81_FR_80352 81 FR 80132 - Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change in Connection With a Proposed Corporate Transaction Involving CBOE Holdings, Inc. and Bats Global Markets, Inc.

81 FR 80132 - Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change in Connection With a Proposed Corporate Transaction Involving CBOE Holdings, Inc. and Bats Global Markets, Inc.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 220 (November 15, 2016)

Page Range80132-80134
FR Document2016-27372

Federal Register, Volume 81 Issue 220 (Tuesday, November 15, 2016)
[Federal Register Volume 81, Number 220 (Tuesday, November 15, 2016)]
[Notices]
[Pages 80132-80134]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-27372]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79267; File No. SR-C2-2016-022]


Self-Regulatory Organizations; C2 Options Exchange, Incorporated; 
Notice of Filing of a Proposed Rule Change in Connection With a 
Proposed Corporate Transaction Involving CBOE Holdings, Inc. and Bats 
Global Markets, Inc.

November 8, 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 November 4, 2016, C2 Options Exchange, Incorporated (the 
``Exchange'' or ``C2'') 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.
---------------------------------------------------------------------------

    \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 submits this rule filing in connection with a proposed 
corporate transaction (the ``Transaction'') involving its ultimate 
parent company, CBOE Holdings, Inc. (``CBOE Holdings''), two wholly 
owned subsidiaries of CBOE Holdings, CBOE Corporation and CBOE V, LLC 
(``CBOE V''), and Bats Global Markets, Inc. (``BGM''). BGM is the 
ultimate parent company of Bats BZX Exchange, Inc. (``Bats BZX''), Bats 
BYX Exchange, Inc. (``Bats BYX''), Bats EDGX Exchange, Inc. (``Bats 
EDGX''), and Bats EDGA Exchange, Inc. (``Bats EDGA'' and, together with 
Bats BZX, Bats BYX, and Bats EDGX, the ``Bats Exchanges''). Upon 
completion of the Transaction (the ``Closing''), CBOE Holdings will 
become the ultimate parent of the Bats Exchanges.
    On September 25, 2016, CBOE Holdings, CBOE Corporation, CBOE V, and 
BGM entered into an Agreement and Plan of Merger, as it may be amended 
from time to time (the ``Merger Agreement''). In connection with the 
Transaction, the Exchange seeks the Commission's approval of a 
provision in the Merger Agreement regarding the composition of the CBOE 
Holdings Board of Directors (``CBOE Holdings Board'') upon the Closing. 
There are no

[[Page 80133]]

proposed changes to Exchange rules or governing documents of CBOE 
Holdings or the Exchange.

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 aspects 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 submits this filing for Commission approval of a 
provision in the Merger Agreement regarding the composition of the CBOE 
Holdings Board upon Closing. Other than as described herein, the 
Exchange will continue to conduct its regulated activities (including 
operating and regulating its market and Trading Permit Holders) in 
essentially the same manner it conducts them today, and will not make 
any changes to its regulated activities in connection with the 
Transaction. The Exchange is not proposing any amendments to its 
trading and regulatory rules or organizational and governance documents 
at this time. If the Exchange determines to make any such changes, it 
will submit rule filings to the Commission proposing such changes to 
the extent required by the Act and the rules and regulations 
thereunder.
Current Corporate Structures
    Each of C2 and Chicago Board Options Exchange, Incorporated 
(``CBOE'' and, together with the Exchange, the ``CBOE Exchanges'') is a 
Delaware corporation that is a national securities exchange registered 
with the Commission pursuant to Section 6(a) of the Act.\3\ Each CBOE 
Exchange is a direct, wholly owned subsidiary of CBOE Holdings, a 
publicly traded Delaware corporation. CBOE V is a Delaware limited 
liability company and direct, wholly owned subsidiary of CBOE Holdings, 
which currently has no material assets and conducts no operations.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f(a).
---------------------------------------------------------------------------

    Each Bats Exchange is a Delaware corporation that is a national 
securities exchange registered with the Commission pursuant to Section 
6(a) of the Act.\4\ BGM is a publicly traded Delaware corporation and 
the ultimate parent of the Bats Exchanges.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(a).
---------------------------------------------------------------------------

The Transaction
    Pursuant to and subject to the terms of the Merger Agreement, at 
the Closing, among other things, each share of BGM common stock 
(whether voting or non-voting) issued and outstanding (other than 
shares owned by CBOE Holdings, BGM or any of their respective 
subsidiaries, and certain shares held by BGM stockholders that are 
entitled to and properly demand appraisal rights) will be converted 
into the right to receive a particular number of shares of CBOE 
Holdings common stock, an amount of cash, or a combination of both, at 
the election of the holder of such share of BGM common stock. BGM will 
ultimately merge with and into CBOE Holdings' wholly owned subsidiary 
CBOE V, at which time the separate existence of BGM will cease and CBOE 
V will be the surviving company.
Post-Closing Corporate Structure
    As a result of the Transaction, CBOE Holdings will be the ultimate 
parent of the Bats Exchanges, each of which will continue to operate 
separately. CBOE Holdings will continue to be a publicly owned company 
and the ultimate parent of the CBOE Exchanges, each of which will 
continue to operate separately.
Post-Closing CBOE Holdings Board
    In connection with the Transaction, CBOE Holdings agreed in the 
Merger Agreement to take all requisite actions so, as of the Closing, 
the CBOE Holdings Board will include three individuals designated by 
BGM who (1) are serving as BGM directors immediately prior to the 
Closing and (2) comply with the policies (including clarifications of 
the policies provided to BGM) of the Nominating and Governance 
Committee of the CBOE Holdings Board as in effect on the date of the 
Merger Agreement and previously provided to BGM (each of whom will be 
appointed to the CBOE Holdings Board as of the Closing). The CBOE 
Holdings Board currently consists of 14 directors.\5\ The Exchange 
expects three current CBOE Holdings directors to resign effective prior 
to the Closing and the remaining CBOE Holdings directors to fill the 
vacancies created by those resignations with the three BGM directors 
designated by BGM.\6\
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    \5\ Pursuant to the Second Amended and Restated Certificate of 
Incorporation of CBOE Holdings (``CBOE Holdings Certificate'') and 
the Third Amended and Restated Bylaws of CBOE Holdings (``CBOE 
Holdings Bylaws''), the CBOE Holdings Board will consist of no less 
than 11 and no more than 23 directors, the exact number to be fixed 
by the CBOE Holdings Board from time to time pursuant to resolution 
adopted by the Board. See CBOE Holdings Certificate Article Seventh 
(b) and CBOE Holdings Bylaws Section 3.2.
    \6\ See Sections 3.4 and 3.5 of the CBOE Holdings Bylaws.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\7\ Specifically, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \8\ requirements that the rules of 
an exchange be designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
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. 
Additionally, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \9\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ Id.
---------------------------------------------------------------------------

    The proposed rule change is consistent with CBOE Holdings' 
organizational and governing documents previously filed with the 
Commission.\10\ The Exchange will continue to have the authority and 
ability to effectively fulfill its self-regulatory duties pursuant to 
the Act and the rules promulgated thereunder. CBOE Holdings' governing 
documents will not change at the Closing and, therefore, will continue 
to include various provisions intended to protect and maintain the 
integrity of the self-regulatory functions of the Exchange. 
Additionally, the Commission will

[[Page 80134]]

continue to have regulatory authority over the Exchange, as is 
currently the case, as well as jurisdiction over CBOE Holdings with 
respect to activities related to the Exchange.\11\
---------------------------------------------------------------------------

    \10\ See, e.g., Securities Exchange Act Release Nos. 34-76282 
(October 27, 2015), 80 FR 67464 (November 2, 2015) (SR-CBOE-2015-
092); and 34-76281 (October 27, 2015), 80 FR 67461 (November 2, 
2015) (SR-C2-2015-022) (notices of filing and immediate 
effectiveness of recent proposed rule changes to amend the CBOE 
Holdings Certificate and Bylaws); see also supra notes 5 and 6.
    \11\ See, e.g., CBOE Holdings Certificate Article Fourteenth.
---------------------------------------------------------------------------

    The Exchange is proposing no changes to its existing operational 
and trading structure in connection with the Transaction. Upon Closing, 
the Exchange will operate in essentially the same manner as it operates 
today. Therefore, the Exchange believes it will continue to satisfy the 
requirements of the Act and the rules and regulations thereunder 
applicable to a national securities exchange.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe the proposed rule change will impose 
any burden on competition not necessary or appropriate in furtherance 
of the purposes of the Act. The proposed rule change relates to the 
corporate governance of CBOE Holdings--specifically a change in 
composition of the CBOE Holdings Board in connection with a corporate 
transaction--and not the operations of the Exchange. This is not a 
competitive filing and, therefore, imposes no burden on competition.

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

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

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    A. By order approve or disapprove such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule 
change should be 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-C2-2016-022 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-C2-2016-022. 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 the 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 ubmissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-C2-2016-022, and should be 
submitted on or before December 6, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

Brent J. Fields,
Secretary.
[FR Doc. 2016-27372 Filed 11-14-16; 8:45 am]
 BILLING CODE 8011-01-P



                                                  80132                      Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Notices

                                                     Finally, the Exchange represents that                  • Send an email to rule-comments@                    SECURITIES AND EXCHANGE
                                                  it has an adequate surveillance program                 sec.gov. Please include File Number SR–                COMMISSION
                                                  in place to detect manipulative trading                 BOX–2016–50 on the subject line.
                                                                                                                                                                 [Release No. 34–79267; File No. SR–C2–
                                                  in RealDay Options. The Exchange                                                                               2016–022]
                                                  believes that by initially limiting                     Paper Comments
                                                  RealDay Options to only SPY, it will                      • Send paper comments in triplicate                  Self-Regulatory Organizations; C2
                                                  reduce the chances of manipulation due                  to Secretary, Securities and Exchange                  Options Exchange, Incorporated;
                                                  to the robust market and liquidity in                                                                          Notice of Filing of a Proposed Rule
                                                                                                          Commission, 100 F Street, NE.,
                                                  SPY. The Exchange also represents that                                                                         Change in Connection With a
                                                                                                          Washington, DC 20549–1090.
                                                  it has the necessary systems capacity to                                                                       Proposed Corporate Transaction
                                                  support the new options series; and as                  All submissions should refer to File                   Involving CBOE Holdings, Inc. and
                                                  stated in the filing, the Exchange has                  Number SR–BOX-2016–50. This file                       Bats Global Markets, Inc.
                                                  rules in place designed to protect public               number should be included on the
                                                  customer trading.                                                                                              November 8, 2016.
                                                                                                          subject line if email is used. To help the
                                                                                                                                                                    Pursuant to Section 19(b)(1) of the
                                                  B. Self-Regulatory Organization’s                       Commission process and review your
                                                                                                                                                                 Securities Exchange Act of 1934
                                                  Statement on Burden on Competition                      comments more efficiently, please use
                                                                                                                                                                 (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                                                                          only one method. The Commission will                   notice is hereby given that on November
                                                     The Exchange does not believe that
                                                                                                          post all comments on the Commission’s                  4, 2016, C2 Options Exchange,
                                                  the proposed rule change will impose
                                                                                                          Internet Web site (http://www.sec.gov/                 Incorporated (the ‘‘Exchange’’ or ‘‘C2’’)
                                                  any burden on competition not
                                                                                                          rules/sro.shtml). Copies of the                        filed with the Securities and Exchange
                                                  necessary or appropriate in furtherance
                                                  of the purposes of the Act. The                         submission, all subsequent                             Commission (‘‘Commission’’) the
                                                  Exchange notes that the proposed rule                   amendments, all written statements                     proposed rule change as described in
                                                  change will facilitate the listing and                  with respect to the proposed rule                      Items I, II, and III below, which Items
                                                  trading of a novel option product that                  change that are filed with the                         have been prepared by the Exchange.
                                                  will enhance competition among market                   Commission, and all written                            The Commission is publishing this
                                                  participants, to the benefit of investors               communications relating to the                         notice to solicit comments on the
                                                  and the marketplace.                                    proposed rule change between the                       proposed rule change from interested
                                                                                                          Commission and any person, other than                  persons.
                                                  C. Self-Regulatory Organization’s                       those that may be withheld from the
                                                  Statement on Comments on the                                                                                   I. Self-Regulatory Organization’s
                                                                                                          public in accordance with the                          Statement of the Terms of Substance of
                                                  Proposed Rule Change Received From
                                                                                                          provisions of 5 U.S.C. 552, will be                    the Proposed Rule Change
                                                  Members, Participants, or Others
                                                                                                          available for Web site viewing and
                                                    The Exchange has neither solicited                                                                              The Exchange submits this rule filing
                                                                                                          printing in the Commission’s Public
                                                  nor received comments on the proposed                                                                          in connection with a proposed corporate
                                                                                                          Reference Room, 100 F Street NE.,
                                                  rule change.                                                                                                   transaction (the ‘‘Transaction’’)
                                                                                                          Washington, DC 20549 on official                       involving its ultimate parent company,
                                                  III. Date of Effectiveness of the                       business days between the hours of                     CBOE Holdings, Inc. (‘‘CBOE
                                                  Proposed Rule Change and Timing for                     10:00 a.m. and 3:00 p.m. Copies of the                 Holdings’’), two wholly owned
                                                  Commission Action                                       filing also will be available for                      subsidiaries of CBOE Holdings, CBOE
                                                     Within 45 days of the date of                        inspection and copying at the principal                Corporation and CBOE V, LLC (‘‘CBOE
                                                  publication of this notice in the Federal               office of the Exchange. All comments                   V’’), and Bats Global Markets, Inc.
                                                  Register or within such longer period (i)               received will be posted without change;                (‘‘BGM’’). BGM is the ultimate parent
                                                  as the Commission may designate up to                   the Commission does not edit personal                  company of Bats BZX Exchange, Inc.
                                                  90 days of such date if it finds such                   identifying information from                           (‘‘Bats BZX’’), Bats BYX Exchange, Inc.
                                                  longer period to be appropriate and                     submissions. You should submit only                    (‘‘Bats BYX’’), Bats EDGX Exchange, Inc.
                                                  publishes its reasons for so finding or                 information that you wish to make                      (‘‘Bats EDGX’’), and Bats EDGA
                                                  (ii) as to which the self-regulatory                    available publicly. All submissions                    Exchange, Inc. (‘‘Bats EDGA’’ and,
                                                  organization consents, the Commission                   should refer to File Number SR–BOX–                    together with Bats BZX, Bats BYX, and
                                                  will:                                                   2016–50 and should be submitted on or                  Bats EDGX, the ‘‘Bats Exchanges’’).
                                                     (A) by order approve or disapprove                   before December 6, 2016.                               Upon completion of the Transaction
                                                  the proposed rule change, or                                                                                   (the ‘‘Closing’’), CBOE Holdings will
                                                                                                            For the Commission, by the Division of
                                                     (B) institute proceedings to determine                                                                      become the ultimate parent of the Bats
                                                                                                          Trading and Markets, pursuant to delegated
                                                  whether the proposed rule change                                                                               Exchanges.
                                                                                                          authority.43
                                                  should be disapproved.                                                                                            On September 25, 2016, CBOE
                                                                                                          Brent J. Fields,                                       Holdings, CBOE Corporation, CBOE V,
                                                  IV. Solicitation of Comments                            Secretary.                                             and BGM entered into an Agreement
                                                    Interested persons are invited to                     [FR Doc. 2016–27363 Filed 11–14–16; 8:45 am]           and Plan of Merger, as it may be
                                                  submit written data, views, and                         BILLING CODE 8011–01–P                                 amended from time to time (the ‘‘Merger
                                                  arguments concerning the foregoing,                                                                            Agreement’’). In connection with the
                                                  including whether the proposed rule                                                                            Transaction, the Exchange seeks the
mstockstill on DSK3G9T082PROD with NOTICES




                                                  change is consistent with the Act.                                                                             Commission’s approval of a provision in
                                                  Comments may be submitted by any of                                                                            the Merger Agreement regarding the
                                                  the following methods:                                                                                         composition of the CBOE Holdings
                                                                                                                                                                 Board of Directors (‘‘CBOE Holdings
                                                  Electronic Comments
                                                                                                                                                                 Board’’) upon the Closing. There are no
                                                    • Use the Commission’s Internet
                                                  comment form (http://www.sec.gov/                                                                                1 15   U.S.C. 78s(b)(1).
                                                  rules/sro.shtml); or                                      43 17   CFR 200.30–3(a)(12).                           2 17   CFR 240.19b–4.



                                             VerDate Sep<11>2014   22:00 Nov 11, 2016   Jkt 241001   PO 00000   Frm 00118    Fmt 4703   Sfmt 4703   E:\FR\FM\15NON1.SGM     15NON1


                                                                                Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Notices                                                    80133

                                                  proposed changes to Exchange rules or                      material assets and conducts no                       three current CBOE Holdings directors
                                                  governing documents of CBOE Holdings                       operations.                                           to resign effective prior to the Closing
                                                  or the Exchange.                                             Each Bats Exchange is a Delaware                    and the remaining CBOE Holdings
                                                                                                             corporation that is a national securities             directors to fill the vacancies created by
                                                  II. Self-Regulatory Organization’s                         exchange registered with the                          those resignations with the three BGM
                                                  Statement of the Purpose of, and                           Commission pursuant to Section 6(a) of                directors designated by BGM.6
                                                  Statutory Basis for, the Proposed Rule                     the Act.4 BGM is a publicly traded
                                                  Change                                                     Delaware corporation and the ultimate                 2. Statutory Basis
                                                                                                             parent of the Bats Exchanges.                            The Exchange believes the proposed
                                                    In its filing with the Commission, the
                                                                                                                                                                   rule change is consistent with the Act
                                                  Exchange included statements                               The Transaction                                       and the rules and regulations
                                                  concerning the purpose of and basis for
                                                                                                               Pursuant to and subject to the terms                thereunder applicable to the Exchange
                                                  the proposed rule change and discussed                     of the Merger Agreement, at the Closing,              and, in particular, the requirements of
                                                  any comments it received on the                            among other things, each share of BGM                 Section 6(b) of the Act.7 Specifically,
                                                  proposed rule change. The text of these                    common stock (whether voting or non-                  the Exchange believes the proposed rule
                                                  statements may be examined at the                          voting) issued and outstanding (other                 change is consistent with the Section
                                                  places specified in Item IV below. The                     than shares owned by CBOE Holdings,                   6(b)(5) 8 requirements that the rules of
                                                  Exchange has prepared summaries, set                       BGM or any of their respective                        an exchange be designed to prevent
                                                  forth in sections A, B, and C below, of                    subsidiaries, and certain shares held by              fraudulent and manipulative acts and
                                                  the most significant aspects of such                       BGM stockholders that are entitled to                 practices, to promote just and equitable
                                                  statements.                                                and properly demand appraisal rights)                 principles of trade, to foster cooperation
                                                  A. Self-Regulatory Organization’s                          will be converted into the right to                   and coordination with persons engaged
                                                  Statement of the Purpose of, and the                       receive a particular number of shares of              in regulating, clearing, settling,
                                                  Statutory Basis for, the Proposed Rule                     CBOE Holdings common stock, an                        processing information with respect to,
                                                  Change                                                     amount of cash, or a combination of                   and facilitating transactions in
                                                                                                             both, at the election of the holder of                securities, to remove impediments to
                                                  1. Purpose                                                 such share of BGM common stock. BGM                   and perfect the mechanism of a free and
                                                     The Exchange submits this filing for                    will ultimately merge with and into                   open market and a national market
                                                  Commission approval of a provision in                      CBOE Holdings’ wholly owned                           system, and, in general, to protect
                                                  the Merger Agreement regarding the                         subsidiary CBOE V, at which time the                  investors and the public interest.
                                                  composition of the CBOE Holdings                           separate existence of BGM will cease                  Additionally, the Exchange believes the
                                                  Board upon Closing. Other than as                          and CBOE V will be the surviving                      proposed rule change is consistent with
                                                  described herein, the Exchange will                        company.                                              the Section 6(b)(5) 9 requirement that
                                                  continue to conduct its regulated                                                                                the rules of an exchange not be designed
                                                                                                             Post-Closing Corporate Structure                      to permit unfair discrimination between
                                                  activities (including operating and
                                                                                                               As a result of the Transaction, CBOE                customers, issuers, brokers, or dealers.
                                                  regulating its market and Trading Permit
                                                                                                             Holdings will be the ultimate parent of                  The proposed rule change is
                                                  Holders) in essentially the same manner
                                                                                                             the Bats Exchanges, each of which will                consistent with CBOE Holdings’
                                                  it conducts them today, and will not
                                                                                                             continue to operate separately. CBOE                  organizational and governing
                                                  make any changes to its regulated
                                                                                                             Holdings will continue to be a publicly               documents previously filed with the
                                                  activities in connection with the
                                                                                                             owned company and the ultimate parent                 Commission.10 The Exchange will
                                                  Transaction. The Exchange is not
                                                                                                             of the CBOE Exchanges, each of which                  continue to have the authority and
                                                  proposing any amendments to its
                                                                                                             will continue to operate separately.                  ability to effectively fulfill its self-
                                                  trading and regulatory rules or
                                                                                                                                                                   regulatory duties pursuant to the Act
                                                  organizational and governance                              Post-Closing CBOE Holdings Board
                                                                                                                                                                   and the rules promulgated thereunder.
                                                  documents at this time. If the Exchange                      In connection with the Transaction,                 CBOE Holdings’ governing documents
                                                  determines to make any such changes,                       CBOE Holdings agreed in the Merger                    will not change at the Closing and,
                                                  it will submit rule filings to the                         Agreement to take all requisite actions               therefore, will continue to include
                                                  Commission proposing such changes to                       so, as of the Closing, the CBOE Holdings              various provisions intended to protect
                                                  the extent required by the Act and the                     Board will include three individuals                  and maintain the integrity of the self-
                                                  rules and regulations thereunder.                          designated by BGM who (1) are serving                 regulatory functions of the Exchange.
                                                  Current Corporate Structures                               as BGM directors immediately prior to                 Additionally, the Commission will
                                                                                                             the Closing and (2) comply with the
                                                     Each of C2 and Chicago Board                            policies (including clarifications of the             Board will consist of no less than 11 and no more
                                                  Options Exchange, Incorporated                             policies provided to BGM) of the                      than 23 directors, the exact number to be fixed by
                                                  (‘‘CBOE’’ and, together with the                           Nominating and Governance Committee                   the CBOE Holdings Board from time to time
                                                                                                                                                                   pursuant to resolution adopted by the Board. See
                                                  Exchange, the ‘‘CBOE Exchanges’’) is a                     of the CBOE Holdings Board as in effect               CBOE Holdings Certificate Article Seventh (b) and
                                                  Delaware corporation that is a national                    on the date of the Merger Agreement                   CBOE Holdings Bylaws Section 3.2.
                                                  securities exchange registered with the                    and previously provided to BGM (each                     6 See Sections 3.4 and 3.5 of the CBOE Holdings

                                                  Commission pursuant to Section 6(a) of                     of whom will be appointed to the CBOE                 Bylaws.
                                                                                                                                                                      7 15 U.S.C. 78f(b).
                                                  the Act.3 Each CBOE Exchange is a                          Holdings Board as of the Closing). The                   8 15 U.S.C. 78f(b)(5).
                                                  direct, wholly owned subsidiary of                         CBOE Holdings Board currently consists
mstockstill on DSK3G9T082PROD with NOTICES




                                                                                                                                                                      9 Id.
                                                  CBOE Holdings, a publicly traded                           of 14 directors.5 The Exchange expects                   10 See, e.g., Securities Exchange Act Release Nos.
                                                  Delaware corporation. CBOE V is a                                                                                34–76282 (October 27, 2015), 80 FR 67464
                                                  Delaware limited liability company and                       4 15 U.S.C. 78f(a).                                 (November 2, 2015) (SR–CBOE–2015–092); and 34–
                                                  direct, wholly owned subsidiary of                           5 Pursuant  to the Second Amended and Restated      76281 (October 27, 2015), 80 FR 67461 (November
                                                  CBOE Holdings, which currently has no                      Certificate of Incorporation of CBOE Holdings         2, 2015) (SR–C2–2015–022) (notices of filing and
                                                                                                             (‘‘CBOE Holdings Certificate’’) and the Third         immediate effectiveness of recent proposed rule
                                                                                                             Amended and Restated Bylaws of CBOE Holdings          changes to amend the CBOE Holdings Certificate
                                                    3 15   U.S.C. 78f(a).                                    (‘‘CBOE Holdings Bylaws’’), the CBOE Holdings         and Bylaws); see also supra notes 5 and 6.



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                                                  80134                      Federal Register / Vol. 81, No. 220 / Tuesday, November 15, 2016 / Notices

                                                  continue to have regulatory authority                    Electronic Comments                                    SECURITIES AND EXCHANGE
                                                  over the Exchange, as is currently the                                                                          COMMISSION
                                                  case, as well as jurisdiction over CBOE                    • Use the Commission’s Internet
                                                  Holdings with respect to activities                      comment form (http://www.sec.gov/                      [Release No. 34–79261; File No. SR–Phlx–
                                                  related to the Exchange.11                               rules/sro.shtml); or                                   2016–110]
                                                     The Exchange is proposing no                            • Send an email to rule-                             Self-Regulatory Organizations;
                                                  changes to its existing operational and                  comments@sec.gov. Please include File                  NASDAQ PHLX LLC; Notice of Filing
                                                  trading structure in connection with the                 Number SR–C2–2016–022 on the                           and Immediate Effectiveness of
                                                  Transaction. Upon Closing, the                           subject line.
                                                  Exchange will operate in essentially the                                                                        Proposed Rule Change To Amend
                                                  same manner as it operates today.                        Paper Comments                                         Commentary .14 to Rule 3317
                                                  Therefore, the Exchange believes it will                                                                        (Compliance With Regulation NMS
                                                  continue to satisfy the requirements of                    • Send paper comments in triplicate                  Plan To Implement a Tick Size Pilot)
                                                  the Act and the rules and regulations                    to Secretary, Securities and Exchange                  November 8, 2016.
                                                  thereunder applicable to a national                      Commission, 100 F Street NE.,
                                                                                                                                                                     Pursuant to Section 19(b)(1) of the
                                                  securities exchange.                                     Washington, DC 20549–1090.                             Securities Exchange Act of 1934
                                                  B. Self-Regulatory Organization’s                        All submissions should refer to File                   (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                  Statement on Burden on Competition                       Number SR–C2–2016–022. This file                       notice is hereby given that on October
                                                                                                           number should be included on the                       31, 2016, NASDAQ PHLX LLC (‘‘Phlx’’
                                                    The Exchange does not believe the
                                                                                                           subject line if email is used. To help the             or ‘‘Exchange’’) filed with the Securities
                                                  proposed rule change will impose any
                                                                                                           Commission process and review your                     and Exchange Commission (‘‘SEC’’ or
                                                  burden on competition not necessary or
                                                  appropriate in furtherance of the                        comments more efficiently, please use                  ‘‘Commission’’) the proposed rule
                                                  purposes of the Act. The proposed rule                   only one method. The Commission will                   change as described in Items I and II,
                                                  change relates to the corporate                          post all comments on the Commission’s                  below, which Items have been prepared
                                                  governance of CBOE Holdings—                             Internet Web site (http://www.sec.gov/                 by the Exchange. The Commission is
                                                  specifically a change in composition of                  rules/sro.shtml). Copies of the                        publishing this notice to solicit
                                                  the CBOE Holdings Board in connection                                                                           comments on the proposed rule change
                                                                                                           submission, all subsequent
                                                  with a corporate transaction—and not                                                                            from interested persons.
                                                                                                           amendments, all written statements
                                                  the operations of the Exchange. This is                  with respect to the proposed rule                      I. Self-Regulatory Organization’s
                                                  not a competitive filing and, therefore,                 change that are filed with the                         Statement of the Terms of Substance of
                                                  imposes no burden on competition.                        Commission, and all written                            the Proposed Rule Change
                                                  C. Self-Regulatory Organization’s                        communications relating to the                            The Exchange proposes to amend
                                                  Statement on Comments on the                             proposed rule change between the                       Commentary .14 to Rule 3317
                                                  Proposed Rule Change Received From                       Commission and any person, other than                  (Compliance with Regulation NMS Plan
                                                  Members, Participants, or Others                         those that may be withheld from the                    to Implement a Tick Size Pilot) to
                                                    The Exchange neither solicited nor                     public in accordance with the                          provide the SEC with notice of its efforts
                                                  received comments on the proposed                        provisions of 5 U.S.C. 552, will be                    to re-program its systems to eliminate a
                                                  rule change.                                             available for Web site viewing and                     re-pricing functionality for certain
                                                                                                           printing in the Commission’s Public                    orders in Test Group Three securities in
                                                  III. Date of Effectiveness of the                        Reference Room, 100 F Street NE.,                      connection with the Regulation NMS
                                                  Proposed Rule Change and Timing for                                                                             Plan to Implement a Tick Size Pilot
                                                                                                           Washington, DC 20549, on official
                                                  Commission Action                                                                                               Program (‘‘Plan’’ or ‘‘Pilot’’).3
                                                                                                           business days between the hours of
                                                     Within 45 days of the date of                         10:00 a.m. and 3:00 p.m. Copies of the                    The text of the proposed rule change
                                                  publication of this notice in the Federal                filing also will be available for                      is set forth below. Proposed new
                                                  Register or within such longer period                    inspection and copying at the principal                language is underlined; deleted text is
                                                  up to 90 days (i) as the Commission may                  office of the Exchange. All comments                   in brackets.
                                                  designate if it finds such longer period                                                                        *      *     *    *     *
                                                                                                           received will be posted without change;
                                                  to be appropriate and publishes its
                                                                                                           the Commission does not edit personal                  NASDAQ PHLX Rules
                                                  reasons for so finding or (ii) as to which
                                                  the Exchange consents, the Commission                    identifying information from
                                                                                                           ubmissions. You should submit only                     *          *       *    *   *
                                                  will:
                                                     A. By order approve or disapprove                     information that you wish to make                      3317. Compliance With Regulation
                                                  such proposed rule change, or                            available publicly. All submissions                    NMS Plan To Implement a Tick Size
                                                     B. institute proceedings to determine                 should refer to File Number SR–C2–                     Pilot
                                                  whether the proposed rule change                         2016–022, and should be submitted on                       (a) through (d) No Change.
                                                  should be disapproved.                                   or before December 6, 2016.
                                                                                                                                                                  Commentary
                                                  IV. Solicitation of Comments                               For the Commission, by the Division of
                                                                                                           Trading and Markets, pursuant to delegated               .01–.13 No change.
                                                    Interested persons are invited to                                                                               .14 Until [October 31, 2016]
                                                                                                           authority.12
                                                  submit written data, views, and                                                                                 November 14, 2016, the treatment of
mstockstill on DSK3G9T082PROD with NOTICES




                                                  arguments concerning the foregoing,                      Brent J. Fields,
                                                                                                                                                                  Price to Comply Orders, Price to Display
                                                  including whether the proposed rule                      Secretary.
                                                                                                                                                                  Orders, Non-Displayed Orders, and
                                                  change is consistent with the Act.                       [FR Doc. 2016–27372 Filed 11–14–16; 8:45 am]
                                                  Comments may be submitted by any of                      BILLING CODE 8011–01–P                                     1 15U.S.C. 78s(b)(1).
                                                  the following methods:                                                                                              2 17CFR 240.19b–4.
                                                                                                                                                                     3 See Securities Exchange Act Release No. 74892
                                                    11 See, e.g., CBOE Holdings Certificate Article                                                               (May 6, 2015), 80 FR 27513 (May 13, 2015)
                                                  Fourteenth.                                                12 17   CFR 200.30–3(a)(12).                         (‘‘Approval Order’’).



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Document Created: 2016-11-15 00:48:27
Document Modified: 2016-11-15 00:48:27
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation81 FR 80132 

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