81 FR 90895 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 21.5 of Bats BZX Exchange, Inc. To Extend Through June 30, 2017, the Penny Pilot Program in Options Classes in Certain Issues

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 241 (December 15, 2016)

Page Range		90895-90896
FR Document		2016-30095

Federal Register, Volume 81 Issue 241 (Thursday, December 15, 2016)

[Federal Register Volume 81, Number 241 (Thursday, December 15, 2016)]
[Notices]
[Pages 90895-90896]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-30095]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79523; File No. SR-BatsBZX-2016-84)

Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change to Rule
21.5 of Bats BZX Exchange, Inc. To Extend Through June 30, 2017, the
Penny Pilot Program in Options Classes in Certain Issues

December 9, 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 30, 2016, Bats BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the Exchange. The
Exchange has designated this proposal as a ``non-controversial''
proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and
Rule 19b-4(f)(6)(iii) thereunder,\4\ which renders it effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

The Exchange filed a proposal to extend through June 30, 2017, the
Penny Pilot Program (``Penny Pilot'') in options classes in certain
issues (``Pilot Program'') previously approved by the Commission.\5\
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.
---------------------------------------------------------------------------

\5\ The rules of BZX Options, including rules applicable to BZX
Options' participation in the Penny Pilot, were approved on January
26, 2010. See Securities Exchange Act Release No. 61419 (January 26,
2010), 75 FR 5157 (February 1, 2010) (SR-BATS-2009-031). BZX Options
commenced operations on February 26, 2010. The Penny Pilot was most
recently extended for BZX Options through December 31, 2016. See
Securities Exchange Act Release No. 78032 (June 10, 2016), 81 FR
39307 (June 16, 2016) (SR-BatsBZX-2016-23).
---------------------------------------------------------------------------

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 purpose of this filing is to extend the Penny Pilot, which was
previously approved by the Commission, through June 30, 2017, and to
provide revised dates for adding replacement issues to the Pilot
Program. The Exchange proposes that any Pilot Program issues that have
been delisted may be replaced on the second trading day following
January 1, 2017. The replacement issues will be selected based on
trading activity for the most recent six month period excluding the
month immediately preceding the replacement (i.e., beginning June 1,
2016, and ending November 30, 2016).
The Exchange represents that the Exchange has the necessary system
capacity to continue to support operation of the Penny Pilot. The
Exchange believes the benefits to public customers and other market
participants who will be able to express their true prices to buy and
sell options have been demonstrated to outweigh the increase in quote
traffic.
2. Statutory Basis
The Exchange believes that its proposal is consistent with the
requirements of the Act and the rules and regulations thereunder that
are applicable to a national securities exchange, and, in particular,
with the requirements of Section 6(b) of the Act.\6\ In particular, the
proposal is consistent with Section 6(b)(5) of the Act \7\ because it
would promote just and equitable principles of trade, remove
impediments to, and perfect the mechanism of, a free and open market
and a national market system. The Exchange believes that the Pilot
Program promotes just and equitable principles of trade by enabling
public customers and other market participants to express their true
prices to buy and sell options. Accordingly, the Exchange believes that
the proposal is consistent with the Act because it will allow the
Exchange to extend the Pilot Program prior to its expiration on
December 31, 2016. The Exchange notes that this proposal does not
propose any new policies or provisions that are unique or unproven, but
instead relates to the continuation of an existing program that
operates on a pilot basis.
---------------------------------------------------------------------------

\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

The Exchange 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. In this regard, the Exchange
notes that the rule change is being proposed in order to continue the
Pilot Program, which is a

[[Page 90896]]

competitive response to analogous programs offered by other options
exchanges. The Exchange believes this proposed rule change is necessary
to permit fair competition among the options exchanges.

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 written comments from members or other interested parties.

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

Because the foregoing proposed rule change does not: (A)
Significantly affect the protection of investors or the public
interest; (B) impose any significant burden on competition; and (C) by
its terms, become operative for 30 days from the date on which it was
filed or such shorter time as the Commission may designate it has
become effective pursuant to Section 19(b)(3)(A) of the Act \8\ and
paragraph (f)(6) of Rule 19b-4 thereunder,\9\ the Exchange has
designated this rule filing as non-controversial. The Exchange has
given the Commission written notice of its intent to file the proposed
rule change, along with a brief description and text of the proposed
rule change at least five business days prior to the date of filing of
the proposed rule change, or such shorter time as designated by the
Commission.
---------------------------------------------------------------------------

\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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: (1)
Necessary or appropriate in the public interest; (2) for the protection
of investors; or (3) otherwise in furtherance of the purposes of the
Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule 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 proposal 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 rule-comments@sec.gov. Please include
File No. SR-BatsBZX-2016-84 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-BatsBZX-2016-84. 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-BatsBZX-2016-84 and should be
submitted on or before January 5, 2017.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2016-30095 Filed 12-14-16; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 81, No. 241 / Thursday, December 15, 2016 / Notices 90895

number should be included on the 30, 2016, Bats BZX Exchange, Inc. (the June 30, 2017, and to provide revised
subject line if email is used. To help the ‘‘Exchange’’ or ‘‘BZX’’) filed with the dates for adding replacement issues to
Commission process and review your Securities and Exchange Commission the Pilot Program. The Exchange
comments more efficiently, please use (‘‘Commission’’) the proposed rule proposes that any Pilot Program issues
only one method. The Commission will change as described in Items I, II and III that have been delisted may be replaced
post all comments on the Commission’s below, which Items have been prepared on the second trading day following
Internet Web site (http://www.sec.gov/ by the Exchange. The Exchange has January 1, 2017. The replacement issues
rules/sro.shtml). Copies of the designated this proposal as a ‘‘non- will be selected based on trading
submission, all subsequent controversial’’ proposed rule change activity for the most recent six month
amendments, all written statements pursuant to Section 19(b)(3)(A) of the period excluding the month
with respect to the proposed rule Act 3 and Rule 19b–4(f)(6)(iii) immediately preceding the replacement
change that are filed with the thereunder,4 which renders it effective (i.e., beginning June 1, 2016, and ending
Commission, and all written upon filing with the Commission. The November 30, 2016).
communications relating to the Commission is publishing this notice to The Exchange represents that the
proposed rule change between the solicit comments on the proposed rule Exchange has the necessary system
Commission and any person, other than change from interested persons. capacity to continue to support
those that may be withheld from the operation of the Penny Pilot. The
I. Self-Regulatory Organization’s Exchange believes the benefits to public
public in accordance with the
Statement of the Terms of Substance of customers and other market participants
provisions of 5 U.S.C. 552, will be
the Proposed Rule Change who will be able to express their true
available for Web site viewing and
printing in the Commission’s Public The Exchange filed a proposal to prices to buy and sell options have been
Reference Room, 100 F Street NE., extend through June 30, 2017, the Penny demonstrated to outweigh the increase
Washington, DC 20549 on official Pilot Program (‘‘Penny Pilot’’) in options in quote traffic.
business days between the hours of classes in certain issues (‘‘Pilot
Program’’) previously approved by the 2. Statutory Basis
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for Commission.5 The text of the proposed The Exchange believes that its
inspection and copying at the principal rule change is available at the proposal is consistent with the
office of the Exchange. All comments Exchange’s Web site at requirements of the Act and the rules
received will be posted without change; www.batstrading.com, at the principal and regulations thereunder that are
the Commission does not edit personal office of the Exchange, and at the applicable to a national securities
identifying information from Commission’s Public Reference Room. exchange, and, in particular, with the
submissions. You should submit only requirements of Section 6(b) of the Act.6
II. Self-Regulatory Organization’s
information that you wish to make Statement of the Purpose of, and In particular, the proposal is consistent
available publicly. All submissions Statutory Basis for, the Proposed Rule with Section 6(b)(5) of the Act 7 because
should refer to File Number SR–NYSE– Change it would promote just and equitable
2016–80, and should be submitted on or principles of trade, remove
before January 5, 2017. In its filing with the Commission, the impediments to, and perfect the
Exchange included statements mechanism of, a free and open market
For the Commission, by the Division of concerning the purpose of and basis for
Trading and Markets, pursuant to delegated and a national market system. The
authority.10
the proposed rule change and discussed Exchange believes that the Pilot
any comments it received on the Program promotes just and equitable
Eduardo A. Aleman,
proposed rule change. The text of these principles of trade by enabling public
Assistant Secretary. statements may be examined at the
[FR Doc. 2016–30079 Filed 12–14–16; 8:45 am]
customers and other market participants
places specified in Item IV below. The to express their true prices to buy and
BILLING CODE 8011–01–P Exchange has prepared summaries, set sell options. Accordingly, the Exchange
forth in Sections A, B, and C below, of believes that the proposal is consistent
the most significant parts of such with the Act because it will allow the
SECURITIES AND EXCHANGE statements.
COMMISSION Exchange to extend the Pilot Program
A. Self-Regulatory Organization’s prior to its expiration on December 31,
[Release No. 34–79523; File No. SR– Statement of the Purpose of, and 2016. The Exchange notes that this
BatsBZX–2016–84)
Statutory Basis for, the Proposed Rule proposal does not propose any new
Self-Regulatory Organizations; Bats Change policies or provisions that are unique or
BZX Exchange, Inc.; Notice of Filing unproven, but instead relates to the
1. Purpose continuation of an existing program that
and Immediate Effectiveness of a
Proposed Rule Change to Rule 21.5 of The purpose of this filing is to extend operates on a pilot basis.
Bats BZX Exchange, Inc. To Extend the Penny Pilot, which was previously
approved by the Commission, through B. Self-Regulatory Organization’s
Through June 30, 2017, the Penny Pilot Statement on Burden on Competition
Program in Options Classes in Certain 3 15 U.S.C. 78s(b)(3)(A). The Exchange does not believe that
Issues 4 17 CFR 240.19b–4(f)(6)(iii). the proposed rule change will impose
5 The rules of BZX Options, including rules
December 9, 2016. any burden on competition that is not
applicable to BZX Options’ participation in the
Pursuant to Section 19(b)(1) of the necessary or appropriate in furtherance
rmajette on DSK2TPTVN1PROD with NOTICES

Penny Pilot, were approved on January 26, 2010.
Securities Exchange Act of 1934 (the See Securities Exchange Act Release No. 61419 of the purposes of the Act. In this
‘‘Act’’),1 and Rule 19b–4 thereunder,2 (January 26, 2010), 75 FR 5157 (February 1, 2010) regard, the Exchange notes that the rule
notice is hereby given that on November (SR–BATS–2009–031). BZX Options commenced change is being proposed in order to
operations on February 26, 2010. The Penny Pilot
was most recently extended for BZX Options
continue the Pilot Program, which is a
10 17 CFR 200.30–3(a)(12). through December 31, 2016. See Securities
1 15 U.S.C. 78s(b)(1). 6 15 U.S.C. 78f(b).
Exchange Act Release No. 78032 (June 10, 2016), 81
2 17 CFR 240.19b–4. FR 39307 (June 16, 2016) (SR–BatsBZX–2016–23). 7 15 U.S.C. 78f(b)(5).

VerDate Sep<11>2014 15:19 Dec 14, 2016 Jkt 241001 PO 00000 Frm 00124 Fmt 4703 Sfmt 4703 E:\FR\FM\15DEN1.SGM 15DEN1

90896 Federal Register / Vol. 81, No. 241 / Thursday, December 15, 2016 / Notices

competitive response to analogous Electronic Comments SECURITIES AND EXCHANGE
programs offered by other options COMMISSION
exchanges. The Exchange believes this • Use the Commission’s Internet
comment form (http://www.sec.gov/ [Release No. 34–79520; File No. SR–CBOE–
proposed rule change is necessary to 2016–071]
permit fair competition among the rules/sro.shtml); or
options exchanges. • Send an email to rule-comments@ Self-Regulatory Organizations;
C. Self-Regulatory Organization’s sec.gov. Please include File No. SR– Chicago Board Options Exchange,
Statement on Comments on the BatsBZX–2016–84 on the subject line. Incorporated; Notice of Filing of
Proposed Rule Change Received From Amendment No. 1 and Order Granting
Paper Comments
Members, Participants or Others Accelerated Approval of a Proposed
• Send paper comments in triplicate Rule Change, as Modified by
The Exchange has not solicited, and Amendment No. 1, Relating To
to Secretary, Securities and Exchange
does not intend to solicit, comments on Opening and Closing Rotations Under
Commission, 100 F Street NE.,
this proposed rule change. The the HOSS System
Exchange has not received any written Washington, DC 20549–1090.
comments from members or other All submissions should refer to File No. December 9, 2016.
interested parties. SR–BatsBZX–2016–84. This file number I. Introduction
III. Date of Effectiveness of the should be included on the subject line
On October 7, 2016, Chicago Board
Proposed Rule Change and Timing for if email is used. To help the Options Exchange, Incorporated
Commission Action Commission process and review your (‘‘CBOE’’ or ‘‘Exchange’’) filed with the
comments more efficiently, please use Securities and Exchange Commission
Because the foregoing proposed rule only one method. The Commission will
change does not: (A) Significantly affect (‘‘Commission’’), pursuant to Section
post all comments on the Commission’s 19(b)(1) of the Securities Exchange Act
the protection of investors or the public Internet Web site (http://www.sec.gov/
interest; (B) impose any significant of 1934 (‘‘Act’’) 1 and Rule 19b–4
rules/sro.shtml). Copies of the thereunder,2 a proposed rule change to
burden on competition; and (C) by its
submission, all subsequent amend its rules relating to the opening
terms, become operative for 30 days
amendments, all written statements of series for trading on the Exchange.
from the date on which it was filed or
such shorter time as the Commission with respect to the proposed rule The Commission published the
may designate it has become effective change that are filed with the proposed rule change for comment in
pursuant to Section 19(b)(3)(A) of the Commission, and all written the Federal Register on October 27,
Act 8 and paragraph (f)(6) of Rule 19b– communications relating to the 2016.3 On November 18, 2016, the
4 thereunder,9 the Exchange has proposed rule change between the Exchange filed Amendment No. 1 to the
designated this rule filing as non- Commission and any person, other than proposed rule change.4 The Commission
controversial. The Exchange has given those that may be withheld from the received no comments on the proposal.
the Commission written notice of its public in accordance with the This order provides notice of filing of
intent to file the proposed rule change, provisions of 5 U.S.C. 552, will be Amendment No. 1 and approves the
along with a brief description and text available for Web site viewing and proposed rule change, as modified by
of the proposed rule change at least five printing in the Commission’s Public Amendment No. 1, on an accelerated
business days prior to the date of filing Reference Room, 100 F Street NE., basis.
of the proposed rule change, or such Washington, DC 20549, on official II. Description of the Proposed Rule
shorter time as designated by the business days between the hours of Change
Commission. 10:00 a.m. and 3:00 p.m. Copies of such CBOE proposes to amend its rules
At any time within 60 days of the filing will also be available for relating to the opening of series for
filing of the proposed rule change, the inspection and copying at the principal trading on the Exchange. Rule 6.2B
Commission summarily may office of the Exchange. All comments describes the process (referred to as
temporarily suspend such rule change if received will be posted without change; ‘‘HOSS’’) that the Exchange’s Hybrid
it appears to the Commission that such the Commission does not edit personal Trading System (the ‘‘System’’) uses to
action is: (1) Necessary or appropriate in identifying information from open series on the Exchange each
the public interest; (2) for the protection submissions. You should submit only trading day. The Exchange may also use
of investors; or (3) otherwise in information that you wish to make HOSS for closing series or opening
furtherance of the purposes of the Act. available publicly. All submissions
If the Commission takes such action, the should refer to File No. SR–BatsBZX– 1 15 U.S.C. 78s(b)(1).
Commission shall institute proceedings 2 17 CFR 240.19b–4.
2016–84 and should be submitted on or
to determine whether the proposed rule 3 See Securities Exchange Act Release No. 79133
before January 5, 2017.
should be approved or disapproved. (October 21, 2016), 81 FR 74828 (October 27, 2016)
For the Commission, by the Division of (‘‘Notice’’).
IV. Solicitation of Comments Trading and Markets, pursuant to delegated
4 In Amendment No. 1, the Exchange updated a

cross-reference to Rule 6.2B in Rule 6.13. To
Interested persons are invited to authority.10 promote transparency of its proposed amendment,
submit written data, views and Eduardo A. Aleman, when CBOE filed Amendment No. 1 with the
arguments concerning the foregoing, Commission, it also submitted Amendment No. 1 as
Assistant Secretary.
rmajette on DSK2TPTVN1PROD with NOTICES

a comment letter to the file, which the Commission
including whether the proposal is [FR Doc. 2016–30095 Filed 12–14–16; 8:45 am] posted on its Web site and placed in the public
consistent with the Act. Comments may BILLING CODE 8011–01–P comment file for SR–CBOE–2016–071 (available at
be submitted by any of the following https://www.sec.gov/comments/sr-cboe-2016-071/
methods: cboe2016071.shtml). The Exchange also posted a
copy of its Amendment No. 1 on its Web site
(http://www.cboe.com/aboutcboe/legal/
8 15 U.S.C. 78s(b)(3)(A). submittedsecfilings.aspx), when it filed it with the
9 17 CFR 240.19b–4. 10 17 CFR 200.30–3(a)(12). Commission.

VerDate Sep<11>2014 15:19 Dec 14, 2016 Jkt 241001 PO 00000 Frm 00125 Fmt 4703 Sfmt 4703 E:\FR\FM\15DEN1.SGM 15DEN1

Document Created: 2016-12-15 01:10:13
Document Modified: 2016-12-15 01:10:13

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 90895