81 FR 88282 - Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Penny Pilot Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 235 (December 7, 2016)

Page Range		88282-88284
FR Document		2016-29286
Federal Register, Volume 81 Issue 235 (Wednesday, December 7, 2016)
[Federal Register Volume 81, Number 235 (Wednesday, December 7, 2016)]
[Notices]
[Pages 88282-88284]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-29286]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79441; File No. SR-C2-2016-023]


Self-Regulatory Organizations; C2 Options Exchange, Incorporated; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to the Penny Pilot Program

December 1, 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 23, 2016, C2 Options Exchange, Incorporated (the 
``Exchange'' or ``C2'') filed with the Securities and Exchange 
Commission (the ``Commission'') the proposed rule change as described 
in Items I and II below, which Items have been prepared by the 
Exchange. The Exchange filed the proposal as a ``non-controversial'' 
proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 
\3\ and Rule 19b-4(f)(6) thereunder.\4\ The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend the operation of Penny Pilot 
Program through June 30, 2017. The text of the proposed rule change is 
provided below.

    (additions are italicized; deletions are [bracketed])
* * * * *

C2 Options Exchange, Incorporated

Rules

* * * * *

[[Page 88283]]

Rule 6.4. Minimum Increments for Bids and Offers

    The Board of Directors may establish minimum quoting increments 
for options traded on the Exchange. When the Board of Directors 
determines to change the minimum increments, the Exchange will 
designate such change as a stated policy, practice, or 
interpretation with respect to the administration of this Rule 
within the meaning of subparagraph (3)(A) of subsection 19(b) of the 
Exchange Act and will file a rule change for effectiveness upon 
filing with the Commission. Until such time as the Board of 
Directors makes a change to the minimum increments, the following 
minimum increments shall apply to options traded on the Exchange:
    (1) No change.
    (2) No change.
    (3) The decimal increments for bids and offers for all series of 
the option classes participating in the Penny Pilot Program are: 
$0.01 for all option series quoted below $3 (including LEAPS), and 
$0.05 for all option series $3 and above (including LEAPS). For 
QQQQs, IWM, and SPY, the minimum increment is $0.01 for all option 
series. The Exchange may replace any option class participating in 
the Penny Pilot Program that has been delisted with the next most 
actively-traded, multiply-listed option class, based on national 
average daily volume in the preceding six calendar months, that is 
not yet included in the Pilot Program. Any replacement class would 
be added on the second trading day following [July 1, 2016]January 
1, 2017. The Penny Pilot shall expire on [December 31, 2016]June 30, 
2017. Also, for so long as SPDR options (SPY) and options on 
Diamonds (DIA) participate in the Penny Pilot Program, the minimum 
increments for Mini-SPX Index Options (XSP) and options on the Dow 
Jones Industrial Average (DJX), respectively, may be $0.01 for all 
option series quoting less than $3 (including LEAPS), and $0.05 for 
all option series quoting at $3 or higher (including LEAPS).
    (4) 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 Penny Pilot Program (the ``Pilot Program'') is scheduled to 
expire on December 31, 2016. C2 proposes to extend the Pilot Program 
until June 30, 2017. C2 believes that extending the Pilot Program will 
allow for further analysis of the Pilot Program and a determination of 
how the Pilot Program should be structured in the future.
    During this extension of the Pilot Program, C2 proposes that it may 
replace any option class that is currently included in the Pilot 
Program and that has been delisted with the next most actively traded, 
multiply listed option class that is not yet participating in the Pilot 
Program (``replacement class''). Any replacement class would be 
determined based on national average daily volume in the preceding six 
months,\5\ and would be added on the second trading day following 
January 1, 2017. C2 will announce to its Trading Permit Holders by 
circular any replacement classes in the Pilot Program. The Exchange 
notes that it intends to utilize the same parameters to prospective 
replacement classes as was originally approved.
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    \5\ The month immediately preceding a replacement class's 
addition to the Pilot Program (i.e., December) would not be used for 
purposes of the six-month analysis. Thus, a replacement class to be 
added on the second trading day following January 1, 2017 would be 
identified based on The Option Clearing Corporation's trading volume 
data from June 1, 2016 through November 30, 2016.
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    C2 is specifically authorized to act jointly with the other options 
exchanges participating in the Pilot Program in identifying any 
replacement class.
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.\6\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \7\ 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 facilitation 
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) \8\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers. In particular, the proposed rule change allows for 
an extension of the Pilot Program for the benefit of market 
participants.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ Id.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    C2 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. Specifically, the Exchange 
believes that, by extending the expiration of the Pilot Program, the 
proposed rule change will allow for further analysis of the Pilot 
Program and a determination of how the Program shall be structured in 
the future. In doing so, the proposed rule change will also serve to 
promote regulatory clarity and consistency, thereby reducing burdens on 
the marketplace and facilitating investor protection. In addition, the 
Exchange has been authorized to act jointly in extending the Pilot 
Program and believes the other exchanges will be filing similar 
extensions.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) \10\ thereunder. 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if

[[Page 88284]]

consistent with the protection of investors and the public interest, 
the proposed rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6)(iii) thereunder.\12\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission will institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-C2-2016-023 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-C2-2016-023. 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-C2-2016-023 and should be 
submitted on or before December 28, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields.
Secretary.
[FR Doc. 2016-29286 Filed 12-6-16; 8:45 am]
 BILLING CODE 8011-01-P
88282 Federal Register / Vol. 81, No. 235 / Wednesday, December 7, 2016 / Notices

requirements of Section 6 of the Act.7 19b–4 thereunder.10 At any time within available publicly. All submissions
Specifically, the Exchange believes that 60 days of the filing of the proposed rule should refer to File Number SR–
the proposed rule change is consistent change, the Commission summarily may BatsEDGX–2016–67, and should be
with Sections 6(b)(4) of the Act of the temporarily suspend such rule change if submitted on or before December 28,
Act [sic],8 in that it provides for the it appears to the Commission that such 2016.
equitable allocation of reasonable dues, action is necessary or appropriate in the For the Commission, by the Division of
fees and other charges among members public interest, for the protection of Trading and Markets, pursuant to delegated
and other persons using any facility or investors, or otherwise in furtherance of authority.11
system which the Exchange operates or the purposes of the Act. Lynn Powalski,
controls. The Exchange believes that the IV. Solicitation of Comments Deputy Secretary.
proposed changes are reasonable and [FR Doc. 2016–29282 Filed 12–6–16; 8:45 am]
equitable because they are intended to Interested persons are invited to
simplify the Exchange’s fee schedule submit written data, views, and BILLING CODE 8011–01–P

and provide greater transparency to arguments concerning the foregoing,
market participants regarding how the including whether the proposed rule
change is consistent with the Act. SECURITIES AND EXCHANGE
Exchange assesses fees and calculates COMMISSION
rebates. The Exchange notes that these Comments may be submitted by any of
changes are purely clerical and do not the following methods: [Release No. 34–79441; File No. SR–C2–
substantively amend any fee or rebate, Electronic Comments 2016–023]
nor do they alter the manner in which
• Use the Commission’s Internet Self-Regulatory Organizations; C2
the Exchange assesses fees or calculates
comment form (http://www.sec.gov/ Options Exchange, Incorporated;
rebates. The Exchange also believes that rules/sro.shtml); or
the proposal is non-discriminatory Notice of Filing and Immediate
• Send an email to rule-comments@ Effectiveness of a Proposed Rule
because it applies uniformly to all sec.gov. Please include File Number SR-
Members. Finally, the Exchange Change Relating to the Penny Pilot
BatsEDGX–2016–67 on the subject line. Program
believes that the proposed changes will
make the fee schedule clearer and Paper Comments December 1, 2016.
eliminate potential investor confusion, • Send paper comments in triplicate Pursuant to Section 19(b)(1) of the
thereby removing impediments to and to Secretary, Securities and Exchange Securities Exchange Act of 1934 (the
perfecting the mechanism of a free and Commission, 100 F Street NE., ‘‘Act’’),1 and Rule 19b–4 thereunder,2
open market and a national market Washington, DC 20549–1090. notice is hereby given that on November
system, and, in general, protecting All submissions should refer to File 23, 2016, C2 Options Exchange,
investors and the public interest. Number SR–BatsEDGX–2016–67. This Incorporated (the ‘‘Exchange’’ or ‘‘C2’’)
B. Self-Regulatory Organization’s file number should be included on the filed with the Securities and Exchange
Statement on Burden on Competition subject line if email is used. To help the Commission (the ‘‘Commission’’) the
Commission process and review your proposed rule change as described in
The Exchange does not believe that comments more efficiently, please use Items I and II below, which Items have
the proposed rule change will result in only one method. The Commission will been prepared by the Exchange. The
any burden on competition that is not post all comments on the Commission’s Exchange filed the proposal as a ‘‘non-
necessary or appropriate in furtherance Internet Web site (http://www.sec.gov/ controversial’’ proposed rule change
of the purposes of the Act, as amended. rules/sro.shtml). Copies of the pursuant to Section 19(b)(3)(A)(iii) of
To the contrary, the Exchange believes submission, all subsequent the Act 3 and Rule 19b–4(f)(6)
that the [sic] will not impose any amendments, all written statements thereunder.4 The Commission is
burden on competition as the changes with respect to the proposed rule publishing this notice to solicit
are purely clerical and do not amend change that are filed with the comments on the proposed rule change
and [sic] fee or rebate. Commission, and all written from interested persons.
C. Self-Regulatory Organization’s communications relating to the
proposed rule change between the I. Self-Regulatory Organization’s
Statement on Comments on the Statement of the Terms of Substance of
Proposed Rule Change Received From Commission and any person, other than
those that may be withheld from the the Proposed Rule Change
Members, Participants, or Others
public in accordance with the The Exchange proposes to extend the
The Exchange has not solicited, and provisions of 5 U.S.C. 552, will be operation of Penny Pilot Program
does not intend to solicit, comments on available for Web site viewing and through June 30, 2017. The text of the
this proposed rule change. The printing in the Commission’s Public proposed rule change is provided
Exchange has not received any written Reference Room, 100 F Street NE., below.
comments from members or other Washington, DC 20549 on official (additions are italicized; deletions are
interested parties. business days between the hours of [bracketed])
10:00 a.m. and 3:00 p.m. Copies of such * * * * *
III. Date of Effectiveness of the
filing also will be available for
Proposed Rule Change and Timing for C2 Options Exchange, Incorporated
inspection and copying at the principal
asabaliauskas on DSK3SPTVN1PROD with NOTICES

Commission Action
office of the Exchange. All comments Rules
The foregoing rule change has become received will be posted without change; * * * * *
effective pursuant to Section 19(b)(3)(A) the Commission does not edit personal
of the Act 9 and paragraph (f) of Rule identifying information from 11 17 CFR 200.30–3(a)(12).
submissions. You should submit only 1 15 U.S.C. 78s(b)(1).
7 15 U.S.C. 78f. information that you wish to make 2 17 CFR 240.19b–4.
8 15 U.S.C. 78f(b)(4). 3 15 U.S.C. 78s(b)(3)(A)(iii).
9 15 U.S.C. 78s(b)(3)(A). 10 17 CFR 240.19b–4(f). 4 17 CFR 240.19b–4(f)(6).

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88284 Federal Register / Vol. 81, No. 235 / Wednesday, December 7, 2016 / Notices

consistent with the protection of Reference Room, 100 F Street NE., Rule 14.11 in order to make the rule text
investors and the public interest, the Washington, DC 20549 on official more clear.
proposed rule change has become business days between the hours of The text of the proposed rule change
effective pursuant to Section 19(b)(3)(A) 10:00 a.m. and 3:00 p.m. Copies of the is available at the Exchange’s Web site
of the Act 11 and Rule 19b–4(f)(6)(iii) filing also will be available for at www.batstrading.com, at the
thereunder.12 inspection and copying at the principal principal office of the Exchange, and at
At any time within 60 days of the office of the Exchange. All comments the Commission’s Public Reference
filing of the proposed rule change, the received will be posted without change; Room.
Commission summarily may the Commission does not edit personal
temporarily suspend such rule change if identifying information from II. Self-Regulatory Organization’s
it appears to the Commission that such submissions. You should submit only Statement of the Purpose of, and
action is necessary or appropriate in the information that you wish to make Statutory Basis for, the Proposed Rule
public interest, for the protection of available publicly. All submissions Change
investors, or otherwise in furtherance of should refer to File Number SR–C2– In its filing with the Commission, the
the purposes of the Act. If the 2016–023 and should be submitted on Exchange included statements
Commission takes such action, the or before December 28, 2016. concerning the purpose of and basis for
Commission will institute proceedings For the Commission, by the Division of the proposed rule change and discussed
to determine whether the proposed rule Trading and Markets, pursuant to delegated any comments it received on the
change should be approved or authority.13 proposed rule change. The text of these
disapproved. Brent J. Fields. statements may be examined at the
Secretary. places specified in Item IV below. The
IV. Solicitation of Comments
[FR Doc. 2016–29286 Filed 12–6–16; 8:45 am] Exchange has prepared summaries, set
Interested persons are invited to forth in Sections A, B, and C below, of
BILLING CODE 8011–01–P
submit written data, views, and the most significant parts of such
arguments concerning the foregoing, statements.
including whether the proposed rule SECURITIES AND EXCHANGE
change is consistent with the Act. A. Self-Regulatory Organization’s
COMMISSION Statement of the Purpose of, and
Comments may be submitted by any of
the following methods: [Release No. 34–79450; File No. SR- Statutory Basis for, the Proposed Rule
BatsBZX–2016–80] Change
Electronic Comments
Self-Regulatory Organizations; Bats 1. Purpose
• Use the Commission’s Internet
comment form (http://www.sec.gov/ BZX Exchange, Inc.; Notice of Filing of The Exchange proposes to amend the
rules/sro.shtml); or Proposed Rule Changes to BZX Rule listing rules for ETPs in Bats Rule 14.11,
• Send an email to rule-comments@ 14.11, Other Securities, and BZX Rule entitled ‘‘Other Securities,’’ to add
sec.gov. Please include File Number SR– 14.12, Failure To Meet Listing additional continued listing standards
C2–2016–023 on the subject line. Standards as well as a related amendment to Rule
December 1, 2016. 14.12, entitled ‘‘Failure to Meet Listing
Paper Comments Standards.’’ The Exchange is also
Pursuant to Section 19(b)(1) of the
• Send paper comments in triplicate Securities Exchange Act of 1934 proposing to make certain cleanup
to Secretary, Securities and Exchange (‘‘Act’’),1 and Rule 19b–4 thereunder,2 changes throughout Rule 14.11 in order
Commission, 100 F Street NE., notice is hereby given that on November to make the rule text more clear.
Washington, DC 20549–1090. 18, 2016, Bats BZX Exchange, Inc. (the The proposed rule changes are being
All submissions should refer to File ‘‘Exchange’’ or ‘‘BZX’’) filed with the made at the request of and as part of
Number SR–C2–2016–023. This file Securities and Exchange Commission discussions with the Commission.
number should be included on the (‘‘SEC’’ or ‘‘Commission’’) the proposed Based on concerns about certain of the
subject line if email is used. To help the rule change as described in Items I and ETP listing rules applying only on an
Commission process and review your II below, which Items have been initial basis, SEC staff has requested that
comments more efficiently, please use prepared by the Exchange. The the Exchange adopt certain additional
only one method. The Commission will Commission is publishing this notice to continued listing standards for ETPs. As
post all comments on the Commission’s solicit comments on the proposed rule a result, the proposed amendment
Internet Web site (http://www.sec.gov/ change from interested persons. reflects guidance provided by SEC staff
rules/sro.shtml). Copies of the to clarify that most initial listing
submission, all subsequent I. Self-Regulatory Organization’s standards, as well as certain
amendments, all written statements Statement of the Terms of Substance of representations (‘‘Continued Listing
with respect to the proposed rule the Proposed Rule Change Representations’’) included in Exchange
change that are filed with the The Exchange filed a proposal to rule filings pursuant to Section 19(b) of
Commission, and all written amend the listing rules for exchange- the Act 3 to list an ETP on the Exchange
communications relating to the traded products in Bats Rule 14.11 (‘‘Rule Filing’’), are also considered
proposed rule change between the (‘‘ETPs’’) to add additional continued continued listing standards. Continued
asabaliauskas on DSK3SPTVN1PROD with NOTICES

Commission and any person, other than listing standards as well as a related Listing Representations will also be
those that may be withheld from the amendment to Rule 14.12, entitled required to be maintained on a
public in accordance with the ‘‘Failure to Meet Listing Standards.’’ continuous basis and include any of the
provisions of 5 U.S.C. 552, will be The Exchange is also proposing to make representations regarding the index
available for Web site viewing and certain cleanup changes throughout composition, the description of the
printing in the Commission’s Public portfolio or reference assets, limitations
13 17 CFR 200.30–3(a)(12). on portfolio holdings or reference assets,
11 15 U.S.C. 78s(b)(3)(A). 1 15 U.S.C. 78s(b)(1).
12 17 CFR 240.19b–4(f)(6). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b).

VerDate Sep<11>2014 17:54 Dec 06, 2016 Jkt 241001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 E:\FR\FM\07DEN1.SGM 07DEN1
Document Created: 2016-12-07 05:32:06
Document Modified: 2016-12-07 05:32:06
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 88282