81 FR 95232 - Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4770 (Compliance With Regulation NMS Plan To Implement a Tick Size Pilot)
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 248 (December 27, 2016)
Federal Register Volume 81, Issue 248 (December 27, 2016)
| Page Range | 95232-95236 | |
| FR Document | 2016-31107 |
[Federal Register Volume 81, Number 248 (Tuesday, December 27, 2016)] [Notices] [Pages 95232-95236] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-31107] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79615; File No. SR-BX-2016-069] Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4770 (Compliance With Regulation NMS Plan To Implement a Tick Size Pilot) December 20, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on December 13, 2016, NASDAQ BX, Inc. (``BX'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 4770 (Compliance with Regulation NMS Plan to Implement a Tick Size Pilot) relating to the handling to certain Order Types in Test Group Three Pilot Securities in connection with the Regulation NMS Plan to Implement a Tick Size Pilot Program (``Plan'' or ``Pilot'').\3\ Relatedly, BX also proposes to delete Commentary .14, which addresses the current handling of those Order Types. Finally, BX proposes to add language to Rule 4770(d)(1) to clarify the treatment of orders in a Test Group Three Security entered through the RASH or FIX protocols. --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 74892 (May 6, 2015), 80 FR 27513 (May 13, 2015) (``Approval Order''). --------------------------------------------------------------------------- The text of the proposed rule change is available on the Exchange's Web site at http://nasdaqbx.cchwallstreet.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 aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose On September 7, 2016, the Exchange filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') a proposed rule change (``Proposal'') to adopt paragraph (d) to Exchange Rule 4770 to describe changes to system functionality necessary to implement the Plan. The Exchange also proposed amendments to Rule 4770(a) and (c) to clarify how the Trade-at exception may be satisfied. The SEC published the Proposal in the Federal Register for notice and comment on September 20, 2016.\4\ BX subsequently filed three Partial Amendments to clarify aspects of the Proposal. The Commission approved the Proposal, as amended, on October 7, 2016.\5\ --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 78838 (September 14, 2016), 81 FR 64566 (September 20, 2016) (Notice of filing of SR-BX- 2016-050). \5\ See Securities Exchange Act Release No. 79076 (October 7, 2016) (Order approving SR-BX-2016-050). --------------------------------------------------------------------------- In SR-BX-2016-050, BX had initially proposed a re-pricing functionality for Price to Comply Orders, Non-Displayed Orders, and Post-Only Orders entered through the OUCH and FLITE protocols in Group Three Pilot Securities.\6\ BX subsequently determined that it would not offer this re-pricing functionality for Price to Comply Orders, Non- Displayed Orders, and Post-Only Orders entered through the OUCH and FLITE protocols in Test Group Three Pilot securities. As part of Partial Amendment No. 2 to SR-BX-2016-050, BX proposed to delete the relevant language from Rule 4770 related to this re-pricing functionality. --------------------------------------------------------------------------- \6\ As originally proposed, Rule 4770(d)(2) stated that Price to Comply Orders in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO until such time as the Price to Comply Order is able to be ranked and displayed at its original entered limit price. Rule 4770(d)(3) stated that, if market conditions allow, a Non-Displayed Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO up (down) to the Order's limit price. Rule 4770(d)(4) stated that, if market conditions allow, the Post-Only Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO or the best price on the BX Book, as applicable until such time as the Post-Only Order is able to be ranked and displayed at its original entered limit price. --------------------------------------------------------------------------- In that amendment, BX noted that this change would only impact the treatment of Price to Comply Orders, Non-Displayed Orders, and Post- Only orders that are submitted through the OUCH and FLITE protocols in Test Group Three Pilot Securities, as these types of Orders that are currently submitted to BX through the RASH or FIX protocols are already subject to this re-pricing functionality and will remain subject to this functionality under the Pilot. In the Amendment, BX further noted that its systems are currently programmed so that Price to Comply Orders, Non-Displayed Orders and Post-Only Orders entered through the OUCH and FLITE protocols in Test Group Three Pilot Securities may be adjusted repeatedly to reflect changes to the NBBO and/or the best price on the BX book. BX stated that it was re-programming its systems to remove this functionality for Price to Comply Orders, Non-Displayed Orders and Post-Only Orders entered through the OUCH and FLITE protocols in Test Group Three Pilot Securities. In the Amendment, BX stated that it anticipated that this re-programming shall be completed no later than November 30, 2016. If it appeared that this functionality would remain operational by October 17, 2016, BX indicated that it would file a proposed rule change with the SEC and will provide notice to market participants sufficiently in advance of that date to provide effective notice. The rule change and the notice to market participants will describe the current operation of the BX systems in this regard, and the timing related to the re- programming. On October 17, 2016, BX filed a proposal to extend the date by which it would complete the re-programing of its systems to eliminate the re-pricing functionality in Test Group Three Pilot Securities for Price to Comply Orders, Price to Display Orders, Non-Displayed Orders, and Post-Only Orders that are entered through the OUCH or FLITE protocols.\7\ In that proposal, BX stated [[Page 95233]] that it anticipated that this re-programming shall be complete on or before October 31, 2016.\8\ As BX continued to re-program its systems to eliminate the re-pricing functionality in Test Group Three Pilot Securities for Price to Comply Orders, Price to Display Orders, Non- Displayed Orders, and Post-Only Orders that are entered through the OUCH or FLITE protocols, it extended the date by which the re- programming shall be complete to the current date of December 12, 2016.\9\ --------------------------------------------------------------------------- \7\ See Securities Exchange Act Release No. 79154 (October 25, 2016), 81 FR 75468 (October 31, 2016) (SR-BX-2016-054). Subsequent to the approval of SR-BX-2016-050, BX become aware that this re-pricing functionality also applies to Price to Display Orders that are entered through the OUCH and FLITE protocols in Test Group Three Securities, and amended Commentary .14 to indicate that Price to Display Orders will be treated in the same manner as Price to Comply Orders under the re-pricing functionality. Id. \8\ Id. \9\ See Securities Exchange Act Release Nos. 79262 (November 8, 2016), 81 FR 80123 (November 15, 2016) (SR-BX-2016-153) (extending current re-pricing functionality to November 14, 2016); 79409 (November 28, 2016), 81 FR 87091 (December 2, 2016) (SR-BX-2016-061) (extending current re-pricing functionality to December 12, 2016). --------------------------------------------------------------------------- The Exchange has now completed the re-programming its systems to eliminate the re-pricing functionality in Test Group Three Pilot Securities for Price to Comply Orders, Price to Display Orders, Non- Displayed Orders, and Post-Only Orders that are entered through the OUCH or FLITE protocols. However, as a result of removing the re- pricing functionality, there are instances, due to the different functionality of the OUCH and FLITE protocols in comparison to the other applicable Exchange protocols, where the behavior of certain Order Types entered through the OUCH and FLITE protocols in Test Group Three Pilot Securities will differ from the behavior of those Order Types as set forth in Rule 4770; specifically, the behavior of Price to Comply Orders, Non-Displayed Orders, and Post-Only Orders entered through the OUCH and FLITE protocols when the Order locks or crosses a Protected Quotation. As discussed below, BX is therefore amending Rule 4770 to clarify these differences. Although the changes made to Price to Comply Orders, Non-Displayed Orders, and Post-Only Orders entered through OUCH and FLITE reflect the different functionality of the OUCH and FLITE protocols in comparison with the other BX protocols, the proposed changes treat Price to Comply Orders, Non-Displayed Orders and Post-Only Orders entered through OUCH and FLITE protocols in Test Group Three Securities as consistently as possible with such orders entered through OUCH and FLITE in Control Group Securities, and Test Group One and Test Group Two Securities. These changes will adjust Price to Comply Orders, Non-Displayed Orders, and Post-Only Orders entered through OUCH and FLITE when the Order has been ranked at a midpoint of the NBBO that then becomes impermissible due to changes in the NBBO. Price to Comply Orders Currently, Rule 4770(d)(2) states that a Price to Comply Order in a Test Group Pilot Security will operate as described in Rule 4702(b)(1) except as provided under this paragraph. If a Price to Comply Order for a Test Group Three Pilot Security is partially executed upon entry and the remainder would lock a Protected Quotation of another market center, the unexecuted portion of the Order will be cancelled. If the Order is not executable against any previously posted orders on the Exchange Book, and the limit price of a buy (sell) Price to Comply Order in a Test Group Three Pilot Security would lock or cross a Protected Quotation of another market center, the Order will display at one minimum price increment below (above) the Protected Quotation, and the Order will be ranked on the Exchange Book at the current midpoint of the NBBO. BX proposes to augment this provision to clarify the behavior of Price to Comply Orders entered through the OUCH or FLITE protocols in Test Group Three Pilot Securities that lock or cross a Protected Quotation. Specifically, a Price to Comply Order in a Test Group Three Pilot Security entered through OUCH or FLITE may be adjusted in the following manner after initial entry and posting to the BX Book. If entered at a price that locked a Protected Quotation, and if the NBBO changes such that its price will no longer lock a Protected Quotation, the Price to Comply Order will be adjusted to rank and display at its original entered limit price.\10\ --------------------------------------------------------------------------- \10\ BX notes that a Price to Comply Order will always be adjusted in this scenario, regardless of its port setting. --------------------------------------------------------------------------- If entered at a price that crossed a Protected Quotation, and if the NBBO changes such that it can be ranked at the price of the Protected Quotation it crossed, the Price to Comply Order, based on the participant's choice, may either be (i) cancelled or (ii) adjusted to rank at the price of the Protected Quotation it crossed upon entry with its displayed price remaining unchanged. If, after being posted on the BX Book, the non-displayed price of a Price to Comply Order becomes locked or crossed by a Protected Quotation due to a change in the NBBO, or if the Price to Comply Order is at an impermissible price under Regulation NMS or the Plan and it cannot otherwise be adjusted as above, the Price to Comply Order will be cancelled.\11\ --------------------------------------------------------------------------- \11\ For example, if the National Best Bid is $10.00 and the National Best Offer is $10.10, and a Price to Comply Order to buy at $10.15 is entered, the Price to Comply Order will be displayed at $10.05 and ranked at $10.075. If the National Best Offer then changes to $10.15, the Price to Comply Order will be adjusted to rank at $10.10, and will remain displayed at $10.05. If the National Best Offer subsequently changes to $10.10, the Price to Comply Order will be cancelled. BX notes that a Price to Comply Order, Non-Displayed Order, or Post-Only Order entered through OUCH or FLITE in either a Control Group Security, a Test Group One Pilot Security or a Test Group Two Pilot Security would only cancel if the resting order is crossed (not locked) by a Protected Quotation due to a change in the NBBO. --------------------------------------------------------------------------- Non-Displayed Orders Currently, Rule 4770(d)(3) states that a Non-Displayed Order in a Test Group Pilot Security will operate as described in Rule 4702(b)(3) except as provided under this paragraph. A resting Non-Displayed Order in a Test Group Three Pilot security cannot execute at the price of a Protected Quotation of another market center unless the incoming Order otherwise qualifies for an exception to the Trade-at prohibition provided under Rule 4770(c)(3)(D). If the limit price of a buy (sell) Non-Displayed Order in a Test Group Three Pilot Security would lock or cross a Protected Quotation of another market center, the Order will be ranked on the Exchange Book at either one minimum price increment below (above) the National Best Offer (National Best Bid) or at the midpoint of the NBBO, whichever is higher (lower). For a Non-Displayed Order in a Test Group Three Pilot Security entered through RASH or FIX, if after being posted to the Exchange Book, the NBBO changes so that the Non- Displayed Order would no longer be executable at its posted price due to the requirements of Regulation NMS or the Plan, the Non-Displayed Order will be repriced to a price that is at either one minimum price increment below (above) the National Best Offer (National Best Bid) or at the midpoint of the NBBO, whichever is higher (lower) and will receive a new timestamp.\12\ For [[Page 95234]] a Non-Displayed Order in a Test Group Three Pilot Security entered through OUCH or FLITE, if after such a Non-Displayed Order is posted to the Exchange Book, the NBBO changes so that the Non-Displayed Order would no longer be executable at its posted price due to the requirements of Regulation NMS or the Plan, the Non-Displayed Order will be cancelled back to the Participant. --------------------------------------------------------------------------- \12\ As part of this proposal, BX also proposes to clarify the operation of this provision so that it is structurally consistent with provisions in the descriptions of Price to Comply and Post-Only Orders. Specifically, BX will amend this language to provide that, if a resting Non-Displayed Order in a Test Group Three Pilot Security entered through RASH or FIX becomes locked or crossed by a Protected Quotation due to a change in the NBBO, or if the Non- Displayed Order is at an impermissible price under Regulation NMS or the Plan, the Non-Displayed Order will be repriced to a price that is at either one minimum price increment below (above) the National Best Offer (National Best Bid) or at the midpoint of the NBBO, whichever is higher (lower) and will receive a new timestamp. --------------------------------------------------------------------------- BX proposes to amend this provision to clarify the behavior of Non- Displayed Orders entered through the OUCH or FLITE protocols in Test Group Three Pilot Securities that lock or cross a Protected Quotation. Specifically, a Non-Displayed Order in a Test Group Three Pilot Security entered through OUCH or FLITE may be adjusted in the following manner after initial entry and posting to the BX Book. If entered at a price that locked a Protected Quotation, and if the NBBO changes such that its price would no longer lock a Protected Quotation, the Non-Displayed Order will be adjusted to rank at its original entered limit price.\13\ --------------------------------------------------------------------------- \13\ BX notes that a Non-Displayed Order will always be adjusted in this scenario, regardless of its port setting. --------------------------------------------------------------------------- If entered at a price that crossed a Protected Quotation, and if the NBBO changes such that it can be ranked at the price of the Protected Quotation it crossed, the Order, based on the Participant's choice, may either be (i) cancelled or (ii) adjusted to rank at the price of the Protected Quotation it crossed.\14\ --------------------------------------------------------------------------- \14\ For example, if the National Best Bid is $10.00 and the National Best Offer is $10.10, and a Non-Displayed Order to buy at $10.15 is entered, the Non-Displayed Order will be ranked at $10.05. If the National Best Offer then changes to $10.15, the Non-Displayed Order may either be adjusted to rank at $10.10, or may be cancelled back to the Participant. --------------------------------------------------------------------------- If entered at a price that locked or crossed a Protected Quotation, and if the NBBO changes such that it cannot be ranked at the price of the Protected Quotation it locked or crossed but can be ranked closer to its original limit price, the Non-Displayed Order will be adjusted to the new midpoint of the NBBO.\15\ --------------------------------------------------------------------------- \15\ For example, if the National Best Bid is $10.00 and the National Best Offer is $10.10, and a Non-Displayed Order to buy at $10.10 is entered, the Non-Displayed Order will be ranked at $10.05. If the National Best Bid then changes to $10.05, the price of the Non-Displayed Order will be adjusted to $10.075. BX notes that a Non-Displayed Order entered through OUCH or FLITE in either a Control Group Security, a Test Group One Pilot Security or a Test Group Two Pilot Security would be ranked at the locking price upon entry. --------------------------------------------------------------------------- If, after being posted on the BX Book, the Non-Displayed Order becomes locked or crossed by a Protected Quotation due to a change in the NBBO, or if the Non-Displayed Order is at an impermissible price under Regulation NMS or the Plan and it cannot otherwise be adjusted as above, the Non-Displayed Order will be cancelled.\16\ --------------------------------------------------------------------------- \16\ For example, if the National Best Bid is $10.00 and the National Best Offer is $10.10, and a Non-Displayed Order to buy at $10.10 is entered, the Non-Displayed Order will be ranked at $10.05. If the National Best Offer then changes to $10.05, the Non-Displayed Order will be cancelled back to the Participant. --------------------------------------------------------------------------- Post-Only Orders Currently, Rule 4770(d)(4) states that a Post-Only Order in a Test Group Pilot Security will operate as described in Rule 4702(b)(4) except as provided under this paragraph. For orders that are not attributable, if the limit price of a buy (sell) Post-Only Order in a Test Group Three Pilot Security would lock or cross a Protected Quotation of another market center, the Order will display at one minimum price increment below (above) the Protected Quotation, and the Order will be ranked on the Exchange Book at the current midpoint of the NBBO. BX proposes to augment this provision to clarify the behavior of Post-Only Orders entered through the OUCH or FLITE protocols in Test Group Three Pilot Securities that lock or cross a Protected Quotation. Specifically, a Non-Attributable Post-Only Order in a Test Group Three Pilot Security entered through OUCH or FLITE may be adjusted in the following manner after initial entry and posting to the BX Book. If entered at a price that locked a Protected Quotation, and if the NBBO changes such that its price will no longer lock a Protected Quotation, the Post-Only Order will be adjusted to rank and display at its original entered limit price.\17\ --------------------------------------------------------------------------- \17\ BX notes that a Post-Only Order will always be adjusted in this scenario, regardless of its port setting. --------------------------------------------------------------------------- If entered at a price that crossed a Protected Quotation, and if the NBBO changes such that it can be ranked at the price of the Protected Quotation it crossed, the Post-Only Order, based on the Participant's choice, may either be (i) cancelled or (ii) adjusted to rank at the price of the Protected Quotation it crossed upon entry with its displayed price remaining unchanged. If, after being posted on the BX Book, the non-displayed price of a resting Post-Only Order becomes locked or crossed by a Protected Quotation due to a change in the NBBO, or if the Post-Only Order is at an impermissible price under Regulation NMS or the Plan and it cannot otherwise be adjusted as above, the Post-Only Order will be cancelled. Commentary .14 In removing the current re-pricing functionality, Commentary .014 [sic], which addresses the behavior of current treatment of Price to Comply Orders, Price to Display Orders, Non-Displayed Orders, and Post- Only Orders that are entered through the OUCH or FLITE protocols in Test Group Three Pilot Securities, is no longer necessary.\18\ The Exchange therefore proposes to delete this Commentary from the Rule. --------------------------------------------------------------------------- \18\ Under Commentary .14, the current treatment of Price to Comply Orders, Price to Display Orders, Non-Displayed Orders, and Post-Only Orders that are entered through the OUCH or FLITE protocols in Test Group Three securities is as follows: Following entry, and if market conditions allow, a Price to Comply Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO until such time as the Price to Comply Order is able to be ranked and displayed at its original entered limit price. Following entry, and if market conditions allow, a Price to Display Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO until such time as the Price to Display Order is able to be ranked and displayed at its original entered limit price. Following entry, and if market conditions allow, a Non-Displayed Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO up (down) to the Order's limit price. Following entry, and if market conditions allow, the Post-Only Order in a Test Group Three Pilot Security will be adjusted repeatedly in accordance with changes to the NBBO or the best price on the Exchange Book, as applicable until such time as the Post-Only Order is able to be ranked and displayed at its original entered limit price. --------------------------------------------------------------------------- Finally, BX proposes to add language to Rule 4770(d)(1) to clarify the treatment of orders in a Test Group Three Security entered through the RASH or FIX protocols. Specifically, subject to the provisions set forth in the remainder of Rule 4770(d), if the entered limit price of an Order in a Test Group Three Pilot Security, entered through RASH or FIX, locked or crossed a Protected Quotation and the NBBO changes so that the Order can be ranked closer to its original entered limit price, the price of the Order will be adjusted repeatedly in accordance with changes to the NBBO. BX is proposing to make this change to clarify the current treatment of orders in Test Group Three Pilot Securities entered through RASH or FIX. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) [[Page 95235]] of the Act,\19\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\20\ in particular, in that it is designed 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. --------------------------------------------------------------------------- \19\ 15 U.S.C. 78f(b). \20\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that the proposed rule change is consistent with the Act because it clarifies the changes the Exchange is making to the handling of certain Order Types necessary to implement the requirements of the Plan on its System and, in the case of the changes of Rule 4770(d)(1), to clarify the current treatment of orders in Test Group Three Pilot Securities entered through RASH or FIX. As a result of removing the current re-pricing functionality that applies to certain Order Types in Test Group Three Securities entered through the OUCH and FLITE protocols, and due to the different functionality of the OUCH and FLITE protocols in comparison to the other applicable BX protocols, these Order Types will behave differently than is currently set forth in Rule 4770 when entered through the OUCH or FLITE protocols in certain instances. As noted above, these changes will adjust Price to Comply Orders, Non-Displayed Orders, and Post-Only Orders entered through OUCH and FLITE when the Order has been ranked at a midpoint of the NBBO that then becomes impermissible due to changes in the NBBO. These changes also will adjust Price to Comply Orders, Non-Displayed Orders, and Post-Only Orders entered through OUCH and FLITE in scenarios where the subsequent movement of the NBBO implicates the Trade-at prohibition with respect to the resting order. By clarifying the behavior of certain Order Types in Test Group Three Pilot Securities entered through the OUCH or FLITE protocols, the proposal will help allow market participants to continue to trade NMS Stocks, within quoting and trading requirements that are in compliance with the Plan, with certainty on how certain orders and trading interests would be treated. This, in turn, will help encourage market participants to continue to provide liquidity in the marketplace. More generally, BX also notes that the Plan, which was approved by the Commission pursuant to an order issued by the Commission in reliance on Section 11A of the Act,\21\ provides the Exchange authority to establish, maintain, and enforce written policies and procedures that are reasonably designed to comply with applicable quoting and trading requirements specified in the Plan. The Exchange believes that the proposed rule change is consistent with the authority granted to it by the Plan to establish specifications and procedures for the implementation and operation of the Plan that are consistent with the provisions of the Plan. Likewise, the Exchange believes that the proposed rule change provides interpretations of the Plan that are consistent with the Act, in general, and furthers the objectives of the Act, in particular. --------------------------------------------------------------------------- \21\ 15 U.S.C. 78k-1. --------------------------------------------------------------------------- Finally, BX believes that the proposal is consistent with the Act because the proposed functionality will more closely align the handling of Price to Comply Orders, Non-Displayed Orders, and Post-Only Orders that are entered through the OUCH or FLITE protocols for Test Group Three Pilot Securities with the handling of such Orders entered through the OUCH or FLITE protocols for Control Group, Test Group One and Test Group Two Securities than the current functionality in place for these Orders. 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 not necessary or appropriate in furtherance of the purposes of the Act. The proposed changes are being made to establish, maintain, and enforce written policies and procedures that are reasonably designed to comply with the trading and quoting requirements specified in the Plan, of which other equities exchanges are also Participants. Other competing national securities exchanges are subject to the same trading and quoting requirements specified in the Plan, and must take the same steps that the Exchange has to conform its existing rules to the requirements of the Plan. Therefore, the proposed changes would not impose any burden on competition, while providing certainty of treatment and execution of trading interests on the Exchange to market participants in NMS Stocks that are acting in compliance with the requirements specified in the Plan. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing 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 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)(iii) of the Act \22\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\23\ --------------------------------------------------------------------------- \22\ 15 U.S.C. 78s(b)(3)(A)(iii). \23\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \24\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\25\ the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. In this filing, the Exchange has asked that the Commission waive the requirement that the proposed rule change not become operative for 30 days after the date of the filing. --------------------------------------------------------------------------- \24\ Id. \25\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- The Exchange notes the proposed rule is intended to clarify the differences in the handling of certain orders entered into the system by different protocols. The Exchange notes that orders will be treated as consistently as possible across the Test Groups and the Control Group while complying with each grouping's varied quoting and trading requirements. Additionally, the Exchange proposed to remove Commentary .14 because it is no longer necessary. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because the proposal clarifies the Exchange's rules and provides transparency to members with regards to the handling of certain orders entered via OUCH and FLITE as well as RASH or FIX protocols for locked or crossed orders in Test Group Three Pilot Securities. The Commission notes that the Exchange proposed to remove the functionality described in Commentary .14 and make the necessary corresponding systems changes in Partial Amendment No. 2 to BX-2016-050, which the Commission approved.\26\ The Exchange notes that it was able to implement the systems changes and that they became fully operational on the December 14, 2016. Therefore, the [[Page 95236]] Commission hereby waives the 30-day operative delay and designates the proposed rule change to be operative on December 14, 2016.\27\ --------------------------------------------------------------------------- \26\ See supra note 5. \27\ For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- 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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) 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 proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse 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-BX-2016-069 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-BX-2016-069. 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-BX-2016-069 and should be submitted on or before January 17, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\28\ --------------------------------------------------------------------------- \28\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2016-31107 Filed 12-23-16; 8:45 am] BILLING CODE 8011-01-P
![95232 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices
For the Commission, by the Division of II. Self-Regulatory Organization’s not offer this re-pricing functionality for
Trading and Markets, pursuant to delegated Statement of the Purpose of, and Price to Comply Orders, Non-Displayed
authority.42 Statutory Basis for, the Proposed Rule Orders, and Post-Only Orders entered
Eduardo A. Aleman, Change through the OUCH and FLITE protocols
Assistant Secretary. in Test Group Three Pilot securities. As
In its filing with the Commission, the
[FR Doc. 2016–31115 Filed 12–23–16; 8:45 am] Exchange included statements part of Partial Amendment No. 2 to SR–
BILLING CODE 8011–01–P concerning the purpose of and basis for BX–2016–050, BX proposed to delete
the proposed rule change and discussed the relevant language from Rule 4770
any comments it received on the related to this re-pricing functionality.
SECURITIES AND EXCHANGE proposed rule change. The text of these In that amendment, BX noted that this
COMMISSION statements may be examined at the change would only impact the treatment
places specified in Item IV below. The of Price to Comply Orders, Non-
[Release No. 34–79615; File No. SR–BX–
2016–069] Exchange has prepared summaries, set Displayed Orders, and Post-Only orders
forth in sections A, B, and C below, of that are submitted through the OUCH
Self-Regulatory Organizations; the most significant aspects of such and FLITE protocols in Test Group
NASDAQ BX, Inc.; Notice of Filing and statements. Three Pilot Securities, as these types of
Immediate Effectiveness of Proposed Orders that are currently submitted to
Rule Change To Amend Rule 4770 A. Self-Regulatory Organization’s BX through the RASH or FIX protocols
(Compliance With Regulation NMS Statement of the Purpose of, and are already subject to this re-pricing
Plan To Implement a Tick Size Pilot) Statutory Basis for, the Proposed Rule functionality and will remain subject to
Change this functionality under the Pilot.
December 20, 2016. In the Amendment, BX further noted
1. Purpose
Pursuant to Section 19(b)(1) of the that its systems are currently
Securities Exchange Act of 1934 On September 7, 2016, the Exchange programmed so that Price to Comply
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 filed with the Securities and Exchange Orders, Non-Displayed Orders and Post-
notice is hereby given that on December Commission (‘‘SEC’’ or ‘‘Commission’’) Only Orders entered through the OUCH
13, 2016, NASDAQ BX, Inc. (‘‘BX’’ or a proposed rule change (‘‘Proposal’’) to and FLITE protocols in Test Group
‘‘Exchange’’) filed with the Securities adopt paragraph (d) to Exchange Rule Three Pilot Securities may be adjusted
and Exchange Commission (‘‘SEC’’ or 4770 to describe changes to system repeatedly to reflect changes to the
‘‘Commission’’) the proposed rule functionality necessary to implement NBBO and/or the best price on the BX
change as described in Items I and II the Plan. The Exchange also proposed book. BX stated that it was re-
below, which Items have been prepared amendments to Rule 4770(a) and (c) to programming its systems to remove this
by the Exchange. The Commission is clarify how the Trade-at exception may functionality for Price to Comply
publishing this notice to solicit be satisfied. The SEC published the Orders, Non-Displayed Orders and Post-
comments on the proposed rule change Proposal in the Federal Register for Only Orders entered through the OUCH
from interested persons. notice and comment on September 20, and FLITE protocols in Test Group
2016.4 BX subsequently filed three Three Pilot Securities. In the
I. Self-Regulatory Organization’s Partial Amendments to clarify aspects of
Statement of the Terms of Substance of Amendment, BX stated that it
the Proposal. The Commission approved anticipated that this re-programming
the Proposed Rule Change the Proposal, as amended, on October 7, shall be completed no later than
The Exchange proposes to amend 2016.5 November 30, 2016. If it appeared that
Rule 4770 (Compliance with Regulation In SR–BX–2016–050, BX had initially this functionality would remain
NMS Plan to Implement a Tick Size proposed a re-pricing functionality for operational by October 17, 2016, BX
Pilot) relating to the handling to certain Price to Comply Orders, Non-Displayed indicated that it would file a proposed
Order Types in Test Group Three Pilot Orders, and Post-Only Orders entered rule change with the SEC and will
Securities in connection with the through the OUCH and FLITE protocols provide notice to market participants
Regulation NMS Plan to Implement a in Group Three Pilot Securities.6 BX sufficiently in advance of that date to
Tick Size Pilot Program (‘‘Plan’’ or subsequently determined that it would provide effective notice. The rule
‘‘Pilot’’).3 Relatedly, BX also proposes to change and the notice to market
4 See Securities Exchange Act Release No. 78838
delete Commentary .14, which participants will describe the current
(September 14, 2016), 81 FR 64566 (September 20,
addresses the current handling of those 2016) (Notice of filing of SR–BX–2016–050). operation of the BX systems in this
Order Types. Finally, BX proposes to 5 See Securities Exchange Act Release No. 79076 regard, and the timing related to the re-
add language to Rule 4770(d)(1) to (October 7, 2016) (Order approving SR–BX–2016– programming.
clarify the treatment of orders in a Test 050). On October 17, 2016, BX filed a
6 As originally proposed, Rule 4770(d)(2) stated
Group Three Security entered through proposal to extend the date by which it
that Price to Comply Orders in a Test Group Three
the RASH or FIX protocols. Pilot Security will be adjusted repeatedly in would complete the re-programing of its
The text of the proposed rule change accordance with changes to the NBBO until such systems to eliminate the re-pricing
is available on the Exchange’s Web site time as the Price to Comply Order is able to be functionality in Test Group Three Pilot
at http://nasdaqbx.cchwallstreet.com/, ranked and displayed at its original entered limit
price. Rule 4770(d)(3) stated that, if market
Securities for Price to Comply Orders,
at the principal office of the Exchange, Price to Display Orders, Non-Displayed
asabaliauskas on DSK3SPTVN1PROD with NOTICES
conditions allow, a Non-Displayed Order in a Test
and at the Commission’s Public Group Three Pilot Security will be adjusted Orders, and Post-Only Orders that are
Reference Room. repeatedly in accordance with changes to the NBBO entered through the OUCH or FLITE
up (down) to the Order’s limit price. Rule
4770(d)(4) stated that, if market conditions allow,
protocols.7 In that proposal, BX stated
42 17 CFR 200.30–3(a)(12). the Post-Only Order in a Test Group Three Pilot
1 15 U.S.C. 78s(b)(1). 7 See Securities Exchange Act Release No. 79154
Security will be adjusted repeatedly in accordance
2 17 CFR 240.19b–4. (October 25, 2016), 81 FR 75468 (October 31, 2016)
with changes to the NBBO or the best price on the
3 See Securities Exchange Act Release No. 74892 BX Book, as applicable until such time as the Post- (SR–BX–2016–054).
(May 6, 2015), 80 FR 27513 (May 13, 2015) Only Order is able to be ranked and displayed at Subsequent to the approval of SR–BX–2016–050,
(‘‘Approval Order’’). its original entered limit price. BX become aware that this re-pricing functionality
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![95234 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices
a Non-Displayed Order in a Test Group If, after being posted on the BX Book, crossed by a Protected Quotation due to
Three Pilot Security entered through the Non-Displayed Order becomes a change in the NBBO, or if the Post-
OUCH or FLITE, if after such a Non- locked or crossed by a Protected Only Order is at an impermissible price
Displayed Order is posted to the Quotation due to a change in the NBBO, under Regulation NMS or the Plan and
Exchange Book, the NBBO changes so or if the Non-Displayed Order is at an it cannot otherwise be adjusted as
that the Non-Displayed Order would no impermissible price under Regulation above, the Post-Only Order will be
longer be executable at its posted price NMS or the Plan and it cannot cancelled.
due to the requirements of Regulation otherwise be adjusted as above, the
Commentary .14
NMS or the Plan, the Non-Displayed Non-Displayed Order will be
Order will be cancelled back to the cancelled.16 In removing the current re-pricing
Participant. functionality, Commentary .014 [sic],
Post-Only Orders which addresses the behavior of current
BX proposes to amend this provision
to clarify the behavior of Non-Displayed Currently, Rule 4770(d)(4) states that treatment of Price to Comply Orders,
Orders entered through the OUCH or a Post-Only Order in a Test Group Pilot Price to Display Orders, Non-Displayed
FLITE protocols in Test Group Three Security will operate as described in Orders, and Post-Only Orders that are
Pilot Securities that lock or cross a Rule 4702(b)(4) except as provided entered through the OUCH or FLITE
Protected Quotation. Specifically, a under this paragraph. For orders that are protocols in Test Group Three Pilot
Non-Displayed Order in a Test Group not attributable, if the limit price of a Securities, is no longer necessary.18 The
Three Pilot Security entered through buy (sell) Post-Only Order in a Test Exchange therefore proposes to delete
OUCH or FLITE may be adjusted in the Group Three Pilot Security would lock this Commentary from the Rule.
following manner after initial entry and or cross a Protected Quotation of Finally, BX proposes to add language
posting to the BX Book. another market center, the Order will to Rule 4770(d)(1) to clarify the
If entered at a price that locked a display at one minimum price treatment of orders in a Test Group
Protected Quotation, and if the NBBO increment below (above) the Protected Three Security entered through the
changes such that its price would no Quotation, and the Order will be ranked RASH or FIX protocols. Specifically,
longer lock a Protected Quotation, the on the Exchange Book at the current subject to the provisions set forth in the
Non-Displayed Order will be adjusted to midpoint of the NBBO. remainder of Rule 4770(d), if the
rank at its original entered limit price.13 BX proposes to augment this entered limit price of an Order in a Test
If entered at a price that crossed a provision to clarify the behavior of Post- Group Three Pilot Security, entered
Protected Quotation, and if the NBBO Only Orders entered through the OUCH through RASH or FIX, locked or crossed
changes such that it can be ranked at the or FLITE protocols in Test Group Three a Protected Quotation and the NBBO
price of the Protected Quotation it Pilot Securities that lock or cross a changes so that the Order can be ranked
crossed, the Order, based on the Protected Quotation. Specifically, a closer to its original entered limit price,
Participant’s choice, may either be (i) Non-Attributable Post-Only Order in a the price of the Order will be adjusted
cancelled or (ii) adjusted to rank at the Test Group Three Pilot Security entered repeatedly in accordance with changes
price of the Protected Quotation it through OUCH or FLITE may be to the NBBO. BX is proposing to make
crossed.14 adjusted in the following manner after this change to clarify the current
If entered at a price that locked or initial entry and posting to the BX Book. treatment of orders in Test Group Three
If entered at a price that locked a Pilot Securities entered through RASH
crossed a Protected Quotation, and if the
Protected Quotation, and if the NBBO or FIX.
NBBO changes such that it cannot be
changes such that its price will no
ranked at the price of the Protected 2. Statutory Basis
longer lock a Protected Quotation, the
Quotation it locked or crossed but can
Post-Only Order will be adjusted to rank The Exchange believes that its
be ranked closer to its original limit
and display at its original entered limit proposal is consistent with Section 6(b)
price, the Non-Displayed Order will be
price.17
adjusted to the new midpoint of the If entered at a price that crossed a 18 Under Commentary .14, the current treatment
NBBO.15 Protected Quotation, and if the NBBO of Price to Comply Orders, Price to Display Orders,
changes such that it can be ranked at the Non-Displayed Orders, and Post-Only Orders that
a price that is at either one minimum price are entered through the OUCH or FLITE protocols
increment below (above) the National Best Offer price of the Protected Quotation it in Test Group Three securities is as follows:
(National Best Bid) or at the midpoint of the NBBO, crossed, the Post-Only Order, based on Following entry, and if market conditions allow,
whichever is higher (lower) and will receive a new the Participant’s choice, may either be a Price to Comply Order in a Test Group Three Pilot
timestamp. (i) cancelled or (ii) adjusted to rank at Security will be adjusted repeatedly in accordance
13 BX notes that a Non-Displayed Order will with changes to the NBBO until such time as the
always be adjusted in this scenario, regardless of its
the price of the Protected Quotation it Price to Comply Order is able to be ranked and
port setting. crossed upon entry with its displayed displayed at its original entered limit price.
14 For example, if the National Best Bid is $10.00 price remaining unchanged. Following entry, and if market conditions allow,
and the National Best Offer is $10.10, and a Non- If, after being posted on the BX Book, a Price to Display Order in a Test Group Three Pilot
Displayed Order to buy at $10.15 is entered, the the non-displayed price of a resting Security will be adjusted repeatedly in accordance
Non-Displayed Order will be ranked at $10.05. If with changes to the NBBO until such time as the
the National Best Offer then changes to $10.15, the Post-Only Order becomes locked or Price to Display Order is able to be ranked and
Non-Displayed Order may either be adjusted to rank displayed at its original entered limit price.
at $10.10, or may be cancelled back to the Group Two Pilot Security would be ranked at the Following entry, and if market conditions allow,
Participant. locking price upon entry. a Non-Displayed Order in a Test Group Three Pilot
asabaliauskas on DSK3SPTVN1PROD with NOTICES
15 For example, if the National Best Bid is $10.00 16 For example, if the National Best Bid is $10.00 Security will be adjusted repeatedly in accordance
and the National Best Offer is $10.10, and a Non- and the National Best Offer is $10.10, and a Non- with changes to the NBBO up (down) to the Order’s
Displayed Order to buy at $10.10 is entered, the Displayed Order to buy at $10.10 is entered, the limit price.
Non-Displayed Order will be ranked at $10.05. If Non-Displayed Order will be ranked at $10.05. If Following entry, and if market conditions allow,
the National Best Bid then changes to $10.05, the the National Best Offer then changes to $10.05, the the Post-Only Order in a Test Group Three Pilot
price of the Non-Displayed Order will be adjusted Non-Displayed Order will be cancelled back to the Security will be adjusted repeatedly in accordance
to $10.075. Participant. with changes to the NBBO or the best price on the
BX notes that a Non-Displayed Order entered 17 BX notes that a Post-Only Order will always be Exchange Book, as applicable until such time as the
through OUCH or FLITE in either a Control Group adjusted in this scenario, regardless of its port Post-Only Order is able to be ranked and displayed
Security, a Test Group One Pilot Security or a Test setting. at its original entered limit price.
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![95236 Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices
Commission hereby waives the 30-day Reference Room, 100 F Street NE., I. Self-Regulatory Organization’s
operative delay and designates the Washington, DC 20549, on official Statement of the Terms of Substance of
proposed rule change to be operative on business days between the hours of the Proposed Rule Change
December 14, 2016.27 10:00 a.m. and 3:00 p.m. Copies of the CBOE proposes to amend Rule 12.3 by
At any time within 60 days of the filing also will be available for extending the Credit Option Margin
filing of the proposed rule change, the inspection and copying at the principal Pilot Program through July 18, 2017.
Commission summarily may office of the Exchange. All comments The text of the proposed rule change
temporarily suspend such rule change if received will be posted without change; is available on the Exchange’s Web site
it appears to the Commission that such
the Commission does not edit personal (http://www.cboe.com/AboutCBOE/
action is: (i) Necessary or appropriate in
identifying information from CBOELegalRegulatoryHome.aspx), at
the public interest; (ii) for the protection
submissions. You should submit only the Exchange’s Office of the Secretary,
of investors; or (iii) otherwise in
information that you wish to make and at the Commission’s Public
furtherance of the purposes of the Act.
available publicly. All submissions Reference Room.
If the Commission takes such action, the
Commission shall institute proceedings should refer to File Number SR–BX– II. Self-Regulatory Organization’s
to determine whether the proposed rule 2016–069 and should be submitted on Statement of the Purpose of, and
should be approved or disapproved. or before January 17, 2017. Statutory Basis for, the Proposed Rule
IV. Solicitation of Comments For the Commission, by the Division of Change
Trading and Markets, pursuant to delegated In its filing with the Commission, the
Interested persons are invited to authority.28
submit written data, views, and Exchange included statements
arguments concerning the foregoing, Eduardo A. Aleman, concerning the purpose of and basis for
including whether the proposed rule Assistant Secretary. the proposed rule change and discussed
change is consistent with the Act. [FR Doc. 2016–31107 Filed 12–23–16; 8:45 am] any comments it received on the
Comments may be submitted by any of BILLING CODE 8011–01–P
proposed rule change. The text of these
the following methods: statements may be examined at the
places specified in Item IV below. The
Electronic Comments Exchange has prepared summaries, set
SECURITIES AND EXCHANGE
• Use the Commission’s Internet COMMISSION forth in sections A, B, and C below, of
comment form (http://www.sec.gov/ the most significant aspects of such
rules/sro.shtml); or statements.
[Release No. 34–79621; File No. SR–CBOE–
• Send an email to rule- A. Self-Regulatory Organization’s
2016–089]
comments@sec.gov. Please include File Statement of the Purpose of, and
Number SR–BX–2016–069 on the Self-Regulatory Organizations; Statutory Basis for, the Proposed Rule
subject line. Change
Chicago Board Options Exchange,
Paper Comments Incorporated; Notice of Filing and 1. Purpose
• Send paper comments in triplicate Immediate Effectiveness of a Proposed
Rule Change To Extend the Credit On February 2, 2011, the Commission
to Brent J. Fields, Secretary, Securities
Option Margin Pilot Program Through approved the Exchange’s proposal to
and Exchange Commission, 100 F Street
July 18, 2017 establish a Credit Option Margin Pilot
NE., Washington, DC 20549–1090.
Program (‘‘Program’’).5 The proposal
All submissions should refer to File December 20, 2016. became effective on a pilot basis to run
Number SR–BX–2016–069. This file on a parallel track with Financial
number should be included on the Pursuant to Section 19(b)(1) of the
Industry Regulatory Authority
subject line if email is used. To help the Securities Exchange Act of 1934 (the
(‘‘FINRA’’) Rule 4240 that similarly
Commission process and review your ‘‘Act’’),1 and Rule 19b–4 thereunder,2 operates on an interim pilot basis.6
comments more efficiently, please use notice is hereby given that on December On January 17, 2012, the Exchange
only one method. The Commission will 14, 2016, Chicago Board Options filed a rule change to, among other
post all comments on the Commission’s Exchange, Incorporated (the ‘‘Exchange’’ things, decouple the Program with the
Internet Web site (http://www.sec.gov/ or ‘‘CBOE’’) filed with the Securities FINRA program and to extend the
rules/sro.shtml). and Exchange Commission (the expiration date of the Program to
Copies of the submission, all ‘‘Commission’’) the proposed rule January 17, 2013.7 The Program,
subsequent amendments, all written change as described in Items I and II however, continues to be substantially
statements with respect to the proposed below, which Items have been prepared
rule change that are filed with the by the Exchange. The Exchange filed the 5 See Securities Exchange Act Release No. 63819
Commission, and all written proposal as a ‘‘non-controversial’’ (February 2, 2011), 76 FR 6838 (February 8, 2011)
communications relating to the proposed rule change pursuant to
order approving (SR–CBOE–2010–106). To
proposed rule change between the implement the Program, the Exchange amended
Section 19(b)(3)(A)(iii) of the Act 3 and Rule 12.3(l), Margin Requirements, to make CBOE’s
Commission and any person, other than margin requirements for Credit Options consistent
Rule 19b–4(f)(6) thereunder.4 The
those that may be withheld from the with Financial Industry Regulatory Authority
public in accordance with the Commission is publishing this notice to (‘‘FINRA’’) Rule 4240, Margin Requirements for
asabaliauskas on DSK3SPTVN1PROD with NOTICES
provisions of 5 U.S.C. 552, will be solicit comments on the proposed rule Credit Default Swaps. CBOE’s Credit Options (i.e.,
available for Web site viewing and change from interested persons. Credit Default Options and Credit Default Basket
Options) are analogous to credit default swaps.
printing in the Commission’s Public 6 See Securities Exchange Act Release No. 59955
28 17 CFR 200.30–3(a)(12). (May 22, 2009), 74 FR 25586 (May 28, 2009) (Notice
27 For purposes only of waiving the operative 1 15 of Filing and Order Granting Accelerated Approval
U.S.C. 78s(b)(1).
delay for this proposal, the Commission has of Proposed Rule Change; SR–FINRA–2009–012).
2 17 CFR 240.19b–4.
considered the proposed rule’s impact on 7 See Securities Exchange Act Release No. 66163
3 15 U.S.C. 78s(b)(3)(A)(iii).
efficiency, competition, and capital formation. See (January 17, 2012), 77 FR 3318 (January 23, 2012)
15 U.S.C. 78c(f). 4 17 CFR 240.19b–4(f)(6). (SR–CBOE–2012–007).
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Document Created: 2018-02-14 09:13:47
Document Modified: 2018-02-14 09:13:47
| 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 95232 |
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