81 FR 70205 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 22.3, Continuing Options Market Maker Registration

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 196 (October 11, 2016)

Page Range		70205-70207
FR Document		2016-24424
Federal Register, Volume 81 Issue 196 (Tuesday, October 11, 2016)
[Federal Register Volume 81, Number 196 (Tuesday, October 11, 2016)]
[Notices]
[Pages 70205-70207]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-24424]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79039; File No. SR-BatsBZX-2016-62]


Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 
22.3, Continuing Options Market Maker Registration

October 4, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 28, 2016, Bats BZX Exchange, Inc. (``BZX'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to make a modification to Exchange 
Rule 22.3, Continuing Options Market Maker Registration, to remove the 
provision of the rule that requires termination of a Member's Options 
Market Maker registration in an option series if the Options Market 
Maker fails to enter quotations in the series within five business days 
after the Options Market Maker's registration in the series becomes 
effective.
    The text of the proposed rule change is available at the Exchange's 
Web site at www.batstrading.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend Exchange Rule 22.3 to remove 
subparagraph (c), which currently requires the Exchange to terminate a 
firm's Options Market Maker registration if it does not enter 
quotations in an option series in which it is registered within five 
business days after the Options Market Maker's registration in the 
series becomes effective. Currently, the Exchange surveils whether a 
newly registered Options Market Maker enters quotations in the series 
within five business days of registration. If an Options Market Maker 
does not, the Exchange is required by Exchange Rule 22.3(c) to 
automatically deregister the Options Market Maker in that series. The 
Exchange views Exchange Rule 22.3(c) as largely duplicative of other 
Exchange Rules and excessively rigid in view of other Exchange Rules 
that allow the Exchange discretion and flexibility in determining an 
appropriate remedy.
    Exchange Rule 22.5(a)(6) provides that Options Market Makers are 
expected to ``maintain active markets'' in all series in which they are 
registered. Both Rule 22.3(c) and Rule 22.5(a)(6) impose an obligation 
upon registered Options Market Maker to maintain active markets. The 
main difference is that Exchange Rule 22.3(c) applies only to the first 
five days that an Options Market Maker is registered, whereas Exchange 
Rule 22.5(a)(6) applies during the first five days and continues for as 
long as the Options Market Maker is

[[Page 70206]]

registered in a series. The Exchange believes that there is no benefit 
to imposing stricter quoting obligations on a newly registered Options 
Market Maker than those imposed on existing registered Options Market 
Makers. Instead, in the Exchange's view, the requirement to maintain 
active markets should be the same from when an Options Market Maker 
first registers as any time after registration.
    The Exchange notes that it will continue to be permitted to 
deregister a registered Options Market Maker under Exchange Rule 
22.2(b) if it is found that the Options Market Maker has failed in its 
obligation to maintain active markets under Exchange Rule 22.5(a)(6) or 
fails its obligation to provide continuous two-sided quotes under Rule 
22.6(d).\3\ Removing Exchange Rule 22.3(c) would simply remove the non-
discretionary requirement that the Exchange must deregister an Options 
Market Maker's registration in a series if it does not enter quotations 
in the series within five business days of registration.
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    \3\ See Exchange Rule 22.2(b) (``The registration of any Member 
as a Market Maker may be suspended or terminated by the Exchange 
upon a determination that such Member has failed to properly perform 
as a Market Maker.'').
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    The Exchange currently conducts surveillance to monitor and enforce 
compliance with the ``active markets'' provision of Exchange Rule 
22.5(a)(6) for all Options Market Makers. A registered Options Market 
Maker is subject to the Exchange Rule 22.5(a)(6) surveillance for the 
entire time the Options Market Maker is registered, including the first 
five days covered by Exchange Rule 22.3(c). If a registered Options 
Market Maker is found by surveillance not to be maintaining active 
markets in the option series in which it is registered, the Exchange 
will determine the appropriate course of action against such Options 
Market Maker. The Exchange may take actions of escalating severity 
against the offending Options Market Maker from an informal warning up 
to deregistering the Options Market Maker in the options in which it 
fails to maintain active markets or bringing formal action.\4\ The 
Exchange has found that this discretion has allowed for effective 
enforcement of Options Market Maker obligations while allowing the 
Exchange to consider the facts and circumstances of each case in 
determining the appropriate remedy.
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    \4\ See Exchange Rules 22.2(b) and 22.5(c).
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    On the other hand, current Exchange Rule 22.3(c) is non-
discretionary and its enforcement can lead to potentially arbitrary 
results, as it does not permit the Exchange to consider the facts and 
circumstances of each case in enforcing the rule. While as a general 
matter an Options Market Maker should enter quotations in a series in 
which it is registered as soon as practicable, experience has shown 
that many factors can affect when a newly registered Options Market 
Maker will be in a position to begin entering quotations. Further, as 
discussed above [sic], Exchange Rule 22.6(d) contemplates certain 
acceptable periods of inactivity. Just as the Exchange is provided 
discretion to enforce all Options Market Maker obligations under 
Exchange Rule 22.2(b), the Exchange believes that it should be afforded 
the same discretion to evaluate the facts and circumstances of each 
case in which an Options Market Maker is not active in a series within 
the first five days of registration and determine the appropriate 
remedy.
    Finally, other national options exchanges do not require automatic 
deregistration of a registered Options Market Maker from an options 
series when the Options Market Maker fails to submit a quote within the 
first five days of registration. Other exchanges allow considerably 
more discretion in determining the appropriate remedy for a registered 
Options Market Maker that fails its quoting obligations. For example, 
neither the Chicago Board Options Exchange (``CBOE''), nor the Miami 
International Securities Exchange (``MIAX''), nor NYSE Arca, Inc. 
Options (``NYSE Arca''), has a requirement to automatically deregister 
an options market maker if it fails in its quoting or other obligations 
within five days of registration. Instead, each of the above exchanges 
appears to rely on a rule substantively identical to Exchange Rule 
22.2(b) that gives the respective exchange discretion as to the 
appropriate remedy for Options Market Makers that do not meet their 
obligations.\5\
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    \5\ See CBOE Rule 8.2(b) (``The registration of a Market-Maker 
may be suspended or terminated by the Exchange upon a determination 
that the Market-Maker has failed to properly perform as a Market-
Maker.''); MIAX Rule 600(c) (``The registration of any Member as a 
Lead Market Maker, Primary Lead Market Maker, or as a Registered 
Market Maker may be suspended or terminated by the Exchange upon a 
determination that such Member has failed to properly perform as a 
Market Maker''); NYSE Arca Options Rule 6.33 (``The registration of 
any person as a Market Maker may be suspended or terminated by the 
Exchange upon a determination of any substantial or continued 
failure by such Market Maker to engage in dealings in accordance 
with [Market Maker Obligations].'').
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    The Exchange, therefore, proposes to amend Exchange Rule 22.3 to 
remove subparagraph (c) and to enforce its Options Market Maker 
``active market'' obligations with the remedies permitted in Exchange 
Rule 22.2(b) and Exchange Rule 22.5(c).
2. Statutory Basis
    The Exchange believes that its proposal is consistent with the 
requirements of the Act and the rules and regulations thereunder that 
are applicable to a national securities exchange, and, in particular, 
with the requirements of Section 6(b) of the Act.\6\
    In particular, the proposal is consistent with Section 6(b)(1) \7\ 
in that it enables the Exchange to be so organized as to have the 
capacity to be able to carry out the purposes of the Exchange Act and 
to comply, and to enforce compliance by its exchange members and 
persons associated with its exchange members, with the provisions of 
the Exchange Act, the rules and regulations thereunder, and the rules 
of the Exchange. The proposal allows the Exchange the discretion so 
that it may appropriately and equitably enforce compliance by its 
members with the rules of the Exchange--in particular, the Exchange's 
Options Market Maker obligations.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(1).
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    Additionally, the proposal is consistent with Section 6(b)(5) of 
the Act \8\ because it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, 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. The proposed amendment to remove Exchange Rule 
22.3(c) will permit the Exchange to consider all facts and 
circumstances in instances where it appears that a registered Options 
Market Maker does not meet its obligations and to exercise discretion 
in applying the appropriate remedy for such failure.
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    \8\ 15 U.S.C. 78f(b)(5).
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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 
does not introduce any burden on competition, but rather, removes the 
automatic deregistration requirement of Exchange Rule 22.3(c) to allow 
the Exchange to apply the obligation to maintain active

[[Page 70207]]

markets to all registered Options Market Makers equally.

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

    Because the foregoing proposed rule change does not: (A) 
Significantly affect the protection of investors or the public 
interest; (B) impose any significant burden on competition; and (C) by 
its terms, 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 \9\ and 
paragraph (f)(6) of Rule 19b-4 thereunder,\10\ the Exchange has 
designated this rule filing as non-controversial. The Exchange has 
given the Commission written notice of its intent to file the proposed 
rule change, along with a brief description and text of the proposed 
rule change at least five business days prior to the date of filing of 
the proposed rule change, or such shorter time as designated by the 
Commission.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (1) 
Necessary or appropriate in the public interest; (2) for the protection 
of investors; or (3) 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-BatsBZX-2016-62 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-BatsBZX-2016-62. 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-BatsBZX-2016-62, and should 
be submitted on or before November 1, 2016.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-24424 Filed 10-7-16; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 81, No. 196 / Tuesday, October 11, 2016 / Notices 70205

reasons for so finding or (ii) as to which (http://dtcc.com/legal/sec-rule- The text of the proposed rule change
the self-regulatory organization filings.aspx). All comments received is available at the Exchange’s Web site
consents, the Commission will: will be posted without change; the at www.batstrading.com, at the
(A) By order approve or disapprove Commission does not edit personal principal office of the Exchange, and at
such proposed rule change, or identifying information from the Commission’s Public Reference
(B) institute proceedings to determine submissions. You should submit only Room.
whether the proposed rule change information that you wish to make
should be disapproved. II. Self-Regulatory Organization’s
available publicly. All submissions
The proposal shall not take effect Statement of the Purpose of, and
should refer to File Number SR–DTC–
until all regulatory actions required Statutory Basis for, the Proposed Rule
2016–008 and should be submitted on
with respect to the proposal are Change
or before November 1, 2016.
completed.24 For the Commission, by the Division of
In its filing with the Commission, the
Trading and Markets, pursuant to delegated Exchange included statements
IV. Solicitation of Comments
authority.25 concerning the purpose of and basis for
Interested persons are invited to the proposed rule change and discussed
Brent J. Fields,
submit written data, views and any comments it received on the
Secretary.
arguments concerning the foregoing, proposed rule change. The text of these
including whether the proposed rule [FR Doc. 2016–24499 Filed 10–7–16; 8:45 am]
statements may be examined at the
change is consistent with the Act. BILLING CODE 8011–01–P
places specified in Item IV below. The
Comments may be submitted by any of Exchange has prepared summaries, set
the following methods: forth in Sections A, B, and C below, of
SECURITIES AND EXCHANGE
Electronic Comments the most significant parts of such
COMMISSION
statements.
• Use the Commission’s Internet [Release No. 34–79039; File No. SR–
comment form A. Self-Regulatory Organization’s
BatsBZX–2016–62]
(http://www.sec.gov/rules/sro.shtml); Statement of the Purpose of, and the
or Self-Regulatory Organizations; Bats Statutory Basis for, the Proposed Rule
• Send an email to rule-comments@ BZX Exchange, Inc.; Notice of Filing Change
sec.gov. Please include File Number SR– and Immediate Effectiveness of a 1. Purpose
DTC–2016–008 on the subject line. Proposed Rule Change to Rule 22.3,
The Exchange proposes to amend
Paper Comments Continuing Options Market Maker
Exchange Rule 22.3 to remove
Registration
• Send paper comments in triplicate subparagraph (c), which currently
to Secretary, Securities and Exchange October 4, 2016. requires the Exchange to terminate a
Commission, 100 F Street NE., Pursuant to Section 19(b)(1) of the firm’s Options Market Maker
Washington, DC 20549. Securities Exchange Act of 1934 registration if it does not enter
All submissions should refer to File (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 quotations in an option series in which
Number SR–DTC–2016–008. This file notice is hereby given that on it is registered within five business days
number should be included on the September 28, 2016, Bats BZX after the Options Market Maker’s
subject line if email is used. To help the Exchange, Inc. (‘‘BZX’’ or the registration in the series becomes
Commission process and review your ‘‘Exchange’’) filed with the Securities effective. Currently, the Exchange
comments more efficiently, please use and Exchange Commission surveils whether a newly registered
only one method. The Commission will (‘‘Commission’’) the proposed rule Options Market Maker enters quotations
post all comments on the Commission’s change as described in Items I, II, and in the series within five business days
Internet Web site (http://www.sec.gov/ III below, which Items have been of registration. If an Options Market
rules/sro.shtml). Copies of the prepared by the Exchange. The Maker does not, the Exchange is
submission, all subsequent Commission is publishing this notice to required by Exchange Rule 22.3(c) to
amendments, all written statements solicit comments on the proposed rule automatically deregister the Options
with respect to the proposed rule change from interested persons. Market Maker in that series. The
change that are filed with the Exchange views Exchange Rule 22.3(c)
I. Self-Regulatory Organization’s as largely duplicative of other Exchange
Commission, and all written Statement of the Terms of Substance of
communications relating to the Rules and excessively rigid in view of
the Proposed Rule Change other Exchange Rules that allow the
proposed rule change between the
Commission and any person, other than The Exchange filed a proposal to Exchange discretion and flexibility in
those that may be withheld from the make a modification to Exchange Rule determining an appropriate remedy.
public in accordance with the 22.3, Continuing Options Market Maker Exchange Rule 22.5(a)(6) provides
provisions of 5 U.S.C. 552, will be Registration, to remove the provision of that Options Market Makers are
available for Web site viewing and the rule that requires termination of a expected to ‘‘maintain active markets’’
printing in the Commission’s Public Member’s Options Market Maker in all series in which they are registered.
Reference Room, 100 F Street NE., registration in an option series if the Both Rule 22.3(c) and Rule 22.5(a)(6)
impose an obligation upon registered
asabaliauskas on DSK3SPTVN1PROD with NOTICES

Washington, DC 20549 on official Options Market Maker fails to enter
business days between the hours of quotations in the series within five Options Market Maker to maintain
10:00 a.m. and 3:00 p.m. Copies of the business days after the Options Market active markets. The main difference is
filing also will be available for Maker’s registration in the series that Exchange Rule 22.3(c) applies only
inspection and copying at the principal becomes effective. to the first five days that an Options
office of DTC and on DTCC’s Web site Market Maker is registered, whereas
25 17 CFR 200.30–3(a)(12). Exchange Rule 22.5(a)(6) applies during
24 See
supra note 3 (regarding filing of related 1 15 U.S.C. 78s(b)(1). the first five days and continues for as
advance notice). 2 17 CFR 240.19b–4. long as the Options Market Maker is

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70206 Federal Register / Vol. 81, No. 196 / Tuesday, October 11, 2016 / Notices

registered in a series. The Exchange circumstances of each case in enforcing in Exchange Rule 22.2(b) and Exchange
believes that there is no benefit to the rule. While as a general matter an Rule 22.5(c).
imposing stricter quoting obligations on Options Market Maker should enter
2. Statutory Basis
a newly registered Options Market quotations in a series in which it is
Maker than those imposed on existing registered as soon as practicable, The Exchange believes that its
registered Options Market Makers. experience has shown that many factors proposal is consistent with the
Instead, in the Exchange’s view, the can affect when a newly registered requirements of the Act and the rules
requirement to maintain active markets Options Market Maker will be in a and regulations thereunder that are
should be the same from when an position to begin entering quotations. applicable to a national securities
Options Market Maker first registers as Further, as discussed above [sic], exchange, and, in particular, with the
any time after registration. Exchange Rule 22.6(d) contemplates requirements of Section 6(b) of the Act.6
The Exchange notes that it will certain acceptable periods of inactivity. In particular, the proposal is
continue to be permitted to deregister a Just as the Exchange is provided consistent with Section 6(b)(1) 7 in that
registered Options Market Maker under discretion to enforce all Options Market it enables the Exchange to be so
Exchange Rule 22.2(b) if it is found that Maker obligations under Exchange Rule organized as to have the capacity to be
the Options Market Maker has failed in 22.2(b), the Exchange believes that it able to carry out the purposes of the
its obligation to maintain active markets should be afforded the same discretion Exchange Act and to comply, and to
under Exchange Rule 22.5(a)(6) or fails to evaluate the facts and circumstances enforce compliance by its exchange
its obligation to provide continuous of each case in which an Options members and persons associated with
two-sided quotes under Rule 22.6(d).3 Market Maker is not active in a series its exchange members, with the
Removing Exchange Rule 22.3(c) would within the first five days of registration provisions of the Exchange Act, the
simply remove the non-discretionary and determine the appropriate remedy. rules and regulations thereunder, and
requirement that the Exchange must Finally, other national options the rules of the Exchange. The proposal
deregister an Options Market Maker’s exchanges do not require automatic allows the Exchange the discretion so
registration in a series if it does not deregistration of a registered Options that it may appropriately and equitably
enter quotations in the series within five Market Maker from an options series enforce compliance by its members with
business days of registration. when the Options Market Maker fails to
The Exchange currently conducts the rules of the Exchange—in particular,
submit a quote within the first five days the Exchange’s Options Market Maker
surveillance to monitor and enforce
of registration. Other exchanges allow obligations.
compliance with the ‘‘active markets’’
considerably more discretion in Additionally, the proposal is
provision of Exchange Rule 22.5(a)(6)
determining the appropriate remedy for consistent with Section 6(b)(5) of the
for all Options Market Makers. A
a registered Options Market Maker that Act 8 because it is designed to prevent
registered Options Market Maker is
fails its quoting obligations. For fraudulent and manipulative acts and
subject to the Exchange Rule 22.5(a)(6)
example, neither the Chicago Board practices, to promote just and equitable
surveillance for the entire time the
Options Exchange (‘‘CBOE’’), nor the principles of trade, to foster cooperation
Options Market Maker is registered,
Miami International Securities and coordination with persons engaged
including the first five days covered by
Exchange Rule 22.3(c). If a registered Exchange (‘‘MIAX’’), nor NYSE Arca, in facilitating transactions in securities,
Options Market Maker is found by Inc. Options (‘‘NYSE Arca’’), has a to remove impediments to, and perfect
surveillance not to be maintaining requirement to automatically deregister the mechanism of, a free and open
active markets in the option series in an options market maker if it fails in its market and a national market system
which it is registered, the Exchange will quoting or other obligations within five and, in general, to protect investors and
determine the appropriate course of days of registration. Instead, each of the the public interest. The proposed
action against such Options Market above exchanges appears to rely on a amendment to remove Exchange Rule
Maker. The Exchange may take actions rule substantively identical to Exchange 22.3(c) will permit the Exchange to
of escalating severity against the Rule 22.2(b) that gives the respective consider all facts and circumstances in
offending Options Market Maker from exchange discretion as to the instances where it appears that a
an informal warning up to deregistering appropriate remedy for Options Market registered Options Market Maker does
the Options Market Maker in the Makers that do not meet their not meet its obligations and to exercise
options in which it fails to maintain obligations.5 discretion in applying the appropriate
active markets or bringing formal The Exchange, therefore, proposes to remedy for such failure.
action.4 The Exchange has found that amend Exchange Rule 22.3 to remove
subparagraph (c) and to enforce its B. Self-Regulatory Organization’s
this discretion has allowed for effective Statement on Burden on Competition
enforcement of Options Market Maker Options Market Maker ‘‘active market’’
obligations while allowing the Exchange obligations with the remedies permitted The Exchange does not believe that
to consider the facts and circumstances the proposed rule change will impose
of each case in determining the 5 See CBOE Rule 8.2(b) (‘‘The registration of a
any burden on competition that is not
appropriate remedy. Market-Maker may be suspended or terminated by necessary or appropriate in furtherance
the Exchange upon a determination that the Market-
On the other hand, current Exchange Maker has failed to properly perform as a Market- of the purposes of the Act. The
Rule 22.3(c) is non-discretionary and its Maker.’’); MIAX Rule 600(c) (‘‘The registration of proposed rule change does not
enforcement can lead to potentially
asabaliauskas on DSK3SPTVN1PROD with NOTICES

any Member as a Lead Market Maker, Primary Lead introduce any burden on competition,
arbitrary results, as it does not permit Market Maker, or as a Registered Market Maker may but rather, removes the automatic
be suspended or terminated by the Exchange upon
the Exchange to consider the facts and a determination that such Member has failed to deregistration requirement of Exchange
properly perform as a Market Maker’’); NYSE Arca Rule 22.3(c) to allow the Exchange to
3 See Exchange Rule 22.2(b) (‘‘The registration of
Options Rule 6.33 (‘‘The registration of any person apply the obligation to maintain active
any Member as a Market Maker may be suspended as a Market Maker may be suspended or terminated
or terminated by the Exchange upon a by the Exchange upon a determination of any
6 15 U.S.C. 78f(b).
determination that such Member has failed to substantial or continued failure by such Market
properly perform as a Market Maker.’’). Maker to engage in dealings in accordance with 7 15 U.S.C. 78f(b)(1).
4 See Exchange Rules 22.2(b) and 22.5(c). [Market Maker Obligations].’’). 8 15 U.S.C. 78f(b)(5).

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markets to all registered Options Market • Send an email to rule-comments@ SECURITIES AND EXCHANGE
Makers equally. sec.gov. Please include File Number SR– COMMISSION
C. Self-Regulatory Organization’s BatsBZX–2016–62 on the subject line.
[Release No. 34–79035; File No. SR–
Statement on Comments on the Paper Comments NASDAQ–2016–124]
Proposed Rule Change Received From
Members, Participants, or Others • Send paper comments in triplicate Self-Regulatory Organizations; The
to Brent J. Fields, Secretary, Securities NASDAQ Stock Market LLC; Notice of
The Exchange has not solicited, and Filing and Immediate Effectiveness of
does not intend to solicit, comments on and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090. Proposed Rule Change To Amend
this proposed rule change. The Nasdaq Rule 7046
Exchange has not received any written All submissions should refer to File
comments from members or other Number SR–BatsBZX–2016–62. This file October 4, 2016.
interested parties. number should be included on the Pursuant to Section 19(b)(1) of the
subject line if email is used. To help the Securities Exchange Act of 1934
III. Date of Effectiveness of the (‘‘Act’’),1 and Rule 19b–4 thereunder,2
Proposed Rule Change and Timing for Commission process and review your
notice is hereby given that, on
Commission Action comments more efficiently, please use
September 23, 2016, The NASDAQ
Because the foregoing proposed rule only one method. The Commission will Stock Market LLC (‘‘Nasdaq’’ or
change does not: (A) Significantly affect post all comments on the Commission’s ‘‘Exchange’’) filed with the Securities
the protection of investors or the public Internet Web site (http://www.sec.gov/ and Exchange Commission (‘‘SEC’’ or
interest; (B) impose any significant rules/sro.shtml). Copies of the ‘‘Commission’’) the proposed rule
burden on competition; and (C) by its submission, all subsequent change as described in Items I, II, and
terms, become operative for 30 days amendments, all written statements III below, which Items have been
from the date on which it was filed or with respect to the proposed rule prepared by the Exchange. The
such shorter time as the Commission change that are filed with the Commission is publishing this notice to
may designate it has become effective Commission, and all written solicit comments on the proposed rule
pursuant to Section 19(b)(3)(A) of the communications relating to the change from interested persons.
Act 9 and paragraph (f)(6) of Rule 19b– proposed rule change between the I. Self-Regulatory Organization’s
4 thereunder,10 the Exchange has Commission and any person, other than Statement of the Terms of Substance of
designated this rule filing as non- those that may be withheld from the the Proposed Rule Change
controversial. The Exchange has given public in accordance with the
the Commission written notice of its provisions of 5 U.S.C. 552, will be Nasdaq is proposing to amend
intent to file the proposed rule change, proposed [sic] Nasdaq Rule 7046
available for Web site viewing and
along with a brief description and text (Nasdaq Trading Insights) by adding the
printing in the Commission’s Public
of the proposed rule change at least five corresponding fee for the optional
Reference Room, 100 F Street NE., Nasdaq Trading Insights product.
business days prior to the date of filing Washington, DC 20549 on official
of the proposed rule change, or such The text of the proposed rule change
business days between the hours of is available at
shorter time as designated by the 10:00 a.m. and 3:00 p.m. Copies of such
Commission. nasdaq.cchwallstreet.com, at Nasdaq’s
filing also will be available for principal office, and at the
At any time within 60 days of the
inspection and copying at the principal Commission’s Public Reference Room.
filing of the proposed rule change, the
office of the Exchange. All comments
Commission summarily may II. Self-Regulatory Organization’s
temporarily suspend such rule change if received will be posted without change;
Statement of the Purpose of, and
it appears to the Commission that such the Commission does not edit personal
Statutory Basis for, the Proposed Rule
action is: (1) Necessary or appropriate in identifying information from Change
the public interest; (2) for the protection submissions. You should submit only
information that you wish to make In its filing with the Commission,
of investors; or (3) otherwise in Nasdaq included statements concerning
furtherance of the purposes of the Act. available publicly. All submissions
should refer to File Number SR– the purpose of, and basis for, the
If the Commission takes such action, the proposed rule change and discussed any
Commission shall institute proceedings BatsBZX–2016–62, and should be
comments it received on the proposed
to determine whether the proposed rule submitted on or before November 1,
rule change. The text of those
should be approved or disapproved. 2016.
statements may be examined at the
IV. Solicitation of Comments For the Commission, by the Division of places specified in Item IV below. The
Trading and Markets, pursuant to delegated Exchange has prepared summaries, set
Interested persons are invited to authority.11
submit written data, views, and forth in sections A, B, and C below, of
arguments concerning the foregoing, Robert W. Errett, the most significant parts of such
including whether the proposed rule Deputy Secretary. statements.
change is consistent with the Act. [FR Doc. 2016–24424 Filed 10–7–16; 8:45 am] A. Self-Regulatory Organization’s
Comments may be submitted by any of BILLING CODE 8011–01–P Statement of the Purpose of, and
asabaliauskas on DSK3SPTVN1PROD with NOTICES

the following methods: Statutory Basis for, the Proposed Rule
Change
Electronic Comments
• Use the Commission’s Internet 1. Purpose
comment form (http://www.sec.gov/ The Exchange proposes to amend
rules/sro.shtml); or Nasdaq Rule 7046 (Nasdaq Trading
9 15 U.S.C. 78s(b)(3)(A). 1 15 U.S.C. 78s(b)(1).
10 17 CFR 240.19b–4. 11 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4.

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Document Created: 2018-02-13 16:34:18
Document Modified: 2018-02-13 16:34:18
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 70205