]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78131; File No. SR-CBOE-2016-052]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Extend a Pilot Program that Eliminates Position 
and Exercise Limits for Physically-Settled SPDR S&P 500 ETF Trust 
(``SPY'') Options

June 22, 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 June 20, 2016, Chicago Board Options Exchange, Incorporated 
(the ``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 Exchange filed the proposal as a ``non-controversial'' proposed 
rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and 
Rule 19b-4(f)(6) thereunder.\4\ The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to extend the operation of a pilot program 
that eliminates position and exercise limits for physically-settled SPY 
options (``SPY Pilot Program''). The text of the proposed rule change 
is provided below.

(additions are italicized; deletions are [bracketed])
* * * * *
Chicago Board Options Exchange, Incorporated Rules
* * * * *
Rule 4.11. Position Limits
No changes.
. . . Interpretations and Policies:
.01-.06 No change.
    .07 The position limits under Rule 4.11 applicable to options on 
shares or other securities that represent interests in registered 
investment companies (or series thereof) organized as open-end 
management investment companies, unit investment trusts or similar 
entities that satisfy the criteria set forth in Interpretation and 
Policy .06 under Rule 5.3 shall be the same as the position limits 
applicable to equity options under Rule 4.11 and Interpretations and 
Policies thereunder; except that the position limits under Rule 4.11 
applicable to option contracts on the securities listed in the below 
chart are as follows:

------------------------------------------------------------------------
           Security underlying option                 Position limit
------------------------------------------------------------------------
The DIAMONDS Trust (DIA)........................  300,000 contracts.
The Standard and Poor's Depositary Receipt Trust  None.
 (SPY).
The iShares Russell 2000 Index Fund (IWM).......  500,000 contracts.
The PowerShares QQQ Trust (QQQ).................  900,000 contracts.
The iShares MSCI Emerging Markets Index Fund      500,000 contracts.
 (EEM).
------------------------------------------------------------------------

    Position limits for SPY options are subject to a pilot program 
through [July 12, 2016] July 12, 2017.
.08 No change.
* * * * *
    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

[[Page 42012]]

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 Interpretation and Policy .07 to 
Rule 4.11 (Position Limits) to extend the duration of the SPY Pilot 
Program.\5\ The SPY Pilot Program is currently scheduled to expire on 
July 12, 2016 and this proposal would extend the SPY Pilot Program 
through July 12, 2017. There are no substantive changes being proposed 
to the SPY Pilot Program.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release Nos. 67937 (September 
27, 2012), 77 FR 60489 (October 3, 2012) (SR-CBOE-2012-091); 70878 
(November 14, 2013), 78 FR 69737 (November 20, 2013) (SR-CBOE-2013-
106); 74149 (January 27, 2015) 80 FR 5606 (February 2, 2015) (SR-
CBOE-2015-008); and 75381 (July 7, 2015) 80 FR 40111 (July 13, 2015) 
(SR-CBOE-2015-065).
---------------------------------------------------------------------------

    In proposing to extend the SPY Pilot Program, the Exchange 
reaffirms its consideration of several factors that supported its 
original proposal to establish the SPY Pilot Program, which include: 
(1) The liquidity of the option and the underlying security; (2) the 
market capitalization of the underlying security and the securities 
that make up the S&P 500 Index; (3) options reporting requirements; and 
(4) financial requirements imposed by CBOE and the Commission. When the 
SPY Pilot Program was most recently renewed in July 2015, CBOE 
submitted a report providing an analysis of the SPY Pilot Program 
during the period January 2014 through May 2015 (the ``Pilot Report''). 
In the July 2015 extension, the Exchange stated that if it were to 
submit a proposal to either extend the SPY Pilot Program, adopt the SPY 
Pilot Program on a permanent basis, or terminate the SPY Pilot Program, 
it would submit another Pilot Report covering the period since the 
previous extension.\6\ Accordingly, the Exchange is submitting another 
Pilot Report that details CBOE's experience with the SPY Pilot Program. 
The Pilot Report now includes the period of June 2015 through April 
2016. The Pilot Report is attached as Exhibit 3. CBOE notes that it is 
unaware of any problems created by the SPY Pilot Program and does not 
foresee any as a result of the proposed extension. In extending the SPY 
Pilot Program, the Exchange states that if CBOE were to propose another 
extension, permanent approval or termination of the SPY Pilot Program, 
the Exchange will submit another Pilot Report covering the period since 
the previous extension, which will be submitted at least 30 days before 
the end of the proposed extension. If the SPY Pilot Program is not 
extended or adopted on a permanent basis by July 12, 2017, position 
limits in SPY will revert to their Pre-Pilot levels.
---------------------------------------------------------------------------

    \6\ See 80 FR at 40112.
---------------------------------------------------------------------------

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.\7\ Specifically, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \8\ 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 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. Specifically, the Exchange believes that extending the 
SPY Pilot Program promotes just and equitable principles of trade by 
permitting market participants, including market makers, institutional 
investors and retail investors, to establish greater positions when 
pursuing their investment goals and needs. Extending the SPY Pilot 
Program will give the Exchange and the Commission additional time to 
evaluate the pilot and its effect on the market.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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. The proposed rule change is 
not designed to address any aspect of competition, whether between the 
Exchange and its competitors, or among market participants. Instead, 
the proposed rule change is designed to allow the SPY Pilot Program to 
continue as the Exchange expects other SROs will propose similar 
extensions.

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

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

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

    Because the foregoing proposed rule change does not: (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, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6) thereunder.\9\
---------------------------------------------------------------------------

    \9\ 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.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \10\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \11\ 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, noting 
that such waiver will allow the Exchange to extend the pilot program 
prior to its expiration on July 12, 2016. In addition, the Exchange 
believes that waiver of the operative delay is consistent with the 
protection of investors and the public interest because it will allow 
for the least amount of market disruption as the pilot will continue as 
it currently does maintaining the status quo. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. Therefore, the 
Commission hereby waives the operative delay and designates the 
proposed rule change operative upon filing.\12\
---------------------------------------------------------------------------

    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has 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

[[Page 42013]]

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 [email protected]. Please include 
File Number SR-CBOE-2016-052 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2016-052. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-CBOE-2016-052, and should be 
submitted on or before July 19, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2016-15179 Filed 6-27-16; 8:45 am]
 BILLING CODE 8011-01-P



                                                                                           Federal Register / Vol. 81, No. 124 / Tuesday, June 28, 2016 / Notices                                                                                   42011

                                                    change is consistent with the Act.                                    received will be posted without change;                                change pursuant to Section
                                                    Comments may be submitted by any of                                   the Commission does not edit personal                                  19(b)(3)(A)(iii) of the Act 3 and Rule
                                                    the following methods:                                                identifying information from                                           19b–4(f)(6) thereunder.4 The
                                                                                                                          submissions. You should submit only                                    Commission is publishing this notice to
                                                    Electronic Comments
                                                                                                                          information that you wish to make                                      solicit comments on the proposed rule
                                                      • Use the Commission’s Internet                                     available publicly. All submissions                                    change from interested persons.
                                                    comment form (http://www.sec.gov/                                     should refer to File Number SR–BX–
                                                    rules/sro.shtml); or                                                  2016–030, and should be submitted on                                   I. Self-Regulatory Organization’s
                                                      • Send an email to rule-comments@                                   or before July 19, 2016.                                               Statement of the Terms of the Substance
                                                    sec.gov. Please include File Number SR–                                                                                                      of the Proposed Rule Change
                                                                                                                            For the Commission, by the Division of
                                                    BX–2016–030 on the subject line.                                      Trading and Markets, pursuant to delegated                                The Exchange proposes to extend the
                                                    Paper Comments                                                        authority.10                                                           operation of a pilot program that
                                                                                                                          Brent J. Fields,                                                       eliminates position and exercise limits
                                                       • Send paper comments in triplicate
                                                                                                                          Secretary.                                                             for physically-settled SPY options
                                                    to Brent J. Fields, Secretary, Securities
                                                                                                                          [FR Doc. 2016–15175 Filed 6–27–16; 8:45 am]                            (‘‘SPY Pilot Program’’). The text of the
                                                    and Exchange Commission, 100 F Street
                                                                                                                                                                                                 proposed rule change is provided
                                                    NE., Washington, DC 20549–1090.                                       BILLING CODE 8011–01–P
                                                                                                                                                                                                 below.
                                                    All submissions should refer to File
                                                    Number SR–BX–2016–030. This file                                                                                                             (additions are italicized; deletions are
                                                                                                                          SECURITIES AND EXCHANGE                                                   [bracketed])
                                                    number should be included on the
                                                                                                                          COMMISSION                                                             *      *    *     *     *
                                                    subject line if email is used. To help the
                                                    Commission process and review your                                    [Release No. 34–78131; File No. SR–CBOE–
                                                                                                                                                                                                 Chicago Board Options Exchange,
                                                    comments more efficiently, please use                                 2016–052]
                                                                                                                                                                                                 Incorporated Rules
                                                    only one method. The Commission will
                                                    post all comments on the Commission’s                                 Self-Regulatory Organizations;                                         *          *      *       *       *
                                                    Internet Web site (http://www.sec.gov/                                Chicago Board Options Exchange,
                                                                                                                          Incorporated; Notice of Filing and                                     Rule 4.11. Position Limits
                                                    rules/sro.shtml). Copies of the
                                                                                                                          Immediate Effectiveness of a Proposed                                  No changes.
                                                    submission, all subsequent
                                                                                                                          Rule Change To Extend a Pilot                                          . . . Interpretations and Policies:
                                                    amendments, all written statements
                                                                                                                          Program that Eliminates Position and                                   .01–.06 No change.
                                                    with respect to the proposed rule
                                                                                                                          Exercise Limits for Physically-Settled
                                                    change that are filed with the                                                                                                                  .07 The position limits under Rule
                                                                                                                          SPDR S&P 500 ETF Trust (‘‘SPY’’)
                                                    Commission, and all written                                                                                                                  4.11 applicable to options on shares or
                                                                                                                          Options
                                                    communications relating to the                                                                                                               other securities that represent interests
                                                    proposed rule change between the                                      June 22, 2016.                                                         in registered investment companies (or
                                                    Commission and any person, other than                                    Pursuant to Section 19(b)(1) of the                                 series thereof) organized as open-end
                                                    those that may be withheld from the                                   Securities Exchange Act of 1934 (the                                   management investment companies,
                                                    public in accordance with the                                         ‘‘Act’’),1 and Rule 19b–4 thereunder,2                                 unit investment trusts or similar entities
                                                    provisions of 5 U.S.C. 552, will be                                   notice is hereby given that on June 20,                                that satisfy the criteria set forth in
                                                    available for Web site viewing and                                    2016, Chicago Board Options Exchange,                                  Interpretation and Policy .06 under Rule
                                                    printing in the Commission’s Public                                   Incorporated (the ‘‘Exchange’’ or                                      5.3 shall be the same as the position
                                                    Reference Room, 100 F Street NE.,                                     ‘‘CBOE’’) filed with the Securities and                                limits applicable to equity options
                                                    Washington, DC 20549 on official                                      Exchange Commission (‘‘Commission’’)                                   under Rule 4.11 and Interpretations and
                                                    business days between the hours of                                    the proposed rule change as described                                  Policies thereunder; except that the
                                                    10:00 a.m. and 3:00 p.m. Copies of such                               in Items I and II below, which Items                                   position limits under Rule 4.11
                                                    filing also will be available for                                     have been prepared by the Exchange.                                    applicable to option contracts on the
                                                    inspection and copying at the principal                               The Exchange filed the proposal as a                                   securities listed in the below chart are
                                                    office of the Exchange. All comments                                  ‘‘non-controversial’’ proposed rule                                    as follows:

                                                                                                                   Security underlying option                                                                                      Position limit

                                                    The   DIAMONDS Trust (DIA) .........................................................................................................................................   300,000     contracts.
                                                    The   Standard and Poor’s Depositary Receipt Trust (SPY) ...........................................................................................                   None.
                                                    The   iShares Russell 2000 Index Fund (IWM) ...............................................................................................................            500,000     contracts.
                                                    The   PowerShares QQQ Trust (QQQ) ...........................................................................................................................          900,000     contracts.
                                                    The   iShares MSCI Emerging Markets Index Fund (EEM) ............................................................................................                      500,000     contracts.



                                                       Position limits for SPY options are                                the Exchange’s Office of the Secretary,                                II. Self-Regulatory Organization’s
                                                    subject to a pilot program through [July                              and at the Commission’s Public                                         Statement of the Purpose of, and
                                                    12, 2016] July 12, 2017.                                              Reference Room.                                                        Statutory Basis for, the Proposed Rule
                                                    .08 No change.                                                                                                                               Change
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                    *      *     *    *     *                                                                                                                       In its filing with the Commission, the
                                                       The text of the proposed rule change                                                                                                      Exchange included statements
                                                    is also available on the Exchange’s Web                                                                                                      concerning the purpose of and basis for
                                                    site (http://www.cboe.com/AboutCBOE/                                                                                                         the proposed rule change and discussed
                                                    CBOELegalRegulatoryHome.aspx), at                                                                                                            any comments it received on the
                                                      10 17   CFR 200.30–3(a)(12).                                          2 17   CFR 240.19b–4.                                                    4 17   CFR 240.19b–4(f)(6).
                                                      1 15   U.S.C. 78s(b)(1).                                              3 15   U.S.C. 78s(b)(3)(A)(iii).



                                               VerDate Sep<11>2014       17:49 Jun 27, 2016       Jkt 238001      PO 00000      Frm 00084       Fmt 4703     Sfmt 4703      E:\FR\FM\28JNN1.SGM              28JNN1


                                                    42012                          Federal Register / Vol. 81, No. 124 / Tuesday, June 28, 2016 / Notices

                                                    proposed rule change. The text of these                 Exchange states that if CBOE were to                     C. Self-Regulatory Organization’s
                                                    statements may be examined at the                       propose another extension, permanent                     Statement on Comments on the
                                                    places specified in Item IV below. The                  approval or termination of the SPY Pilot                 Proposed Rule Change Received From
                                                    Exchange has prepared summaries, set                    Program, the Exchange will submit                        Members, Participants, or Others
                                                    forth in sections A, B, and C below, of                 another Pilot Report covering the period                   The Exchange neither solicited nor
                                                    the most significant aspects of such                    since the previous extension, which will                 received comments on the proposed
                                                    statements.                                             be submitted at least 30 days before the                 rule change.
                                                    A. Self-Regulatory Organization’s                       end of the proposed extension. If the
                                                                                                                                                                     III. Date of Effectiveness of the
                                                    Statement of the Purpose of, and                        SPY Pilot Program is not extended or                     Proposed Rule Change and Timing for
                                                    Statutory Basis for, the Proposed Rule                  adopted on a permanent basis by July                     Commission Action
                                                    Change                                                  12, 2017, position limits in SPY will
                                                                                                            revert to their Pre-Pilot levels.                           Because the foregoing proposed rule
                                                    1. Purpose                                                                                                       change does not: (i) Significantly affect
                                                       The Exchange proposes to amend                       2. Statutory Basis                                       the protection of investors or the public
                                                    Interpretation and Policy .07 to Rule                                                                            interest; (ii) impose any significant
                                                    4.11 (Position Limits) to extend the                       The Exchange believes the proposed                    burden on competition; and (iii) become
                                                    duration of the SPY Pilot Program.5 The                 rule change is consistent with the Act                   operative for 30 days from the date on
                                                    SPY Pilot Program is currently                          and the rules and regulations                            which it was filed, or such shorter time
                                                    scheduled to expire on July 12, 2016                    thereunder applicable to the Exchange                    as the Commission may designate, it has
                                                    and this proposal would extend the SPY                  and, in particular, the requirements of                  become effective pursuant to Section
                                                    Pilot Program through July 12, 2017.                    Section 6(b) of the Act.7 Specifically,                  19(b)(3)(A) of the Act and Rule 19b–
                                                    There are no substantive changes being                  the Exchange believes the proposed rule                  4(f)(6) thereunder.9
                                                    proposed to the SPY Pilot Program.                      change is consistent with the Section                       A proposed rule change filed
                                                       In proposing to extend the SPY Pilot                 6(b)(5) 8 requirements that the rules of                 pursuant to Rule 19b–4(f)(6) under the
                                                    Program, the Exchange reaffirms its                     an exchange be designed to prevent                       Act 10 normally does not become
                                                    consideration of several factors that                   fraudulent and manipulative acts and                     operative for 30 days after the date of its
                                                    supported its original proposal to                      practices, to promote just and equitable                 filing. However, Rule 19b–4(f)(6)(iii) 11
                                                    establish the SPY Pilot Program, which                  principles of trade, to remove                           permits the Commission to designate a
                                                    include: (1) The liquidity of the option                                                                         shorter time if such action is consistent
                                                                                                            impediments to and perfect the
                                                    and the underlying security; (2) the                                                                             with the protection of investors and the
                                                                                                            mechanism of a free and open market
                                                    market capitalization of the underlying                                                                          public interest. The Exchange has asked
                                                                                                            and a national market system, and, in                    the Commission to waive the 30-day
                                                    security and the securities that make up                general, to protect investors and the
                                                    the S&P 500 Index; (3) options reporting                                                                         operative delay, noting that such waiver
                                                                                                            public interest. Specifically, the                       will allow the Exchange to extend the
                                                    requirements; and (4) financial
                                                    requirements imposed by CBOE and the                    Exchange believes that extending the                     pilot program prior to its expiration on
                                                    Commission. When the SPY Pilot                          SPY Pilot Program promotes just and                      July 12, 2016. In addition, the Exchange
                                                    Program was most recently renewed in                    equitable principles of trade by                         believes that waiver of the operative
                                                    July 2015, CBOE submitted a report                      permitting market participants,                          delay is consistent with the protection
                                                    providing an analysis of the SPY Pilot                  including market makers, institutional                   of investors and the public interest
                                                    Program during the period January 2014                  investors and retail investors, to                       because it will allow for the least
                                                    through May 2015 (the ‘‘Pilot Report’’).                establish greater positions when                         amount of market disruption as the pilot
                                                    In the July 2015 extension, the Exchange                pursuing their investment goals and                      will continue as it currently does
                                                    stated that if it were to submit a                      needs. Extending the SPY Pilot Program                   maintaining the status quo. The
                                                    proposal to either extend the SPY Pilot                 will give the Exchange and the                           Commission believes that waiving the
                                                    Program, adopt the SPY Pilot Program                    Commission additional time to evaluate                   30-day operative delay is consistent
                                                    on a permanent basis, or terminate the                  the pilot and its effect on the market.                  with the protection of investors and the
                                                    SPY Pilot Program, it would submit                                                                               public interest. Therefore, the
                                                    another Pilot Report covering the period                B. Self-Regulatory Organization’s                        Commission hereby waives the
                                                    since the previous extension.6                          Statement on Burden on Competition                       operative delay and designates the
                                                    Accordingly, the Exchange is submitting                                                                          proposed rule change operative upon
                                                                                                              The Exchange does not believe that                     filing.12
                                                    another Pilot Report that details CBOE’s
                                                                                                            the proposed rule change will impose                        At any time within 60 days of the
                                                    experience with the SPY Pilot Program.
                                                    The Pilot Report now includes the                       any burden on competition that is not                    filing of the proposed rule change, the
                                                    period of June 2015 through April 2016.                 necessary or appropriate in furtherance                  Commission summarily may
                                                    The Pilot Report is attached as Exhibit                 of the purposes of the Act. The                          temporarily suspend such rule change if
                                                    3. CBOE notes that it is unaware of any                 proposed rule change is not designed to                  it appears to the Commission that such
                                                    problems created by the SPY Pilot                       address any aspect of competition,
                                                    Program and does not foresee any as a                   whether between the Exchange and its                       9 17 CFR 240.19b–4(f)(6). As required under Rule

                                                                                                            competitors, or among market                             19b–4(f)(6)(iii), the Exchange provided the
                                                    result of the proposed extension. In                                                                             Commission with written notice of its intent to file
                                                    extending the SPY Pilot Program, the                    participants. Instead, the proposed rule                 the proposed rule change, along with a brief
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                                                                            change is designed to allow the SPY                      description and the text of the proposed rule
                                                      5 See Securities Exchange Act Release Nos. 67937      Pilot Program to continue as the                         change, at least five business days prior to the date
                                                    (September 27, 2012), 77 FR 60489 (October 3,                                                                    of filing of the proposed rule change, or such
                                                                                                            Exchange expects other SROs will                         shorter time as designated by the Commission.
                                                    2012) (SR–CBOE–2012–091); 70878 (November 14,
                                                    2013), 78 FR 69737 (November 20, 2013) (SR–             propose similar extensions.                                10 17 CFR 240.19b–4(f)(6).

                                                    CBOE–2013–106); 74149 (January 27, 2015) 80 FR                                                                     11 17 CFR 240.19b–4(f)(6)(iii).

                                                    5606 (February 2, 2015) (SR–CBOE–2015–008); and                                                                    12 For purposes only of waiving the 30-day
                                                    75381 (July 7, 2015) 80 FR 40111 (July 13, 2015)                                                                 operative delay, the Commission has considered the
                                                                                                              7 15   U.S.C. 78f(b).
                                                    (SR–CBOE–2015–065).                                                                                              proposed rule’s impact on efficiency, competition,
                                                      6 See 80 FR at 40112.                                   8 15   U.S.C. 78f(b)(5).                               and capital formation. See 15 U.S.C. 78c(f).



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                                                                                   Federal Register / Vol. 81, No. 124 / Tuesday, June 28, 2016 / Notices                                                    42013

                                                    action is necessary or appropriate in the               2016–052, and should be submitted on                   at www.batstrading.com, at the
                                                    public interest, for the protection of                  or before July 19, 2016.                               principal office of the Exchange, and at
                                                    investors, or otherwise in furtherance of                 For the Commission, by the Division of               the Commission’s Public Reference
                                                    the purposes of the Act. If the                         Trading and Markets, pursuant to delegated             Room.
                                                    Commission takes such action, the                       authority.13
                                                                                                                                                                   II. Self-Regulatory Organization’s
                                                    Commission shall institute proceedings                  Brent J. Fields,                                       Statement of the Purpose of, and
                                                    to determine whether the proposed rule                  Secretary.                                             Statutory Basis for, the Proposed Rule
                                                    should be approved or disapproved.                      [FR Doc. 2016–15179 Filed 6–27–16; 8:45 am]            Change
                                                    IV. Solicitation of Comments                            BILLING CODE 8011–01–P
                                                                                                                                                                      In its filing with the Commission, the
                                                      Interested persons are invited to                                                                            Exchange included statements
                                                    submit written data, views, and                         SECURITIES AND EXCHANGE                                concerning the purpose of and basis for
                                                    arguments concerning the foregoing,                     COMMISSION                                             the proposed rule change and discussed
                                                    including whether the proposed rule                                                                            any comments it received on the
                                                    change is consistent with the Act.                      [Release No. 34–78122; File No. SR-                    proposed rule change. The text of these
                                                                                                            BatsBYX–2016–12]                                       statements may be examined at the
                                                    Comments may be submitted by any of
                                                    the following methods:                                  Self-Regulatory Organizations; Bats                    places specified in Item IV below. The
                                                                                                            BYX Exchange, Inc.; Notice of Filing                   Exchange has prepared summaries, set
                                                    Electronic Comments                                                                                            forth in Sections A, B, and C below, of
                                                                                                            and Immediate Effectiveness of a
                                                      • Use the Commission’s Internet                       Proposed Rule Change Related to Fees                   the most significant parts of such
                                                    comment form (http://www.sec.gov/                                                                              statements.
                                                    rules/sro.shtml); or                                    June 22, 2016.
                                                                                                                                                                   A. Self-Regulatory Organization’s
                                                      • Send an email to rule-comments@                        Pursuant to Section 19(b)(1) of the
                                                                                                                                                                   Statement of the Purpose of, and the
                                                    sec.gov. Please include File Number SR–                 Securities Exchange Act of 1934 (the
                                                                                                                                                                   Statutory Basis for, the Proposed Rule
                                                    CBOE–2016–052 on the subject line.                      ‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                                                                                                                                   Change
                                                                                                            notice is hereby given that on June 8,
                                                    Paper Comments                                          2016, Bats BYX Exchange, Inc. (the                     1. Purpose
                                                       • Send paper comments in triplicate                  ‘‘Exchange’’ or ‘‘BYX’’) filed with the                   The Exchange proposes to amend its
                                                    to Brent J. Fields, Secretary, Securities               Securities and Exchange Commission                     Fee Schedule to: (i) Add fee codes NA
                                                    and Exchange Commission, 100 F Street                   (‘‘Commission’’) the proposed rule                     and NB; (ii) reduce the rebate for fee
                                                    NE., Washington, DC 20549–1090.                         change as described in Items I, II and III             codes BB, N, and W; (iii) add Add
                                                    All submissions should refer to File                    below, which Items have been prepared                  Volume Tier 2 under footnote 1; and (iv)
                                                                                                            by the Exchange. The Exchange has
                                                    Number SR–CBOE–2016–052. This file                                                                             add Remove Volume Tier under
                                                                                                            designated the proposed rule change as
                                                    number should be included on the                                                                               footnote 1.
                                                                                                            one establishing or changing a member
                                                    subject line if email is used. To help the
                                                                                                            due, fee, or other charge imposed by the               Fee Codes NA and NB
                                                    Commission process and review your
                                                                                                            Exchange under Section 19(b)(3)(A)(ii)                   The Exchange previously filed a
                                                    comments more efficiently, please use
                                                                                                            of the Act 3 and Rule 19b–4(f)(2)                      proposed rule change with the
                                                    only one method. The Commission will
                                                                                                            thereunder,4 which renders the                         Commission to identify Non-Displayed
                                                    post all comments on the Commission’s
                                                                                                            proposed rule change effective upon                    Orders 6 as such when routed to an
                                                    Internet Web site (http://www.sec.gov/
                                                                                                            filing with the Commission. The                        away Trading Center.7 The Exchange
                                                    rules/sro.shtml). Copies of the
                                                                                                            Commission is publishing this notice to                intends to implement this functionality
                                                    submission, all subsequent                              solicit comments on the proposed rule
                                                    amendments, all written statements                                                                             on June 1, 2016.8 Because other Trading
                                                                                                            change from interested persons.                        Centers typically provide different
                                                    with respect to the proposed rule
                                                    change that are filed with the                          I. Self-Regulatory Organization’s                      rebates or fees with respect to non-
                                                    Commission, and all written                             Statement of the Terms of Substance of                 displayed liquidity the Exchange
                                                    communications relating to the                          the Proposed Rule Change                               proposes to amend its Fee Schedule to
                                                    proposed rule change between the                           The Exchange filed a proposal to                    add fee codes NA and NB, which would
                                                    Commission and any person, other than                   amend the fee schedule applicable to                   apply to routed Non-Displayed Orders.
                                                    those that may be withheld from the                     Members 5 and non-members of the                       Proposed fee code NA would be applied
                                                    public in accordance with the                           Exchange pursuant to BYX Rules 15.1(a)                 to Non-Displayed Orders that are routed
                                                    provisions of 5 U.S.C. 552, will be                     and (c) (‘‘Fee Schedule’’) to: (i) Add fee             to and add liquidity on Bats EDGX
                                                    available for Web site viewing and                      codes NA and NB; (ii) reduce the rebate                Exchange, Inc. (‘‘EDGX’’), Bats BZX
                                                    printing in the Commission’s Public                     for fee codes BB, N, and W; (iii) add                  Exchange, Inc. (‘‘BZX’’), the New York
                                                    Reference Room, 100 F Street NE.,                       Add Volume Tier 2 under footnote 1;                      6 See Exchange Rule 11.9(c)(11).
                                                    Washington, DC 20549 on official                        and (iv) add Remove Volume Tier under                    7 The Exchange notes that the Exchange also
                                                    business days between the hours of                      footnote 1.                                            amended its rules to route Reserve Orders (as
                                                    10:00 a.m. and 3:00 p.m. Copies of such                    The text of the proposed rule change                defined in Rule 11.9(c)(1)) as such to other Trading
                                                    filing also will be available for                       is available at the Exchange’s Web site                Centers. See Securities Exchange Act 77187
                                                    inspection and copying at the principal                                                                        (February 19, 2016), 81 FR 9556 (February 25, 2016)
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                    office of the Exchange. All comments                      13 17                                                (SR–BYX–2016–04). Non-Displayed Orders and
                                                                                                                    CFR 200.30–3(a)(12).
                                                                                                                                                                   Reserve Orders would be handled in accordance
                                                    received will be posted without change;                   1 15 U.S.C. 78s(b)(1).                               with the rules of the Trading Center to which they
                                                    the Commission does not edit personal                     2 17 CFR 240.19b–4.
                                                                                                                                                                   are routed. Id. This proposal does not impact the
                                                                                                              3 15 U.S.C. 78s(b)(3)(A)(ii).
                                                    identifying information from                                                                                   routing of Reserve Orders.
                                                                                                              4 17 CFR 240.19b–4(f)(2).                              8 See Bats Announces Support for Hidden Post-
                                                    submissions. You should submit only                       5 The term ‘‘Member’’ is defined as ‘‘any            to-Away Routed Orders,available at http://
                                                    information that you wish to make                       registered broker or dealer that has been admitted     cdn.batstrading.com/resources/release_notes/2016/
                                                    available publicly. All submissions                     to membership in the Exchange.’’ See Exchange          Bats-Announces-Support-for-Hidden-Post-to-Away-
                                                    should refer to File Number SR–CBOE–                    Rule 1.5(n).                                           Routed-Orders.pdf.



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Document Created: 2016-06-28 00:53:39
Document Modified: 2016-06-28 00:53:39
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation81 FR 42011 

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