81 FR 72129 - Self-Regulatory Organizations; The Options Clearing Corporation; Order Approving Proposed Rule Change Concerning the Options Clearing Corporation's Escrow Deposit Program
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 202 (October 19, 2016)
Federal Register Volume 81, Issue 202 (October 19, 2016)
| Page Range | 72129-72131 | |
| FR Document | 2016-25234 |
[Federal Register Volume 81, Number 202 (Wednesday, October 19, 2016)] [Notices] [Pages 72129-72131] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-25234] [[Page 72129]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79094; File No. SR-OCC-2016-009] Self-Regulatory Organizations; The Options Clearing Corporation; Order Approving Proposed Rule Change Concerning the Options Clearing Corporation's Escrow Deposit Program October 13, 2016. On August 15, 2016, The Options Clearing Corporation (``OCC'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change SR-OCC-2016-009 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4 thereunder.\2\ The proposed rule change was published for comment in the Federal Register on August 31, 2016.\3\ The Commission did not receive any comments on the proposed rule change. This order approves the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ Securities Exchange Act Release No. 78675 (August 25, 2016), 81 FR 60099 (August 31, 2016) (SR-OCC-2016-009) (``Notice''). --------------------------------------------------------------------------- I. Description of the Proposed Rule Change A. Background OCC is the sole clearing agency for the U.S. listed options markets and a systemically important financial market utility. In this role, OCC seeks to manage risks that could cause a financial loss or settlement disruption and, therefore, threaten the stability of the U.S. financial system, by collecting collateral to protect against potential losses stemming from the default of a clearing member or its customers through margin from its clearing members or from deposits in lieu of margin of clearing members' customers through OCC's escrow deposit program. According to OCC, users of its escrow deposit program are customers of clearing members who, through the escrow deposit program, are permitted to collateralize eligible positions directly with OCC (instead of with the relevant clearing member who will, in turn, deposit margin at OCC). When a customer of a clearing member makes a deposit in lieu of margin through OCC's escrow deposit program, the relevant positions are excluded from the clearing member's margin requirement at OCC. OCC states that the escrow deposit program therefore provides users of OCC's services with a means to more efficiently use cash or securities they may have available. B. The Proposed Rule Change The proposed rule change seeks to improve the resiliency of OCC's escrow deposit program by effecting the following changes. First, The proposed rule change would increase OCC's visibility into and control over collateral deposits made under the escrow deposit program. As described in the Notice, securities deposits in the escrow deposit program (``specific deposits'') are currently held at either the Depository Trust Company (``DTC'') or custodian banks, and cash deposits in the escrow deposit program (``escrow deposits'') are held at custodian banks. While OCC currently can verify the value of the securities deposited at DTC through DTC's systems, it lacks similar visibility into cash and securities held in custodian bank accounts, relying instead on the custodian banks to verify the value of such collateral. The proposed changes require securities in the escrow deposit program to be held at DTC, providing OCC with increased visibility into the collateral, as OCC will be able to view, validate, and value the collateral in real time and perform the controls currently performed by custodian banks. As stated in the Notice, banks participating in the escrow deposit program (``Tri-Party Custodian Banks'') will also provide OCC with online view access to each customer's cash account designated for the escrow deposit program, allowing visibility into transactional activity and account balances without having to rely upon a third party to value or validate the existence of the collateral. Second, the proposed changes will provide more specificity concerning the manner in which OCC will take possession of collateral in OCC's escrow deposit program in the event of a clearing member or custodian bank default. As described in the Notice, proposed Rules 610A(b), 610B(f), 610C(q), and 610C(r) will provide that in the event of a clearing member or custodian bank default, OCC will have the right to direct DTC to deliver the securities included in a member specific deposit, third-party specific deposit or escrow deposit to OCC's DTC participant account for the purpose of satisfying the obligations of the clearing member or reimbursing itself for losses incurred as a result of the failure. Similarly, proposed Rules 610C(q) and 610C(r) will give OCC the right in the event of a Tri-Party Custodian Bank default to take possession of cash included within an escrow deposit for the same purposes. Further, Rule 1106(b)(2) will be amended to provide that OCC may close out a short position of a suspended clearing member covered by a member specific, third-party specific or escrow deposit, subject to the ability of the suspended clearing member or its representative to transfer the short position to another clearing member under certain circumstances. Third, the proposed changes will clarify clearing members' rights to collateral in the escrow deposit program in the event of a customer default to the clearing member. According to the Notice, Proposed Rules 610B(c) and 610C(f) will provide for the grant of a security interest by the customer to the clearing member with respect to any given third- party specific deposit and escrow deposit, as applicable, with the clearing member's right subordinate to OCC's interest. Proposed Rules 610C(d), 610C(o), 610C(p) and 610C(s), relating to escrow deposits, and proposed Rules 610B(d) and 610B(e), relating to third-party specific deposits, will provide that, in the event of a customer default to a clearing member, the clearing member will have the right to request a ``hold'' on a deposit, which will prevent the withdrawal of deposited securities or cash by a custodian bank or the release of a deposit that will otherwise occur in the ordinary course. OCC states that placing the ``hold'' instruction gives a clearing member the right to request that OCC direct delivery of the deposit to the clearing member through DTC's systems, in the case of securities, or an instruction to the Tri- Party Custodian Bank in the case of cash. OCC believes that providing clearing members with transparent instructions regarding how to place a hold instruction on and direct delivery of a deposit in the escrow deposit program will be a significant enhancement to the current escrow deposit program. Fourth, the proposed changes will improve the readability of the rules governing OCC's escrow deposit program by consolidating all such rules into a single location in OCC's Rulebook. Upon implementation of the proposed changes, all securities collateral in OCC's escrow deposit program will be held at DTC, and custodian banks will only be allowed to hold cash collateral. Fifth, the proposed rule change will consolidate all of the rules concerning the escrow deposit program, including the provisions of the Escrow Deposit Agreement (``EDA''), which also contains substantive provisions governing the program, into Rules 610, 610A, 610B and 610C. OCC believes that consolidating the many rules governing the escrow deposit program into a single [[Page 72130]] location will significantly enhance the understandability and transparency of the rules concerning the escrow deposit program for current users of the program as well as any persons that may be interested in using the program in the future. As part of the consolidation efforts, the proposed rule change would also rename certain existing terminologies used in the escrow deposit program.\4\ --------------------------------------------------------------------------- \4\ See Notice, supra note 3, 81 FR at 60100. --------------------------------------------------------------------------- Finally, OCC will eliminate the EDA and replace it with a streamlined agreement entitled the ``Participating Escrow Bank Agreement.'' The Participating Escrow Bank Agreement will provide that custodian banks are subject to all terms of the rules governing the revised escrow deposit program, as they may be amended from time to time.\5\ The Participating Escrow Bank Agreement will contain eligibility requirements for custodian banks, including representations regarding the custodian bank's Tier 1 Capital, and provide OCC with express representations concerning the bank's authority to enter into the Participating Escrow Bank Agreement. --------------------------------------------------------------------------- \5\ Under the Participating Escrow Bank Agreement, however, OCC will agree to provide custodian banks with advance notice of material amendments to the rules relating to deposits in lieu of margin and custodian banks will have the opportunity to withdraw from the escrow deposit program if they object to the amendments. OCC states that, as a general matter, the Participating Escrow Bank Agreement will not be negotiable, although OCC may determine to vary certain non-material terms in limited circumstances. --------------------------------------------------------------------------- Additionally, Proposed Rule 610C(b) will require customers wishing to deposit cash collateral and custodian banks holding escrow deposits comprised of cash to enter into a tri-party agreement involving OCC, the customer and the applicable custodian bank. While cash collateral pledged in the escrow deposit program will continue to be facilitated through existing interfaces, OCC states that pledges will be required to be made in the customer's account at the Tri-Party Custodian Bank. OCC states that the Tri-Party Agreement will govern the customer's use of cash in the program, confirm the grant of a security interest in the customer's account to OCC and the relevant clearing member (as set forth in proposed Rule 610C(f)), and cause customers of clearing members to be subject to all terms of the Rules governing the revised escrow deposit program. Each custodian bank entering into the Tri-Party Agreement will also agree to follow the directions of OCC with respect to cash escrow deposits without further consent by the customer. II. Discussion and Commission Findings Exchange Act Section 19(b)(2)(C) \6\ directs the Commission to approve a proposed rule change of a self-regulatory organization if it finds that the rule change, as proposed, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to such organization. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78s(b)(2)(C). --------------------------------------------------------------------------- The Commission finds that the proposed rule change is consistent with Section 17A(b)(3)(F) of the Exchange Act, which requires, among other things, that the rules of a clearing agency assure the safeguarding of securities and funds that are in the custody or control of the clearing agency or for which it is responsible.\7\ As described above, the proposed rule change will enhance OCC's ability to validate and value escrow deposit program deposits in real time and enhance its ability to expeditiously take possession of such deposits in the event of a default. These enhancements will enable OCC to better ensure that it monitors and maintains adequate financial resources in the event of a clearing member default and thereby assure the safeguarding of securities and funds in OCC's custody or control or for which it is responsible. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78q-1(b)(3)(F). --------------------------------------------------------------------------- Additionally, the Commission finds that the proposed rule change is consistent with Exchange Act Rules 17Ad-22(d)(1), (3), and (11). Exchange Act Rule 17Ad-22(d)(1) requires clearing agencies to establish, implement, maintain and enforce written policies and procedures reasonably designed to provide a well-founded, transparent, and enforceable legal framework for each aspect of its activities in all relevant jurisdictions.\8\ Through the proposed change, OCC will provide clarity to clearing members, their customers, and potential users of OCC's escrow deposit program regarding the operations of the escrow deposit program and the rights of OCC, clearing members and customers upon a clearing member or customer default. For example, the proposed change will better codify OCC's and clearing members' rights to collateral in the escrow deposit program the event of a clearing member or customer default and provide greater transparency regarding the operational steps involved in taking possession of such collateral. Moreover, consolidating the rules governing the escrow deposit program and terms previously located in the EDA into a single location will enhance the transparency of the applicable rules. As such, the Commission believes the proposed change is consistent with Exchange Act Rule 17Ad-22(d)(1).\9\ --------------------------------------------------------------------------- \8\ 17 CFR 240.17Ad-22(d)(1). \9\ Id. --------------------------------------------------------------------------- In addition, the Commission believes that the proposed change is consistent with Exchange Act Rule 17Ad-22(d)(3), which requires clearing agencies to, among other things, establish, implement, maintain and enforce written policies and procedures reasonably designed to hold assets in a manner that minimizes risk of loss or delay in its access to them.\10\ As described above, all non-cash collateral in the escrow deposit program will be held at DTC, allowing OCC to validate and value collateral in real time and quickly obtain possession of deposited securities in an event of default without involving custodian banks by issuing a transfer instruction through DTC's systems. The proposed change will also codify OCC's right to take possession of cash collateral within an escrow account upon a clearing member or custodian bank default and provide OCC with online view access to each customer's cash account at the custodian bank. Together, these changes will allow OCC to monitor the adequacy of collateral in the escrow deposit program and be able to more quickly take possession of such collateral in the event of a clearing member default, which will, thereby, reduce potential losses to OCC, other clearing members and market participants. --------------------------------------------------------------------------- \10\ 17 CFR 240.17Ad-22(d)(3). --------------------------------------------------------------------------- Finally, the Commission believes that the proposed change is consistent with Exchange Act Rule 17Ad-22(d)(11), which requires clearing agencies to, among other things, establish, implement, maintain and enforce written policies and procedures reasonably designed to make key aspects of their default procedures publicly available.\11\ The Commission believes that the proposed change is consistent with Rule 17Ad-22(d)(11) because it will incorporate the substantive terms of the escrow deposit program, and specifically the rules concerning default management, into OCC's Rules, which are publicly available on OCC's Web site, rather than in private agreements. --------------------------------------------------------------------------- \11\ 17 CFR 240.17Ad-22(d)(11). --------------------------------------------------------------------------- III. Conclusion On the basis of the foregoing, the Commission finds that the proposal is consistent with the requirements of the Act, and in particular, with the requirements of Section 17A of the [[Page 72131]] Act \12\ and the rules and regulations thereunder. --------------------------------------------------------------------------- \12\ In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- It is therefore ordered, pursuant to Section 19(b)(2) of the Exchange Act,\13\ that the proposed rule change (SR-OCC-2016-009) be, and it hereby is, approved. --------------------------------------------------------------------------- \13\ 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\ --------------------------------------------------------------------------- \14\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-25234 Filed 10-18-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 202 / Wednesday, October 19, 2016 / Notices 72129
SECURITIES AND EXCHANGE efficiently use cash or securities they 1106(b)(2) will be amended to provide
COMMISSION may have available. that OCC may close out a short position
of a suspended clearing member
[Release No. 34–79094; File No. SR–OCC– B. The Proposed Rule Change
2016–009]
covered by a member specific, third-
The proposed rule change seeks to party specific or escrow deposit, subject
Self-Regulatory Organizations; The improve the resiliency of OCC’s escrow to the ability of the suspended clearing
Options Clearing Corporation; Order deposit program by effecting the member or its representative to transfer
Approving Proposed Rule Change following changes. First, The proposed the short position to another clearing
Concerning the Options Clearing rule change would increase OCC’s member under certain circumstances.
Corporation’s Escrow Deposit visibility into and control over collateral Third, the proposed changes will
Program deposits made under the escrow deposit clarify clearing members’ rights to
program. As described in the Notice, collateral in the escrow deposit program
October 13, 2016. securities deposits in the escrow deposit in the event of a customer default to the
On August 15, 2016, The Options program (‘‘specific deposits’’) are clearing member. According to the
Clearing Corporation (‘‘OCC’’) filed with currently held at either the Depository Notice, Proposed Rules 610B(c) and
the Securities and Exchange Trust Company (‘‘DTC’’) or custodian 610C(f) will provide for the grant of a
Commission (‘‘Commission’’) the banks, and cash deposits in the escrow security interest by the customer to the
proposed rule change SR–OCC–2016– deposit program (‘‘escrow deposits’’) are clearing member with respect to any
009 pursuant to Section 19(b)(1) of the held at custodian banks. While OCC given third-party specific deposit and
Securities Exchange Act of 1934 currently can verify the value of the escrow deposit, as applicable, with the
(‘‘Exchange Act’’) 1 and Rule 19b–4 securities deposited at DTC through clearing member’s right subordinate to
thereunder.2 The proposed rule change DTC’s systems, it lacks similar visibility OCC’s interest. Proposed Rules 610C(d),
was published for comment in the into cash and securities held in 610C(o), 610C(p) and 610C(s), relating to
Federal Register on August 31, 2016.3 custodian bank accounts, relying escrow deposits, and proposed Rules
The Commission did not receive any instead on the custodian banks to verify 610B(d) and 610B(e), relating to third-
comments on the proposed rule change. the value of such collateral. The party specific deposits, will provide
This order approves the proposed rule proposed changes require securities in that, in the event of a customer default
change. the escrow deposit program to be held to a clearing member, the clearing
at DTC, providing OCC with increased member will have the right to request a
I. Description of the Proposed Rule visibility into the collateral, as OCC will ‘‘hold’’ on a deposit, which will prevent
Change be able to view, validate, and value the the withdrawal of deposited securities
A. Background collateral in real time and perform the or cash by a custodian bank or the
OCC is the sole clearing agency for the controls currently performed by release of a deposit that will otherwise
U.S. listed options markets and a custodian banks. As stated in the occur in the ordinary course. OCC states
systemically important financial market Notice, banks participating in the that placing the ‘‘hold’’ instruction gives
escrow deposit program (‘‘Tri-Party a clearing member the right to request
utility. In this role, OCC seeks to
Custodian Banks’’) will also provide that OCC direct delivery of the deposit
manage risks that could cause a
OCC with online view access to each to the clearing member through DTC’s
financial loss or settlement disruption
customer’s cash account designated for systems, in the case of securities, or an
and, therefore, threaten the stability of
the escrow deposit program, allowing instruction to the Tri-Party Custodian
the U.S. financial system, by collecting
visibility into transactional activity and Bank in the case of cash. OCC believes
collateral to protect against potential
account balances without having to rely that providing clearing members with
losses stemming from the default of a
upon a third party to value or validate transparent instructions regarding how
clearing member or its customers
the existence of the collateral. to place a hold instruction on and direct
through margin from its clearing Second, the proposed changes will
members or from deposits in lieu of delivery of a deposit in the escrow
provide more specificity concerning the deposit program will be a significant
margin of clearing members’ customers manner in which OCC will take enhancement to the current escrow
through OCC’s escrow deposit program. possession of collateral in OCC’s escrow
According to OCC, users of its escrow deposit program.
deposit program in the event of a Fourth, the proposed changes will
deposit program are customers of clearing member or custodian bank improve the readability of the rules
clearing members who, through the default. As described in the Notice, governing OCC’s escrow deposit
escrow deposit program, are permitted proposed Rules 610A(b), 610B(f), program by consolidating all such rules
to collateralize eligible positions 610C(q), and 610C(r) will provide that into a single location in OCC’s
directly with OCC (instead of with the in the event of a clearing member or Rulebook. Upon implementation of the
relevant clearing member who will, in custodian bank default, OCC will have proposed changes, all securities
turn, deposit margin at OCC). When a the right to direct DTC to deliver the collateral in OCC’s escrow deposit
customer of a clearing member makes a securities included in a member specific program will be held at DTC, and
deposit in lieu of margin through OCC’s deposit, third-party specific deposit or custodian banks will only be allowed to
escrow deposit program, the relevant escrow deposit to OCC’s DTC hold cash collateral.
positions are excluded from the clearing participant account for the purpose of Fifth, the proposed rule change will
member’s margin requirement at OCC. satisfying the obligations of the clearing consolidate all of the rules concerning
OCC states that the escrow deposit member or reimbursing itself for losses the escrow deposit program, including
sradovich on DSK3GMQ082PROD with NOTICES
program therefore provides users of incurred as a result of the failure. the provisions of the Escrow Deposit
OCC’s services with a means to more Similarly, proposed Rules 610C(q) and Agreement (‘‘EDA’’), which also
1 15
610C(r) will give OCC the right in the contains substantive provisions
U.S.C. 78s(b)(1).
2 17
event of a Tri-Party Custodian Bank governing the program, into Rules 610,
CFR 240.19b–4.
3 Securities Exchange Act Release No. 78675 default to take possession of cash 610A, 610B and 610C. OCC believes that
(August 25, 2016), 81 FR 60099 (August 31, 2016) included within an escrow deposit for consolidating the many rules governing
(SR–OCC–2016–009) (‘‘Notice’’). the same purposes. Further, Rule the escrow deposit program into a single
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![Federal Register / Vol. 81, No. 202 / Wednesday, October 19, 2016 / Notices 72131
Act 12 and the rules and regulations II. Self-Regulatory Organization’s TCV, the Exchange also proposes to
thereunder. Statement of the Purpose of, and amend the percentage of OCV necessary
It is therefore ordered, pursuant to Statutory Basis for, the Proposed Rule to achieve the tier so that it is
Section 19(b)(2) of the Exchange Act,13 Change substantially identical to the previously
that the proposed rule change (SR– required percentage of TCV. Doing so
In its filing with the Commission, the
OCC–2016–009) be, and it hereby is, will keep each tier’s criteria relatively
Exchange included statements
approved. unchanged from its current
concerning the purpose of and basis for
For the Commission, by the Division of the proposed rule change and discussed requirements. The rates for each tier are
Trading and Markets, pursuant to delegated any comments it received on the unchanged. Changes to each tier are
authority.14 described below.
proposed rule change. The text of these
Robert W. Errett, statements may be examined at the Customer Volume Tiers
Deputy Secretary. places specified in Item IV below. The
[FR Doc. 2016–25234 Filed 10–18–16; 8:45 am] Customer orders that yield fee codes
Exchange has prepared summaries, set
NC 7 or PC 8 and are given a standard
BILLING CODE 8011–01–P forth in Sections A, B, and C below, of
rebate of $0.05 per contract. Footnote 1
the most significant parts of such
of the fee schedule sets forth five tiers,
statements.
SECURITIES AND EXCHANGE each providing enhanced rebates,
COMMISSION A. Self-Regulatory Organization’s ranging from $0.10 to $0.25 per contract,
Statement of the Purpose of, and to a Member’s order that yield fee codes
[Release No. 34–79091; File No. SR– Statutory Basis for, the Proposed Rule NC or PC upon satisfying monthly
BatsEDGX–2016–57]
Change volume criteria based on an ADV 9 in
Self-Regulatory Organizations; Bats Customer orders equal to or greater than
1. Purpose
EDGX Exchange, Inc.; Notice of Filing a percentage of average TCV.
and Immediate Effectiveness of a The Exchange proposes to amend its • Tier 1 currently requires that a
Proposed Rule Change to Fees for Use fee schedule for its equity options Member have an ADV in Customer
of Bats EDGX Exchange, Inc. Options platform (‘‘EDGX Options’’) to: (i) Add orders equal to or greater than 0.15% of
Platform definition of OCC Customer Volume or average TCV. As amended, a Member
OCV, to the Definitions section of the must have an ADV in Customer orders
October 13, 2016. fee schedule; and (ii) modify the criteria equal to or greater than 0.20% of
Pursuant to Section 19(b)(1) of the for the Customer Volume, Market Maker average OCV.
Securities Exchange Act of 1934 (the Volume, and Firm Penny Pilot Cross- • Tier 2 currently requires that a
‘‘Act’’),1 and Rule 19b–4 thereunder,2 Asset Tiers to reflect the new definition Member have an ADV in Customer
notice is hereby given that on October of OCV; and (iii) to make a non- orders equal to or greater than 0.30% of
6, 2016, Bats EDGX Exchange, Inc. (the substantive change. average TCV. As amended, a Member
‘‘Exchange’’ or ‘‘EDGX’’) filed with the must have an ADV in Customer orders
Securities and Exchange Commission OCC Customer Volume Definition
equal to or greater than 0.40% of
(the ‘‘Commission’’) the proposed rule The Exchange proposes to add the average OCV.
change as described in Items I, II, and definition of ‘‘OCC Customer Volume’’ • Tier 3 currently requires that a
III below, which Items have been or ‘‘OCV’’ to the definition section of its Member have an ADV in Customer
prepared by the Exchange. The fee schedule. OCC Customer Volume or orders equal to or greater than 0.50% of
Commission is publishing this notice to OCV will be defined as the total equity average TCV. As amended, a Member
solicit comments on the proposed rule and Exchange Traded Fund (‘‘ETF’’) must have an ADV in Customer orders
change from interested persons. options volume that clears in the equal to or greater than 0.65% of
Customer 4 range at the Options Clearing average OCV.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
Corporation (‘‘OCC’’) for the month for • Tier 4 currently requires that a
of the Proposed Rule Change which the fees apply, excluding volume Member has an ADV in Customer orders
on any day that the Exchange equal to or greater than 0.80% of
The Exchange filed a proposal to experiences an Exchange System average TCV. As amended, a Member
amend the fee schedule applicable to Disruption 5 and on any day with a must have an ADV in Customer orders
Members 3 and non-Members of the scheduled early market close. equal to or greater than 1.05% of
Exchange pursuant to EDGX Rules average OCV.
Tier Qualifications Change
15.1(a) and (c). • Tier 5 currently requires that a
The text of the proposed rule change The Exchange proposes to replace Member have an ADV in Customer
is available at the Exchange’s Web site current tier qualifications which refer to orders equal to or greater than 0.05% of
at www.batstrading.com, at the Total Consolidated Volume (‘‘TCV’’) 6 average TCV, and an ADV in Customer
principal office of the Exchange, and at with a reference to OCV in the Customer or Market Maker 10 orders equal to or
the Commission’s Public Reference Volume Tier, Market Maker Volume greater than 0.25% of average TCV. As
Room. Tier and Firm Penny Pilot Cross-Asset amended, a Member must have an ADV
Tier, in Footnotes 1, 2 and 4, in Customer orders equal to or greater
12 In approving this proposed rule change, the
Commission has considered the proposed rule’s
respectively. Because OCV generally than 0.05% of average OCV, and an
impact on efficiency, competition, and capital makes up a smaller range than the prior
sradovich on DSK3GMQ082PROD with NOTICES
formation. See 15 U.S.C. 78c(f). 7 Fee code NC is appended to a Member’s order
13 15 U.S.C. 78s(b)(2). 4 As defined in the Exchange’s fee schedule which removes liquidity (Customer), Non-Penny.
14 17 CFR 200.30–3(a)(12). available at http://www.batsoptions.com/support/ Id.
1 15 U.S.C. 78s(b)(1). fee_schedule/edgx/. 8 Fee code PC is appended to a Member’s order
2 17 CFR 240.19b–4. 5 An ‘‘Exchange System Disruption’’ means ‘‘any which removes liquidity (Customer) Penny Pilot. Id.
3 The term ‘‘Member’’ is defined as ‘‘any day that the Exchange’s system experiences a 9 As defined in the Exchange’s fee schedule
registered broker or dealer that has been admitted disruption that lasts for more than 60 minutes available at http://www.batsoptions.com/support/
to membership in the Exchange.’’ See Exchange during Regular Trading Hours.’’ Id. fee_schedule/edgx/.
Rule 1.5(n). 6 Id. 10 Id.
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Document Created: 2016-10-19 02:11:54
Document Modified: 2016-10-19 02:11:54
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| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| FR Citation | 81 FR 72129 |
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