82 FR 14936 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change Amending Rule 968NY To Make Permanent a Program That Allows Transactions To Take Place at a Price That Is Below $1 per Option Contract
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 55 (March 23, 2017)
Federal Register Volume 82, Issue 55 (March 23, 2017)
| Page Range | 14936-14938 | |
| FR Document | 2017-05743 |
[Federal Register Volume 82, Number 55 (Thursday, March 23, 2017)] [Notices] [Pages 14936-14938] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-05743] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80272; File No. SR-NYSEMKT-2017-13] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change Amending Rule 968NY To Make Permanent a Program That Allows Transactions To Take Place at a Price That Is Below $1 per Option Contract March 17, 2017. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that, on March 2, 2017, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I and II, below, which Items have been prepared by the self-regulatory organization. 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\ 15 U.S.C. 78a. \3\ 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 968NY to make permanent a program that allows transactions to take place at a price that is below $1 per option contract. The proposed rule change is available on the Exchange's Web site at www.nyse.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 self-regulatory organization 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 those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Rule 968NY to make permanent a program that allows transactions to take place at a price that is below $1 per option contract.\4\ The program is currently subject to a pilot that is scheduled to expire on July 5, 2017.\5\ --------------------------------------------------------------------------- \4\ See Commentary .01 to Rule 968NY. \5\ See Securities Exchange Act Release No. 79564 (December 15, 2016), 81 FR 93716 (December 21, 2016) (SR-NYSEMKT-2016-116). The Exchange initially adopted the program in 2010. See Securities Exchange Act Release No. 63475 (December 8, 2010), 75 FR 77932 (December 14, 2010) (SR-NYSE Amex-2010-114). --------------------------------------------------------------------------- An ``accommodation'' or ``cabinet'' trade refers to trades in listed options on the Exchange that are worthless and typically not actively traded. Trading is generally conducted in accordance with Exchange Rules, except as provided in Exchange Rule 968NY, Accommodation Transactions (Cabinet Trades), which sets forth specific procedures for engaging in cabinet trades. Rule 968NY currently provides that cabinet transactions at a price of $1 per option contract to occur via open outcry in any options series open for trading on the Exchange, except option classes participating in the Penny Pilot Program.\6\ Rule 968NY provides that bids and offers (whether opening or closing a position) at a price of $1 per option contract may be represented in the trading crowd by a Floor Broker or by a Market Maker or be provided in response to a request by a Trading Official, a Floor Broker or a Market Maker, but must yield priority to all resting orders in the Cabinet (those orders held by the Trading Official, and which resting cabinet orders may be closing only). If the buyer and the seller yield to resting cabinet orders, opening cabinet bids can trade with opening cabinet offers at $1 per option contract. --------------------------------------------------------------------------- \6\ The $1 cabinet trading procedures are not available in Penny Pilot Program classes because in those classes an option series can trade in a standard increment as low as $0.01 per share (or $1.00 per option contract with a 100 share multiplier). --------------------------------------------------------------------------- The Exchange has amended the cabinet procedures to allow transactions to take place in open outcry at a price of at least $0 but less than $1 per option [[Page 14937]] contract. This amendment expires on July 5, 2017. These lower-priced transactions are permitted to be traded pursuant to the same procedures applicable to $1 cabinet trades, except that (i) bids and offers for opening transactions are permitted only to accommodate closing transactions, and (ii) transactions in option classes participating in the Penny Pilot Program are permitted. The Exchange believes that allowing a price of at least $0 but less than $1 better accommodates the closing of options positions in series that are worthless or not actively traded, particularly when there has been a significant move in the price of the underlying security, resulting in a large number of series being out-of-the-money. For example, a market participant might have a long position in a put series with a strike price of $30 and the underlying stock might be trading at $100. In such an instance, there is likely no market to close-out the position, even at the $1 cabinet price. As with other accommodation liquidations under Rule 968NY, transactions at prices less than $1 are not disseminated to the public on the consolidated tape. In addition, as with other accommodation liquidations under Rule 968NY, the transactions are exempt from the Consolidated Options Audit Trail (``COATS'') requirements of Exchange Rule 955NY, Order Format and System Entry Requirements. However, the Exchange maintains quotation, order and transaction information for such transactions in the same format as the COATS data is maintained. In this regard, all transactions for less than $1 must be reported to the Exchange following the close of each business day. The Exchange notes that while the level of liquidation trades are not meaningful, such trades serve an essential purpose in that they allow market participants to close out options positions that are worthless or not actively trading. To illustrate, in 2016, there were a total of 222 Cabinet trades. Of these, 148 trades comprising 112,257 contracts were executed at a price of $0.01, while the remaining 74 trades comprising 165,868 contracts were executed for a premium of less than $0.01. The Exchange believes this level of trading demonstrates the benefit of the current program to market participants. In support of making the program permanent, the Exchange represents that there are no operational issues in processing and clearing Cabinet trades in penny and sub-penny increments. Each Cabinet trade is input manually into the clearing system, and is then submitted for settlement at the Options Clearing Corporation. Additionally, ATP Holders have not raised any concerns with the processing of Cabinet trades. 2. Statutory Basis The Exchange believes that this proposed rule change is consistent with Section 6(b) \7\ of the Securities Exchange Act of 1934 (the ``Act''), in general, and furthers the objectives of Section 6(b)(5) \8\ of the Act in particular, in that it is designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, to remove impediments to and to perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. The Exchange believes that liquidation trades promote competition and afford market participants the opportunity to close out their options positions. The Exchange believes that permanently approving the rules that allow for liquidations at a price less than $1 per option contract would better facilitate the closing of options positions that are worthless or not actively trading, especially in Penny Pilot issues where cabinet trades are not otherwise permitted. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78f(b). \8\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that approving the program on a permanent basis is also consistent with the Act. With respect to the level of liquidation trades transacted on the Exchange, the Exchange believes that the data gathered provides meaningful support to make the program permanent. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that approving the program on a permanent basis will not impact competition, as it will continue to facilitate ATP Holders the ability to close positions in worthless or not actively traded series. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to 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 self-regulatory organization 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 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-NYSEMKT-2017-13 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-NYSEMKT-2017-13. 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 [[Page 14938]] 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-NYSEMKT-2017-13 and should be submitted on or before April 13, 2017. --------------------------------------------------------------------------- \9\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\9\ Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-05743 Filed 3-22-17; 8:45 am] BILLING CODE 8011-01-P
![14936 Federal Register / Vol. 82, No. 55 / Thursday, March 23, 2017 / Notices
to be appropriate and publishes its should refer to File Number SR– on the proposed rule change. The text
reasons for so finding or (ii) as to which NYSEARCA–2017–24 and should be of those statements may be examined at
the self-regulatory organization submitted on or before April 13, 2017. the places specified in Item IV below.
consents, the Commission will: For the Commission, by the Division of The Exchange has prepared summaries,
(A) By order approve or disapprove Trading and Markets, pursuant to delegated set forth in sections A, B, and C below,
such proposed rule change, or authority.9 of the most significant parts of such
(B) institute proceedings to determine Eduardo A. Aleman, statements.
whether the proposed rule change Assistant Secretary.
should be disapproved. A. Self-Regulatory Organization’s
[FR Doc. 2017–05742 Filed 3–22–17; 8:45 am] Statement of the Purpose of, and the
IV. Solicitation of Comments BILLING CODE 8011–01–P Statutory Basis for, the Proposed Rule
Interested persons are invited to Change
submit written data, views, and 1. Purpose
arguments concerning the foregoing, SECURITIES AND EXCHANGE
including whether the proposed rule COMMISSION The Exchange proposes to amend
change is consistent with the Act. Rule 968NY to make permanent a
[Release No. 34–80272; File No. SR–
Comments may be submitted by any of NYSEMKT–2017–13] program that allows transactions to take
the following methods: place at a price that is below $1 per
Self-Regulatory Organizations; NYSE option contract.4 The program is
Electronic Comments MKT LLC; Notice of Filing of Proposed currently subject to a pilot that is
• Use the Commission’s Internet Rule Change Amending Rule 968NY To scheduled to expire on July 5, 2017.5
comment form (http://www.sec.gov/ Make Permanent a Program That An ‘‘accommodation’’ or ‘‘cabinet’’
rules/sro.shtml); or Allows Transactions To Take Place at trade refers to trades in listed options on
• Send an email to rule-comments@ a Price That Is Below $1 per Option the Exchange that are worthless and
sec.gov. Please include File Number SR– Contract typically not actively traded. Trading is
NYSEARCA–2017–24 on the subject generally conducted in accordance with
line. March 17, 2017. Exchange Rules, except as provided in
Pursuant to Section 19(b)(1) 1 of the Exchange Rule 968NY, Accommodation
Paper Comments Securities Exchange Act of 1934 (the Transactions (Cabinet Trades), which
• Send paper comments in triplicate ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 sets forth specific procedures for
to Secretary, Securities and Exchange notice is hereby given that, on March 2, engaging in cabinet trades.
Commission, 100 F Street NE., 2017, NYSE MKT LLC (the ‘‘Exchange’’ Rule 968NY currently provides that
Washington, DC 20549–1090. or ‘‘NYSE MKT’’) filed with the cabinet transactions at a price of $1 per
All submissions should refer to File Securities and Exchange Commission option contract to occur via open outcry
Number SR–NYSEARCA–2017–24. This (the ‘‘Commission’’) the proposed rule in any options series open for trading on
file number should be included on the change as described in Items I and II, the Exchange, except option classes
subject line if email is used. To help the below, which Items have been prepared participating in the Penny Pilot
Commission process and review your by the self-regulatory organization. The Program.6 Rule 968NY provides that
comments more efficiently, please use Commission is publishing this notice to bids and offers (whether opening or
only one method. The Commission will solicit comments on the proposed rule closing a position) at a price of $1 per
post all comments on the Commission’s change from interested persons. option contract may be represented in
Internet Web site (http://www.sec.gov/ the trading crowd by a Floor Broker or
I. Self-Regulatory Organization’s by a Market Maker or be provided in
rules/sro.shtml). Copies of the Statement of the Terms of Substance of
submission, all subsequent response to a request by a Trading
the Proposed Rule Change Official, a Floor Broker or a Market
amendments, all written statements
The Exchange proposes to amend Maker, but must yield priority to all
with respect to the proposed rule
Rule 968NY to make permanent a resting orders in the Cabinet (those
change that are filed with the
program that allows transactions to take orders held by the Trading Official, and
Commission, and all written
place at a price that is below $1 per which resting cabinet orders may be
communications relating to the
option contract. The proposed rule closing only). If the buyer and the seller
proposed rule change between the
change is available on the Exchange’s yield to resting cabinet orders, opening
Commission and any person, other than
Web site at www.nyse.com, at the cabinet bids can trade with opening
those that may be withheld from the
principal office of the Exchange, and at cabinet offers at $1 per option contract.
public in accordance with the
the Commission’s Public Reference The Exchange has amended the
provisions of 5 U.S.C. 552, will be
Room. cabinet procedures to allow transactions
available for Web site viewing and
to take place in open outcry at a price
printing in the Commission’s Public II. Self-Regulatory Organization’s of at least $0 but less than $1 per option
Reference Room, 100 F Street NE., Statement of the Purpose of, and
Washington, DC 20549 on official Statutory Basis for, the Proposed Rule 4 See Commentary .01 to Rule 968NY.
business days between the hours of Change 5 See Securities Exchange Act Release No. 79564
10:00 a.m. and 3:00 p.m. Copies of the In its filing with the Commission, the (December 15, 2016), 81 FR 93716 (December 21,
filing also will be available for self-regulatory organization included
2016) (SR–NYSEMKT–2016–116). The Exchange
inspection and copying at the principal initially adopted the program in 2010. See
sradovich on DSK3GMQ082PROD with NOTICES
statements concerning the purpose of, Securities Exchange Act Release No. 63475
office of the Exchange. All comments and basis for, the proposed rule change (December 8, 2010), 75 FR 77932 (December 14,
received will be posted without change; and discussed any comments it received 2010) (SR–NYSE Amex–2010–114).
the Commission does not edit personal 6 The $1 cabinet trading procedures are not
identifying information from 9 17
available in Penny Pilot Program classes because in
CFR 200.30–3(a)(12). those classes an option series can trade in a
submissions. You should submit only 1 15 U.S.C. 78s(b)(1). standard increment as low as $0.01 per share (or
information that you wish to make 2 15 U.S.C. 78a.
$1.00 per option contract with a 100 share
available publicly. All submissions 3 17 CFR 240.19b–4. multiplier).
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![14938 Federal Register / Vol. 82, No. 55 / Thursday, March 23, 2017 / Notices
inspection and copying at the principal Pacific. Certain members also represent of Public Diplomacy and Public Affairs
office of the Exchange. All comments relevant state and regional authorities. in the Office of the Legal Adviser, U.S.
received will be posted without change; The panel was established in 1992 to Department of State (telephone: 202–
the Commission does not edit personal advise the U.S. Section of the NPAFC on 632–6471; email: section2459@
identifying information from research needs and priorities for state.gov). The mailing address is U.S.
submissions. You should submit only anadromous species, such as salmon, Department of State, L/PD, SA–5, Suite
information that you wish to make and ecologically related species 5H03, Washington, DC 20522–0505.
available publicly. All submissions occurring in the high seas of the North
Alyson Grunder,
should refer to File Number SR– Pacific Ocean. The upcoming Panel
NYSEMKT–2017–13 and should be meeting will focus on a review of the Deputy Assistant Secretary for Policy, Bureau
agenda for the 2017 annual meeting of of Educational and Cultural Affairs,
submitted on or before April 13, 2017. Department of State.
For the Commission, by the Division of
the NPAFC (May 15–19, 2017; Victoria,
[FR Doc. 2017–05797 Filed 3–22–17; 8:45 am]
Trading and Markets, pursuant to delegated Canada). Background material is
available from the point of contact noted BILLING CODE 4710–05–P
authority.9
Eduardo A. Aleman, above and by visiting www.npafc.org.
Assistant Secretary. Dave Hogan,
[FR Doc. 2017–05743 Filed 3–22–17; 8:45 am] Acting Director, Office of Marine SURFACE TRANSPORTATION BOARD
BILLING CODE 8011–01–P Conservation, Department of State.
[Docket No. AB 290 (Sub-No. 389X)]
[FR Doc. 2017–05796 Filed 3–22–17; 8:45 am]
BILLING CODE 4710–09–P Norfolk Southern Railway Company—
DEPARTMENT OF STATE Abandonment Exemption—in
[Public Notice: 9923] Roanoke, Va.
DEPARTMENT OF STATE
Norfolk Southern Railway Company
Notice of Public Meeting [Public Notice: 9926]
(NSR) has filed a verified notice of
SUMMARY: The Advisory Panel to the Notice of Determinations; Culturally exemption under 49 CFR part 1152,
U.S. Section of the North Pacific Significant Objects Imported for subpart F—Exempt Abandonments to
Anadromous Fish Commission will Exhibition Determinations: ‘‘Robert abandon an approximately 0.5-mile line
meet on May 3, 2017. Rauschenberg’’ Exhibition of railroad, between mileposts R 4.0 and
DATES: The meeting will take place via R 4.5, in Roanoke, Va. (the Line).1 The
Notice is hereby given of the following Line traverses United States Postal
teleconference on May 3, 2017, from 4 determinations: Pursuant to the
p.m. to 5 p.m. Eastern time. Service Zip Code 24015.
authority vested in me by the Act of NSR has certified that: (1) No local
Meeting Details: The teleconference October 19, 1965 (79 Stat. 985; 22 U.S.C.
call-in number is toll-free 877–336– traffic has moved over the Line for at
2459), E.O. 12047 of March 27, 1978, the least two years; (2) no overhead traffic
1831, passcode 6472335, and will have Foreign Affairs Reform and
a limited number of lines for members has moved over the Line for at least two
Restructuring Act of 1998 (112 Stat. years and overhead traffic, if there were
of the public to access from anywhere 2681, et seq.; 22 U.S.C. 6501 note, et
in the United States. Callers will hear any, could be rerouted over other lines;
seq.), Delegation of Authority No. 234 of (3) no formal complaint filed by a user
instructions for using the passcode and October 1, 1999, Delegation of Authority
joining the call after dialing the toll-free of rail service on the Line (or by a state
No. 236–3 of August 28, 2000 (and, as or local government entity acting on
number noted. Members of the public appropriate, Delegation of Authority No.
wishing to participate in the behalf of such user) regarding cessation
257–1 of December 11, 2015), I hereby of service over the Line either is
teleconference must contact the OES determine that the objects to be
officer in charge as noted in the FOR pending with the Surface
included in the exhibition ‘‘Robert Transportation Board (Board) or with
MORE INFORMATION CONTACT section
Rauschenberg,’’ imported from abroad any U.S. District Court or has been
below no later than close of business on for temporary exhibition within the
Monday, May 1, 2017. decided in favor of complainant within
United States, are of cultural the two-year period; and (4) the
FOR FURTHER INFORMATION CONTACT: significance. The objects are imported requirements at 49 CFR 1105.7(c) and
Colin Brinkman, Office of Marine pursuant to loan agreements with the 1105.8(c) (environmental and historic
Conservation. Telephone (202) 647– foreign owners or custodians. I also report), 49 CFR 1105.11 (transmittal
1952, email address brinkmancc@ determine that the exhibition or display letter), 49 CFR 1105.12 (newspaper
state.gov. of the exhibit objects at The Museum of publication), and 49 CFR 1152.50(d)(1)
SUPPLEMENTARY INFORMATION: In Modern Art, New York, New York, from (notice to governmental agencies) have
accordance with the requirements of the on or about May 21, 2017, until on or been met.
Federal Advisory Committee Act, notice about September 17, 2017, at the San As a condition to this exemption, any
is given that the Advisory Panel to the Francisco Museum of Modern Art, San employee adversely affected by the
U.S. Section of the North Pacific Francisco, California, from on or about abandonment shall be protected under
Anadromous Fish Commission (NPAFC) November 4, 2017, until on or about Oregon Short Line Railroad—
will meet on the date and time noted March 25, 2018, and at possible Abandonment Portion Goshen Branch
additional exhibitions or venues yet to
sradovich on DSK3GMQ082PROD with NOTICES
above. The panel consists of members Between Firth & Ammon, in Bingham &
from the states of Alaska and be determined, is in the national Bonneville Counties, Idaho, 360 I.C.C.
Washington who represent the broad interest. I have ordered that Public 91 (1979). To address whether this
range of fishing and conservation Notice of these Determinations be condition adequately protects affected
interests in anadromous and published in the Federal Register. employees, a petition for partial
ecologically related species in the North FOR FURTHER INFORMATION CONTACT: For
further information, including a list of 1 On March 15, 2017, NSR filed a corrected map
9 17 CFR 200.30–3(a)(12). the imported objects, contact the Office of the Line.
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Document Created: 2017-03-23 02:45:43
Document Modified: 2017-03-23 02:45:43
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