81 FR 6916 - Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a Proposed Rule Change Relating to the Index Underlying the WisdomTree Put Write Strategy Fund

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 26 (February 9, 2016)

Page Range		6916-6917
FR Document		2016-02440
Federal Register, Volume 81 Issue 26 (Tuesday, February 9, 2016)
[Federal Register Volume 81, Number 26 (Tuesday, February 9, 2016)]
[Notices]
[Pages 6916-6917]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-02440]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77045; File No. SR-NYSEArca-2015-113]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a 
Proposed Rule Change Relating to the Index Underlying the WisdomTree 
Put Write Strategy Fund

February 3, 2016.

I. Introduction

    On December 2, 2015, NYSE Arca, Inc. (``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposal to change a representation the Exchange made in support of a 
prior proposed rule change. The proposed rule change was published for 
comment in the Federal Register on December 21, 2015.\3\ The Commission 
received no comments on the proposed rule change. This order approves 
the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 76646 (Dec. 15, 
2015), 80 FR 79371 (``Notice'').
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II. The Exchange's Description of the Proposed Rule Change

A. The Prior Proposal

    The Commission approved the listing and trading on the Exchange of 
shares (``Shares'') of the WisdomTree Put Write Strategy Fund 
(``Fund'') under NYSE Arca Equities Rule 5.2(j)(3), which governs the 
listing and trading of Investment Company Units.\4\ The Exchange filed 
that proposed rule change because the Fund and the Shares did not meet 
all of the ``generic'' listing requirements of Commentary .01(a)(A) to 
NYSE Arca Equities Rule 5.2(j)(3), applicable to the listing of 
Investment Company Units based upon an index of ``US Component 
Stocks.'' \5\ The Exchange represented that the Shares would conform to 
the initial and continued listing criteria under NYSE Arca Equities 
Rules 5.2(j)(3) and 5.5(g)(2), except that the underlying index, the 
CBOE S&P 500 Put Write Index (the ``Index''), would not meet the 
requirements of NYSE Arca Equities Rule 5.2(j)(3), Commentary 
.01(a)(A)(1)-(5). The Exchange, however, also represented that the 
Index would (1) include a minimum of 20 components, and therefore (2) 
meet the numerical requirements of NYSE Arca Equities Rule 5.2(j)(3), 
Commentary .01(a)(A)(4), which requires a minimum of 13 index or 
portfolio components.
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    \4\ See Securities Exchange Act Release Nos. 74290 (February 18, 
2015), 80 FR 9818 (February 24, 2015) (SR-NYSEArca-2015-05) (``Prior 
Notice''); 74675 (April 8, 2015), 80 FR 20038 (April 14, 2015) (SR-
NYSEArca-2015-05) (``Prior Order'' and, together with the Prior 
Notice, the ``Prior Release'').
    \5\ NYSE Arca Equities Rule 5.2(j)(3) provides that the term 
``US Component Stock'' shall mean an equity security that is 
registered under Sections 12(b) or 12(g) of the Act and an American 
Depositary Receipt, the underlying equity securities of which is 
registered under Sections 12(b) or 12(g) of the Act.
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    The Exchange has not listed or commenced trading in the Shares.\6\
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    \6\ See Notice, supra note 3, 80 FR at 79371.
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B. The Instant Proposed Rule Change

    The Exchange submitted this proposal to correct two representations 
made in support of its prior proposal to list and trade the Shares. 
Specifically, the Exchange seeks to strike its representations that the 
Index will (1) include a minimum of 20 components; and (2) meet the 
numerical requirements of NYSE Arca Equities Rule 5.2(j)(3), Commentary 
.01(a)(A)(4). At any given time, the Index consists of one component, 
an ``SPX Put.'' \7\ Additionally, NYSE Arca clarifies that the 
Commentary is inapplicable because the Index contains options 
components.\8\
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    \7\ The Index is maintained by the Chicago Board Options 
Exchange, Inc. (``CBOE'') and tracks the value of a passive 
investment strategy, which consists of overlaying of S&P 500 Index 
put options (``SPX Puts'') over a money market account, invested in 
one and three-month Treasury bills. The SPX Puts are struck at-the-
money and are sold on a monthly basis, usually the third Friday of 
the month (i.e., the ``Roll Date''), which matches the expiration 
date of the SPX Puts. All SPX Puts are standardized options traded 
on the CBOE.
    \8\ NYSE Arca Equities Rule 5.2(j)(3), Commentary .01(a)(A)(5) 
provides that all securities in the applicable index or portfolio 
shall be US Component Stocks listed on a national securities 
exchange and shall be NMS Stocks as defined in Rule 600 under 
Regulation NMS of the Act. Each component stock of the S&P 500 Index 
is a US Component Stock that is listed on a national securities 
exchange and is an NMS Stock. Options are excluded from the 
definition of NMS Stock.
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    The Exchange asserts that the deletion of its prior representations 
would not adversely affect investors or the public interest, because 
the Index is based on CBOE-traded puts on the S&P 500, which are highly 
liquid.\9\ The Exchange further estimates that, on the launch date, the 
Fund would hold approximately $2.5-$5.0 million in cash and cash 
equivalents. The Exchange also believes that sufficient protections are 
in place to protect against market manipulation of the Fund's Shares 
and SPX Puts because: (i) Trading in the Shares and the underlying Fund 
instruments are subject to the federal securities laws and to the 
Exchange's, CBOE's, and the Financial Industry Regulatory Authority's 
rules and surveillance programs, which are designed to detect 
violations; (ii) assets in the portfolio--which will primarily be 
short-term U.S. Treasury bills \10\ and SPX Puts--will be acquired in 
extremely liquid and highly regulated markets; and (iii) the exchange-
traded fund creation/redemption and arbitrage mechanisms are tied to 
the large pool of liquidity of each of the Fund's underlying 
investments.
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    \9\ See Notice, supra note 3, at 79372 and 79373 for the 
Exchange's representation of the average daily trading volume of at-
the-money 30-day SPX Puts, the trading volume of the at-the-money 
SPX Puts, and the daily high, low and last reported sales prices on 
each of the Roll Dates for SPX Puts at-the-money.
    \10\ See Notice, supra note 3, at 79373. The Exchange states 
that the short-term Treasury securities that the Fund will acquire 
as part of its strategy are not readily susceptible to market 
manipulation due to the liquidity and extensive oversight associated 
with the short-term U.S. Treasury market.
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    The Exchange represents that trading in the Shares will be subject 
to the existing trading surveillances and that these procedures are 
adequate to properly monitor Exchange trading of the Shares in all 
trading sessions and to deter and detect violations of Exchange rules 
and federal securities laws. Furthermore, the Financial Industry

[[Page 6917]]

Regulatory Authority (``FINRA''), on behalf of the Exchange, or the 
regulatory staff of the Exchange, will communicate as needed regarding 
trading in the Shares and SPX Index options with other markets and 
other entities that are members of the Intermarket Surveillance Group 
(``ISG''), and FINRA, on behalf of the Exchange, or the regulatory 
staff of the Exchange, may obtain trading information regarding trading 
in the portfolio securities from these markets and other entities. In 
addition, the regulatory staff of the Exchange may obtain information 
regarding trading in the portfolio securities from markets and other 
entities that are members of ISG or with which the Exchange has in 
place a comprehensive surveillance sharing agreement.

III. Discussion and Commission's Findings

    After careful review, the Commission finds that the exchange's 
proposal is consistent with the requirements of Section 6 of the Act 
\11\ and the rules and regulations thereunder applicable to a national 
securities exchange.\12\ In particular, the Commission finds that the 
proposed rule change is consistent with Section 6(b)(5) of the Act,\13\ 
which requires, among other things, that the Exchange's rules 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.
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    \11\ 15 U.S.C. 78f.
    \12\ In approving this proposed rule change, the Commission 
notes that it has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \13\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that it would be difficult to manipulate 
the price of the Shares by manipulating the prices of its underlying 
assets. The Fund's portfolio will comprise cash, short-term U.S. 
Treasury bills, and SPX Puts.\14\ The Exchange contends that neither 
short-term Treasury securities nor SPX Puts are readily susceptible to 
market manipulation due to the deep liquidity in\15\ and extensive 
oversight of those markets.\16\ With respect to SPX Puts, specifically, 
the Exchange has provided data demonstrating that the average daily 
trading volume (through expiration) of recent SPX Puts compares 
favorably to the average daily trading volumes of at-the-money put 
options on other major indexes and is, in fact, higher than that of at-
the-money puts on the Russell 2000 index.\17\
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    \14\ See Notice, supra note 3, 80 FR at 79373.
    \15\ The Exchange states: ``According to Federal Reserve Bank of 
New York data as of September 2015, average daily trading volume for 
U.S. Treasury bills totaled $67.8 billion. . . . SPX options are 
among the most liquid index options in the U.S. and derive their 
value from the actively traded S&P 500 Index components. SPX options 
are cash-settled with no delivery of stocks or ETFs, and trade in 
competitive auction markets with price and quote transparency. The 
Exchange believes that the highly regulated S&P 500 options markets, 
and the broad base and scope of the S&P 500 Index, make securities 
that derive their value from that index, including S&P 500 options, 
less susceptible to potential market manipulation in view of market 
capitalization and liquidity of the S&P 500 Index components, price 
and quote transparency, and arbitrage opportunities.'' Id.
    \16\ The Exchange states: ``In addition, the Treasury market and 
its participants are subject to a wide range of oversight and 
regulations, including requirements designed to prevent market 
manipulation and other abuses. For example, Treasury market 
participants and the Treasury market, itself, are subject to 
significant oversight by a number of regulatory authorities, 
including the Treasury, the Commission, federal bank regulators, and 
the Financial Industry Regulatory Authority.'' Id., n.15. The 
Exchange represents that the SPX Puts will be subject to CBOE and 
FINRA surveillance programs. See id., 80 FR at 79374.
    \17\ See id., 80 FR at 79372-73.
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    For these reasons, the Commission believes that it would be 
difficult to manipulate the price of the Shares by manipulating the 
prices of its underlying assets. The Commission also notes that, except 
as discussed above, all other representations made in support of the 
Prior Release remain unchanged.
    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with Section 6(b)(5) of the Act \18\ and the 
rules and regulations thereunder applicable to a national securities 
exchange.
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    \18\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\19\ that the proposed rule change (SR-NYSEArca-2015-113), be, and 
it hereby is, approved.
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    \19\ 15 U.S.C. 78s(b)(2).
    \20\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-02440 Filed 2-8-16; 8:45 am]
 BILLING CODE 8011-01-P
6916 Federal Register / Vol. 81, No. 26 / Tuesday, February 9, 2016 / Notices

transactions. Finally, the TC Charter II. The Exchange’s Description of the Additionally, NYSE Arca clarifies that
promotes the effectiveness of OCC’s risk Proposed Rule Change the Commentary is inapplicable because
management procedures by establishing the Index contains options
A. The Prior Proposal
a Board-level committee focused on components.8
reducing IT-related risk at OCC. The Commission approved the listing The Exchange asserts that the deletion
and trading on the Exchange of shares of its prior representations would not
III. Conclusion (‘‘Shares’’) of the WisdomTree Put Write adversely affect investors or the public
Strategy Fund (‘‘Fund’’) under NYSE interest, because the Index is based on
On the basis of the foregoing, the
Arca Equities Rule 5.2(j)(3), which CBOE-traded puts on the S&P 500,
Commission finds that the proposal is
governs the listing and trading of which are highly liquid.9 The Exchange
consistent with the requirements of the
Investment Company Units.4 The further estimates that, on the launch
Act, and in particular, with the
Exchange filed that proposed rule date, the Fund would hold
requirements of Section 17A of the Act 8
change because the Fund and the Shares approximately $2.5–$5.0 million in cash
and the rules and regulations
did not meet all of the ‘‘generic’’ listing and cash equivalents. The Exchange
thereunder.
requirements of Commentary .01(a)(A) also believes that sufficient protections
It is therefore ordered, pursuant to to NYSE Arca Equities Rule 5.2(j)(3), are in place to protect against market
Section 19(b)(2) of the Act,9 that the applicable to the listing of Investment manipulation of the Fund’s Shares and
proposed rule change (SR–OCC–2015– Company Units based upon an index of SPX Puts because: (i) Trading in the
018) be, and it hereby is, approved. ‘‘US Component Stocks.’’ 5 The Shares and the underlying Fund
For the Commission, by the Division of Exchange represented that the Shares instruments are subject to the federal
Trading and Markets, pursuant to delegated would conform to the initial and securities laws and to the Exchange’s,
authority.10 continued listing criteria under NYSE CBOE’s, and the Financial Industry
Robert W. Errett, Arca Equities Rules 5.2(j)(3) and Regulatory Authority’s rules and
Deputy Secretary.
5.5(g)(2), except that the underlying surveillance programs, which are
index, the CBOE S&P 500 Put Write designed to detect violations; (ii) assets
[FR Doc. 2016–02437 Filed 2–8–16; 8:45 am]
Index (the ‘‘Index’’), would not meet the in the portfolio—which will primarily
BILLING CODE 8011–01–P
requirements of NYSE Arca Equities be short-term U.S. Treasury bills 10 and
Rule 5.2(j)(3), Commentary .01(a)(A)(1)– SPX Puts—will be acquired in
(5). The Exchange, however, also extremely liquid and highly regulated
SECURITIES AND EXCHANGE represented that the Index would (1) markets; and (iii) the exchange-traded
COMMISSION include a minimum of 20 components, fund creation/redemption and arbitrage
and therefore (2) meet the numerical mechanisms are tied to the large pool of
[Release No. 34–77045; File No. SR– requirements of NYSE Arca Equities liquidity of each of the Fund’s
NYSEArca–2015–113] Rule 5.2(j)(3), Commentary .01(a)(A)(4), underlying investments.
which requires a minimum of 13 index The Exchange represents that trading
Self-Regulatory Organizations; NYSE or portfolio components. in the Shares will be subject to the
Arca, Inc.; Order Approving a The Exchange has not listed or existing trading surveillances and that
Proposed Rule Change Relating to the commenced trading in the Shares.6 these procedures are adequate to
Index Underlying the WisdomTree Put properly monitor Exchange trading of
Write Strategy Fund B. The Instant Proposed Rule Change
the Shares in all trading sessions and to
The Exchange submitted this proposal deter and detect violations of Exchange
February 3, 2016.
to correct two representations made in rules and federal securities laws.
I. Introduction support of its prior proposal to list and Furthermore, the Financial Industry
trade the Shares. Specifically, the
On December 2, 2015, NYSE Arca, Exchange seeks to strike its invested in one and three-month Treasury bills. The
Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed representations that the Index will (1) SPX Puts are struck at-the-money and are sold on
with the Securities and Exchange include a minimum of 20 components; a monthly basis, usually the third Friday of the
Commission (‘‘Commission’’), pursuant month (i.e., the ‘‘Roll Date’’), which matches the
and (2) meet the numerical expiration date of the SPX Puts. All SPX Puts are
to Section 19(b)(1) of the Securities requirements of NYSE Arca Equities standardized options traded on the CBOE.
Exchange Act of 1934 (‘‘Act’’) 1 and Rule Rule 5.2(j)(3), Commentary .01(a)(A)(4). 8 NYSE Arca Equities Rule 5.2(j)(3), Commentary

19b–4 thereunder,2 a proposal to change At any given time, the Index consists of .01(a)(A)(5) provides that all securities in the
a representation the Exchange made in applicable index or portfolio shall be US
one component, an ‘‘SPX Put.’’ 7 Component Stocks listed on a national securities
support of a prior proposed rule change. exchange and shall be NMS Stocks as defined in
The proposed rule change was 4 See Securities Exchange Act Release Nos. 74290
Rule 600 under Regulation NMS of the Act. Each
published for comment in the Federal (February 18, 2015), 80 FR 9818 (February 24, 2015) component stock of the S&P 500 Index is a US
Register on December 21, 2015.3 The (SR–NYSEArca–2015–05) (‘‘Prior Notice’’); 74675 Component Stock that is listed on a national
(April 8, 2015), 80 FR 20038 (April 14, 2015) (SR– securities exchange and is an NMS Stock. Options
Commission received no comments on NYSEArca–2015–05) (‘‘Prior Order’’ and, together are excluded from the definition of NMS Stock.
the proposed rule change. This order with the Prior Notice, the ‘‘Prior Release’’). 9 See Notice, supra note 3, at 79372 and 79373 for
approves the proposed rule change. 5 NYSE Arca Equities Rule 5.2(j)(3) provides that
the Exchange’s representation of the average daily
the term ‘‘US Component Stock’’ shall mean an trading volume of at-the-money 30-day SPX Puts,
8 In approving this proposed rule change, the
equity security that is registered under Sections the trading volume of the at-the-money SPX Puts,
12(b) or 12(g) of the Act and an American and the daily high, low and last reported sales
mstockstill on DSK4VPTVN1PROD with NOTICES

Commission has considered the proposed rule’s Depositary Receipt, the underlying equity securities prices on each of the Roll Dates for SPX Puts at-
impact on efficiency, competition, and capital of which is registered under Sections 12(b) or 12(g) the-money.
formation. See 15 U.S.C. 78c(f). of the Act. 10 See Notice, supra note 3, at 79373. The
9 15 U.S.C. 78s(b)(2).
6 See Notice, supra note 3, 80 FR at 79371.
10 17 CFR 200.30–3(a)(12).
Exchange states that the short-term Treasury
7 The Index is maintained by the Chicago Board securities that the Fund will acquire as part of its
1 15 U.S.C. 78s(b)(1).
Options Exchange, Inc. (‘‘CBOE’’) and tracks the strategy are not readily susceptible to market
2 17 CFR 240.19b–4.
value of a passive investment strategy, which manipulation due to the liquidity and extensive
3 See Securities Exchange Act Release No. 76646 consists of overlaying of S&P 500 Index put options oversight associated with the short-term U.S.
(Dec. 15, 2015), 80 FR 79371 (‘‘Notice’’). (‘‘SPX Puts’’) over a money market account, Treasury market.

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Federal Register / Vol. 81, No. 26 / Tuesday, February 9, 2016 / Notices 6917

Regulatory Authority (‘‘FINRA’’), on those markets.16 With respect to SPX SECURITIES AND EXCHANGE
behalf of the Exchange, or the regulatory Puts, specifically, the Exchange has COMMISSION
staff of the Exchange, will communicate provided data demonstrating that the [Release No. 34–77041; File No. SR–OCC–
as needed regarding trading in the average daily trading volume (through 2016–001]
Shares and SPX Index options with expiration) of recent SPX Puts compares
other markets and other entities that are favorably to the average daily trading Self-Regulatory Organizations; The
members of the Intermarket volumes of at-the-money put options on Options Clearing Corporation; Notice
Surveillance Group (‘‘ISG’’), and FINRA, other major indexes and is, in fact, of Filing and Immediate Effectiveness
on behalf of the Exchange, or the higher than that of at-the-money puts on of Proposed Rule Change To Revise
regulatory staff of the Exchange, may the Russell 2000 index.17 the Options Clearing Corporation’s
obtain trading information regarding Schedule of Fees
trading in the portfolio securities from For these reasons, the Commission
these markets and other entities. In believes that it would be difficult to February 3, 2016.
addition, the regulatory staff of the manipulate the price of the Shares by Pursuant to Section 19(b)(1) of the
Exchange may obtain information manipulating the prices of its Securities Exchange Act of 1934
regarding trading in the portfolio underlying assets. The Commission also (‘‘Act’’),1 and Rule 19b–4 thereunder,2
securities from markets and other notes that, except as discussed above, notice is hereby given that on January
entities that are members of ISG or with all other representations made in 20, 2016, The Options Clearing
which the Exchange has in place a support of the Prior Release remain Corporation (‘‘OCC’’) filed with the
comprehensive surveillance sharing unchanged. Securities and Exchange Commission
agreement. (‘‘Commission’’) the proposed rule
For the foregoing reasons, the change as described in Items I, II, and
III. Discussion and Commission’s Commission finds that the proposed III below, which Items have been
Findings rule change is consistent with Section prepared primarily by OCC. OCC filed
6(b)(5) of the Act 18 and the rules and the proposed rule change pursuant to
After careful review, the Commission
finds that the exchange’s proposal is regulations thereunder applicable to a Section 19(b)(3)(A)(ii) 3 of the Act and
consistent with the requirements of national securities exchange. Rule 19b–4(f)(2) 4 thereunder so that the
Section 6 of the Act 11 and the rules and IV. Conclusion proposal was effective upon filing with
regulations thereunder applicable to a the Commission. The Commission is
national securities exchange.12 In It is therefore ordered, pursuant to publishing this notice to solicit
particular, the Commission finds that Section 19(b)(2) of the Act,19 that the comments on the rule change from
the proposed rule change is consistent proposed rule change (SR–NYSEArca– interested persons.
with Section 6(b)(5) of the Act,13 which 2015–113), be, and it hereby I. Clearing Agency’s Statement of the
requires, among other things, that the is,approved. Terms of Substance of the Proposed
Exchange’s rules be designed to prevent Rule Change
For the Commission, by the Division of
fraudulent and manipulative acts and Trading and Markets, pursuant to delegated
practices, to promote just and equitable The purpose of this proposed rule
authority.20 change by The Options Clearing
principles of trade, to remove
impediments to and perfect the Robert W. Errett, Corporation (‘‘OCC’’) is to revise OCC’s
mechanism of a free and open market Deputy Secretary. Schedule of Fees effective March 1,
and a national market system, and, in [FR Doc. 2016–02440 Filed 2–8–16; 8:45 am] 2016, to implement a reduction of
general, to protect investors and the clearing fees in accordance with OCC’s
BILLING CODE 8011–01–P
public interest. Fee Policy, which was recently adopted
The Commission believes that it as part of OCC’s Capital Plan.5
would be difficult to manipulate the 1 15
quote transparency. The Exchange believes that the U.S.C. 78s(b)(1).
price of the Shares by manipulating the 2 17 CFR 240.19b–4.
prices of its underlying assets. The highly regulated S&P 500 options markets, and the
3 15 U.S.C. 78s(b)(3)(A)(ii).
broad base and scope of the S&P 500 Index, make
Fund’s portfolio will comprise cash, securities that derive their value from that index,
4 17 CFR 240.19b–4(f)(2).

short-term U.S. Treasury bills, and SPX including S&P 500 options, less susceptible to
5 In 2015, the Commission approved (‘‘Approval

Puts.14 The Exchange contends that potential market manipulation in view of market Order’’) OCC’s plan for raising additional capital
neither short-term Treasury securities (‘‘Capital Plan’’), which was put in place in light of
capitalization and liquidity of the S&P 500 Index
proposed regulatory capital requirements applicable
nor SPX Puts are readily susceptible to components, price and quote transparency, and to systemically important financial market utilities,
market manipulation due to the deep arbitrage opportunities.’’ Id. such as OCC. See Securities Exchange Act Release
16 The Exchange states: ‘‘In addition, the Treasury
liquidity in15 and extensive oversight of No. 74452 (March 6, 2015) 80 FR 13058 (March 12,
market and its participants are subject to a wide 2015) (SR–OCC–2015–02). OCC also filed proposals
11 15 range of oversight and regulations, including in the Capital Plan Filing as an advance notice
U.S.C. 78f.
12 In requirements designed to prevent market under Section 806(e)(1) of the Payment, Clearing,
approving this proposed rule change, the and Settlement Supervision Act of 2010. 12 U.S.C.
Commission notes that it has considered the manipulation and other abuses. For example,
Treasury market participants and the Treasury 5465(e)(1). On February 26, 2015, the Commission
proposed rule’s impact on efficiency, competition, issued a notice of no objection to the advance notice
and capital formation. See 15 U.S.C. 78c(f). market, itself, are subject to significant oversight by
filing. See Exchange Act Release No. 74387
13 15 U.S.C. 78f(b)(5). a number of regulatory authorities, including the (February 26, 2015), 80 FR 12215 (March 6, 2015)
14 See Notice, supra note 3, 80 FR at 79373. Treasury, the Commission, federal bank regulators, (SR–OCC–2014–813). BATS Global Markets, Inc.,
mstockstill on DSK4VPTVN1PROD with NOTICES

15 The Exchange states: ‘‘According to Federal and the Financial Industry Regulatory Authority.’’ BOX Options Exchange LLC, KCG Holdings, Inc.,
Reserve Bank of New York data as of September Id., n.15. The Exchange represents that the SPX Miami International Securities Exchange, LLC, and
2015, average daily trading volume for U.S. Puts will be subject to CBOE and FINRA Susquehanna International Group, LLP (collectively
Treasury bills totaled $67.8 billion. . . . SPX surveillance programs. See id., 80 FR at 79374. ‘‘Petitioners’’) each filed petitions for review of the
options are among the most liquid index options in 17 See id., 80 FR at 79372–73. Approval Order, challenging the action taken by
the U.S. and derive their value from the actively 18 15 U.S.C. 78f(b)(5).
delegated authority. The filing of the petitions
traded S&P 500 Index components. SPX options are automatically stayed the Approval Order. OCC filed
19 15 U.S.C. 78s(b)(2).
cash-settled with no delivery of stocks or ETFs, and a Motion to Lift the Stay on April 2, 2015, and the
trade in competitive auction markets with price and 20 17 CFR 200.30–3(a)(12). Continued

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Document Created: 2018-02-02 14:30:34
Document Modified: 2018-02-02 14:30:34
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 6916