81 FR 8797 - Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing of a Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Adopt an Early Trading Session and Three New Time-in-Force Instructions
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 34 (February 22, 2016)
Federal Register Volume 81, Issue 34 (February 22, 2016)
| Page Range | 8797-8803 | |
| FR Document | 2016-03524 |
[Federal Register Volume 81, Number 34 (Monday, February 22, 2016)] [Notices] [Pages 8797-8803] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-03524] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77141; File No. SR-EDGA-2016-02] Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing of a Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Adopt an Early Trading Session and Three New Time-in-Force Instructions February 16, 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 February 2, 2016, EDGA Exchange, Inc. (the ``Exchange'' or ``EDGA'') 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. On February 12, 2016, the Exchange filed Amendment No. 1 to the proposed rule change.\3\ The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ In Amendment No. 1, the Exchange noted that it would subject orders that are eligible for execution as of the start of the Pre- Opening Session to all of the Exchange's standard regulatory checks, including compliance with Regulation NMS, Regulation SHO, as well as other relevant Exchange rules. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to amend its rules to: (i) Create a new trading session to be known as the Early Trading Session, which will run from 7:00 a.m. to 8:00 a.m. Eastern Time; and (ii) adopt three new Time-in-Force (``TIF'') instructions.\4\ --------------------------------------------------------------------------- \4\ The Exchange notes that its affiliates, BATS Exchange, Inc, (``BZX'') and BATS Y-Exchange, Inc. (``BYX'') also intend to file proposed rule changes with the Commission to amend their rules to also: (i) Create a new trading session to be known as the Early Trading Session, which will run from 7:00 a.m. to 8:00 a.m. Eastern Time; and (ii) adopt identical TIF instructions. The Exchange further notes that the proposed rule change would operate in an identical manner to that proposed by BZX and BYX and the language of the BZX, BYX and Exchange Rules would differ to the extent necessary to conform with existing Exchange rule text or to account for details or descriptions included in the Exchange Rules but not currently included in BZX or BYX rules based on the current structure of such rules. --------------------------------------------------------------------------- The text of the proposed rule change is available at the Exchange's Web site at www.batstrading.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its rules to: (i) Create a new trading session to be known as the Early Trading Session, which will run from 7:00 a.m. to 8:00 a.m. Eastern Time; and (ii) adopt three new TIF instructions. Early Trading Session The Exchange trading day is currently divided into three sessions of which a User \5\ may select their order(s) be eligible for execution: (i) The Pre-Opening Session which starts at 8:00 a.m. and ends at 9:30 a.m. Eastern Time; (ii) Regular Trading Hours which runs from 9:30 a.m. to 4:00 p.m. Eastern Time; and (iii) the Post-Closing Session, which runs from 4:00 p.m. to 8:00 p.m. Eastern Time. The Exchange proposes to amend its rules to create a new trading session to be known as the Early Trading Session, which will run from 7:00 a.m. to 8:00 a.m. Eastern Time.\6\ Exchange Rule 1.5 would be amended to add a new definition for the term ``Early Trading Session'' under new paragraph (ii). ``Early Trading Session'' would be [[Page 8798]] defined as ``the time between 7:00 a.m. and 8:00 a.m. Eastern Time.'' \7\ --------------------------------------------------------------------------- \5\ ``User'' is defined as ``any Member or Sponsored Participant who is authorized to obtain access to the System pursuant to Rule 11.3.'' See Exchange Rule 1.5(ee). \6\ The Exchange notes that NYSE Arca, Inc. (``NYSE Arca'') operates an Opening Session that starts at 4:00 a.m. Eastern Time (1:00 a.m. Pacific Time) and ends at 9:30 a.m. Eastern Time (6:30 a.m. Pacific Time). See NYSE Arca Rule 7.34(a)(1). The Nasdaq Stock Market LLC (``Nasdaq'') operates a pre-market session that also opens at 4:00 a.m. and ends at 9:30 a.m. Eastern Time. See Nasdaq Rule 4701(g). See also Securities Exchange Act Release No. 69151 (March 15, 2013), 78 FR 17464 (March 21, 2013) (SR-Nasdaq-2013-033) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend the Pre-Market Hours of the Exchange to 4:00 a.m. EST). \7\ An Exchange having bifurcated after hours trading sessions is not novel. For example, the Chicago Stock Exchange, Inc. (``CHX'') maintains two after hours trading sessions. See CHX Article 20, Rule 1(b). See also Securities Exchange Act Release No. 60605 (September 1, 2009), 74 FR 46277 (September 8, 2009) (SR-CHX- 2009-13) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change Adding Additional Trading Sessions). --------------------------------------------------------------------------- The Exchange also proposes to amend Rule 11.1(a) to account for the Early Trading Session starting at 7:00 a.m. Eastern Time. Other than the proposal to adopt an Early Trading Session starting at 7:00 a.m. Eastern Time, the Exchange does not propose to amend the substance or operation of Rule 11.1(a). Users currently designate when their orders are eligible for execution by selecting the desired TIF instruction under Exchange Rule 11.6(q). Orders entered between 6:00 a.m. and 8:00 a.m. Eastern Time are not eligible for execution until the start of the Pre-Opening Session, or Regular Trading Hours,\8\ depending on the TIF selected by the User. Users may enter orders in advance of the trading session they intend the order to be eligible for. For example, Users may enter orders starting at 6:00 a.m. Eastern Time with a TIF of Regular Hours Only, which designates that the order only be eligible for execution during Regular Trading Hours.\9\ As stated above, Users may enter orders as early as 6:00 a.m. Eastern Time, but those orders would not be eligible for execution until the start of the Pre-Opening Session at 8:00 a.m. Some Users have requested the ability for their orders to be eligible for execution starting at 7:00 a.m. Eastern Time. Therefore, the Exchange is proposing to adopt the Early Trading Session as discussed herein. --------------------------------------------------------------------------- \8\ ``Regular Trading Hours'' is defined as ``the time between 9:30 a.m. and 4:00 p.m. Eastern Time.'' See Exchange Rule 1.5(y). \9\ See Exchange Rule 11.6(q)(6). --------------------------------------------------------------------------- Order entry and execution during the Early Trading Session would operate in the same manner as it does during the Pre-Opening Session. As amended, Exchange Rule 11.1(a)(1) would state that orders entered between 6:00 a.m. and 7:00 a.m. Eastern Time, rather than 6:00 a.m. and 8:00 a.m. Eastern Time, would not be eligible for execution until the start of the Early Trading Session, Pre-Opening Session, or Regular Trading Hours, depending on the TIF selected by the User. Exchange Rule 11.1(a)(1) will also be amended to state that the Exchange will not accept the following orders prior to 7:00 a.m. Eastern Time, rather than 8:00 a.m.: orders with a Post Only instruction,\10\ Intermarket Sweep Orders (``ISOs''),\11\ Market Orders \12\ with a TIF other than Regular Hours Only, orders with a Minimum Execution Quantity instruction \13\ that also include a TIF of Regular Hours Only, and all orders with a TIF instruction of Immediate-or-Cancel (``IOC'') \14\ or Fill-or-Kill (``FOK'').\15\ At the commencement of the Early Trading Session, orders entered between 6:00 a.m. and 7:00 a.m. Eastern Time, rather than 6:00 a.m. and 8:00 a.m. Eastern Time, will be handled in time sequence, beginning with the order with the oldest time stamp, and will be placed on the EDGA Book,\16\ routed, cancelled, or executed in accordance with the terms of the order. As amended, Rule 11.1(a) would state that orders may be executed on the Exchange or routed away from the Exchange during Regular Trading Hours and during the Early Trading, Pre-Opening, Regular and Post Closing Sessions. --------------------------------------------------------------------------- \10\ See Exchange Rule 11.6(n)(4). \11\ See Exchange Rule 11.8(c). \12\ See Exchange Rule 11.8(a). \13\ See Exchange Rule 11.6(h). \14\ See Exchange Rule 11.6(q)(1). \15\ See Exchange Rule 11.6(q)(3). \16\ See Exchange Rule 1.5(d). --------------------------------------------------------------------------- Operations. From the Members' operational perspective, the Exchange's goal is to permit trading for those that choose to trade, without imposing burdens on those that do not. Thus, for example, the Exchange will not require any Member to participate in the Early Trading Session, including not requiring registered market makers to make two-sided markets between 7:00 a.m. and 8:00 a.m., just as it does not require such participation between 8:00 a.m. and 9:30 a.m.\17\ The Exchange will minimize Members' preparation efforts to the greatest extent possible by allowing Members to trade beginning at 7:00 a.m. with the same equipment, connectivity, order types, and data feeds they currently use from 8:00 a.m. onwards. --------------------------------------------------------------------------- \17\ See Exchange Rule 11.20(d)(2) (stating that for NMS stocks (as defined in Rule 600 under Regulation NMS) a Market Maker shall adhere to the pricing obligations established by this Rule during Regular Trading Hours). --------------------------------------------------------------------------- Opening Process. The Exchange will offer no opening process at 7:00 a.m., just as it offers no opening process at 8:00 a.m. today. Instead, at 7:00 a.m., the System will ``wake up'' by loading in price/time priority all open trading interest entered after 6:00 a.m.\18\ Also at 7:00 a.m., the Exchange will open the execution system and accept new eligible orders, just as it currently does at 8:00 a.m. Members will be permitted to enter orders beginning at 6:00 a.m. Market Makers will be permitted but not required to open their quotes beginning at 7:00 a.m. in the same manner they open their quotes today beginning at 8:00 a.m. --------------------------------------------------------------------------- \18\ See Exchange Rule 11.1(a)(1). --------------------------------------------------------------------------- Order Types. Every order type that is currently available beginning at 8:00 a.m. will be available beginning at 7:00 a.m.\19\ All other order types, and all order type behaviors, will otherwise remain unchanged. The Exchange will not extend the expiration times of any orders. For example, an order that is currently available from 8:00 a.m. to 4:00 p.m. will be modified to be available from 7:00 a.m. to 4:00 p.m. An order that is available from 8:00 a.m. to 9:30 a.m. will be modified to be available from 7:00 a.m. to 9:30 a.m. Users must continue to enter a TIF instruction along with their order to indicate when the order is eligible for execution.\20\ --------------------------------------------------------------------------- \19\ Id. \20\ Id. --------------------------------------------------------------------------- Routing Services. The Exchange will route orders to away markets between 7:00 a.m. and 8:00 a.m., just as it does today between 8:00 a.m. and 9:30 a.m.\21\ All routing strategies set forth in Exchange Rule 11.11 will remain otherwise unchanged, performing the same instructions they perform between 7:00 a.m. and 8:00 a.m. today.\22\ --------------------------------------------------------------------------- \21\ Id. \22\ See Exchange Rule 11.11 (Routing to Away Trading Centers). --------------------------------------------------------------------------- Order Processing. Order processing will operate beginning at 7:00 a.m. just as it does today beginning at 8:00 a.m. There will be no changes to the ranking, display, and execution processes or rules. Data Feeds. The Exchange will report the best bid and offer on the Exchange to the appropriate network processor, as it currently does beginning 8:00 a.m.\23\ The Exchange's proprietary data feeds will be disseminated beginning at 7:00 a.m. using the same formats and delivery mechanisms with which the Exchange currently disseminates them beginning at 8:00 a.m. --------------------------------------------------------------------------- \23\ See Exchange Rule 11.12 (Trade Reporting). --------------------------------------------------------------------------- Trade Reporting. Trades executed between 7:00 a.m. and 8:00 a.m. will be reported to the appropriate network processor with the ``.T'' modifier, just as they are reported today between at 8:00 a.m. and 9:30 a.m.\24\ --------------------------------------------------------------------------- \24\ Id. --------------------------------------------------------------------------- Market Surveillance. The Exchange's commitment to high-quality regulation at all times will extend to 7:00 a.m. The Exchange will offer all surveillance coverage currently performed by the Exchange's surveillance systems, which [[Page 8799]] will launch by the time trading starts at 7:00 a.m. Clearly Erroneous Trade Processing. The Exchange will process trade breaks beginning at 7:00 a.m. pursuant to Exchange Rule 11.15, just as it does today beginning at 8:00 a.m. Related changes to Rules 3.21, 11.8, 11.10, 11.15, 14.1, 14.2 and 14.3. The Exchange proposes to also make the following changes to Rules 3.21, 11.8, 11.10, 11.15, 14.1, 14.2 and 14.3 to reflect the adoption of the Early Trading Session:Rule 3.21, Customer Disclosures. In sum, Exchange Rule 3.21 prohibits Members from accepting an order from a customer for execution in the Pre-Opening or Post-Closing Session without disclosing to their customer that extended hours trading involves material trading risks, including the possibility of lower liquidity, high volatility, changing prices, unlinked markets, an exaggerated effect from news announcements, wider spreads and any other relevant risk. The Exchange proposes to amend Rule 3.21 to include the Early Trading Session as part of the Member's required disclosures to their customers. Rule 11.8, Orders and Modifiers. The Exchange proposes to amend the description of Limit Orders under Rule 11.8(b), ISOs under Rule 11.8(c), MidPoint Peg Orders under Rule 11.8(d), MidPoint Discretionary Orders (``MDO'') under Rule 11.8(e), and Supplemental Peg Orders under Rule 11.8(g) to account for the Early Trading Session.\25\ As stated above, every order type that is currently available beginning at 8:00 a.m. will be available beginning at 7:00 a.m. for inclusion in the Early Trading Session.\26\ All other order types, and all order type behaviors, will otherwise remain unchanged. Therefore, but for Market Orders under Rule 11.8(a) and Market Maker Peg Orders under Rule 11.8(f), each of the above rules for Limit Orders, ISOs, MidPoint Peg Orders, MDOs, and Supplemental Peg Orders would be amended to state that those orders types are available during the Early Trading Session. Market Orders and Market Maker Peg Orders would not be eligible for execution during the Early Trading Session. Market Orders are only eligible for execution during the Regular Session.\27\ Market Maker Peg Orders may currently be submitted to the Exchange starting at the beginning of the Pre-Opening Session, but the order will not be executable or automatically priced until the beginning of Regular Trading Hours [sic]. Rule 11.8(f)(7) would be amended to state that Market Maker Peg Orders may be submitted to the Exchange starting at the beginning of the Early Trading Session. Market Maker Peg Orders would continue to not be executable or automatically priced until after the first regular way transaction on the listing exchange in the security, as reported by the responsible single plan processor. --------------------------------------------------------------------------- \25\ The Exchange notes that the proposed rule change would operate in an identical manner to that proposed in SR-BATS-2016-01 and the language of the BATS and Exchange Rules differ to [sic] extent necessary to conform with existing Exchange rule text or to account for details or descriptions included in the Exchange Rules but not currently included in BATS rules based on the current structure of such rules. See supra note 4. \26\ See proposed amendments to Exchange Rule 11.1(a). \27\ See Exchange Rule 11.8(a)(5). --------------------------------------------------------------------------- Rule 11.10, Order Execution and Routing. Exchange Rule 11.10(a)(2) discusses compliance with Regulation NMS and Trade Through Protections and states that the price of any execution occurring during the Pre-Opening Session or the Post-Closing Session must be equal to or better than the highest Protected Bid or lowest Protected Offer, unless the order is marked ISO or a Protected Bid is crossing a Protected Offer. The Exchange proposes to amend Rule 11.10(a)(2) to expand the rule's requirements to the Early Trading Session. Rule 11.15, Clearly Erroneous Executions. Exchange Rule 11.15 outlines under which conditions the Exchange may determine that an execution is clearly erroneous. The Exchange proposes to amend Rule 11.15 to include executions that occur during the Early Trading Session. Exchange Rule 11.15(c)(1) sets forth the numerical guidelines the Exchange is to follow when determining whether an execution was clearly erroneous during Regular Trading Hours or the Pre-Opening or Post-Closing Trading Session. Exchange Rule 11.15(c)(3) sets forth additional factors the Exchange may consider in determining whether a transaction is clearly erroneous. These factors include Pre-Opening and Post-Closing Trading Session executions. The Exchange proposes to amend Rule 11.15(c)(1) and (3) to include executions occurring during the Early Trading Session. Rule 14.1, Unlisted Trading Privileges. The Exchange proposes to amend Rules 14.1(c)(2), and Interpretation and Policies .01(a) and (b) to account for the proposed Early Trading Session. Specifically, the Exchange proposes to amend paragraph (c)(2) to state that an information circular distributed by the Exchange prior to the commencement of trading of a UTP Derivative Security \28\ will include the risk of trading during the Early Trading Session, in addition to the Pre-Opening Session and Post-Closing Trading Session. In addition, the Exchange proposes to amend Interpretation and Policies .01(a) to add Early Trading Session to the paragraph's title and to state that if a UTP Derivative Security begins trading on the Exchange in the Early Trading Session or Pre-Opening Session and subsequently a temporary interruption occurs in the calculation or wide dissemination of the Intraday Indicative Value (``IIV'') or the value of the underlying index, as applicable, to such UTP Derivative Security, by a major market data vendor, the Exchange may continue to trade the UTP Derivative Security for the remainder of the Early Trading Session and Pre-Opening Session. Lastly, the Exchange proposes to amend Interpretation and Policies .01(b) to add Early Trading Session to the paragraph's title and to amend subparagraph (2) of that section to state that if the IIV or the value of the underlying index continues not to be calculated or widely available as of the commencement of the Early Trading Session or Pre-Opening Session on the next business day, the Exchange shall not commence trading of the UTP Derivative Security in the Early Trading Session or Pre-Opening Session that day. --------------------------------------------------------------------------- \28\ See Exchange Rule 14.1(c). --------------------------------------------------------------------------- Rule 14.2, Investment Company Units. The Exchange proposes to amend Rule 14.2(g) to state that transactions in Investment Company Units may occur during the Early Trading Session, in addition to during Regular Trading Hours and the Pre-Opening and Post Closing Sessions. Rule 14.3, Trust Issued Receipts. The Exchange proposes to amend Rule 14.3(d) to state that transactions in Trust Issued Receipts may occur during the Early Trading Session, in addition to during Regular Trading Hours and the Pre-Opening and Post-Closing Sessions. TIF Instructions The Exchange proposes to adopt three new TIF instructions under Rule 11.6(q).\29\ Under Rule 11.1(a)(1), a User may designate when their order is eligible for execution by selecting the desired TIF instruction under Exchange Rule 11.6(q). Currently, orders entered between 6:00 a.m. and 8:00 a.m. Eastern Time are not eligible for execution until [[Page 8800]] the start of the Pre-Opening Session, or Regular Trading Hours, depending on the TIF selected by the User. Users may enter orders in advance of the trading session they intend the order to be eligible for. For example, Users may enter orders starting at 6:00 a.m. Eastern Time with a TIF of Regular Hours Only, which designates that the order only be eligible for execution during Regular Trading Hours.\30\ As stated above, Users may enter orders as early as 6:00 a.m. Eastern Time, but those orders would not be eligible for execution until the start of the Pre-Opening Session at 8:00 a.m. --------------------------------------------------------------------------- \29\ The Exchange also proposes to amend the descriptions of GTD under Rule 11.6(q)(4) and GTX under Rule 11.6(q)(5) to replace incorrect references to the Post-Market Session with Post-Closing Session, as Post-Closing Session is the correct defined term under Exchange Rule 1.5(r). \30\ See Exchange Rule 11.6(q)(6). --------------------------------------------------------------------------- As discussed above, the Exchange proposed the Early Trading Session in response to User requests for their orders to be eligible for execution starting at 7:00 a.m. Eastern Time. Some Users, however, do not wish for their orders to be executed during the Early Trading Session and have requested their orders continue to not be eligible for execution until the start of the Pre-Opening Session at 8:00 a.m. Therefore, the Exchange proposes to adopt the following three new TIF instructions under Rule 11.6(q): Pre-Opening Session Plus (``PRE''). A limit order that is designated for execution during the Pre-Opening Session and Regular Trading Hours. Like the current Day TIF instruction,\31\ any portion not executed expires at the end of Regular Trading Hours. --------------------------------------------------------------------------- \31\ See Exchange Rule 11.6(q)(2). This is also similar to the current Good-`til Cancel (``GTC'') TIF instruction currently available on BZX and the BATS Y-Exchange, Inc. (``BYX''). See BZX and BYX Rules 11.9(b)(3). --------------------------------------------------------------------------- Pre-Opening Session `til Extended Day (``PTX''). A limit order that is designated for execution during the Pre-Opening Session, Regular Trading Hours, and the Post-Closing Session. Like the current Good-`til Extended Day (``GTX'') TIF instruction,\32\ any portion not executed expires at the end of the Post-Closing Session. --------------------------------------------------------------------------- \32\ See Exchange Rule 11.6(q)(5). --------------------------------------------------------------------------- Pre-Opening Session `til Day (``PTD''). A limit order that is designated for execution during the Pre-Opening Session, Regular Trading Hours, and the Post-Closing Session. Like the current Good-`til Day (``GTD'') TIF instruction,\33\ any portion not executed will be cancelled at the expiration time assigned to the order, which can be no later than the close of the Post-Closing Trading Session. --------------------------------------------------------------------------- \33\ See Exchange Rule 11.6(q)(4). --------------------------------------------------------------------------- Under each proposed TIF instruction, Users may designate that their orders only be eligible for execution starting with the Pre-Opening Session. This is similar to the existing TIF of Regular Hours Only, which designates that the order only be eligible for execution during Regular Trading Hours, which starts at 9:30 a.m. Eastern Time. In such case, a User may enter orders starting at 6:00 a.m. Eastern Time, but such order would not be eligible for execution until 9:30 a.m. Eastern Time. Likewise, under each of the proposed TIF instructions, a User may continue to enter orders as early as 6:00 a.m., but such orders would not be eligible for execution until 8:00 a.m. Eastern Time, the start of the Pre-Opening Session.\34\ At the commencement of the Pre-Opening Session, orders entered between 6:00 a.m. and 8:00 a.m. Eastern Time with one of the proposed TIF instructions will be handled in time sequence, beginning with the order with the oldest time stamp, and will be placed on the EDGA Book, routed, cancelled, or executed in accordance with the terms of the order.\35\ --------------------------------------------------------------------------- \34\ Orders utilizing one of the proposed TIF instructions would not be eligible for execution during the proposed Early Trading Session. \35\ See Exchange Rule 11.1(a). --------------------------------------------------------------------------- Lastly, the Exchange proposes to amend the following order types under Exchange Rule 11.8 to account for the three proposed TIF instructions: \36\ --------------------------------------------------------------------------- \36\ The Exchange notes that the proposed rule change would operate in an identical manner to that proposed in SR-BATS-2016- 01and the language of the BATS and Exchange Rules differ to [sic] extent necessary to conform with existing Exchange rule text or to account for details or descriptions included in the Exchange Rules but not currently included in BATS rules based on the current structure of such rules. See supra note 4. --------------------------------------------------------------------------- Market Orders. The proposed TIF instruction of PRE, PTX, and PTD would not be available to Market Orders. Under Exchange Rule 11.8(a)(2), a Market Order may only include a TIF instruction of IOC, RHO, FOK, or Day. Limit Orders. Rule 11.8(b)(2) describes the TIF instructions that may be attached to a Limit Order. The Exchange proposes to amend paragraph (b)(2) add the TIF instructions of PRE, PTX, or PTD to the list of TIF instructions that a Limit Order may include. ISOs. Rule 11.8(c)(1) describes the TIF instructions that may be attached to an incoming ISO. The Exchange proposes to amend paragraph (c)(1) to state that an incoming ISO may have a TIF instruction of PRE, PTX, or PTD, in addition to Day, GTD, RHO, GTX, and IOC. Exchange Rule 11.8(c)(1) would be further amended to state that an incoming ISO with a Post Only and TIF instruction of PRE, PTX, or PTD, like those with a TIF instruction or GTD, GTX, or Day, will be cancelled without execution if, when entered, it is immediately marketable against an order with a Displayed instruction resting in the EDGA Book unless such order removes liquidity pursuant to Exchange Rule 11.6(n)(4).\37\ --------------------------------------------------------------------------- \37\ Exchange Rule 11.6(n)(4) defined the Post Only instruction and states, in sum, that an order with a Post Only instruction and a Display-Price Sliding or Price Adjust instruction will remove contra-side liquidity from the EDGA Book if the order is an order to buy or sell a security priced below $1.00 or if the value of such execution when removing liquidity equals or exceeds the value of such execution if the order instead posted to the EDGA Book and subsequently provided liquidity, including the applicable fees charged or rebates provided. --------------------------------------------------------------------------- MidPoint Peg Orders. Rule 11.8(d)(1) describes the TIF instructions that may be attached to a MidPoint Peg Order. The Exchange proposes to amend paragraph (d)(1) to state that a MidPoint Peg Order may have a TIF instruction of PRE, PTX, or PTD, in addition to Day, FOK, IOC, RHO, GTX and GTD. MDO. Rule 11.8(e)(1) describes the TIF instructions that may be attached to an MDO. The Exchange proposes to amend paragraph (e)(1) to state that an MDO may have a TIF instruction of PRE, PTX, or PTD, in addition to Day, RHO, GTX and GTD. Market Maker Peg Orders. The proposed TIF instruction of PRE, PTX, and PTD would not be available to Market Maker Peg Orders. Under Exchange Rule 11.8(f)(4), a Market Maker Peg Order may only include a TIF instruction of Day, RHO, or GTD. Supplemental Peg. Rule 11.8(g)(1) describes the TIF instructions that may be attached to a Supplemental Peg Order. The Exchange proposes to amend paragraph (g)(1) to state that a Supplemental Peg Order may have a TIF instruction of PRE, PTX, or PTD, in addition to GTD, GTX, RHO and Day. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,\38\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\39\ in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and in general, to protect investors and the public interest. The Exchange also believes that the proposed rule change is non-discriminatory as it would apply to all Members uniformly. The proposed rule change in whole is designed to attract more order flow to the Exchange [[Page 8801]] between 7:00 a.m. and 9:30 a.m. Eastern Time. Increased liquidity during this time will lead to improved price discovery and increased execution opportunities on the Exchange, therefore, promoting just and equitable principles of trade, and removing impediments to and perfecting the mechanism of a free and open market and a national market system. --------------------------------------------------------------------------- \38\ 15 U.S.C. 78f. \39\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Early Trading Session The Exchange believes its proposal to adopt the Early Trading Session promotes just and equitable principles of trade, removes impediments to and perfects the mechanism of a free and open market and a national market system, prevents fraudulent and manipulative acts and practices, and, in general, protects investors and the public interest. The Exchange believes that the Early Trading Session will benefit investors, the national market system, Members, and the Exchange market by increasing competition for order flow and executions, and thereby spur product enhancements and lower prices. The Early Trading Session will benefit Members and the Exchange market by increasing trading opportunities between 7:00 a.m. and 8:00 a.m. without increasing ancillary trading costs (telecommunications, data, connectivity, etc.) and, thereby, decreasing average trading costs per share. The Exchange notes that trading during the proposed Early Trading Session has been available on NYSE Arca and Nasdaq.\40\ The Exchange believes that the availability of trading between 7:00 a.m. and 8:00 a.m. has been beneficial to market participants including investors and issuers on other markets. Introduction of the Early Trading Session on the Exchange will further expand these benefits. --------------------------------------------------------------------------- \40\ See supra note 6. --------------------------------------------------------------------------- Additionally, the Exchange Act's goal of creating an efficient market system includes multiple policies such as price discovery, order interaction, and competition among markets. The Exchange believes that offering a competing trading session will promote all of these policies and will enhance quote competition, improve liquidity in the market, support the quality of price discovery, promote market transparency, and increase competition for trade executions while reducing spreads and transaction costs. Additionally, increasing liquidity during the Early Trading Session will raise investors' confidence in the fairness of the markets and their transactions, particularly due to the lower volume of trading occurring prior to opening. Although the Exchange will be operating with bifurcated pre-opening trading sessions, the Exchange notes that having bifurcated after hours trading sessions is not novel. For example, the CHX maintains two after hours trading sessions,\41\ the Late Trading Session, which runs from 4:00 p.m. to 4:15 p.m. Eastern Time, and the Late Crossing Session, which runs from 4:15 p.m. to 5:00 Eastern Time. As such, the Exchange does not believe that the proposed rule change will disproportionately increase the complexity of the market. --------------------------------------------------------------------------- \41\ See supra note 7. --------------------------------------------------------------------------- The expansion of trading hours through the creation of the Early Trading Session promotes just and equitable principles of trade by providing market participants with additional options in seeking execution on the Exchange. Order entry and execution during the Early Trading Session would operate in the same manner as it does today during the Pre-Opening Session. In addition, the Exchange will report the best bid and offer on the Exchange to the appropriate network processor, and the Exchange's proprietary data feeds will be disseminated, beginning at 7:00 a.m. The proposal will, therefore, facilitate a well-regulated, orderly, and efficient market during a period of time that is currently underserved. The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices because all surveillance coverage currently performed by the Exchange's surveillance systems will launch by the time trading starts at 7:00 a.m. Eastern Time. Further, the Exchange believes that the proposed rule change will protect investors and the public interest because the Exchange is updating its customer disclosure requirements to prohibit Members from accepting an order from a customer for execution in the Early Trading Session without disclosing to their customer that extended hours trading involves material trading risks, including the possibility of lower liquidity, high volatility, changing prices, unlinked markets, an exaggerated effect from news announcements, wider spreads and any other relevant risk. TIF Instructions The Exchange believes its proposed TIF instructions promote just and equitable principles of trade, and remove impediments to and perfect the mechanism of a free and open market and a national market system. The Exchange believes that the proposed TIF instructions will benefit investors by providing them with greater control over their orders. The proposed TIF instructions simply provide investors with additional optionality for when their orders may be eligible for execution. The ability to select the trading sessions or time upon which an order is to be eligible for execution is not novel and is currently available on the Exchange and other market centers. For example, on the Exchange, a User may enter an order starting at 6:00 a.m. Eastern Time and select that such order not be eligible for execution until 9:30 a.m., the start of Regular Trading Hours using TIF instructions of Regular Hours Only.\42\ In addition, like each of the proposed TIF instructions, Nasdaq utilizes a TIF, referred to as ESCN, under which an order using its SCAN routing strategy entered prior to 8:00 a.m. Eastern Time is not eligible for execution until 8:00 a.m. Eastern Time.\43\ --------------------------------------------------------------------------- \42\ See Exchange Rule 11.6(q)(6). See also Nasdaq Rule 4703(a) (outlining TIF instructions that do not activate orders until 9:30 a.m. Eastern Time). \43\ See Nasdaq Rule 4703(a). See also Nasdaq Rule 4703(a)(7). --------------------------------------------------------------------------- The Exchange proposed the Early Trading Session discussed above in response to User requests for their orders to be eligible for execution starting at 7:00 a.m. Eastern Time. However, some Users have requested their orders continue to not be eligible for execution until the start of the Pre-Opening Session at 8:00 a.m. Therefore, the Exchange proposed the three new TIF instructions in order for Users to designate their orders as eligible for execution as of the start of the Pre- Opening Session. Members will maintain the ability to cancel or modify the terms of their order at any time, including during the time from when the order is routed to the Exchange until the start of the Pre-Opening Session. As a result, a Member who utilizes the proposed TIF instructions, but later determines that market conditions favor execution during Early Trading Session, can cancel the order residing at the Exchange and enter a separate order to execute during the Early Trading Session. While a User must make every effort to execute a marketable customer order it receives fully and promptly,\44\ doing so might not result in the best execution possible for the customer. [[Page 8802]] Such Users may wish to delay the execution of their orders until the start of the Pre-Opening Session for various reasons, including the characteristics of the market for the security as well as the amount of liquidity available in the market as part of their best execution obligations.\45\ --------------------------------------------------------------------------- \44\ See Supplemental Material .01 to Financial Industry Regulatory Authority, Inc. (``FINRA'') Rule 5310. \45\ A Member's best execution obligation may also include cancelling an order when market conditions deteriorate and could result in an inferior execution or informing customers where the execution of their order may be delayed intentionally as the Member utilizes reasonable diligence to ascertain the best market for the security. See FINRA Rule 5130 [sic]. See also FINRA Regulatory Notice 15-46, Best Execution. Guidance on Best Execution Obligations in Equity, Options, and Fixed Income Markets, (November 2015). --------------------------------------------------------------------------- Specifically, FINRA Rule 5310(a)(1) provides that a Member must use reasonable diligence to ascertain the best market for a security and buy or sell in such market so that the resultant price to the customer is as favorable as possible under prevailing market conditions. And importantly, FINRA Rule 5310(a)(1)(A) states that one of the factors that will be considered in determining whether a member has used ``reasonable diligence'' is ``the character of the market for the security (e.g., price, volatility, relative liquidity, and pressure on available communication).\46\ As such, a Member conducting ``reasonable diligence'' may determine that due to the character of the Early Trading Session, along with considering other relevant factors, the Member wants to utilize the proposed TIF instructions. --------------------------------------------------------------------------- \46\ Tellingly, these characteristics are reflected in the disclosure requirements mandated by Exchange Rule 3.21 before a Member may accept an order from a customer for execution in the Pre- Opening, Post-Closing, and proposed Early Trading Sessions. --------------------------------------------------------------------------- Members will be accustomed to this additional analysis in determining whether to participate in the Early Trading Session, Pre- Opening Session, or Regular Trading Hours. The regulatory guidance with respect to best execution anticipates the continued evolution of execution venues: [B]est execution is a facts and circumstances determination. A broker-dealer must consider several factors affecting the quality of execution, including, for example, the opportunity for price improvement, the likelihood of execution . . ., the speed of execution and the trading characteristics of the security, together with other non-price factors such as reliability and service.\47\ \47\ See Securities Exchange Act Release No. 43950 (November 17, 2000), 65 FR 75414 (December 1, 2000) (``Disclosure of Order Execution and Routing Practices release''). --------------------------------------------------------------------------- To the extent there may be best execution obligations at issue, they are no different than the best execution obligations faced by brokers in the current market structure,\48\ including the use of the currently available Regular Trading Hours TIF instruction or SCAN/ESCN routing strategy available on Nasdaq discussed above.\49\ However, similar to why a Member may utilize the Regular Trading Hours TIF instruction, a User may wish to forgo a possible execution during the Early Trading Session and/or Pre-Opening Session if they believe doing so is consistent with their best execution obligations as they anticipate that the market for the security may improve upon the start of the Pre-Opening Session and/or Regular Trading Hours.\50\ Applicable best execution guidance contains no formulaic mandate as to whether or how brokers should direct orders. The optionality created by the proposed rule change simply represents one tool available to Members in order to meet their best execution obligations. --------------------------------------------------------------------------- \48\ The Commission has also indicated a User's best execution obligation may not be satisfied simply by obtaining the best bid or offer (``BBO''). See Securities Exchange Act Release No. 37619A (September 6, 1996), 61 FR 48290 (September 12, 1996) (``Order Executions Obligations release''). While a User may seek the most favorable terms reasonably available under the circumstances of the transaction, such terms may not necessarily in every case be the best price available. Id. See also FINRA Regulatory Notice 15-46, Best Execution. Guidance on Best Execution Obligations in Equity, Options, and Fixed Income Markets, (November 2015). \49\ See supra note 43. \50\ Exchange Rule 3.21 requires Member make [sic] certain disclosures to their customers prior to accepting an order for execution outside of Regular Trading Hours. These disclosures include, among other things, the risk of lower liquidity, higher volatility, wider spreads, and changing prices in extended hours trading as compared to regular market hours. See Exchange Rule 3.21(a)-(g). --------------------------------------------------------------------------- Lastly, the Exchange reminds Members of their regulatory obligations when submitting an order one of the proposed TIF instructions. The Market Access Rule under Rule 15c3-5 of the Act requires broker-dealers to, among other things, implement regulatory risk management controls and procedures that are reasonably designed to prevent the entry of orders that fail to comply with regulatory requirements that apply on a pre-order entry basis.\51\ These pre-trade controls must, for example, be reasonably designed to assure compliance with Exchange trading rules and Commission rules under Regulation SHO \52\ and Regulation NMS.\53\ In accordance with the Market Access Rule, a Member's procedures must be reasonably designed to ensure compliance with their applicable regulatory requirements, not just at the time the order is routed to the Exchange, but also at the time the order becomes eligible for execution. --------------------------------------------------------------------------- \51\ See Securities Exchange Act Release No. 63241 (November 3, 2010), 75 FR 69792 (November 15, 2010) (File no. S7-03-10). \52\ See e.g., Question 2.6 of the Division of Trading and Markets: Response to Frequently Asked Questions Concerning Regulations SHO, available at https://www.sec.gov/divisions/marketreg/mrfaqregsho1204.htm. \53\ 17 CFR 240.610-611 [sic]. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that its proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed rule change will benefit investors, the national market system, Members, and the Exchange market by increasing competition for order flow and executions during the pre-market sessions, thereby spurring product enhancements and lowering prices. The Exchange believes the proposed Early Trading Session would enhance competition by enabling the Exchange to directly compete with NYSE Arca and Nasdaq for order flow and executions starting at 7:00 a.m., rather than 8:00 a.m. Eastern Time. In addition, the proposed TIF instructions will enhance competition by enabling the Exchange to offer functionality similar to Nasdaq.\54\ The fact that the extending of the proposed Early Trading Session and TIF instructions are themselves a response to the competition provided by other markets is evidence of its pro- competitive nature. --------------------------------------------------------------------------- \54\ See supra note 43. --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from Members or other interested parties. 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 (i) as the Commission may designate up to 90 days of such date 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 [[Page 8803]] 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, as modified by Amendment No. 1, 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 No. SR-EDGA-2016-02 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 No. SR-EDGA-2016-02. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing will also 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 No. SR-EDGA-2016-02 and should be submitted on or before March 14, 2016. --------------------------------------------------------------------------- \55\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\55\ Brent J. Fields, Secretary. [FR Doc. 2016-03524 Filed 2-19-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 34 / Monday, February 22, 2016 / Notices 8797
estimated that each broker-dealer that SECURITIES AND EXCHANGE II. Self-Regulatory Organization’s
responds electronically will take 8 COMMISSION Statement of the Purpose of, and
minutes, and each broker-dealer that [Release No. 34–77141; File No. SR–EDGA–
Statutory Basis for, the Proposed Rule
responds manually will take 11⁄2 hours 2016–02] Change
to prepare and submit the securities
trading data requested by the Self-Regulatory Organizations; EDGA In its filing with the Commission, the
Commission. The annual aggregate hour Exchange, Inc.; Notice of Filing of a Exchange included statements
burden for electronic and manual Proposed Rule Change, as Modified by concerning the purpose of and basis for
response firms is estimated to be 8,114 Amendment No. 1 Thereto, To Adopt the proposed rule change and discussed
(59,958 × 8 ÷ 60 = 7,994 hours) + (80 an Early Trading Session and Three any comments it received on the
× 1.5 = 120 hours), respectively.2 In New Time-in-Force Instructions proposed rule change. The text of these
addition, the Commission estimates that statements may be examined at the
February 16, 2016. places specified in Item IV below. The
it will request 8 broker-dealers to supply Pursuant to Section 19(b)(1) of the
the contact information identified in Exchange has prepared summaries, set
Securities Exchange Act of 1934 (the
Rule 17a–25(c) and estimates the total forth in Sections A, B, and C below, of
‘‘Act’’),1 and Rule 19b–4 thereunder,2
aggregate burden hours to be 2. Thus, the most significant parts of such
notice is hereby given that on February
the annual aggregate burden for all 2, 2016, EDGA Exchange, Inc. (the statements.
respondents to the collection of ‘‘Exchange’’ or ‘‘EDGA’’) filed with the A. Self-Regulatory Organization’s
information requirements of Rule 17a– Securities and Exchange Commission Statement of the Purpose of, and
25 is estimated at 8,116 hours (7,994 + (‘‘Commission’’) the proposed rule Statutory Basis for, the Proposed Rule
120 + 2). change as described in Items I, II, and Change
III below, which Items have been
An agency may not conduct or 1. Purpose
prepared by the Exchange. On February
sponsor, and a person is not required to
12, 2016, the Exchange filed
respond to, a collection of information Amendment No. 1 to the proposed rule The Exchange proposes to amend its
under the PRA unless it displays a change.3 The Commission is publishing rules to: (i) Create a new trading session
currently valid OMB control number. this notice to solicit comments on the to be known as the Early Trading
The public may view background proposed rule change, as amended, from Session, which will run from 7:00 a.m.
documentation for this information interested persons. to 8:00 a.m. Eastern Time; and (ii) adopt
collection at the following Web site: three new TIF instructions.
I. Self-Regulatory Organization’s
www.reginfo.gov. Comments should be Statement of the Terms of Substance of Early Trading Session
directed to: (i) Desk Officer for the the Proposed Rule Change
Securities and Exchange Commission, The Exchange trading day is currently
The Exchange filed a proposal to
Office of Information and Regulatory divided into three sessions of which a
amend its rules to: (i) Create a new
Affairs, Office of Management and User 5 may select their order(s) be
trading session to be known as the Early
Budget, Room 10102, New Executive Trading Session, which will run from eligible for execution: (i) The Pre-
Office Building, Washington, DC 20503 7:00 a.m. to 8:00 a.m. Eastern Time; and Opening Session which starts at 8:00
or by sending an email to: Shagufta_ (ii) adopt three new Time-in-Force a.m. and ends at 9:30 a.m. Eastern Time;
Ahmed@comb.eop.gov; and (ii) Pamela (‘‘TIF’’) instructions.4 (ii) Regular Trading Hours which runs
Dyson, Director/Chief Information The text of the proposed rule change from 9:30 a.m. to 4:00 p.m. Eastern
Officer, Securities and Exchange is available at the Exchange’s Web site Time; and (iii) the Post-Closing Session,
Commission, c/o Remi Pavlik-Simon, at www.batstrading.com, at the which runs from 4:00 p.m. to 8:00 p.m.
100 F Street NE., Washington, DC principal office of the Exchange, and at Eastern Time. The Exchange proposes to
20549, or by sending an email to: PRA_ the Commission’s Public Reference amend its rules to create a new trading
Mailbox@sec.gov. Comments must be Room. session to be known as the Early
submitted to OMB within 30 days of Trading Session, which will run from
1 15 U.S.C. 78s(b)(1).
this notice. 7:00 a.m. to 8:00 a.m. Eastern Time.6
2 17 CFR 240.19b–4.
Dated: February 16, 2016. 3 In Amendment No. 1, the Exchange noted that
Exchange Rule 1.5 would be amended to
it would subject orders that are eligible for add a new definition for the term ‘‘Early
Brent J. Fields,
execution as of the start of the Pre-Opening Session Trading Session’’ under new paragraph
Secretary. to all of the Exchange’s standard regulatory checks, (ii). ‘‘Early Trading Session’’ would be
[FR Doc. 2016–03516 Filed 2–19–16; 8:45 am] including compliance with Regulation NMS,
Regulation SHO, as well as other relevant Exchange
BILLING CODE 8011–01–P rules. 5 ‘‘User’’ is defined as ‘‘any Member or Sponsored
4 The Exchange notes that its affiliates, BATS Participant who is authorized to obtain access to the
Exchange, Inc, (‘‘BZX’’) and BATS Y-Exchange, Inc. System pursuant to Rule 11.3.’’ See Exchange Rule
thousand. EBS requests are sent directly to clearing
(‘‘BYX’’) also intend to file proposed rule changes 1.5(ee).
firms, as the clearing firm is the repository for 6 The Exchange notes that NYSE Arca, Inc.
trading data for securities transactions information with the Commission to amend their rules to also:
(i) Create a new trading session to be known as the (‘‘NYSE Arca’’) operates an Opening Session that
provided by itself and correspondent firms.
Early Trading Session, which will run from 7:00 starts at 4:00 a.m. Eastern Time (1:00 a.m. Pacific
Clearing brokers respond for themselves and other
a.m. to 8:00 a.m. Eastern Time; and (ii) adopt Time) and ends at 9:30 a.m. Eastern Time (6:30 a.m.
firms they clear for. There were 124,912 responses
Pacific Time). See NYSE Arca Rule 7.34(a)(1). The
mstockstill on DSK4VPTVN1PROD with NOTICES
identical TIF instructions. The Exchange further
during the 25 month period for an average of Nasdaq Stock Market LLC (‘‘Nasdaq’’) operates a
notes that the proposed rule change would operate
4,996.5 responses per month or an average of 59,958 pre-market session that also opens at 4:00 a.m. and
in an identical manner to that proposed by BZX and
annual responses. BYX and the language of the BZX, BYX and ends at 9:30 a.m. Eastern Time. See Nasdaq Rule
2 Few of respondents submit manual EBS
Exchange Rules would differ to the extent necessary 4701(g). See also Securities Exchange Act Release
responses. The small percentage of respondents that to conform with existing Exchange rule text or to No. 69151 (March 15, 2013), 78 FR 17464 (March
submit manual responses do so by hand, via email, account for details or descriptions included in the 21, 2013) (SR–Nasdaq–2013–033) (Notice of Filing
spreadsheet, disk, or other electronic media. Thus, Exchange Rules but not currently included in BZX and Immediate Effectiveness of Proposed Rule
the number of manual submissions (80) has or BYX rules based on the current structure of such Change to Extend the Pre-Market Hours of the
minimal effect on the total annual burden hours. rules. Exchange to 4:00 a.m. EST).
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![Federal Register / Vol. 81, No. 34 / Monday, February 22, 2016 / Notices 8799
will launch by the time trading starts at for execution during the Regular a UTP Derivative Security 28 will
7:00 a.m. Session.27 Market Maker Peg Orders include the risk of trading during the
Clearly Erroneous Trade Processing. may currently be submitted to the Early Trading Session, in addition to the
The Exchange will process trade breaks Exchange starting at the beginning of the Pre-Opening Session and Post-Closing
beginning at 7:00 a.m. pursuant to Pre-Opening Session, but the order will Trading Session. In addition, the
Exchange Rule 11.15, just as it does not be executable or automatically Exchange proposes to amend
today beginning at 8:00 a.m. priced until the beginning of Regular Interpretation and Policies .01(a) to add
Related changes to Rules 3.21, 11.8, Trading Hours [sic]. Rule 11.8(f)(7) Early Trading Session to the paragraph’s
11.10, 11.15, 14.1, 14.2 and 14.3. The would be amended to state that Market title and to state that if a UTP Derivative
Exchange proposes to also make the Maker Peg Orders may be submitted to Security begins trading on the Exchange
following changes to Rules 3.21, 11.8, the Exchange starting at the beginning of in the Early Trading Session or Pre-
11.10, 11.15, 14.1, 14.2 and 14.3 to the Early Trading Session. Market Opening Session and subsequently a
reflect the adoption of the Early Trading Maker Peg Orders would continue to not temporary interruption occurs in the
Session: be executable or automatically priced calculation or wide dissemination of the
• Rule 3.21, Customer Disclosures. In until after the first regular way Intraday Indicative Value (‘‘IIV’’) or the
sum, Exchange Rule 3.21 prohibits transaction on the listing exchange in value of the underlying index, as
Members from accepting an order from the security, as reported by the applicable, to such UTP Derivative
a customer for execution in the Pre- responsible single plan processor. Security, by a major market data vendor,
Opening or Post-Closing Session • Rule 11.10, Order Execution and the Exchange may continue to trade the
without disclosing to their customer Routing. Exchange Rule 11.10(a)(2) UTP Derivative Security for the
that extended hours trading involves discusses compliance with Regulation remainder of the Early Trading Session
material trading risks, including the NMS and Trade Through Protections and Pre-Opening Session. Lastly, the
possibility of lower liquidity, high and states that the price of any Exchange proposes to amend
volatility, changing prices, unlinked execution occurring during the Pre- Interpretation and Policies .01(b) to add
markets, an exaggerated effect from Opening Session or the Post-Closing Early Trading Session to the paragraph’s
news announcements, wider spreads Session must be equal to or better than title and to amend subparagraph (2) of
and any other relevant risk. The the highest Protected Bid or lowest that section to state that if the IIV or the
Exchange proposes to amend Rule 3.21 Protected Offer, unless the order is value of the underlying index continues
to include the Early Trading Session as marked ISO or a Protected Bid is not to be calculated or widely available
part of the Member’s required crossing a Protected Offer. The as of the commencement of the Early
disclosures to their customers. Exchange proposes to amend Rule Trading Session or Pre-Opening Session
• Rule 11.8, Orders and Modifiers. 11.10(a)(2) to expand the rule’s on the next business day, the Exchange
The Exchange proposes to amend the requirements to the Early Trading shall not commence trading of the UTP
description of Limit Orders under Rule Session. Derivative Security in the Early Trading
11.8(b), ISOs under Rule 11.8(c), • Rule 11.15, Clearly Erroneous Session or Pre-Opening Session that
MidPoint Peg Orders under Rule Executions. Exchange Rule 11.15 day.
11.8(d), MidPoint Discretionary Orders outlines under which conditions the • Rule 14.2, Investment Company
(‘‘MDO’’) under Rule 11.8(e), and Exchange may determine that an Units. The Exchange proposes to amend
Supplemental Peg Orders under Rule execution is clearly erroneous. The Rule 14.2(g) to state that transactions in
11.8(g) to account for the Early Trading Exchange proposes to amend Rule 11.15 Investment Company Units may occur
Session.25 As stated above, every order to include executions that occur during during the Early Trading Session, in
type that is currently available the Early Trading Session. Exchange addition to during Regular Trading
beginning at 8:00 a.m. will be available Rule 11.15(c)(1) sets forth the numerical Hours and the Pre-Opening and Post
beginning at 7:00 a.m. for inclusion in guidelines the Exchange is to follow Closing Sessions.
the Early Trading Session.26 All other when determining whether an execution • Rule 14.3, Trust Issued Receipts.
order types, and all order type was clearly erroneous during Regular The Exchange proposes to amend Rule
behaviors, will otherwise remain Trading Hours or the Pre-Opening or 14.3(d) to state that transactions in Trust
unchanged. Therefore, but for Market Post-Closing Trading Session. Exchange Issued Receipts may occur during the
Orders under Rule 11.8(a) and Market Rule 11.15(c)(3) sets forth additional Early Trading Session, in addition to
Maker Peg Orders under Rule 11.8(f), factors the Exchange may consider in during Regular Trading Hours and the
each of the above rules for Limit Orders, determining whether a transaction is Pre-Opening and Post-Closing Sessions.
ISOs, MidPoint Peg Orders, MDOs, and clearly erroneous. These factors include
Supplemental Peg Orders would be Pre-Opening and Post-Closing Trading TIF Instructions
amended to state that those orders types Session executions. The Exchange The Exchange proposes to adopt three
are available during the Early Trading proposes to amend Rule 11.15(c)(1) and new TIF instructions under Rule
Session. Market Orders and Market (3) to include executions occurring 11.6(q).29 Under Rule 11.1(a)(1), a User
Maker Peg Orders would not be eligible during the Early Trading Session. may designate when their order is
for execution during the Early Trading • Rule 14.1, Unlisted Trading eligible for execution by selecting the
Session. Market Orders are only eligible Privileges. The Exchange proposes to desired TIF instruction under Exchange
amend Rules 14.1(c)(2), and Rule 11.6(q). Currently, orders entered
25 The Exchange notes that the proposed rule
Interpretation and Policies .01(a) and (b) between 6:00 a.m. and 8:00 a.m. Eastern
change would operate in an identical manner to
mstockstill on DSK4VPTVN1PROD with NOTICES
that proposed in SR–BATS–2016–01 and the
to account for the proposed Early Time are not eligible for execution until
language of the BATS and Exchange Rules differ to Trading Session. Specifically, the
[sic] extent necessary to conform with existing Exchange proposes to amend paragraph 28 See Exchange Rule 14.1(c).
Exchange rule text or to account for details or (c)(2) to state that an information 29 The Exchange also proposes to amend the
descriptions included in the Exchange Rules but descriptions of GTD under Rule 11.6(q)(4) and GTX
not currently included in BATS rules based on the
circular distributed by the Exchange
under Rule 11.6(q)(5) to replace incorrect references
current structure of such rules. See supra note 4. prior to the commencement of trading of to the Post-Market Session with Post-Closing
26 See proposed amendments to Exchange Rule Session, as Post-Closing Session is the correct
11.1(a). 27 See Exchange Rule 11.8(a)(5). defined term under Exchange Rule 1.5(r).
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![8800 Federal Register / Vol. 81, No. 34 / Monday, February 22, 2016 / Notices
the start of the Pre-Opening Session, or similar to the existing TIF of Regular immediately marketable against an
Regular Trading Hours, depending on Hours Only, which designates that the order with a Displayed instruction
the TIF selected by the User. Users may order only be eligible for execution resting in the EDGA Book unless such
enter orders in advance of the trading during Regular Trading Hours, which order removes liquidity pursuant to
session they intend the order to be starts at 9:30 a.m. Eastern Time. In such Exchange Rule 11.6(n)(4).37
eligible for. For example, Users may case, a User may enter orders starting at • MidPoint Peg Orders. Rule
enter orders starting at 6:00 a.m. Eastern 6:00 a.m. Eastern Time, but such order 11.8(d)(1) describes the TIF instructions
Time with a TIF of Regular Hours Only, would not be eligible for execution until that may be attached to a MidPoint Peg
which designates that the order only be 9:30 a.m. Eastern Time. Likewise, under Order. The Exchange proposes to amend
eligible for execution during Regular each of the proposed TIF instructions, a paragraph (d)(1) to state that a MidPoint
Trading Hours.30 As stated above, Users User may continue to enter orders as Peg Order may have a TIF instruction of
may enter orders as early as 6:00 a.m. early as 6:00 a.m., but such orders PRE, PTX, or PTD, in addition to Day,
Eastern Time, but those orders would would not be eligible for execution until FOK, IOC, RHO, GTX and GTD.
not be eligible for execution until the 8:00 a.m. Eastern Time, the start of the • MDO. Rule 11.8(e)(1) describes the
start of the Pre-Opening Session at 8:00 Pre-Opening Session.34 At the TIF instructions that may be attached to
a.m. commencement of the Pre-Opening an MDO. The Exchange proposes to
As discussed above, the Exchange Session, orders entered between 6:00 amend paragraph (e)(1) to state that an
proposed the Early Trading Session in a.m. and 8:00 a.m. Eastern Time with MDO may have a TIF instruction of
response to User requests for their one of the proposed TIF instructions PRE, PTX, or PTD, in addition to Day,
orders to be eligible for execution will be handled in time sequence, RHO, GTX and GTD.
starting at 7:00 a.m. Eastern Time. Some beginning with the order with the oldest • Market Maker Peg Orders. The
Users, however, do not wish for their time stamp, and will be placed on the proposed TIF instruction of PRE, PTX,
orders to be executed during the Early EDGA Book, routed, cancelled, or and PTD would not be available to
Trading Session and have requested executed in accordance with the terms Market Maker Peg Orders. Under
their orders continue to not be eligible of the order.35 Exchange Rule 11.8(f)(4), a Market
for execution until the start of the Pre- Lastly, the Exchange proposes to Maker Peg Order may only include a
Opening Session at 8:00 a.m. Therefore, amend the following order types under TIF instruction of Day, RHO, or GTD.
the Exchange proposes to adopt the Exchange Rule 11.8 to account for the Supplemental Peg. Rule 11.8(g)(1)
following three new TIF instructions three proposed TIF instructions: 36 describes the TIF instructions that may
under Rule 11.6(q): • Market Orders. The proposed TIF be attached to a Supplemental Peg
• Pre-Opening Session Plus (‘‘PRE’’). instruction of PRE, PTX, and PTD Order. The Exchange proposes to amend
A limit order that is designated for would not be available to Market paragraph (g)(1) to state that a
execution during the Pre-Opening Orders. Under Exchange Rule 11.8(a)(2), Supplemental Peg Order may have a TIF
Session and Regular Trading Hours. a Market Order may only include a TIF instruction of PRE, PTX, or PTD, in
Like the current Day TIF instruction,31 instruction of IOC, RHO, FOK, or Day. addition to GTD, GTX, RHO and Day.
any portion not executed expires at the • Limit Orders. Rule 11.8(b)(2)
end of Regular Trading Hours. describes the TIF instructions that may 2. Statutory Basis
• Pre-Opening Session ‘til Extended be attached to a Limit Order. The The Exchange believes that the
Day (‘‘PTX’’). A limit order that is Exchange proposes to amend paragraph proposed rule change is consistent with
designated for execution during the Pre- (b)(2) add the TIF instructions of PRE, Section 6(b) of the Act,38 in general, and
Opening Session, Regular Trading PTX, or PTD to the list of TIF furthers the objectives of Section 6(b)(5)
Hours, and the Post-Closing Session. instructions that a Limit Order may of the Act,39 in particular, in that it is
Like the current Good-‘til Extended Day include. designed to prevent fraudulent and
(‘‘GTX’’) TIF instruction,32 any portion • ISOs. Rule 11.8(c)(1) describes the manipulative acts and practices, to
not executed expires at the end of the TIF instructions that may be attached to promote just and equitable principles of
Post-Closing Session. an incoming ISO. The Exchange trade, to remove impediments to and
• Pre-Opening Session ‘til Day proposes to amend paragraph (c)(1) to perfect the mechanism of a free and
(‘‘PTD’’). A limit order that is designated state that an incoming ISO may have a open market and a national market
for execution during the Pre-Opening TIF instruction of PRE, PTX, or PTD, in system, and in general, to protect
Session, Regular Trading Hours, and the addition to Day, GTD, RHO, GTX, and investors and the public interest. The
Post-Closing Session. Like the current IOC. Exchange Rule 11.8(c)(1) would be Exchange also believes that the
Good-‘til Day (‘‘GTD’’) TIF instruction,33 further amended to state that an proposed rule change is non-
any portion not executed will be incoming ISO with a Post Only and TIF discriminatory as it would apply to all
cancelled at the expiration time instruction of PRE, PTX, or PTD, like Members uniformly. The proposed rule
assigned to the order, which can be no those with a TIF instruction or GTD, change in whole is designed to attract
later than the close of the Post-Closing GTX, or Day, will be cancelled without more order flow to the Exchange
Trading Session. execution if, when entered, it is
Under each proposed TIF instruction, 37 Exchange Rule 11.6(n)(4) defined the Post Only
Users may designate that their orders 34 Orders utilizing one of the proposed TIF instruction and states, in sum, that an order with
only be eligible for execution starting instructions would not be eligible for execution a Post Only instruction and a Display-Price Sliding
during the proposed Early Trading Session. or Price Adjust instruction will remove contra-side
with the Pre-Opening Session. This is 35 See Exchange Rule 11.1(a). liquidity from the EDGA Book if the order is an
mstockstill on DSK4VPTVN1PROD with NOTICES
36 The Exchange notes that the proposed rule order to buy or sell a security priced below $1.00
30 See Exchange Rule 11.6(q)(6). change would operate in an identical manner to or if the value of such execution when removing
31 See Exchange Rule 11.6(q)(2). This is also liquidity equals or exceeds the value of such
that proposed in SR–BATS–2016–01and the
similar to the current Good-‘til Cancel (‘‘GTC’’) TIF language of the BATS and Exchange Rules differ to execution if the order instead posted to the EDGA
instruction currently available on BZX and the [sic] extent necessary to conform with existing Book and subsequently provided liquidity,
BATS Y-Exchange, Inc. (‘‘BYX’’). See BZX and BYX Exchange rule text or to account for details or including the applicable fees charged or rebates
Rules 11.9(b)(3). descriptions included in the Exchange Rules but provided.
32 See Exchange Rule 11.6(q)(5). 38 15 U.S.C. 78f.
not currently included in BATS rules based on the
33 See Exchange Rule 11.6(q)(4). current structure of such rules. See supra note 4. 39 15 U.S.C. 78f(b)(5).
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![8802 Federal Register / Vol. 81, No. 34 / Monday, February 22, 2016 / Notices
Such Users may wish to delay the obligations faced by brokers in the accordance with the Market Access
execution of their orders until the start current market structure,48 including Rule, a Member’s procedures must be
of the Pre-Opening Session for various the use of the currently available reasonably designed to ensure
reasons, including the characteristics of Regular Trading Hours TIF instruction compliance with their applicable
the market for the security as well as the or SCAN/ESCN routing strategy regulatory requirements, not just at the
amount of liquidity available in the available on Nasdaq discussed above.49 time the order is routed to the Exchange,
market as part of their best execution However, similar to why a Member may but also at the time the order becomes
obligations.45 utilize the Regular Trading Hours TIF eligible for execution.
Specifically, FINRA Rule 5310(a)(1) instruction, a User may wish to forgo a
provides that a Member must use B. Self-Regulatory Organization’s
possible execution during the Early
reasonable diligence to ascertain the Statement on Burden on Competition
Trading Session and/or Pre-Opening
best market for a security and buy or sell Session if they believe doing so is The Exchange does not believe that its
in such market so that the resultant consistent with their best execution proposed rule change will impose any
price to the customer is as favorable as obligations as they anticipate that the burden on competition that is not
possible under prevailing market market for the security may improve necessary or appropriate in furtherance
conditions. And importantly, FINRA upon the start of the Pre-Opening of the purposes of the Act. The
Rule 5310(a)(1)(A) states that one of the Session and/or Regular Trading Exchange believes that the proposed
factors that will be considered in Hours.50 Applicable best execution rule change will benefit investors, the
determining whether a member has guidance contains no formulaic national market system, Members, and
used ‘‘reasonable diligence’’ is ‘‘the mandate as to whether or how brokers the Exchange market by increasing
character of the market for the security should direct orders. The optionality competition for order flow and
(e.g., price, volatility, relative liquidity, created by the proposed rule change executions during the pre-market
and pressure on available simply represents one tool available to sessions, thereby spurring product
communication).46 As such, a Member Members in order to meet their best enhancements and lowering prices. The
conducting ‘‘reasonable diligence’’ may execution obligations. Exchange believes the proposed Early
determine that due to the character of Lastly, the Exchange reminds Trading Session would enhance
the Early Trading Session, along with Members of their regulatory obligations competition by enabling the Exchange
considering other relevant factors, the when submitting an order one of the to directly compete with NYSE Arca
Member wants to utilize the proposed proposed TIF instructions. The Market and Nasdaq for order flow and
TIF instructions. Access Rule under Rule 15c3–5 of the executions starting at 7:00 a.m., rather
Members will be accustomed to this Act requires broker-dealers to, among than 8:00 a.m. Eastern Time. In
additional analysis in determining other things, implement regulatory risk addition, the proposed TIF instructions
whether to participate in the Early management controls and procedures will enhance competition by enabling
Trading Session, Pre-Opening Session, that are reasonably designed to prevent the Exchange to offer functionality
or Regular Trading Hours. The the entry of orders that fail to comply similar to Nasdaq.54 The fact that the
regulatory guidance with respect to best with regulatory requirements that apply extending of the proposed Early Trading
execution anticipates the continued on a pre-order entry basis.51 These pre- Session and TIF instructions are
evolution of execution venues: trade controls must, for example, be themselves a response to the
[B]est execution is a facts and reasonably designed to assure competition provided by other markets
circumstances determination. A broker- compliance with Exchange trading rules is evidence of its pro-competitive
dealer must consider several factors affecting and Commission rules under Regulation nature.
the quality of execution, including, for SHO 52 and Regulation NMS.53 In
example, the opportunity for price C. Self-Regulatory Organization’s
improvement, the likelihood of execution 48 The Commission has also indicated a User’s Statement on Comments on the
. . ., the speed of execution and the trading best execution obligation may not be satisfied Proposed Rule Change Received From
characteristics of the security, together with simply by obtaining the best bid or offer (‘‘BBO’’). Members, Participants, or Others
other non-price factors such as reliability and See Securities Exchange Act Release No. 37619A
service.47 (September 6, 1996), 61 FR 48290 (September 12, The Exchange has not solicited, and
To the extent there may be best 1996) (‘‘Order Executions Obligations release’’). does not intend to solicit, comments on
While a User may seek the most favorable terms this proposed rule change. The
execution obligations at issue, they are reasonably available under the circumstances of the
no different than the best execution transaction, such terms may not necessarily in Exchange has not received any
every case be the best price available. Id. See also unsolicited written comments from
45 A Member’s best execution obligation may also FINRA Regulatory Notice 15–46, Best Execution. Members or other interested parties.
Guidance on Best Execution Obligations in Equity,
include cancelling an order when market
conditions deteriorate and could result in an
Options, and Fixed Income Markets, (November III. Date of Effectiveness of the
2015). Proposed Rule Change and Timing for
inferior execution or informing customers where 49 See supra note 43.
the execution of their order may be delayed
50 Exchange Rule 3.21 requires Member make
Commission Action
intentionally as the Member utilizes reasonable
diligence to ascertain the best market for the [sic] certain disclosures to their customers prior to Within 45 days of the date of
security. See FINRA Rule 5130 [sic]. See also accepting an order for execution outside of Regular publication of this notice in the Federal
FINRA Regulatory Notice 15–46, Best Execution. Trading Hours. These disclosures include, among
other things, the risk of lower liquidity, higher Register or within such longer period (i)
Guidance on Best Execution Obligations in Equity,
Options, and Fixed Income Markets, (November volatility, wider spreads, and changing prices in as the Commission may designate up to
extended hours trading as compared to regular 90 days of such date if it finds such
2015).
market hours. See Exchange Rule 3.21(a)–(g).
mstockstill on DSK4VPTVN1PROD with NOTICES
46 Tellingly, these characteristics are reflected in
51 See Securities Exchange Act Release No. 63241
longer period to be appropriate and
the disclosure requirements mandated by Exchange publishes its reasons for so finding or
(November 3, 2010), 75 FR 69792 (November 15,
Rule 3.21 before a Member may accept an order
from a customer for execution in the Pre-Opening,
2010) (File no. S7–03–10). (ii) as to which the Exchange consents,
Post-Closing, and proposed Early Trading Sessions.
52 See e.g., Question 2.6 of the Division of Trading
the Commission will: (a) By order
and Markets: Response to Frequently Asked approve or disapprove such proposed
47 See Securities Exchange Act Release No. 43950 Questions Concerning Regulations SHO, available
(November 17, 2000), 65 FR 75414 (December 1, at https://www.sec.gov/divisions/marketreg/ rule change, or (b) institute proceedings
2000) (‘‘Disclosure of Order Execution and Routing mrfaqregsho1204.htm.
Practices release’’). 53 17 CFR 240.610–611 [sic]. 54 See supra note 43.
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![Federal Register / Vol. 81, No. 34 / Monday, February 22, 2016 / Notices 8803
to determine whether the proposed rule For the Commission, by the Division of directed to: (i) Desk Officer for the
change should be disapproved. Trading and Markets, pursuant to delegated Securities and Exchange Commission,
authority.55 Office of Information and Regulatory
IV. Solicitation of Comments Brent J. Fields, Affairs, Office of Management and
Interested persons are invited to Secretary. Budget, Room 10102, New Executive
submit written data, views and [FR Doc. 2016–03524 Filed 2–19–16; 8:45 am] Office Building, Washington, DC 20503,
arguments concerning the foregoing, BILLING CODE 8011–01–P or by sending an email to: Shagufta_
including whether the proposed rule Ahmed@omb.eop.gov; and (ii) Pamela
change, as modified by Amendment No. Dyson, Director/Chief Information
1, is consistent with the Act. Comments SECURITIES AND EXCHANGE Officer, Securities and Exchange
may be submitted by any of the COMMISSION Commission, c/o Remi Pavlik-Simon,
following methods: 100 F Street NE., Washington, DC 20549
Submission for OMB Review; or send an email to: PRA_Mailbox@
Electronic Comments Comment Request sec.gov. Comments must be submitted to
• Use the Commission’s Internet Upon Written Request Copies Available OMB within 30 days of this notice.
comment form (http://www.sec.gov/ From: Securities and Exchange Dated: February 16, 2016.
rules/sro.shtml); or Commission, Office of FOIA Services, Brent J. Fields,
• Send an email to rule-comments@ 100 F Street NE., Washington, DC Secretary.
sec.gov. Please include File No. SR– 20549–2736. [FR Doc. 2016–03522 Filed 2–19–16; 8:45 am]
EDGA–2016–02 on the subject line. Extension: BILLING CODE 8011–01–P
Schedule 14D–1F, SEC File No. 270–338,
Paper Comments OMB Control No. 3235–0376.
• Send paper comments in triplicate Notice is hereby given that, pursuant SECURITIES AND EXCHANGE
to Secretary, Securities and Exchange to the Paperwork Reduction Act of 1995 COMMISSION
Commission, 100 F Street NE., (44 U.S.C. 3501 et seq.), the Securities [Release No. 34–77144; File No. SR–BOX–
Washington, DC 20549–1090. and Exchange Commission 2016–07]
(‘‘Commission’’) has submitted to the
All submissions should refer to File No. Office of Management and Budget this Self-Regulatory Organizations; BOX
SR–EDGA–2016–02. This file number request for extension of the previously Options Exchange LLC; Notice of
should be included on the subject line approved collection of information Filing and Immediate Effectiveness of
if email is used. To help the discussed below. a Proposed Rule Change To Amend
Commission process and review your Schedule 14D–1F (17 CFR 240.14d– the Fee Schedule on the BOX Market
comments more efficiently, please use 102) is a form that may be used by any LLC (‘‘BOX’’) Options Facility
only one method. The Commission will person (the ‘‘bidder’’) making a cash
post all comments on the Commission’s February 16, 2016.
tender or exchange offer for securities of
Internet Web site (http://www.sec.gov/ any issuer (the ‘‘target’’) incorporated or Pursuant to Section 19(b)(1) of the
rules/sro.shtml). Copies of the organized under the laws of Canada or Securities Exchange Act of 1934 (the
submission, all subsequent any Canadian province or territory that ‘‘Act’’),1 and Rule 19b–4 thereunder,2
amendments, all written statements notice is hereby given that on February
is a foreign private issuer, where less
with respect to the proposed rule 5, 2016, BOX Options Exchange LLC
than 40% of the outstanding class of the
change that are filed with the (the ‘‘Exchange’’) filed with the
target’s securities that is the subject of
Commission, and all written Securities and Exchange Commission
the offer is held by U.S. holders.
communications relating to the (‘‘Commission’’) the proposed rule
Schedule 14D–1F is designed to
proposed rule change between the change as described in Items I, II, and
facilitate cross-border transactions in
Commission and any person, other than III below, which Items have been
the securities of Canadian issuers. The
those that may be withheld from the prepared by the Exchange. The
information required to be filed with the
public in accordance with the Exchange filed the proposed rule change
Commission provides security holders
provisions of 5 U.S.C. 552, will be pursuant to Section 19(b)(3)(A)(ii) of the
with material information regarding the Act,3 and Rule 19b–4(f)(2) thereunder,4
available for Web site viewing and bidder as well as the transaction so that
printing in the Commission’s Public which renders the proposal effective
they may make informed investment upon filing with the Commission. The
Reference Room, 100 F Street NE., decisions. The information provided is
Washington, DC 20549, on official Commission is publishing this notice to
mandatory and all information is made solicit comments on the proposed rule
business days between the hours of available to the public upon request.
10:00 a.m. and 3:00 p.m. Copies of such change from interested persons.
Schedule 14D–1F takes approximately 2
filing will also be available for hours per response to prepare and is I. Self-Regulatory Organization’s
inspection and copying at the principal filed by approximately 2 respondents Statement of the Terms of the Substance
office of the Exchange. All comments annually for a total reporting burden of of the Proposed Rule Change
received will be posted without change; 4 hours (2 hours per response × 2 The Exchange is filing with the
the Commission does not edit personal responses). Securities and Exchange Commission
identifying information from An agency may not conduct or (‘‘Commission’’) a proposed rule change
submissions. You should submit only
mstockstill on DSK4VPTVN1PROD with NOTICES
sponsor, and a person is not required to to amend the Fee Schedule to make two
information that you wish to make respond to, a collection of information changes to the Volume Based Rebates
available publicly. All submissions unless it displays a currently valid for Market Makers in Non-Auction
should refer to File No. SR–EDGA– control number.
2016–02 and should be submitted on or The public may view the background 1 15 U.S.C. 78s(b)(1).
before March 14, 2016. documentation for this information 2 17 CFR 240.19b–4.
collection at the following Web site, 3 15 U.S.C. 78s(b)(3)(A)(ii).
55 17 CFR 200.30–3(a)(12). www.reginfo.gov. Comments should be 4 17 CFR 240.19b–4(f)(2).
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Document Created: 2016-02-19 23:57:08
Document Modified: 2016-02-19 23:57:08
| 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 8797 |
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