82 FR 1383 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Related to a Change to the Trading Symbol for P.M.-Settled Options on the Standard & Poor's 500 Index
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 3 (January 5, 2017)
Federal Register Volume 82, Issue 3 (January 5, 2017)
| Page Range | 1383-1386 | |
| FR Document | 2016-31943 |
[Federal Register Volume 82, Number 3 (Thursday, January 5, 2017)] [Notices] [Pages 1383-1386] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-31943] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79712; File No. SR-CBOE-2016-091] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Related to a Change to the Trading Symbol for P.M.-Settled Options on the Standard & Poor's 500 Index December 29, 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 December 16, 2016, Chicago Board Options Exchange, Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I, II, and [[Page 1384]] III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange seeks to amend Exchange rules related to P.M.-settled options on the Standard & Poor's 500 Index. The text of the proposed rule change is available on the Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the Secretary, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange seeks to amend Exchange rules related to P.M.-settled options on the Standard & Poor's 500 Index (``S&P 500 Index''). Specifically, the Exchange seeks to move third-Friday P.M.-settled options into the Hybrid 3.0 S&P 500 Index options class. This proposed rule change will facilitate a change to the trading symbol for P.M.- settled S&P 500 Index options that have standard third Friday-of-the- month (``third-Friday'') expirations from ``SPXPM'' to ``SPXW.'' The Exchange lists A.M.-settled S&P 500 Index options that have standard third-Friday expirations.\3\ The Exchange also lists P.M.- settled S&P 500 Index options that have standard third-Friday expirations.\4\ Currently, third-Friday A.M.-settled S&P 500 Index options trading under the symbol ``SPX'' are included in the Hybrid 3.0 options class.\5\ Also included in the Hybrid 3.0 options class are nonstandard P.M.-settled S&P 500 Index options trading under the symbol ``SPXW,'' which may expire on Mondays, Wednesdays, Fridays (other than third-Friday-of-the-month), and the last trading day of the month.\6\ While included in the Hybrid 3.0 class, the group of options trading under the symbol ``SPXW'' trade on the Hybrid Trading System.\7\ Currently, third-Friday P.M.-settled S&P 500 Index options form a separate options class and trade under the symbol ``SPXPM'' on the Hybrid Trading System.\8\ --------------------------------------------------------------------------- \3\ See Rule 24.9(a)(4)(i) (identifying A.M.-settled S&P 500 Index options as being approved for trading on the Exchange). \4\ See Rule 24.9.14 (authorizing the Exchange to list P.M.- settled S&P 500 options). \5\ See Rule 8.3(c)(iii). \6\ See Rule 24.9(e). \7\ See Rule 8.14.01. \8\ See Rule 8.3(c)(i) (identifying P.M.-settled third-Friday S&P options as a Tier AA Hybrid Options Class). --------------------------------------------------------------------------- The Exchange believes moving SPXPM into the SPX options class to trade under the SPXW symbol will have no adverse impact on the marketplace. In fact, the Exchange believes moving SPXPM into the SPX options class to trade under the SPXW symbol will have a positive impact on the marketplace and retail customers in particular. As previously noted, in addition to end-of-the-month expirations, SPXW options are P.M.-settled S&P 500 Index options that may expire on Mondays, Wednesdays, and Fridays (other than third-Friday-of-the-month) (i.e., nonstandard weekly expirations pursuant to Rule 24.9(e)). Trading P.M.-settled third-Friday expirations under the SPXW symbol will ensure market participants, particularly retail customers, have seamless access to P.M.-settled S&P 500 Index options expiring every Friday of the month. Currently, a user of SPXW options cannot roll an existing SPXW position that expires on a first or second Friday of a month into a SPXW position that expires on a third-Friday. Thus, for SPXW users, there is a gap in Friday expirations. Changing the SPXPM symbol to SPXW will remove the gap in Friday SPXW expirations and allow market participants, especially retail customers that are less likely to utilize both SPXPM and SPXW options to maintain exposure to Friday expirations, to have seamless access to P.M.-settled S&P 500 Index options expiring every Friday of the month. In addition, offering seamless access to P.M.-settled S&P 500 Index options that expire every Friday of the month will allow market participants to submit complex orders with options series that expire on third-Fridays and other Friday expirations. Market participants may not submit complex orders that consist of SPXPM options series and SPXW options series because they are currently in separate classes.\9\ Although market participants have the ability to submit separate orders to leg into a position with third-Friday and other Friday exposure, retail customers are less likely to leg into a position. Thus, changing the SPXPM symbol to SPXW will allow market participants, especially retail customers, to submit complex orders with options series that expire on third-Fridays and other Fridays. --------------------------------------------------------------------------- \9\ The Exchange notes that Rule 24.19 provides a limited exception for the trading of Multi-Class Broad-Based Index Option Spread Orders in open outcry. See also Regulatory Circular RG15-152. --------------------------------------------------------------------------- As previously noted, the Exchange does not believe moving SPXPM into the SPX options class and changing the SPXPM symbol to SPXW will have any adverse impact on market participants. Because SPXPM and SPXW options both trade on the Hybrid Trading System,\10\ and Exchange Rules and systems treat SPXPM and SPXW the same in most respects, the Exchange expects a smooth transition of SPXPM series to the SPXW symbol. For example, the minimum increment applicable to both SPXPM and SPXW orders is the same.\11\ Additionally, the allocation algorithm for both SPXPM and SPXW is currently price-time during Regular Trading Hours (``RTH''),\12\ there is no Lead Market-Maker (``LMM'') \13\ appointed in SPXPM or SPXW during RTH, and the only firm appointed as the LMM in SPXPM during Extended Trading Hours (``ETH'') is also an appointed LMM in SPXW (via the SPX options class appointment) during ETH.\14\ The few differences between SPXPM and SPXW trading parameters are as follows: --------------------------------------------------------------------------- \10\ See Rules 8.3(c)(i) (identifying P.M.-settled third-Friday S&P Index options as a Tier AA Hybrid Options Class) and 8.14.01 (allowing the Exchange to authorize a group of series of a class for trading on the Hybrid Trading System). \11\ See Rule 6.42(1)-(4). \12\ See Rule 6.45B(a)(i). \13\ See Rule 8.15 (giving the Exchange the ability to appoint LMMs). \14\ See CBOE Regulatory Circulars RG 14-134 and RG15-131. ---------------------------------------------------------------------------The allocation algorithm for opening rotations is pro-rata in SPXW and price-time in SPXPM; \15\ --------------------------------------------------------------------------- \15\ See Rule 6.2B.04 (allowing the Exchange to determine the allocation algorithm for opening rotations on a class-by-class basis); see also Regulatory Circulars RG14-016 (setting forth the allocation method for SPXW, which, at the time, only applied to Regular Trading Hours as the Exchange did not yet offer Extended Trading Hours); RG13-012 (setting forth the allocation method for SPXPM, which, at the time, only applied to Regular Trading Hours as the Exchange did not yet offer Extended Trading Hours); RG15-029 (setting forth the allocation method for SPXW during Extended Trading Hours); and RG15-131 (setting forth the allocation method for SPXPM during Extended Trading Hours). --------------------------------------------------------------------------- [[Page 1385]] The Exchange has activated the Automated Improvement Mechanism (``AIM'') for SPXPM during RTH but not SPXW.\16\ AIM is available for SPXPM and SPXW during ETH; \17\ --------------------------------------------------------------------------- \16\ See Rule 6.74A(a)(1) (providing that the Exchange determines the options classes that are eligible for AIM); see also Regulatory Circular sRG16-024 (providing that AIM will not be available in SPXW options during Regular Trading Hours) and RG13-012 (providing that AIM will be available for SPXPM, which, at the time, only applied to Regular Trading Hours as the Exchange did not yet offer Extended Trading Hours). \17\ See Regulatory Circular RG16-049 (providing that AIM will be available in Extended Trading Hours for SPXW and SPXPM). --------------------------------------------------------------------------- During RTH the appointment cost for the SPXPM options class is .50, and the appointment cost for the SPX class is 1.0. However, all Market-Makers currently appointed in SPXPM during RTH are also appointed in SPX during RTH, which SPX appointment confers the right to trade A.M.-settled SPX options as well as P.M.-settled SPXW options.\18\ --------------------------------------------------------------------------- \18\ See Rule 8.3(c)(iii). --------------------------------------------------------------------------- During ETH the appointment cost for the SPXPM options class is .1, and the appointment cost for the SPX class is .4. However, all Market-Makers currently appointed in SPXPM during ETH are also appointed in SPX during ETH. Market-Makers are not allowed to enter orders to rest in the complex order book (``COB'') for SPXW during RTH but are allowed during ETH whereas Market-Makers are allowed to enter orders to rest in the COB for SPXPM in both Regular and Extended Trading Hours.\19\ --------------------------------------------------------------------------- \19\ See Rule 6.53C(c)(i) (providing the Exchange with authority to determine which origin codes are eligible to be entered into the COB); see also Regulatory Circulars RG15-195 (identifying origin codes that are not allowed to rest in the SPXW COB during Regular and Extended Trading Hours); RG13-012 (identifying origin codes that are allowed for SPXPM, which, at the time, only applied to Regular Trading Hours as the Exchange did not yet offer Extended Trading Hours); and RG15-131 (identifying origin codes that are allowed to rest in the SPXPM COB during Extended Trading Hours). --------------------------------------------------------------------------- Position Limits/Reporting Requirements In addition, since third-Friday P.M.-settled options trading under the SPXW symbol will be a new type of series under the SPX options class and not a new options class, all third-Friday P.M.-settled SPXW options will be aggregated together with all other standard expirations for applicable reporting and other requirements.\20\ --------------------------------------------------------------------------- \20\ See e.g., Rule 4.13, Reports Related to Position Limits, and Interpretation and Policy .03 to Rule 24.4, which sets forth the reporting requirements for certain broad-based indexes that do not have position limits. --------------------------------------------------------------------------- Pilot Reports Third-Friday P.M.-Settled S&P 500 Index options are listed on a pilot basis.\21\ The pilot will continue under the same terms that established the pilot. As part of the pilot, the Exchange submits quarterly reports and annual reports that analyze the market impact and trading patterns of third-Friday P.M.-settled S&P 500 options. The reports will be modified to provide the same data and analysis for third-Friday P.M.-settled S&P 500 Index options trading under symbol SPXW that is currently submitted for third-Friday P.M.-settled S&P 500 Index options trading under symbol SPXPM. --------------------------------------------------------------------------- \21\ See Rule 24.9.14 and Securities Exchange Act Release No. 68457 (December 18, 2012), 77 FR 76135 (December 26, 2012) (SR-CBOE- 2012-120). --------------------------------------------------------------------------- 2013 SPXPM Approval Order The Exchange also proposes to correct the record with respect to the original approval to list SPXPM options on CBOE.\22\ The Exchange's initial filing to list SPXPM on CBOE proposed ``to move all P.M.- settled S&P 500 Index options series that are part of the SPXPM [sic] options class and that have an expiration on any day other than the third Friday of every month (e.g., Quarterly Index Options (``QIX''), End-of-Week (``EOW'') series, etc.) to the SPXPM class.'' \23\ First, noted in the previous sentence, the initial filing mistakenly proposed to move options series that were part of the SPXPM options class to the SPXPM options class, which has no meaning because if series are part of an options class they can't be moved to the same options class. Second, the Exchange's Amendment No. 3 to the rule filing sought to replace the above-quoted sentence with the following sentence: --------------------------------------------------------------------------- \22\ See Securities Exchange Act Release No. 68888 (February 8, 2013), 78 FR 10668 (February 14, 2013) (SR-CBOE-2012-120) (Order approving SPXPM for trading on CBOE) (``Approval Order''). \23\ See Securities Exchange Act Release No. 68457 (December 18, 2012), 77 FR 76135 (December 26, 2012) (SR-CBOE-2012-120). The Exchange does not propose to move any P.M.-settled S&P 500 Index options series that are part of the SPX options class and that have an expiration on any day other than the third Friday of every month (e.g., Quarterly Index Options (``QIX''), End-of-Week (``EOW'') --------------------------------------------------------------------------- series, etc.) to the SPXPM class. However, Footnote 5 of the Approval Order mistakenly indicated that pursuant to the Exchange's Amendment No. 3, any P.M.-settled S&P 500 Index options series that are part of the SPX options class and that have an expiration on any day other than the third Friday of every month will remain under the SPXPM class to avoid investor confusion. The Approval Order should have indicated that P.M.-settled S&P 500 Index options series that are part of the SPX options class and that have an expiration on any day other than the third Friday of every month will remain under the SPX class, not the SPXPM class. Notwithstanding the mistake in the Approval Order P.M.-settled S&P 500 Index options series that have an expiration on any day other than the third Friday of every month have been included in the SPX class; thus, this proposal simply corrects the record. Conforming Changes In order to move the SPXPM class into the SPX class the Exchange is making conforming changes to CBOE Rules 6.1A, 6.42, 8.3, 24.4, 24.5, 24.6, 24.9, 24A.7, 24A.8, 24B.7, and 24B.8. Implementation Date The Exchange intends to change the SPXPM symbol to SPXW at some point in February 2017.\24\ However, in the event that the Exchange determines to implement the change at a later date, the proposed rule text provides that current rule text provisions will remain in effect until a date specified by the Exchange in a Regulatory Circular, which date shall be no later than July 31, 2017, and on the date specified by the Exchange in a Regulatory Circular, the rule text provisions amended by this filing will be in effect. --------------------------------------------------------------------------- \24\ See RG16-132. --------------------------------------------------------------------------- 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.\25\ Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \26\ requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market [[Page 1386]] 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) \27\ requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \25\ 15 U.S.C. 78f(b). \26\ 15 U.S.C. 78f(b)(5). \27\ Id. --------------------------------------------------------------------------- In particular, the Exchange believes trading P.M.-settled third- Friday expirations under the SPXW symbol rather than the separate SPXPM symbol will ensure market participants, particularly retail customers, have seamless access to P.M.-settled S&P 500 Index options expiring every Friday of the month, which helps to remove impediments to and perfect the mechanism of a free and open market. The Exchange believes the proposed rule change will help to protect investors and the public interest by allowing market participants to enter options positions with the same underlying in one symbol that spans every Friday expiration in a month, thus providing a more efficient way to gain exposure and hedge risk. B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe the rule change will impose a burden on intramarket competition because all market participants will continue to have access to P.M.-settled S&P 500 Index options expiring every Friday of the month and will be able to trade them under the SPXW symbol. The proposal will not impose a burden on intermarket competition because the options effected by this proposal are exclusive to CBOE. Additionally, the Exchange does not believe the proposal will impose any burden on intermarket competition as market participants on other exchanges are welcome to become Trading Permit Holders and trade at CBOE if they determine that this proposed rule change has made CBOE more attractive or favorable. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents, the Commission will: A. By order approve or disapprove such proposed rule change, or B. institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-CBOE-2016-091 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CBOE-2016-091. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CBOE-2016-091 and should be submitted on or before January 26, 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. 2016-31943 Filed 1-4-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 3 / Thursday, January 5, 2017 / Notices 1383
A trading platform cannot generate from substitute products, and in the post all comments on the Commission’s
market information unless it receives competition among distributors for Internet Web site (http://www.sec.gov/
trade orders. As a result, the customers. For these reasons, the rules/sro.shtml). Copies of the
competition for order flow constrains Exchange has provided a substantial submission, all subsequent
the prices that platforms can charge for basis demonstrating that the fee is amendments, all written statements
proprietary data products. Firms make equitable, fair, reasonable, and not with respect to the proposed rule
decisions on how much and what types unreasonably discriminatory, and change that are filed with the
of data to consume based on the total therefore consistent with and in Commission, and all written
cost of interacting with Nasdaq and furtherance of the purposes of the communications relating to the
other exchanges. Data fees are but one Exchange Act. proposed rule change between the
factor in a total platform analysis. If the Commission and any person, other than
cost of the product exceeds its expected C. Self-Regulatory Organization’s those that may be withheld from the
value, the broker-dealer will choose not Statement on Comments on the public in accordance with the
to buy it. A supracompetitive increase Proposed Rule Change Received From provisions of 5 U.S.C. 552, will be
in the fees charged for either Members, Participants, or Others available for Web site viewing and
transactions or proprietary data has the No written comments were either printing in the Commission’s Public
potential to impair revenues from both solicited or received. Reference Room, 100 F Street NE.,
products. In this manner, the Washington, DC 20549 on official
III. Date of Effectiveness of the
competition for order flow constrains business days between the hours of
Proposed Rule Change and Timing for
prices for proprietary data products. 10:00 a.m. and 3:00 p.m. Copies of such
Commission Action
filing also will be available for
Substitute Products The foregoing proposed rule change inspection and copying at the principal
The price of the data contained in the has become effective pursuant to office of the Exchange. All comments
Daily List and Fundamental Data Section 19(b)(3)(A)(ii) of the Act.12 received will be posted without change;
product is constrained by the ability of At any time within 60 days of the the Commission does not edit personal
a data vendor to obtain the information filing of the proposed rule change, the identifying information from
necessary to create and sell competing Commission summarily may submissions. You should submit only
products. Nasdaq does not have unique temporarily suspend such rule change if information that you wish to make
access to the information that is it appears to the Commission that such available publicly. All submissions
provided through the product, and action is: (i) Necessary or appropriate in should refer to File Number SR–
market participants do not have an the public interest; (ii) for the protection NASDAQ–2016–175, and should be
unqualified need for the information of investors; or (iii) otherwise in submitted on or before January 26, 2017.
provided. Therefore, the price that furtherance of the purposes of the Act. For the Commission, by the Division of
Nasdaq can charge for the product is If the Commission takes such action, the Trading and Markets, pursuant to delegated
constrained by the ability of market Commission shall institute proceedings authority.13
participants to reduce their demand for to determine whether the proposed rule Eduardo A. Aleman,
the product and the ability of should be approved or disapproved. Assistant Secretary.
competitors to enter the market and
profitably undercut any IV. Solicitation of Comments [FR Doc. 2016–31936 Filed 1–4–17; 8:45 am]
BILLING CODE 8011–01–P
supracompetitive price increase. Interested persons are invited to
submit written data, views, and
Competition Among Distributors
arguments concerning the foregoing, SECURITIES AND EXCHANGE
Distributors provide another form of including whether the proposed rule
price discipline for proprietary data COMMISSION
change is consistent with the Act.
products. Distributors are in Comments may be submitted by any of [Release No. 34–79712; File No. SR–CBOE–
competition for users, and can simply the following methods: 2016–091]
refuse to purchase any proprietary data
product that fails to provide sufficient Electronic Comments Self-Regulatory Organizations;
value for the price. If the price of this • Use the Commission’s Internet Chicago Board Options Exchange,
product were set above competitive comment form (http://www.sec.gov/ Incorporated; Notice of Filing of a
levels, Distributors could determine rules/sro.shtml); or Proposed Rule Change Related to a
whether the product was sufficiently • Send an email to rule-comments@ Change to the Trading Symbol for
attractive to their own customers to sec.gov. Please include File Number SR– P.M.-Settled Options on the Standard &
warrant incurring the costs associated NASDAQ–2016–175 on the subject line. Poor’s 500 Index
with purchasing it for distribution. December 29, 2016.
Paper Comments
Since distributors are in competition Pursuant to Section 19(b)(1) of the
with one another to attract customers, • Send paper comments in triplicate Securities Exchange Act of 1934 (the
they must continually evaluate their to Secretary, Securities and Exchange ‘‘Act’’),1 and Rule 19b–4 thereunder,2
cost base and the value of their product Commission, 100 F Street NE., notice is hereby given that on December
offering to customers to determine Washington, DC 20549–1090. 16, 2016, Chicago Board Options
whether they allow them to maximize All submissions should refer to File Exchange, Incorporated (the ‘‘Exchange’’
profitability. This competition for Number SR–NASDAQ–2016–175. This
mstockstill on DSK3G9T082PROD with NOTICES
or ‘‘CBOE’’) filed with the Securities
customers provides another check on file number should be included on the and Exchange Commission (the
the price for proprietary data products subject line if email is used. To help the ‘‘Commission’’) the proposed rule
such as the Daily List and Fundamental Commission process and review your change as described in Items I, II, and
Data. comments more efficiently, please use
In summary, market forces constrain only one method. The Commission will 13 17 CFR 200.30–3(a)(12).
the price of the product through 1 15 U.S.C. 78s(b)(1).
competition for order flow, competition 12 15 U.S.C. 78s(b)(3)(A)(ii). 2 17 CFR 240.19b–4.
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• The Exchange has activated the Pilot Reports options class and that have an
Automated Improvement Mechanism Third-Friday P.M.-Settled S&P 500 expiration on any day other than the
(‘‘AIM’’) for SPXPM during RTH but not Index options are listed on a pilot third Friday of every month will remain
SPXW.16 AIM is available for SPXPM basis.21 The pilot will continue under under the SPXPM class to avoid
and SPXW during ETH; 17 the same terms that established the investor confusion. The Approval Order
• During RTH the appointment cost pilot. As part of the pilot, the Exchange should have indicated that P.M.-settled
for the SPXPM options class is .50, and submits quarterly reports and annual S&P 500 Index options series that are
the appointment cost for the SPX class reports that analyze the market impact part of the SPX options class and that
is 1.0. However, all Market-Makers and trading patterns of third-Friday have an expiration on any day other
currently appointed in SPXPM during P.M.-settled S&P 500 options. The than the third Friday of every month
RTH are also appointed in SPX during reports will be modified to provide the will remain under the SPX class, not the
RTH, which SPX appointment confers same data and analysis for third-Friday SPXPM class. Notwithstanding the
the right to trade A.M.-settled SPX P.M.-settled S&P 500 Index options mistake in the Approval Order P.M.-
options as well as P.M.-settled SPXW trading under symbol SPXW that is settled S&P 500 Index options series
options.18 currently submitted for third-Friday that have an expiration on any day other
• During ETH the appointment cost P.M.-settled S&P 500 Index options than the third Friday of every month
for the SPXPM options class is .1, and trading under symbol SPXPM. have been included in the SPX class;
the appointment cost for the SPX class thus, this proposal simply corrects the
is .4. However, all Market-Makers 2013 SPXPM Approval Order record.
currently appointed in SPXPM during The Exchange also proposes to correct
Conforming Changes
ETH are also appointed in SPX during the record with respect to the original
ETH. approval to list SPXPM options on In order to move the SPXPM class
• Market-Makers are not allowed to CBOE.22 The Exchange’s initial filing to into the SPX class the Exchange is
enter orders to rest in the complex order list SPXPM on CBOE proposed ‘‘to making conforming changes to CBOE
book (‘‘COB’’) for SPXW during RTH but move all P.M.-settled S&P 500 Index Rules 6.1A, 6.42, 8.3, 24.4, 24.5, 24.6,
are allowed during ETH whereas options series that are part of the 24.9, 24A.7, 24A.8, 24B.7, and 24B.8.
Market-Makers are allowed to enter SPXPM [sic] options class and that have Implementation Date
orders to rest in the COB for SPXPM in an expiration on any day other than the
third Friday of every month (e.g., The Exchange intends to change the
both Regular and Extended Trading
Quarterly Index Options (‘‘QIX’’), End- SPXPM symbol to SPXW at some point
Hours.19
of-Week (‘‘EOW’’) series, etc.) to the in February 2017.24 However, in the
Position Limits/Reporting Requirements SPXPM class.’’ 23 First, noted in the event that the Exchange determines to
In addition, since third-Friday P.M.- previous sentence, the initial filing implement the change at a later date, the
settled options trading under the SPXW mistakenly proposed to move options proposed rule text provides that current
symbol will be a new type of series series that were part of the SPXPM rule text provisions will remain in effect
under the SPX options class and not a options class to the SPXPM options until a date specified by the Exchange
new options class, all third-Friday P.M.- class, which has no meaning because if in a Regulatory Circular, which date
settled SPXW options will be aggregated series are part of an options class they shall be no later than July 31, 2017, and
together with all other standard can’t be moved to the same options on the date specified by the Exchange in
expirations for applicable reporting and class. Second, the Exchange’s a Regulatory Circular, the rule text
other requirements.20 Amendment No. 3 to the rule filing provisions amended by this filing will
sought to replace the above-quoted be in effect.
029 (setting forth the allocation method for SPXW sentence with the following sentence: 2. Statutory Basis
during Extended Trading Hours); and RG15–131 The Exchange does not propose to
(setting forth the allocation method for SPXPM The Exchange believes the proposed
during Extended Trading Hours). move any P.M.-settled S&P 500 Index rule change is consistent with the
16 See Rule 6.74A(a)(1) (providing that the options series that are part of the SPX Securities Exchange Act of 1934 (the
Exchange determines the options classes that are options class and that have an ‘‘Act’’) and the rules and regulations
eligible for AIM); see also Regulatory Circular expiration on any day other than the
sRG16–024 (providing that AIM will not be thereunder applicable to the Exchange
available in SPXW options during Regular Trading
third Friday of every month (e.g., and, in particular, the requirements of
Hours) and RG13–012 (providing that AIM will be Quarterly Index Options (‘‘QIX’’), End- Section 6(b) of the Act.25 Specifically,
available for SPXPM, which, at the time, only of-Week (‘‘EOW’’) series, etc.) to the the Exchange believes the proposed rule
applied to Regular Trading Hours as the Exchange SPXPM class.
did not yet offer Extended Trading Hours). change is consistent with the Section
17 See Regulatory Circular RG16–049 (providing However, Footnote 5 of the Approval 6(b)(5) 26 requirements that the rules of
that AIM will be available in Extended Trading Order mistakenly indicated that an exchange be designed to prevent
Hours for SPXW and SPXPM). pursuant to the Exchange’s Amendment fraudulent and manipulative acts and
18 See Rule 8.3(c)(iii).
No. 3, any P.M.-settled S&P 500 Index practices, to promote just and equitable
19 See Rule 6.53C(c)(i) (providing the Exchange
options series that are part of the SPX principles of trade, to foster cooperation
with authority to determine which origin codes are
eligible to be entered into the COB); see also and coordination with persons engaged
Regulatory Circulars RG15–195 (identifying origin certain broad-based indexes that do not have
position limits.
in regulating, clearing, settling,
codes that are not allowed to rest in the SPXW COB
during Regular and Extended Trading Hours); 21 See Rule 24.9.14 and Securities Exchange Act processing information with respect to,
mstockstill on DSK3G9T082PROD with NOTICES
RG13–012 (identifying origin codes that are allowed Release No. 68457 (December 18, 2012), 77 FR and facilitating transactions in
for SPXPM, which, at the time, only applied to 76135 (December 26, 2012) (SR–CBOE–2012–120). securities, to remove impediments to
Regular Trading Hours as the Exchange did not yet 22 See Securities Exchange Act Release No. 68888
and perfect the mechanism of a free and
offer Extended Trading Hours); and RG15–131 (February 8, 2013), 78 FR 10668 (February 14, 2013)
(identifying origin codes that are allowed to rest in (SR–CBOE–2012–120) (Order approving SPXPM for
open market and a national market
the SPXPM COB during Extended Trading Hours). trading on CBOE) (‘‘Approval Order’’).
20 See e.g., Rule 4.13, Reports Related to Position 23 See Securities Exchange Act Release No. 68457 24 See RG16–132.
25 15 U.S.C. 78f(b).
Limits, and Interpretation and Policy .03 to Rule (December 18, 2012), 77 FR 76135 (December 26,
24.4, which sets forth the reporting requirements for 2012) (SR–CBOE–2012–120). 26 15 U.S.C. 78f(b)(5).
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![1386 Federal Register / Vol. 82, No. 3 / Thursday, January 5, 2017 / Notices
system, and, in general, to protect III. Date of Effectiveness of the inspection and copying at the principal
investors and the public interest. Proposed Rule Change and Timing for office of the Exchange. All comments
Additionally, the Exchange believes the Commission Action received will be posted without change;
proposed rule change is consistent with Within 45 days of the date of the Commission does not edit personal
the Section 6(b)(5) 27 requirement that publication of this notice in the Federal identifying information from
the rules of an exchange not be designed Register or within such longer period submissions. You should submit only
to permit unfair discrimination between up to 90 days (i) as the Commission may information that you wish to make
customers, issuers, brokers, or dealers. designate if it finds such longer period available publicly. All submissions
to be appropriate and publishes its should refer to File Number SR–CBOE–
In particular, the Exchange believes
reasons for so finding or (ii) as to which 2016–091 and should be submitted on
trading P.M.-settled third-Friday or before January 26, 2017.
expirations under the SPXW symbol the Exchange consents, the Commission
rather than the separate SPXPM symbol will: For the Commission, by the Division of
will ensure market participants, A. By order approve or disapprove Trading and Markets, pursuant to delegated
such proposed rule change, or authority.28
particularly retail customers, have
B. institute proceedings to determine Eduardo A. Aleman,
seamless access to P.M.-settled S&P 500
Index options expiring every Friday of whether the proposed rule change Assistant Secretary.
the month, which helps to remove should be disapproved. [FR Doc. 2016–31943 Filed 1–4–17; 8:45 am]
impediments to and perfect the IV. Solicitation of Comments BILLING CODE 8011–01–P
mechanism of a free and open market.
Interested persons are invited to
The Exchange believes the proposed
submit written data, views, and SECURITIES AND EXCHANGE
rule change will help to protect
arguments concerning the foregoing, COMMISSION
investors and the public interest by including whether the proposed rule
allowing market participants to enter change is consistent with the Act. Sunshine Act Meeting
options positions with the same Comments may be submitted by any of
underlying in one symbol that spans the following methods: Notice is hereby given, pursuant to
every Friday expiration in a month, thus the provisions of the Government in the
providing a more efficient way to gain Electronic Comments Sunshine Act, Public Law 94–409, that
exposure and hedge risk. • Use the Commission’s Internet the Securities and Exchange
comment form (http://www.sec.gov/ Commission will hold a closed meeting
B. Self-Regulatory Organization’s on Friday, January 6, 2017 at 2:30 p.m.
Statement on Burden on Competition rules/sro.shtml); or
• Send an email to rule-comments@ Commissioners, Counsel to the
CBOE does not believe that the sec.gov. Please include File Number SR– Commissioners, the Secretary to the
proposed rule change will impose any CBOE–2016–091 on the subject line. Commission, and recording secretaries
burden on competition that is not will attend the closed meeting. Certain
Paper Comments staff members who have an interest in
necessary or appropriate in furtherance
of the purposes of the Act. The • Send paper comments in triplicate the matters also may be present.
Exchange does not believe the rule to Secretary, Securities and Exchange The General Counsel of the
change will impose a burden on Commission, 100 F Street NE., Commission, or her designee, has
intramarket competition because all Washington, DC 20549–1090. certified that, in her opinion, one or
market participants will continue to All submissions should refer to File more of the exemptions set forth in 5
have access to P.M.-settled S&P 500 Number SR–CBOE–2016–091. This file U.S.C. 552b(c)(3), (5), (7), 9(B) and (10)
Index options expiring every Friday of number should be included on the and 17 CFR 200.402(a)(3), (a)(5), (a)(7),
the month and will be able to trade subject line if email is used. To help the (a)(9)(ii) and (a)(10), permit
them under the SPXW symbol. The Commission process and review your consideration of the scheduled matter at
proposal will not impose a burden on comments more efficiently, please use the closed meeting.
intermarket competition because the only one method. The Commission will Chair White, as duty officer, voted to
options effected by this proposal are post all comments on the Commission’s consider the items listed for the closed
exclusive to CBOE. Additionally, the Internet Web site (http://www.sec.gov/ meeting in closed session.
Exchange does not believe the proposal rules/sro.shtml). Copies of the The subject matter of the closed
will impose any burden on intermarket submission, all subsequent meeting will be:
competition as market participants on amendments, all written statements Institution of injunctive actions;
other exchanges are welcome to become with respect to the proposed rule Institution and settlement of
Trading Permit Holders and trade at change that are filed with the administrative proceedings;
Commission, and all written
CBOE if they determine that this Adjudicatory matters; and
communications relating to the
proposed rule change has made CBOE Other matters relating to enforcement
proposed rule change between the
more attractive or favorable. proceedings.
Commission and any person, other than
C. Self-Regulatory Organization’s those that may be withheld from the At times, changes in Commission
Statement on Comments on the public in accordance with the priorities require alterations in the
provisions of 5 U.S.C. 552, will be scheduling of meeting items.
mstockstill on DSK3G9T082PROD with NOTICES
Proposed Rule Change Received From
Members, Participants, or Others available for Web site viewing and For further information and to
printing in the Commission’s Public ascertain what, if any, matters have been
The Exchange neither solicited nor Reference Room, 100 F Street NE., added, deleted or postponed; please
received comments on the proposed Washington, DC 20549 on official contact Brent J. Fields from the Office of
rule change. business days between the hours of the Secretary at (202) 551–5400.
10:00 a.m. and 3:00 p.m. Copies of the
27 Id. filing also will be available for 28 17 CFR 200.30–3(a)(12).
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Document Created: 2018-02-01 14:51:04
Document Modified: 2018-02-01 14:51:04
| 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 | 82 FR 1383 |
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