81 FR 87102 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change To Amend Rule 6.53C
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 232 (December 2, 2016)
Federal Register Volume 81, Issue 232 (December 2, 2016)
| Page Range | 87102-87106 | |
| FR Document | 2016-28929 |
[Federal Register Volume 81, Number 232 (Friday, December 2, 2016)] [Notices] [Pages 87102-87106] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-28929] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79406; File No. SR-CBOE-2016-080] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change To Amend Rule 6.53C November 28, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on November 17, 2016, Chicago Board Options Exchange, Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange Commission (the ``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. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange seeks to amend Rule 6.53C. The text of the proposed rule change is provided below. [[Page 87103]] (additions are italicized; deletions are [bracketed]) * * * * * Chicago Board Options Exchange, Incorporated Rules * * * * * Rule 6.53C. Complex Orders on the Hybrid System (a)-(d) No change. . . . Interpretations and Policies: .01-.09 No change. .10 Execution of Complex Orders in Hybrid 3.0 Classes: For each class trading on the Hybrid 3.0 Platform, the Exchange may determine to not allow marketable complex orders entered into COB and/or COA to automatically execute against individual quotes residing in the EBook. The Exchange also may determine for each class trading on the Hybrid 3.0 Platform to not allow leg orders to be generated pursuant to paragraph (c)(iv) for complex orders resting in the COB. If the Exchange authorizes a group of series of a Hybrid 3.0 class for trading on the Hybrid Trading System pursuant to Rule 8.14.01, this Interpretation and Policy .10 applies to a complex order with at least one leg in a series from the group authorized for trading on the Hybrid 3.0 Platform, including if the order has another leg(s) in a series from the group authorized for trading on the Hybrid Trading System. The allocation of such marketable complex orders against orders residing in the EBook and other complex orders shall be based on the best net price(s) and, at the same net price, multiple orders will be allocated as provided in paragraphs (c) and/ or (d) in the Rule, as applicable, subject to the following: (a) A marketable complex order that solely consists of a group of series that is authorized for trading on the Hybrid 3.0 Platform will automatically execute against individual orders residing in the EBook provided the complex order can be executed in full (or in a permissible ratio) by the orders in the EBook and the orders in the EBook are priced equal to or better than the individual quotes residing in the EBook. A marketable complex order that consists of a group of series that is authorized for trading on the Hybrid 3.0 Platform and a group of series authorized for trading on the Hybrid Trading System will not automatically execute against individual orders residing in the EBook. (b)-(e) No change. .11-.12 No change. * * * * * The text of the proposed rule change is also available on the Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the Secretary, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange seeks to amend Rule 6.53C in order to allow complex orders in Hybrid 3.0 classes consisting of series in both the group authorized for trading on the Hybrid 3.0 Platform and the group authorized for trading on the Hybrid Trading System to execute electronically in the same manner as complex orders consisting solely of series in the Hybrid 3.0 group.\3\ --------------------------------------------------------------------------- \3\ See Rule 6.53C.10. --------------------------------------------------------------------------- In 2003, CBOE introduced the Hybrid Trading System (``Hybrid'' or ``Hybrid System''), an electronic trading platform integrated with CBOE's floor-based open-outcry auction market.\4\ The original Hybrid Trading System permitted Market-Makers to stream electronic quotes in their appointed classes provided they were physically present at the trading station.\5\ CBOE subsequently implemented an enhanced version of Hybrid (f/k/a the Hybrid 2.0 platform), which allows remote quoting in option classes.\6\ CBOE subsequently implemented the Hybrid 3.0 Platform, which is a trading platform on the Hybrid Trading System that allows one or more quoters to submit electronic quotes that represent the aggregate Market-Maker quotation interest in a series for the trading crowd.\7\ --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 47959 (May 30, 2003), 68 FR 34441 (June 9, 2003) (SR-CBOE-2002-05). \5\ Id. \6\ See Securities Exchange Act Release No. 50003 (July 12, 2004), 69 FR 43028 (July 19, 2004) (SR-CBOE-2004-24) (implementing enhancements to the Hybrid Trading System that are referred to in subsequent filings as Hybrid 2.0); Release No. 50175 (August 10, 2004), 69 FR 51129 (August 17, 2004) (SR-CBOE-2004-38) (implementing fees associated with, among other things, SR-CBOE-2004-24 and referring to the enhancements to the Hybrid Trading System as Hybrid 2.0); and Release No. 51366 (March 14, 2005), 70 FR 13217 (March 18, 2005) (amending the Rulebook by, among other things, adding the term Hybrid 2.0). \7\ See Securities Exchange Act Release No. 55874 (June 7, 2007), 72 FR 32688 (June 13, 2007) (SR-CBOE-2006-101). --------------------------------------------------------------------------- When the Hybrid 3.0 Platform was first implemented it was the third trading platform operating on the Exchange's trade engine CBOEdirect (the CBOE command trade engine replaced CBOEdirect in 2012) \8\--the other two platforms were the original Hybrid Trading System and the Hybrid 2.0 Platform.\9\ In 2007, the Exchange removed the distinction between hybrid option classes (a/k/a classes on the original Hybrid Trading System) and Hybrid 2.0 option classes and deleted references to the Hybrid 2.0 Platform because over time CBOE migrated all option classes (other than the option classes traded on the Hybrid 3.0 Platform) from the original Hybrid Trading System to the Hybrid 2.0 Platform.\10\ After the removal of the Hybrid 2.0 distinction, all options classes (other than those trading on the Hybrid 3.0 Platform) have been referred to as Hybrid classes trading on the Hybrid Trading System.\11\ In order to distinguish between Hybrid classes trading on the Hybrid Trading System and Hybrid 3.0 classes trading on the Hybrid 3.0 Platform references in the Rulebook to ``Hybrid,'' ``Hybrid System,'' or ``Hybrid Trading System'' include all platforms unless otherwise provided by rule.\12\ Currently, there are two platforms operating on the Exchange's trade engine CBOE Command (which replaced CBOEdirect): (i) The Hybrid Trading System (f/k/a the Hybrid 2.0 Platform) and (ii) the Hybrid 3.0 Platform. --------------------------------------------------------------------------- \8\ See Information Circular IC12-057. \9\ Id. \10\ See Securities Exchange Act Release No. 58153 (July 14, 2008), 73 FR 41386 (July 18, 2008) (SR-CBOE-2008-067) (deleting references to ``Hybrid 2.0 Platform'' and ``non-Hybrid'' classes because non-Hybrid classes no longer exist). \11\ Id. \12\ See Rule 1.1(aaa). --------------------------------------------------------------------------- For each Hybrid 3.0 class, the Exchange may determine to authorize a group of series of the class for trading on the Hybrid Trading System \13\ and establish trading parameters ``on a group basis to the extent rules otherwise provide such parameters to be established on a class basis.'' \14\ Currently, options on the Standard & Poor's 500 (``S&P 500'') are the only Hybrid 3.0 class.\15\ However, pursuant to Rule 8.14.01 the Exchange authorized a group of series within the S&P 500 options class to trade on the Hybrid Trading System (i.e., SPXW options). Thus, currently, the S&P 500 options class contains series trading under symbols SPX and SPXW.\16\ The SPX options series are a.m.-settled contracts with standard third Friday expirations [[Page 87104]] trading on the Hybrid 3.0 Trading System. The SPXW options series are p.m.-settled contracts with non-standard expirations trading on the Hybrid Trading System. --------------------------------------------------------------------------- \13\ See Rule 8.14.01. \14\ See Rule 8.14.01(c). \15\ See Rule 8.3(c)(iii). \16\ Options trading under the symbol SPXPM are a separate class from the SPX and SPXW options. --------------------------------------------------------------------------- Currently, when the Exchange receives a complex order\17\ during regular trading hours that consists of both SPX and SPXW options series (hereinafter an ``SPX/SPXW order'') the order is routed to a PAR workstation pursuant to Rule 6.12(a)(1) in order to provide an opportunity for these orders to trade in open outcry.\18\ If an SPX/ SPXW order is received during extended trading hours, the order is rejected back to the sender.\19\ CBOE handles SPX/SPXW orders in this manner because currently the System cannot accept complex orders consisting of series that trade on different trading platforms, even if part of the same class. The Exchange is updating its systems to accept SPX/SPXW orders so they can trade against each other electronically during regular trading hours and extended trading hours. Thus, the Exchange is seeking to amend Rule 6.53C in order to specify the manner in which SPX/SPXW orders will be executed electronically.\20\ --------------------------------------------------------------------------- \17\ For the purposes of the electronic trading of complex orders a complex order is defined as ``any order involving the execution of two or more different options series in the same underlying security occurring at or near the same time in a ratio that is equal to or greater than one-to-three (.333) and less than or equal to three-to-one (3.00) (or such lower ratio as may be determined by the Exchange on a class-by-class basis) and for the purpose of executing a particular investment strategy. For the purpose of applying the aforementioned ratios to complex orders comprised of both mini-option contracts and standard option contracts, ten (10) mini-option contracts will represent one (1) standard option contract. Only those complex orders with no more than the applicable number of legs, as determined by the Exchange on a class-by-class basis, are eligible for processing.'' See Rule 6.53C(a)(1). \18\ The Exchange determines which options classes are eligible for COB and COA. See Rules 6.53C(c)(i) and (d)(i)(2). \19\ See Rule 6.1A(b) and RG15-013. \20\ While this rule filing focuses on SPX, as it is currently the only Hybrid 3.0 class, the proposed rule text applies to all Hybrid 3.0 classes to accommodate any future classes that may be authorized to trade on the Hybrid 3.0 Platform. --------------------------------------------------------------------------- Rule 6.53C sets forth the manner in which complex orders are executed on the Hybrid Trading System. Interpretation and Policy .10 to Rule 6.53C sets forth the specific manner in which complex orders in Hybrid 3.0 classes trading on the Hybrid 3.0 Platform are to be executed, which is generally the same as the manner in which complex orders are executed on the Hybrid Trading System except as set forth in that Interpretation and Policy .10. For example, one primary difference is, for Hybrid 3.0 classes, the Exchange may determine to not allow marketable complex orders to execute against resting quotes in the leg markets,\21\ and the Exchange has determined to not allow complex orders in SPX to trade against the quotes in the leg markets.\22\ --------------------------------------------------------------------------- \21\ See Rule 6.53.10. \22\ See RG 12-025. --------------------------------------------------------------------------- The Exchange is proposing to amend in Rule 6.53C.10 to allow SPX/ SPXW orders may [sic] be executed in accordance with Rule 6.53C.10 in the same manner as complex orders that solely consist of a group of series that are authorized for trading on the Hybrid 3.0 Platform (i.e., SPX complex orders); however, due to system limitations that in the Exchange's experience were prohibitively expensive to modify, SPX/ SPXW orders (unlike SPX complex orders) will not automatically execute against individual orders residing in the EBook. SPX/SPXW orders that are marketable against individual orders residing in the EBook will instead be routed to a PAR workstation during Regular Trading Hours and rejected during Extended Trading Hours, which is exactly how all SPX/ SPXW orders are treated today. SPX/SPXW orders will trade using a price-time matching algorithm.\23\ The Exchange will handle SPX/SPXW orders during regular trading hours in the following manner: \24\ --------------------------------------------------------------------------- \23\ See Rule 6.45B(a) (giving the Exchange the ability to determine the matching algorithm--i.e., the particular priority method) and Rule 8.14.01(c) (providing that when the Exchange authorizes a group of series of a Hybrid 3.0 class to trade on the Hybrid Trading System the trading parameters will be established by the Exchange on a group basis to the extent the Exchange Rules otherwise provide for such parameter to be established on a class basis). \24\ As noted throughout this filing, the Exchange may, by Rule, configure many of the order handling parameters. ---------------------------------------------------------------------------SPX/SPXW orders with more than 4 legs will be routed for manual handling, which is consistent with the manner in which SPX complex orders are handled by the Exchange.\25\ --------------------------------------------------------------------------- \25\ See Rule 6.53C(a)(1) (providing that complex orders with no more than the applicable number of legs as determined by the Exchange are eligible for processing). The current number of legs permitted for complex orders for electronic processing is four. Pursuant to Rule 6.12(a)(1), orders initially routed for electronic processing that are not eligible for automatic execution or book entry will by default route to PAR or back to the TPH. --------------------------------------------------------------------------- SPX/SPXW orders for the accounts of non-customers will not be allowed to rest in the Complex Order Book (``COB'') but will instead be routed for manual handling, which is consistent with the manner in which SPX complex orders are handled by the Exchange.\26\ All other participants will be allowed to rest in the COB. --------------------------------------------------------------------------- \26\ See Rule 6.53C(c)(i) (giving the Exchange the ability to determine which classes and origin types are eligible for entry into the COB) and RG15-195. --------------------------------------------------------------------------- SPX/SPXW orders for the accounts of customers and non- customers will be permitted to participate in the COB opening process and trade against SPX/SPXW orders resting in the COB, which is consistent with the manner in which SPX complex orders are handled by the Exchange.\27\ --------------------------------------------------------------------------- \27\ See Rule 6.53C.11 and RG15-195. --------------------------------------------------------------------------- Marketable SPX/SPXW orders will not be eligible to automatically execute against individual orders residing in the EBook for the legs.\28\ Although SPX complex orders are eligible to automatically execute against individual orders residing in the EBook for the legs, not allowing SPX/SPXW orders to automatically execute against individual orders residing in the EBook for the legs effectively means that the Exchange is not changing how these particular SPX/SPXW orders will treated by the Exchange. These particular SPX/SPXW orders will be routed to a PAR workstation during regular trading hours, which is consistent with how all SPX/SPXW orders are treated during regular trading hours. --------------------------------------------------------------------------- \28\ See Proposed Rule 6.53C.10(a). --------------------------------------------------------------------------- Marketable SPX/SPXW orders will be eligible to automatically execute against other SPX/SPXW orders resting in the COB provided the execution is at a net price that has priority over the individual orders and quotes residing in the EBook, which is consistent with the manner in which SPX complex orders are handled by the Exchange.\29\ --------------------------------------------------------------------------- \29\ See Rule 6.53C.10(b) --------------------------------------------------------------------------- Marketable SPX/SPXW orders will not be eligible to automatically execute against individual Market-Maker quotes resting in the EBook for the legs, which is consistent with the manner in which SPX complex orders are handled by the Exchange.\30\ --------------------------------------------------------------------------- \30\ See Rule 6.53C.10 (providing that the Exchange may determine to not allow marketable complex orders entered into COB and/or COA to automatically execute against individual quotes residing in the EBook) and RG 12-025 (providing marketable SPX complex orders will not execute with individual quotes). --------------------------------------------------------------------------- SPX/SPXW orders resting in the COB that become marketable against Market-Maker quotes in the individual legs will be subject to COA, which is consistent with the manner in which SPX complex orders are handled by the Exchange.\31\ Such orders (or remaining portion of such orders) that are not executed but are still marketable will be routed for manual handling, which is consistent with the manner in which [[Page 87105]] SPX complex orders are handled by the Exchange.\32\ --------------------------------------------------------------------------- \31\ See Rule 6.53C.10(d). \32\ See Rule 6.53C.10(d). Because an SPX/SPXW that is marketable will not be permitted under the proposed rule to automatically execute against individual Market-Maker quotes or the individual orders residing in the EBook for the legs, an SPX/SPXW order that is marketable will route via the order handling system pursuant to Rule 6.12 in the same manner as marketable SPX complex orders. --------------------------------------------------------------------------- During extended trading hours, SPX/SPXW orders for the accounts of customers and non-customers will be allowed to rest in the COB, and thus participate in the COB opening process and trade against SPX/SPXW orders resting in the COB, which is consistent with the manner in which SPX complex orders are handled by the Exchange.\33\ Additionally, any SPX/SPXW order that would normally be routed for manual handling during regulator trading hours will instead be returned to the order entry firm during extended trading hours because open outcry trading is unavailable during extended trading hours, which is consistent with the manner in which SPX complex orders are handled by the Exchange.\34\ --------------------------------------------------------------------------- \33\ See Rule 6.53C(c) and RG15-013. \34\ See Rule 6.1(A)(b) (providing in extended trading hours if in accordance with the Rules an order would route to PAR, the order entry firm's booth or otherwise for manual handling the System will return the order the Trading Permit Holder during extended trading hours). --------------------------------------------------------------------------- Conclusion The proposed rule change simply provides SPX/SPXW orders with an opportunity to execute electronically instead of automatically being routed to the floor for manual execution. Any electronic execution of SPX/SPXW orders will be in the same manner as complex orders with all SPX legs, except SPX/SPXW orders will not automatically execute against individual orders in the EBook for the legs, which will result in those specific SPX/SPXW orders being treated in exactly the same manner in which they are treated currently (i.e., routed for manual handling during regular trading hours and rejected back to the order entry frim during extended trading hours). The Exchange will announce the implementation date of this rule filing via Regulatory Circular at least 7 days prior to the implementation date. The implementation date will be within 120 days of the approval date of this filing. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ``Act'') and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.\35\ Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \36\ 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) \37\ requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \35\ 15 U.S.C. 78f(b). \36\ 15 U.S.C. 78f(b)(5). \37\ Id. --------------------------------------------------------------------------- In particular, SPX/SPXW orders currently may only be executed in open outcry during regular trading hours, and these orders are not executable during extended trading hours. The proposed rule change merely provides that these orders will be eligible for electronic processing (including electronic execution) in the same manner as complex orders consisting solely of SPX options series, except SPX/SPXW orders will not automatically execute against individual orders in the EBook for the legs, which will result in those specific SPX/SPXW orders being treated in exactly the same manner in which they are treated currently (i.e., routed for manual handling during regular trading hours and rejected back to the order entry frim during extended trading hours). Since routing all SPX/SPXW orders for manual handling during regular trading hours and rejecting all SPX/SPXW orders during extended hours is currently consistent with the Act it is consistent with the Act to allow a subset of SPX/SPXW orders to continue to be treated in such a manner. Allowing certain SPX/SPXW orders to COA and rest in the COB helps remove impediments to and perfect the mechanism of a free and open market and generally helps to protect investors and the public interest by giving SPX/SPXW orders increased opportunities for execution. However, the Exchange's flexibility to determine which market participants' orders may COA or rest in the COB also helps to protect investors and the public interest by allowing the Exchange to manage the ecosystem for all market participants. Regardless, since the Exchange already has the flexibility to determine which market participants' orders may COA \38\ or rest in the COB,\39\ it is consistent with the Act for the Exchange to have the flexibility to determine which market participants' SPX/SPXW orders may COA and rest in the COB. Finally, the manual handling of SPX, SPXW, and SPX/SPXW orders continues to have tremendous value for customers, particularly for orders with a large number of legs; however, COB and COA are additional functionalities that may provide increased opportunity to receive an execution and/or receive price improvement, both of which benefit investors. --------------------------------------------------------------------------- \38\ See Rule 6.53C(d)(i)(2). \39\ See Rule 6.53C(c)(i). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. SPX/SPXW orders can currently be represented and executed in open outcry, and the proposed rule change merely provides these orders will be eligible for electronic processing (including electronic execution). The Exchange's flexibility to determine which market participants' orders may COA or rest in the COB will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act because the flexibility allows the Exchange to manage the ecosystem for all market participants. Regardless, since the Exchange already has the flexibility to determine which market participants' orders may COA \40\ or rest in the COB,\41\ it is not unduly burdensome for the Exchange to have the flexibility to determine which market participants' SPX/SPXW orders may COA and rest in the COB. Additionally, these orders will execute electronically in the same manner as complex orders with all SPX legs currently do, except SPX/SPXW orders will not automatically execute with individual orders in the EBook for the legs, which will result in those specific SPX/SPXW orders being treated in exactly the same manner in which they are treated currently (i.e., routed for manual handling during regular trading hours and rejected back to the order entry frim during extended trading hours). Since routing all SPX/ SPXW orders for manual handling during regular trading hours and [[Page 87106]] rejecting all SPX/SPXW orders during extended hours is currently not unduly burdensome it is not unduly burdensome to allow a subset of SPX/ SPXW orders to continue to be treated in such a manner. Additionally, allowing such orders to be executed electronically will not impose any burden on intermarket competition as options on the S&P 500 are exclusively listed on the Exchange. To the extent the proposed changes make CBOE a more attractive marketplace for market participants at other exchanges, such market participants are welcome to become CBOE market participants. --------------------------------------------------------------------------- \40\ See Rule 6.53C(d)(i)(2). \41\ See Rule 6.53C(c)(i). --------------------------------------------------------------------------- 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-CBOE-2016-080 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-CBOE-2016-080. 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 submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2016-080 and should be submitted on or before December 23, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\42\ --------------------------------------------------------------------------- \42\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-28929 Filed 12-1-16; 8:45 am] BILLING CODE 8011-01-P
![87102 Federal Register / Vol. 81, No. 232 / Friday, December 2, 2016 / Notices
internally consistent, which enhances C. Self-Regulatory Organization’s public in accordance with the
the overall comprehensibility to Statement on Comments on the provisions of 5 U.S.C. 552, will be
investors without altering the operation Proposed Rule Change Received From available for Web site viewing and
of the rule. For example, the Exchange Members, Participants, or Others printing in the Commission’s Public
believes that the revised rule text No written comments were solicited Reference Room, 100 F Street NE.,
governing the execution of COA-Eligible or received with respect to the proposed Washington, DC 20549 on official
orders provides clarity regarding the rule change. business days between the hours of
circumstances under which the leg 10:00 a.m. and 3:00 p.m. Copies of the
markets would have first priority to III. Date of Effectiveness of the filing also will be available for
Proposed Rule Change and Timing for inspection and copying at the principal
execute against an incoming COA-
Commission Action office of the Exchange. All comments
eligible or ECO. The Exchange also
believes that the proposed changes Within 45 days of the date of received will be posted without change;
publication of this notice in the Federal the Commission does not edit personal
would conform to the Exchange’s price/
Register or within such longer period identifying information from
time priority model and reduce the
up to 90 days (i) as the Commission may submissions. You should submit only
potential for investor confusion. information that you wish to make
designate if it finds such longer period
Non-Substantive Changes to be appropriate and publishes its available publicly. All submissions
reasons for so finding or (ii) as to which should refer to File Number SR–
The Exchange believes that the the Exchange consents, the Commission NYSEArca–2016–149 and should be
proposed non-substantive, technical will: submitted on or before December 23,
changes, including updated cross A. By order approve or disapprove 2016.
references that conform rule text to such proposed rule change, or For the Commission, by the Division of
proposed changes, promotes just and B. institute proceedings to determine Trading and Markets, pursuant to delegated
equitable principles of trade, fosters whether the proposed rule change authority.53
cooperation and coordination among should be disapproved. Robert W. Errett,
persons engaged in facilitating securities Deputy Secretary.
transactions, and removes impediments IV. Solicitation of Comments
[FR Doc. 2016–28927 Filed 12–1–16; 8:45 am]
to and perfects the mechanism of a free Interested persons are invited to BILLING CODE 8011–01–P
and open market by ensuring that submit written data, views, and
members, regulators and the public can arguments concerning the foregoing,
more easily navigate the Exchange’s including whether the proposed rule SECURITIES AND EXCHANGE
rulebook and better understand the change is consistent with the Act. COMMISSION
defined terms used by the Exchange. Comments may be submitted by any of
the following methods: [Release No. 34–79406; File No. SR–CBOE–
B. Self-Regulatory Organization’s 2016–080]
Statement on Burden on Competition Electronic Comments
• Use the Commission’s Internet Self-Regulatory Organizations;
The Exchange does not believe that comment form (http://www.sec.gov/ Chicago Board Options Exchange,
the proposed rule change will impose rules/sro.shtml); or Incorporated; Notice of Filing of a
any burden on competition that is not • Send an email to rule-comments@ Proposed Rule Change To Amend Rule
necessary or appropriate in furtherance sec.gov. Please include File Number SR– 6.53C
of the purposes of the Act. To the NYSEArca–2016–149 on the subject November 28, 2016.
contrary, the Exchange believes that the line. Pursuant to Section 19(b)(1) of the
proposed changes would encourage Securities Exchange Act of 1934 (the
increased submission of ECOs, as well Paper Comments
‘‘Act’’),1 and Rule 19b–4 thereunder,2
as increased participation in COAs, • Send paper comments in triplicate notice is hereby given that on November
which will add liquidity to the to Secretary, Securities and Exchange 17, 2016, Chicago Board Options
Exchange to the benefit all market Commission, 100 F Street NE., Exchange, Incorporated (the ‘‘Exchange’’
participants and is therefore pro- Washington, DC 20549–1090. or ‘‘CBOE’’) filed with the Securities
competitive. The proposal does not All submissions should refer to File and Exchange Commission (the
impose an intra-market burden on Number SR–NYSEArca–2016–149. This ‘‘Commission’’) the proposed rule
competition, because these changes file number should be included on the change as described in Items I, II, and
make the rule clearer and more subject line if email is used. To help the III below, which Items have been
complete for all participants. Nor does Commission process and review your prepared by the Exchange. The
the proposal impose a burden on comments more efficiently, please use Commission is publishing this notice to
competition among the options only one method. The Commission will solicit comments on the proposed rule
exchanges, because of the vigorous post all comments on the Commission’s change from interested persons.
competition for order flow among the Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the I. Self-Regulatory Organization’s
options exchanges. To the extent that Statement of the Terms of Substance of
submission, all subsequent
asabaliauskas on DSK3SPTVN1PROD with NOTICES
market participants disagree with the the Proposed Rule Change
amendments, all written statements
particular approach taken by the
with respect to the proposed rule The Exchange seeks to amend Rule
Exchange herein, market participants
change that are filed with the 6.53C. The text of the proposed rule
can easily and readily direct complex Commission, and all written change is provided below.
order flow to competing venues. communications relating to the
proposed rule change between the 53 17 CFR 200.30–3(a)(12).
Commission and any person, other than 1 15 U.S.C. 78s(b)(1).
those that may be withheld from the 2 17 CFR 240.19b–4.
VerDate Sep<11>2014 17:55 Dec 01, 2016 Jkt 241001 PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 E:\FR\FM\02DEN1.SGM 02DEN1](https://thefederalregister.org/doc/81_FR_87334/page/1.svg)
![Federal Register / Vol. 81, No. 232 / Friday, December 2, 2016 / Notices 87103
(additions are italicized; deletions are concerning the purpose of and basis for Exchange’s trade engine CBOEdirect
[bracketed]) the proposed rule change and discussed (the CBOE command trade engine
* * * * * any comments it received on the replaced CBOEdirect in 2012) 8—the
proposed rule change. The text of these other two platforms were the original
Chicago Board Options Exchange, statements may be examined at the Hybrid Trading System and the Hybrid
Incorporated Rules
places specified in Item IV below. The 2.0 Platform.9 In 2007, the Exchange
* * * * * Exchange has prepared summaries, set removed the distinction between hybrid
Rule 6.53C. Complex Orders on the Hybrid forth in sections A, B, and C below, of option classes (a/k/a classes on the
System the most significant aspects of such original Hybrid Trading System) and
(a)–(d) No change. statements. Hybrid 2.0 option classes and deleted
. . . Interpretations and Policies: references to the Hybrid 2.0 Platform
A. Self-Regulatory Organization’s
.01–.09 No change. because over time CBOE migrated all
Statement of the Purpose of, and
.10 Execution of Complex Orders in Hybrid option classes (other than the option
3.0 Classes: For each class trading on the Statutory Basis for, the Proposed Rule
classes traded on the Hybrid 3.0
Hybrid 3.0 Platform, the Exchange may Change
Platform) from the original Hybrid
determine to not allow marketable complex 1. Purpose Trading System to the Hybrid 2.0
orders entered into COB and/or COA to
automatically execute against individual The Exchange seeks to amend Rule Platform.10 After the removal of the
quotes residing in the EBook. The Exchange 6.53C in order to allow complex orders Hybrid 2.0 distinction, all options
also may determine for each class trading on in Hybrid 3.0 classes consisting of series classes (other than those trading on the
the Hybrid 3.0 Platform to not allow leg in both the group authorized for trading Hybrid 3.0 Platform) have been referred
orders to be generated pursuant to paragraph on the Hybrid 3.0 Platform and the to as Hybrid classes trading on the
(c)(iv) for complex orders resting in the COB. group authorized for trading on the Hybrid Trading System.11 In order to
If the Exchange authorizes a group of series distinguish between Hybrid classes
of a Hybrid 3.0 class for trading on the
Hybrid Trading System to execute
electronically in the same manner as trading on the Hybrid Trading System
Hybrid Trading System pursuant to Rule and Hybrid 3.0 classes trading on the
8.14.01, this Interpretation and Policy .10 complex orders consisting solely of
applies to a complex order with at least one series in the Hybrid 3.0 group.3 Hybrid 3.0 Platform references in the
leg in a series from the group authorized for In 2003, CBOE introduced the Hybrid Rulebook to ‘‘Hybrid,’’ ‘‘Hybrid
trading on the Hybrid 3.0 Platform, including Trading System (‘‘Hybrid’’ or ‘‘Hybrid System,’’ or ‘‘Hybrid Trading System’’
if the order has another leg(s) in a series from System’’), an electronic trading platform include all platforms unless otherwise
the group authorized for trading on the integrated with CBOE’s floor-based provided by rule.12 Currently, there are
Hybrid Trading System. The allocation of open-outcry auction market.4 The two platforms operating on the
such marketable complex orders against Exchange’s trade engine CBOE
original Hybrid Trading System
orders residing in the EBook and other Command (which replaced
complex orders shall be based on the best net permitted Market-Makers to stream
electronic quotes in their appointed CBOEdirect): (i) The Hybrid Trading
price(s) and, at the same net price, multiple
orders will be allocated as provided in classes provided they were physically System (f/k/a the Hybrid 2.0 Platform)
paragraphs (c) and/or (d) in the Rule, as present at the trading station.5 CBOE and (ii) the Hybrid 3.0 Platform.
applicable, subject to the following: subsequently implemented an enhanced For each Hybrid 3.0 class, the
(a) A marketable complex order that solely version of Hybrid (f/k/a the Hybrid 2.0 Exchange may determine to authorize a
consists of a group of series that is authorized platform), which allows remote quoting group of series of the class for trading
for trading on the Hybrid 3.0 Platform will
in option classes.6 CBOE subsequently on the Hybrid Trading System 13 and
automatically execute against individual establish trading parameters ‘‘on a group
orders residing in the EBook provided the implemented the Hybrid 3.0 Platform,
which is a trading platform on the basis to the extent rules otherwise
complex order can be executed in full (or in provide such parameters to be
a permissible ratio) by the orders in the Hybrid Trading System that allows one
or more quoters to submit electronic established on a class basis.’’ 14
EBook and the orders in the EBook are priced
equal to or better than the individual quotes quotes that represent the aggregate Currently, options on the Standard &
residing in the EBook. A marketable complex Market-Maker quotation interest in a Poor’s 500 (‘‘S&P 500’’) are the only
order that consists of a group of series that Hybrid 3.0 class.15 However, pursuant
series for the trading crowd.7
is authorized for trading on the Hybrid 3.0 When the Hybrid 3.0 Platform was to Rule 8.14.01 the Exchange authorized
Platform and a group of series authorized for
first implemented it was the third a group of series within the S&P 500
trading on the Hybrid Trading System will options class to trade on the Hybrid
not automatically execute against individual trading platform operating on the
Trading System (i.e., SPXW options).
orders residing in the EBook. Thus, currently, the S&P 500 options
3 See Rule 6.53C.10.
(b)–(e) No change.
4 See Securities Exchange Act Release No. 47959 class contains series trading under
.11–.12 No change.
(May 30, 2003), 68 FR 34441 (June 9, 2003) (SR– symbols SPX and SPXW.16 The SPX
* * * * * CBOE–2002–05). options series are a.m.-settled contracts
5 Id.
The text of the proposed rule change with standard third Friday expirations
6 See Securities Exchange Act Release No. 50003
is also available on the Exchange’s Web
(July 12, 2004), 69 FR 43028 (July 19, 2004) (SR–
site (http://www.cboe.com/AboutCBOE/ CBOE–2004–24) (implementing enhancements to
8 See Information Circular IC12–057.
9 Id.
CBOELegalRegulatoryHome.aspx), at the Hybrid Trading System that are referred to in 10 See Securities Exchange Act Release No. 58153
the Exchange’s Office of the Secretary, subsequent filings as Hybrid 2.0); Release No. 50175
(July 14, 2008), 73 FR 41386 (July 18, 2008) (SR–
(August 10, 2004), 69 FR 51129 (August 17, 2004)
asabaliauskas on DSK3SPTVN1PROD with NOTICES
and at the Commission’s Public CBOE–2008–067) (deleting references to ‘‘Hybrid
(SR–CBOE–2004–38) (implementing fees associated
Reference Room. with, among other things, SR–CBOE–2004–24 and 2.0 Platform’’ and ‘‘non-Hybrid’’ classes because
non-Hybrid classes no longer exist).
referring to the enhancements to the Hybrid Trading
II. Self-Regulatory Organization’s System as Hybrid 2.0); and Release No. 51366
11 Id.
Statement of the Purpose of, and (March 14, 2005), 70 FR 13217 (March 18, 2005)
12 See Rule 1.1(aaa).
Statutory Basis for, the Proposed Rule (amending the Rulebook by, among other things, 13 See Rule 8.14.01.
adding the term Hybrid 2.0). 14 See Rule 8.14.01(c).
Change
7 See Securities Exchange Act Release No. 55874 15 See Rule 8.3(c)(iii).
In its filing with the Commission, the (June 7, 2007), 72 FR 32688 (June 13, 2007) (SR– 16 Options trading under the symbol SPXPM are
Exchange included statements CBOE–2006–101). a separate class from the SPX and SPXW options.
VerDate Sep<11>2014 17:55 Dec 01, 2016 Jkt 241001 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 E:\FR\FM\02DEN1.SGM 02DEN1](https://thefederalregister.org/doc/81_FR_87334/page/2.svg)
![87104 Federal Register / Vol. 81, No. 232 / Friday, December 2, 2016 / Notices
trading on the Hybrid 3.0 Trading Exchange may determine to not allow All other participants will be allowed to
System. The SPXW options series are marketable complex orders to execute rest in the COB.
p.m.-settled contracts with non-standard against resting quotes in the leg • SPX/SPXW orders for the accounts
expirations trading on the Hybrid markets,21 and the Exchange has of customers and non-customers will be
Trading System. determined to not allow complex orders permitted to participate in the COB
Currently, when the Exchange in SPX to trade against the quotes in the opening process and trade against SPX/
receives a complex order17 during leg markets.22 SPXW orders resting in the COB, which
regular trading hours that consists of The Exchange is proposing to amend is consistent with the manner in which
both SPX and SPXW options series in Rule 6.53C.10 to allow SPX/SPXW
SPX complex orders are handled by the
(hereinafter an ‘‘SPX/SPXW order’’) the orders may [sic] be executed in
order is routed to a PAR workstation Exchange.27
accordance with Rule 6.53C.10 in the
pursuant to Rule 6.12(a)(1) in order to same manner as complex orders that • Marketable SPX/SPXW orders will
provide an opportunity for these orders solely consist of a group of series that not be eligible to automatically execute
to trade in open outcry.18 If an SPX/ are authorized for trading on the Hybrid against individual orders residing in the
SPXW order is received during 3.0 Platform (i.e., SPX complex orders); EBook for the legs.28 Although SPX
extended trading hours, the order is however, due to system limitations that complex orders are eligible to
rejected back to the sender.19 CBOE in the Exchange’s experience were automatically execute against individual
handles SPX/SPXW orders in this prohibitively expensive to modify, SPX/ orders residing in the EBook for the legs,
manner because currently the System SPXW orders (unlike SPX complex not allowing SPX/SPXW orders to
cannot accept complex orders consisting orders) will not automatically execute automatically execute against individual
of series that trade on different trading against individual orders residing in the orders residing in the EBook for the legs
platforms, even if part of the same class. EBook. SPX/SPXW orders that are effectively means that the Exchange is
The Exchange is updating its systems to marketable against individual orders not changing how these particular SPX/
accept SPX/SPXW orders so they can residing in the EBook will instead be SPXW orders will treated by the
trade against each other electronically routed to a PAR workstation during Exchange. These particular SPX/SPXW
during regular trading hours and Regular Trading Hours and rejected orders will be routed to a PAR
extended trading hours. Thus, the during Extended Trading Hours, which workstation during regular trading
Exchange is seeking to amend Rule is exactly how all SPX/SPXW orders are hours, which is consistent with how all
6.53C in order to specify the manner in treated today. SPX/SPXW orders are treated during
which SPX/SPXW orders will be SPX/SPXW orders will trade using a regular trading hours.
executed electronically.20 price-time matching algorithm.23 The • Marketable SPX/SPXW orders will
Rule 6.53C sets forth the manner in Exchange will handle SPX/SPXW orders be eligible to automatically execute
which complex orders are executed on during regular trading hours in the against other SPX/SPXW orders resting
the Hybrid Trading System. following manner: 24 in the COB provided the execution is at
Interpretation and Policy .10 to Rule • SPX/SPXW orders with more than 4 a net price that has priority over the
6.53C sets forth the specific manner in legs will be routed for manual handling,
which complex orders in Hybrid 3.0 individual orders and quotes residing in
which is consistent with the manner in the EBook, which is consistent with the
classes trading on the Hybrid 3.0 which SPX complex orders are handled
Platform are to be executed, which is manner in which SPX complex orders
by the Exchange.25 are handled by the Exchange.29
generally the same as the manner in • SPX/SPXW orders for the accounts
which complex orders are executed on of non-customers will not be allowed to • Marketable SPX/SPXW orders will
the Hybrid Trading System except as set rest in the Complex Order Book not be eligible to automatically execute
forth in that Interpretation and Policy (‘‘COB’’) but will instead be routed for against individual Market-Maker quotes
.10. For example, one primary manual handling, which is consistent resting in the EBook for the legs, which
difference is, for Hybrid 3.0 classes, the with the manner in which SPX complex is consistent with the manner in which
orders are handled by the Exchange.26 SPX complex orders are handled by the
17 For the purposes of the electronic trading of Exchange.30
complex orders a complex order is defined as ‘‘any
order involving the execution of two or more
21 See Rule 6.53.10. • SPX/SPXW orders resting in the
different options series in the same underlying 22 See RG 12–025. COB that become marketable against
security occurring at or near the same time in a ratio 23 See Rule 6.45B(a) (giving the Exchange the
Market-Maker quotes in the individual
that is equal to or greater than one-to-three (.333) ability to determine the matching algorithm—i.e.,
and less than or equal to three-to-one (3.00) (or such the particular priority method) and Rule 8.14.01(c)
legs will be subject to COA, which is
lower ratio as may be determined by the Exchange (providing that when the Exchange authorizes a consistent with the manner in which
on a class-by-class basis) and for the purpose of group of series of a Hybrid 3.0 class to trade on the SPX complex orders are handled by the
executing a particular investment strategy. For the Hybrid Trading System the trading parameters will Exchange.31 Such orders (or remaining
purpose of applying the aforementioned ratios to be established by the Exchange on a group basis to
complex orders comprised of both mini-option the extent the Exchange Rules otherwise provide for
portion of such orders) that are not
contracts and standard option contracts, ten (10) such parameter to be established on a class basis). executed but are still marketable will be
mini-option contracts will represent one (1) 24 As noted throughout this filing, the Exchange routed for manual handling, which is
standard option contract. Only those complex may, by Rule, configure many of the order handling consistent with the manner in which
orders with no more than the applicable number of parameters.
legs, as determined by the Exchange on a class-by- 25 See Rule 6.53C(a)(1) (providing that complex
27 See Rule 6.53C.11 and RG15–195.
class basis, are eligible for processing.’’ See Rule orders with no more than the applicable number of
asabaliauskas on DSK3SPTVN1PROD with NOTICES
6.53C(a)(1). legs as determined by the Exchange are eligible for
28 See Proposed Rule 6.53C.10(a).
18 The Exchange determines which options 29 See Rule 6.53C.10(b)
processing). The current number of legs permitted
classes are eligible for COB and COA. See Rules for complex orders for electronic processing is four. 30 See Rule 6.53C.10 (providing that the Exchange
6.53C(c)(i) and (d)(i)(2). Pursuant to Rule 6.12(a)(1), orders initially routed may determine to not allow marketable complex
19 See Rule 6.1A(b) and RG15–013. for electronic processing that are not eligible for orders entered into COB and/or COA to
20 While this rule filing focuses on SPX, as it is automatic execution or book entry will by default automatically execute against individual quotes
currently the only Hybrid 3.0 class, the proposed route to PAR or back to the TPH. residing in the EBook) and RG 12–025 (providing
rule text applies to all Hybrid 3.0 classes to 26 See Rule 6.53C(c)(i) (giving the Exchange the marketable SPX complex orders will not execute
accommodate any future classes that may be ability to determine which classes and origin types with individual quotes).
authorized to trade on the Hybrid 3.0 Platform. are eligible for entry into the COB) and RG15–195. 31 See Rule 6.53C.10(d).
VerDate Sep<11>2014 17:55 Dec 01, 2016 Jkt 241001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 E:\FR\FM\02DEN1.SGM 02DEN1](https://thefederalregister.org/doc/81_FR_87334/page/3.svg)
![87106 Federal Register / Vol. 81, No. 232 / Friday, December 2, 2016 / Notices
rejecting all SPX/SPXW orders during Commission process and review your Commission (‘‘SEC’’ or ‘‘Commission’’)
extended hours is currently not unduly comments more efficiently, please use the proposed rule change as described
burdensome it is not unduly only one method. The Commission will in Items I and II below, which Items
burdensome to allow a subset of SPX/ post all comments on the Commission’s have been prepared by the Exchange.
SPXW orders to continue to be treated Internet Web site (http://www.sec.gov/ The Commission is publishing this
in such a manner. Additionally, rules/sro.shtml). Copies of the notice to solicit comments on the
allowing such orders to be executed submission, all subsequent proposed rule change from interested
electronically will not impose any amendments, all written statements persons.
burden on intermarket competition as with respect to the proposed rule
change that are filed with the I. Self-Regulatory Organization’s
options on the S&P 500 are exclusively
Commission, and all written Statement of the Terms of Substance of
listed on the Exchange. To the extent
communications relating to the the Proposed Rule Change
the proposed changes make CBOE a
more attractive marketplace for market proposed rule change between the The Exchange proposes to amend
participants at other exchanges, such Commission and any person, other than Commentary .14 to Rule 4770
market participants are welcome to those that may be withheld from the (Compliance with Regulation NMS Plan
become CBOE market participants. public in accordance with the to Implement a Tick Size Pilot) to
provisions of 5 U.S.C. 552, will be provide the SEC with notice of its efforts
C. Self-Regulatory Organization’s available for Web site viewing and to re-program its systems to eliminate a
Statement on Comments on the printing in the Commission’s Public re-pricing functionality for certain
Proposed Rule Change Received From Reference Room, 100 F Street NE., orders in Test Group Three securities in
Members, Participants, or Others Washington, DC 20549 on official connection with the Regulation NMS
The Exchange neither solicited nor business days between the hours of Plan to Implement a Tick Size Pilot
received comments on the proposed 10:00 a.m. and 3:00 p.m. Copies of the Program (‘‘Plan’’ or ‘‘Pilot’’).3
rule change. filing also will be available for The text of the proposed rule change
inspection and copying at the principal is set forth below. Proposed new
III. Date of Effectiveness of the office of the Exchange. All comments language is italicized; deleted text is in
Proposed Rule Change and Timing for received will be posted without change; brackets.
Commission Action the Commission does not edit personal * * * * *
Within 45 days of the date of identifying information from
publication of this notice in the Federal submissions. You should submit only The NASDAQ Stock Market Rules
Register or within such longer period information that you wish to make * * * * *
up to 90 days (i) as the Commission may available publicly. All submissions
designate if it finds such longer period should refer to File Number SR–CBOE– 4770. Compliance With Regulation
to be appropriate and publishes its 2016–080 and should be submitted on NMS Plan To Implement a Tick Size
reasons for so finding or (ii) as to which or before December 23, 2016. Pilot
the Exchange consents, the Commission For the Commission, by the Division of (a) through (d) No Change.
will: Trading and Markets, pursuant to delegated Commentary: .01–.13 No change.
A. By order approve or disapprove authority.42 .14 Until [November 14,
such proposed rule change, or Robert W. Errett, 2016]December 12, 2016, the treatment
B. institute proceedings to determine Deputy Secretary. of Price to Comply Orders, Price to
whether the proposed rule change [FR Doc. 2016–28929 Filed 12–1–16; 8:45 am] Display Orders, Non-Displayed Orders,
should be disapproved. and Post-Only Orders that are entered
BILLING CODE 8011–01–P
IV. Solicitation of Comments through the OUCH or FLITE protocols
in Test Group Three securities shall be
Interested persons are invited to as follows:
SECURITIES AND EXCHANGE
submit written data, views, and COMMISSION Following entry, and if market
arguments concerning the foregoing, conditions allow, a Price to Comply
including whether the proposed rule [Release No. 34–79408; File No. SR–
Order in a Test Group Three Pilot
change is consistent with the Act. NASDAQ–2016–159]
Security will be adjusted repeatedly in
Comments may be submitted by any of accordance with changes to the NBBO
Self-Regulatory Organizations; The
the following methods: until such time as the Price to Comply
NASDAQ Stock Market LLC; Notice of
Electronic Comments Filing and Immediate Effectiveness of Order is able to be ranked and displayed
Proposed Rule Change To Amend at its original entered limit price.
• Use the Commission’s Internet Following entry, and if market
comment form (http://www.sec.gov/ Commentary .14 to Rule 4770
(Compliance With Regulation NMS conditions allow, a Price to Display
rules/sro.shtml); or Order in a Test Group Three Pilot
• Send an email to rule-comments@ Plan To Implement a Tick Size Pilot)
Security will be adjusted repeatedly in
sec.gov. Please include File Number SR– November 28, 2016. accordance with changes to the NBBO
CBOE–2016–080 on the subject line. Pursuant to Section 19(b)(1) of the until such time as the Price to Display
Paper Comments Securities Exchange Act of 1934 Order is able to be ranked and displayed
asabaliauskas on DSK3SPTVN1PROD with NOTICES
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 at its original entered limit price.
• Send paper comments in triplicate notice is hereby given that on November
to Secretary, Securities and Exchange Following entry, and if market
14, 2016, The NASDAQ Stock Market conditions allow, a Non-Displayed
Commission, 100 F Street NE., LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed
Washington, DC 20549–1090. Order in a Test Group Three Pilot
with the Securities and Exchange Security will be adjusted repeatedly in
All submissions should refer to File
Number SR–CBOE–2016–080. This file 42 17 CFR 200.30–3(a)(12). 3 See Securities Exchange Act Release No. 74892
number should be included on the 1 15 U.S.C. 78s(b)(1). (May 6, 2015), 80 FR 27513 (May 13, 2015)
subject line if email is used. To help the 2 17 CFR 240.19b–4. (‘‘Approval Order’’).
VerDate Sep<11>2014 17:55 Dec 01, 2016 Jkt 241001 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 E:\FR\FM\02DEN1.SGM 02DEN1](https://thefederalregister.org/doc/81_FR_87334/page/5.svg)
Document Created: 2018-02-14 09:02:14
Document Modified: 2018-02-14 09:02:14
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 81 FR 87102 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR