81 FR 44377 - Self-Regulatory Organizations; ISE Mercury, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Penny Pilot Program
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 130 (July 7, 2016)
Federal Register Volume 81, Issue 130 (July 7, 2016)
| Page Range | 44377-44379 | |
| FR Document | 2016-16029 |
[Federal Register Volume 81, Number 130 (Thursday, July 7, 2016)] [Notices] [Pages 44377-44379] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-16029] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78202; File No. SR-ISE Mercury-2016-12] Self-Regulatory Organizations; ISE Mercury, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Penny Pilot Program June 30, 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 29, 2016, ISE Mercury, LLC (the ``Exchange'' or ``ISE Mercury'') filed with the Securities and Exchange Commission the proposed rule change as described in Items I and II below, which items have been prepared by the self-regulatory organization. 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. --------------------------------------------------------------------------- [[Page 44378]] I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change ISE Mercury proposes to amend its rules to extend a pilot program to quote and to trade certain options classes in penny increments (``Penny Pilot Program''). The text of the proposed rule change is available on the Exchange's Web site www.ise.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 self-regulatory organization 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 self-regulatory organization 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 Under the Penny Pilot Program, 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 Program is currently scheduled to expire on June 30, 2016. The Exchange proposes to extend the Penny Pilot Program through December 31, 2016, and to provide a revised date for adding replacement issues to the Penny Pilot Program. 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 for the most recent six month period excluding the month immediately preceding the replacement (i.e., beginning December 1, 2015, and ending May 31, 2016). This filing does not propose any substantive changes to the Penny Pilot Program: all classes currently participating 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 any increase in quote traffic. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.\3\ Specifically, the proposed rule change is consistent with Section 6(b)(5) of the Act,\4\ because it is designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest. In particular, the proposed rule change, which extends the Penny Pilot Program for an additional six months, will enable public customers and other market participants to express their true prices to buy and sell options to the benefit of all market participants. --------------------------------------------------------------------------- \3\ 15 U.S.C. 78f(b). \4\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,\5\ the Exchange does not believe that the proposed rule change will impose any burden on intermarket or intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. Specifically, the Exchange believes that, by extending the expiration of the Penny Pilot Program, the proposed rule change will allow for further analysis of the Penny Pilot Program and a determination of how the Penny Pilot Program should be structured in the future. In doing so, the proposed rule change will also serve to promote regulatory clarity and consistency, thereby reducing burdens on the marketplace and facilitating investor protection. --------------------------------------------------------------------------- \5\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \6\ and Rule 19b-4(f)(6) thereunder.\7\ 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. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78s(b)(3)(A)(iii). \7\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \8\ normally does not become operative prior to 30 days after the date of the filing.\9\ However, pursuant to Rule 19b-4(f)(6)(iii),\10\ 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.\11\ --------------------------------------------------------------------------- \8\ 17 CFR 240.19b-4(f)(6). \9\ 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. \10\ 17 CFR 240.19b-4(f)(6)(iii). \11\ 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). --------------------------------------------------------------------------- [[Page 44379]] 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) \12\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form http://www.sec.gov/rules/sro.shtml); or Send an Email to [email protected]. Please include File No. SR-ISE Mercury-2016-12 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-ISE Mercury-2016-12. 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 inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of ISE Mercury. 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-ISE Mercury-2016-12 and should be submitted by July 28, 2016. --------------------------------------------------------------------------- \13\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\13\ Robert W. Errett, Deputy Secretary. [FR Doc. 2016-16029 Filed 7-6-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 130 / Thursday, July 7, 2016 / Notices 44377
similar guidance.20 The Exchange rule change does not raise any new or Commission, and all written
believes that disparate rules regarding novel issues from those considered in communications relating to the
Professional order designation, and a the CBOE and PHLX proposals. Based proposed rule change between the
lack of uniform application of such on the foregoing, the Commission Commission and any person, other than
rules, does not promote the best believes that it is consistent with the those that may be withheld from the
regulation and may, in fact, encourage protection of investors and the public public in accordance with the
regulatory arbitrage. The Exchange interest to waive the 30-day operative provisions of 5 U.S.C. 552, will be
believes that it is therefore prudent and date so that the proposal may take effect available for Web site viewing and
necessary to conform its rules to that of upon filing.26 printing in the Commission’s Public
other options exchanges for purposes of At any time within 60 days of the Reference Room, 100 F Street NE.,
calculating the threshold volume of filing of such proposed rule change, the
Washington, DC 20549, on official
orders to be designated as a Commission summarily may
Professional. This is particularly true business days between the hours of
temporarily suspend such rule change if
where the Exchange’s third-party it appears to the Commission that such 10:00 a.m. and 3:00 p.m. Copies of such
routing broker-dealers are members of action is necessary or appropriate in the filing will also be available for
several exchanges that have rules public interest, for the protection of inspection and copying at the principal
requiring Professional order investors, or otherwise in furtherance of office of the Exchange. All comments
designations. the purposes of the Act. If the received will be posted without change;
Commission takes such action, the the Commission does not edit personal
C. Self-Regulatory Organization’s identifying information from
Statement on Comments on the Commission shall institute proceedings
under Section 19(b)(2)(B) of the Act 27 to submissions. You should submit only
Proposed Rule Change Received From information that you wish to make
Members, Participants or Others determine whether the proposed rule
change should be approved or available publicly. All submissions
No written comments were either disapproved. should refer to File No. SR–BX–2016–
solicited or received. 035 and should be submitted on or
IV. Solicitation of Comments
III. Date of Effectiveness of the before July 28, 2016.
Proposed Rule Change and Timing for Interested persons are invited to
For the Commission, by the Division of
Commission Action submit written data, views, and
Trading and Markets, pursuant to delegated
arguments concerning the foregoing,
Because the foregoing proposed rule authority.28
including whether the proposed rule
change does not: (i) Significantly affect change is consistent with the Act. Robert W. Errett,
the protection of investors or the public Comments may be submitted by any of Deputy Secretary.
interest; (ii) impose any significant the following methods: [FR Doc. 2016–16026 Filed 7–6–16; 8:45 am]
burden on competition; and (iii) become
BILLING CODE 8011–01–P
operative for 30 days from the date on Electronic Comments
which it was filed, or such shorter time • Use the Commission’s Internet
as the Commission may designate, it has comment form (http://www.sec.gov/ SECURITIES AND EXCHANGE
become effective pursuant to Section rules/sro.shtml); or COMMISSION
19(b)(3)(A)(iii) of the Act 21 and • Send an email to rule-comments@
subparagraph (f)(6) of Rule 19b–4 sec.gov. Please include File No. SR–BX–
thereunder.22 A proposed rule change 2016–035 on the subject line. [Release No. 34–78202; File No. SR–ISE
filed under Rule 19b–4(f)(6) normally Mercury–2016–12]
Paper Comments
does not become operative prior to 30
• Send paper comments in triplicate Self-Regulatory Organizations; ISE
days after the date of filing.23 Rule 19b–
4(f)(6)(iii), however, permits the to Secretary, Securities and Exchange Mercury, LLC; Notice of Filing and
Commission to designate a shorter time Commission, 100 F Street NE., Immediate Effectiveness of Proposed
if such action is consistent with the Washington, DC 20549–1090. Rule Change To Extend the Penny
protection of investors and the public All submissions should refer to File No. Pilot Program
interest.24 SR–BX–2016–035. This file number June 30, 2016.
The Exchange has requested that the should be included on the subject line
Commission waive the 30-day operative if email is used. To help the Pursuant to Section 19(b)(1) of the
delay. The Commission notes that it has Commission process and review your Securities Exchange Act of 1934 (the
considered a substantially similar comments more efficiently, please use ‘‘Act’’),1 and Rule 19b–4 thereunder,2
proposed rule change filed by CBOE and only one method. The Commission will notice is hereby given that on June 29,
PHLX which it approved after a notice post all comments on the Commission’s 2016, ISE Mercury, LLC (the
and comment period.25 This proposed Internet Web site (http://www.sec.gov/ ‘‘Exchange’’ or ‘‘ISE Mercury’’) filed
rules/sro.shtml). Copies of the with the Securities and Exchange
20 See supra note 16. submission, all subsequent Commission the proposed rule change
21 15 U.S.C. 78s(b)(3)(a)(iii). amendments, all written statements as described in Items I and II below,
22 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
with respect to the proposed rule which items have been prepared by the
the Commission written notice of its intent to file change that are filed with the self-regulatory organization. The
srobinson on DSK5SPTVN1PROD with NOTICES
the proposed rule change at least five business days Commission is publishing this notice to
prior to the date of filing of the proposed rule CBOE–2016–005); 77449 (March 25, 2016), 81 FR
change, or such shorter time as designated by the
solicit comments on the proposed rule
18665, (March 31, 2016) (Order Approving SR–
Commission. The Exchange has satisfied this Phlx–2016–10). change from interested persons.
requirement. 26 For purposes only of waiving the 30-day
23 17 CFR 240.19b–4(f)(6)(iii).
operative delay, the Commission has considered the
28 17 CFR 200.30–3(a)(12).
24 Id. proposed rule’s impact on efficiency, competition,
1 15 U.S.C. 78s(b)(1).
25 See Securities Exchange Act Release Nos. and capital formation. See 15 U.S.C. 78c(f).
77450 (March 25, 2016) (Order Approving SR– 27 15 U.S.C. 78s(b)(2)(B). 2 17 CFR 240.19b–4.
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![Federal Register / Vol. 81, No. 130 / Thursday, July 7, 2016 / Notices 44379
At any time within 60 days of the information from submissions. You consider any comments it receives in
filing of such proposed rule change, the should submit only information that making its determination whether to
Commission summarily may you wish to make available publicly. All grant DDR registration as an SDR.5
temporarily suspend such rule change if submissions should refer to File
II. Background
it appears to the Commission that such Number SR–ISE Mercury–2016–12 and
action is necessary or appropriate in the should be submitted by July 28, 2016. A. SDR Registration, Duties and Core
public interest, for the protection of For the Commission, by the Division of Principles, and Regulation SBSR
investors, or otherwise in furtherance of Trading and Markets, pursuant to delegated Section 763(i) of the Dodd-Frank Act
the purposes of the Act. If the authority.13 added Section 13(n) to the Exchange
Commission takes such action, the Robert W. Errett, Act, which requires an SDR to register
Commission shall institute proceedings Deputy Secretary. with the Commission and provides that,
under Section 19(b)(2)(B) 12 of the Act to [FR Doc. 2016–16029 Filed 7–6–16; 8:45 am] to be registered and maintain
determine whether the proposed rule BILLING CODE 8011–01–P registration as an SDR, an SDR must
change should be approved or comply with certain requirements and
disapproved. ‘‘core principles’’ described in Section
IV. Solicitation of Comments SECURITIES AND EXCHANGE 13(n) and any requirement that the
COMMISSION Commission may impose by rule or
Interested persons are invited to
regulation.6
submit written data, views, and [Release No. 34–78216; File No. SBSDR–
The Commission adopted Exchange
arguments concerning the foregoing, 2016–02]
Act Rules 13n–1 through 13n–12 (‘‘SDR
including whether the proposed rule rules’’), which require an SDR to register
change is consistent with the Act. Security-Based Swap Data
Repositories; DTCC Data Repository with the Commission and comply with
Comments may be submitted by any of certain ‘‘duties and core principles.’’ 7
the following methods: (U.S.) LLC; Notice of Filing of
Application for Registration as a Among other requirements, the SDR
Electronic Comments Security-Based Swap Data Repository rules require an SDR to collect and
• Use the Commission’s Internet maintain accurate SBS data and make
June 30, 2016. such data available to the Commission
comment form http://www.sec.gov/
rules/sro.shtml); or I. Introduction and other authorities so that relevant
• Send an Email to rule-comments@ authorities will be better able to monitor
On April 6, 2016 and as amended on the buildup and concentration of risk
sec.gov. Please include File No. SR–ISE April 25, 2016, DTCC Data Repository
Mercury–2016–12 on the subject line. exposure in the SBS market.8
(U.S.) LLC (‘‘DDR’’) filed with the Concurrent with the Commission’s
Paper Comments Securities and Exchange Commission adoption of the SDR rules, the
(‘‘Commission’’) a Form SDR seeking Commission adopted Regulation SBSR,9
• Send paper comments in triplicate registration as a security-based swap
to Secretary, Securities and Exchange which, among other things, provides for
data repository (‘‘SDR’’) under Section the reporting of SBS information to
Commission, 100 F Street NE., 13(n) of the Securities Exchange Act of
Washington, DC 20549–1090. registered SDRs, and the public
1934 (‘‘Exchange Act’’) 1 and the dissemination of SBS transaction,
All submissions should refer to File Commission’s rules promulgated
Number SR–ISE Mercury–2016–12. This volume, and pricing information by
thereunder.2 DDR states that it proposes registered SDRs. In addition, Regulation
file number should be included on the to operate as a registered SDR for SBSR requires each registered SDR to
subject line if email is used. To help the security-based swap (‘‘SBS’’) register with the Commission as a
Commission process and review your transactions in the credit, equity, and securities information processor.10
comments more efficiently, please use interest rates 3 derivatives asset classes.
only one method. The Commission will The Commission is publishing this B. Standard for Granting SDR
post all comments on the Commission’s notice to solicit comments from Registration
Internet Web site (http://www.sec.gov/ interested persons regarding DDR’s To be registered with the Commission
rules/sro.shtml). Copies of the Form SDR,4 and the Commission will as an SDR and maintain such
submission, all subsequent
amendments, all written statements 13 17
CFR 200.30–3(a)(12). DDR’s Form SDR application, and principally from
with respect to the proposed rule 1 15
U.S.C. 78m(n)(3). DDR’s Rulebook (Exhibit HH.2), which outlines the
change that are filed with the 2 17 CFR 240.13n–1 through 240.13n–12. applicant’s policies and procedures designed to
3 DDR seeks to include in its application the address its statutory and regulatory obligations as
Commission, and all written an SDR registered with the Commission. DDR’s
‘‘rates’’ asset class based on feedback from potential
communications relating to the DDR participants who have identified certain types Form SDR application and non-confidential
proposed rule change between the of transactions which will be reported through the exhibits thereto are available on [appropriate
Commission and any person, other than interest rate infrastructure within the industry and EDGAR reference to be inserted]. In addition, the
public may access copies of these materials on the
those that may be withheld from the that the industry participants have identified as
Commission’s Web site at: [appropriate Web site
falling under the definition of a SBS. The
public in accordance with the Commission notes that DDR’s application is for
address to be inserted].
provisions of 5 U.S.C. 552, will be registration as a SBS data repository, which the
5 DDR’s Form SDR application also constitutes an
available for inspection and copying in Exchange Act defines as a ‘‘person that collects and application for registration as a securities
maintains information or records with respect to information processor. See Exchange Act Release
the Commission’s Public Reference No. 74246 (Feb. 11, 2015), 80 FR 14438, 14458
transactions or positions in, or the terms and
Room. Copies of such filing also will be
srobinson on DSK5SPTVN1PROD with NOTICES
conditions of, security-based swaps entered into by (Mar. 19, 2015) (‘‘SDR Adopting Release’’).
available for inspection and copying at third parties for the purpose of providing a
6 15 U.S.C. 78m(n).
the principal office of ISE Mercury. All centralized recordkeeping facility for security-based 7 See SDR Adopting Release, 80 FR 14438.
8 See SDR Adopting Release, 80 FR at 14450.
comments received will be posted swaps.’’ 15 U.S.C. 78c(a)(75).
4 DDR filed its Form SDR, including the exhibits 9 See Exchange Act Release No. 74244 (Feb. 11,
without change; the Commission does
thereto, electronically with the Commission. The 2015), 80 FR 14563 (Mar. 19, 2015) (‘‘Regulation
not edit personal identifying descriptions set forth in this notice regarding the SBSR Adopting Release’’).
structure and operations of DDR have been derived, 10 See Regulation SBSR Adopting Release, 80 FR
12 15 U.S.C. 78s(b)(2)(B). excerpted, and/or summarized from information in at 14567.
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Document Created: 2018-02-08 07:54:37
Document Modified: 2018-02-08 07:54:37
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 81 FR 44377 |
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