82 FR 22033 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, Amending Rule 968NY To Make Permanent a Program That Allows Cabinet Trade Transactions To Take Place at a Price Below $1 Per Option Contract
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 90 (May 11, 2017)
Federal Register Volume 82, Issue 90 (May 11, 2017)
| Page Range | 22033-22035 | |
| FR Document | 2017-09532 |
[Federal Register Volume 82, Number 90 (Thursday, May 11, 2017)] [Notices] [Pages 22033-22035] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-09532] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80616; File No. SR-NYSEMKT-2017-13] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, Amending Rule 968NY To Make Permanent a Program That Allows Cabinet Trade Transactions To Take Place at a Price Below $1 Per Option Contract May 5, 2017. I. Introduction On March 2, 2017, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') filed with the Securities and Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change amending the Exchange's rules to make permanent a program that allows transactions to take place in open outcry trading at prices of at least $0 but less than $1 per option contract (``sub-dollar cabinet trades''). The proposed rule change was published for comment in the Federal Register on March 23, 2017.\3\ On April 25, 2017, the Exchange filed Amendment No. 1 to the proposed rule change.\4\ The Commission received no comment letters on the proposed rule change. This order provides notice of filing of Amendment No. 1 and approves the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 80272 (March 17, 2017), 82 FR 14936 (March 23, 2017) (``Notice''). \4\ In Amendment No. 1, the Exchange provided supplemental background detail on its proposal, including a summary of why it initially put the program on a pilot, a description of the systems enhancements it made to be able to process cabinet trades in the regular course, an example of how a cabinet trade is done on the trading floor, and a representation that, to its knowledge, neither the Options Clearing Corporation (``OCC'') nor the Exchange's members have reported any operational issues in connection with cabinet trades. To promote transparency of its proposed amendment, when NYSE MKT filed Amendment No. 1 with the Commission, it also submitted Amendment No. 1 as a comment letter to the file, which the Commission posted on its Web site and placed in the public comment file for SR-NYSEMKT-2017-13 (available at https://www.sec.gov/comments/sr-nysemkt-2017-13/nysemkt201713.htm). The Exchange also posted a copy of its Amendment No. 1 on its Web site (https://www.nyse.com/regulation/rule-filings) when it filed it with the Commission. --------------------------------------------------------------------------- II. Description of the Proposed Rule Change Prior to 2010, Exchange Rule 968NY (Cabinet Trades (Accommodation Transactions)) allowed cabinet trade transactions at a price of $1 per option contract to occur in open outcry trading for certain classes.\5\ In 2010, the Exchange amended Rule 968NY on a pilot basis to allow sub- dollar cabinet trades to take place at prices of at least $0 but less than $1 per option contract.\6\ The Exchange now proposes to amend Rule 968NY to make permanent its sub-dollar cabinet trade pilot program, which currently is scheduled to expire on July 5, 2017.\7\ --------------------------------------------------------------------------- \5\ See Rule 968NY. See also Notice, supra note 3, at 14936 (discussing Rule 968NY). \6\ See Securities Exchange Act Release No. 63475 (December 8, 2010), 75 FR 77932 (December 14, 2010) (SR-NYSEAmex-2010-114). \7\ See Commentary .01 to Rule 968NY. See also Securities Exchange Act Release No. 79564 (December 15, 2016), 81 FR 93716 (December 21, 2016) (SR-NYSEMKT-2016-116). --------------------------------------------------------------------------- [[Page 22034]] The Exchange permits sub-dollar cabinet trade transactions to be traded pursuant to the same procedures applicable to $1 cabinet trades, except that for sub-dollar cabinet trades (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.\8\ As it explained in the Notice, the Exchange believes that ``allowing trading at 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.'' \9\ --------------------------------------------------------------------------- \8\ See Commentary .01 to Rule 968NY. See also Notice, supra note 3, at 14937 (discussing the pilot). \9\ Notice, supra note 3, at 14937. --------------------------------------------------------------------------- III. Discussion and Commission Findings After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act \10\ and the rules and regulations thereunder applicable to a national securities exchange.\11\ In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,\12\ which requires, among other things, that the rules of a national securities 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 system, and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78f. \11\ In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). \12\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- In the Notice, as amended, the Exchange explains that it initially put the sub-dollar cabinet trade rule on a pilot so that it could ``evaluate the efficacy of the change and to address any operational issues that might arise in processing [c]abinet trades.'' \13\ During the course of the pilot, the Exchange made enhancements to its system to accommodate cabinet trades at a price as small as $0.00000001.\14\ With that systems change, and based on its experience with these types of trades, the Exchange notes that its systems now ``allow it to process [c]abinet trades in a manner similar to how all other trades are processed by the Exchange.'' \15\ --------------------------------------------------------------------------- \13\ Amendment No. 1, supra note 4. \14\ See id. \15\ Id. See also Notice, supra note 3, at 14937 (noting that ``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''). --------------------------------------------------------------------------- In support of making the pilot program permanent, the Exchange represents that ``there are no operational issues in processing and clearing [c]abinet trades in penny and sub-penny increments.'' \16\ The Exchange also represents that ``ATP Holders have not raised any concerns with the current method of processing of [c]abinet trades.'' \17\ Finally, the Exchange represents that it is ``not aware of the Options Clearing Corporation (``OCC'') having operational issues with processing [c]abinet trades submitted by the Exchange.'' \18\ --------------------------------------------------------------------------- \16\ Notice, supra note 3, at 14937. \17\ Amendment No. 1, supra note 4. \18\ Id. --------------------------------------------------------------------------- Based on the representations of the Exchange, the Commission believes that permanent approval of the sub-dollar cabinet trade pilot is consistent with the Act. In particular, the Commission notes that the Exchange has made the necessary systems changes to accommodate sub- dollar cabinet trades into its regular trading infrastructure, and thus is able to process such trades in the normal course. Further, the Exchange has not observed any issues or concerns with sub-dollar cabinet trades at the Exchange level or with and among its members or in processing the trades through OCC. Accordingly, the Exchange's rule appears reasonably designed to remove impediments, prevent fraudulent and manipulative acts and practices, and foster cooperation and coordination with persons engaged in facilitating transactions in securities. Further, permanent approval will continue to provide investors with choice when considering a cabinet trade, including the ability to price such trades below $1 per contract. IV. Solicitation of Comments on Amendment No. 1 to the Proposed Rule Change Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether Amendment No. 1 to 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 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 June 1, 2017. V. Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1 The Commission finds good cause to approve the proposed rule change, as modified by Amendment No. 1, prior to the thirtieth day after the date of publication of notice of the amended proposal in the Federal Register. In Amendment No. 1, NYSE MKT provided supplemental background detail on why the sub-dollar cabinet [[Page 22035]] trade provision was put on a pilot initially, described the systems changes that the Exchange made to be able to process cabinet trades, and represented its understanding that neither OCC nor the Exchange's members have reported any operational issues in connection with cabinet trades.\19\ The additional information contained in Amendment No. 1 provides further support for the Exchange's proposal, is consistent with the proposal as initially filed, and does not introduce any new provisions or novel arguments in support of the proposal. Further, the Commission notes that it did not receive any comment letters on the Exchange's proposal. Accordingly, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act,\20\ to approve the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. --------------------------------------------------------------------------- \19\ See Amendment No. 1, supra note 4. See also supra note 4 (noting that the Exchange submitted Amendment No. 1 as a comment letter to the file, which the Commission posted on its Web site and placed in the public comment file). \20\ 15 U.S.C. 78s(b)(2). --------------------------------------------------------------------------- VI. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\21\ that the proposed rule change (SR-NYSEMKT-2017-13), as modified by Amendment No. 1, be, and hereby is, approved on an accelerated basis. --------------------------------------------------------------------------- \21\ 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\22\ --------------------------------------------------------------------------- \22\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-09532 Filed 5-10-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 90 / Thursday, May 11, 2017 / Notices 22033
Rule 203A–2(e), SEC File No. 270–501, approximately four burden hours per to Section 19(b)(1) of the Securities
OMB Control No. 3235–0559. year per adviser and results in an Exchange Act of 1934 (‘‘Act’’) 1 and Rule
Notice is hereby given that, pursuant estimated 576 of total burden hours 19b–4 thereunder,2 a proposed rule
to the Paperwork Reduction Act of 1995 (4 × 144) for all advisers. change amending the Exchange’s rules
(44 U.S.C. 3501 et seq.) (‘‘PRA’’), the This collection of information is to make permanent a program that
Securities and Exchange Commission mandatory, as it is used by Commission allows transactions to take place in open
(‘‘Commission’’) has submitted to the staff in its examination and oversight outcry trading at prices of at least $0 but
Office of Management and Budget program in order to determine less than $1 per option contract (‘‘sub-
(‘‘OMB’’) a request for extension and continued Commission registration dollar cabinet trades’’). The proposed
approval of the previously approved eligibility of advisers registered under rule change was published for comment
collection of information discussed this rule. Responses generally are kept in the Federal Register on March 23,
below. confidential pursuant to section 210(b) 2017.3 On April 25, 2017, the Exchange
Rule 203A–2(e),1 which is entitled of the Advisers Act.7 An agency may not filed Amendment No. 1 to the proposed
‘‘Internet Investment Advisers,’’ conduct or sponsor, and a person is not rule change.4 The Commission received
exempts from the prohibition on required to respond to a collection of no comment letters on the proposed rule
Commission registration an Internet information unless it displays a change. This order provides notice of
investment adviser who provides currently valid control number. filing of Amendment No. 1 and
investment advice to all of its clients The public may view the background approves the proposed rule change, as
exclusively through computer software- documentation for this information modified by Amendment No. 1, on an
based models or applications termed collection at the following Web site, accelerated basis.
under the rule as ‘‘interactive Web www.reginfo.gov. Comments should be II. Description of the Proposed Rule
sites.’’ 2 These advisers generally would directed to: (i) Desk Officer for the Change
not meet the statutory thresholds Securities and Exchange Commission,
currently set out in section 203A of the Office of Information and Regulatory Prior to 2010, Exchange Rule 968NY
Advisers Act 3—they do not manage $25 Affairs, Office of Management and (Cabinet Trades (Accommodation
million or more in assets and do not Budget, Room 10102, New Executive Transactions)) allowed cabinet trade
advise registered investment companies, Office Building, Washington, DC 20503, transactions at a price of $1 per option
or they manage between $25 million or by sending an email to: Shagufta_ contract to occur in open outcry trading
and $100 million in assets, do not Ahmed@omb.eop.gov; and (ii) Pamela for certain classes.5 In 2010, the
advise registered investment companies Dyson, Director/Chief Information Exchange amended Rule 968NY on a
or business development companies, Officer, Securities and Exchange pilot basis to allow sub-dollar cabinet
and are required to be registered as Commission, c/o Remi Pavlik-Simon, trades to take place at prices of at least
investment advisers with the states in 100 F Street NE., Washington, DC 20549 $0 but less than $1 per option contract.6
which they maintain their principal or send an email to: PRA_Mailbox@ The Exchange now proposes to amend
offices and places of business and are sec.gov. Comments must be submitted to Rule 968NY to make permanent its sub-
subject to examination as an adviser by OMB within 30 days of this notice. dollar cabinet trade pilot program,
such states.4 Eligibility under rule which currently is scheduled to expire
203A–2(e) is conditioned on an adviser Dated: May 5, 2017. on July 5, 2017.7
maintaining in an easily accessible Eduardo A. Aleman,
place, for a period of not less than five Assistant Secretary. 1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
years from the filing of Form ADV,5 a [FR Doc. 2017–09584 Filed 5–10–17; 8:45 am]
3 See Securities Exchange Act Release No. 80272
record demonstrating that the adviser’s BILLING CODE 8011–01–P
(March 17, 2017), 82 FR 14936 (March 23, 2017)
advisory business has been conducted (‘‘Notice’’).
through an interactive Web site in 4 In Amendment No. 1, the Exchange provided
accordance with the rule.6 SECURITIES AND EXCHANGE supplemental background detail on its proposal,
This record maintenance requirement COMMISSION including a summary of why it initially put the
is a ‘‘collection of information’’ for PRA program on a pilot, a description of the systems
[Release No. 34–80616; File No. SR– enhancements it made to be able to process cabinet
purposes. The Commission believes that NYSEMKT–2017–13] trades in the regular course, an example of how a
approximately 144 advisers are cabinet trade is done on the trading floor, and a
registered with the Commission under Self-Regulatory Organizations; NYSE representation that, to its knowledge, neither the
rule 203A–2(e), which involves a Options Clearing Corporation (‘‘OCC’’) nor the
MKT LLC; Notice of Filing of Exchange’s members have reported any operational
recordkeeping requirement of Amendment No. 1 and Order Granting issues in connection with cabinet trades. To
Accelerated Approval of a Proposed promote transparency of its proposed amendment,
1 17 CFR 275.203A–2(e). Rule Change, as Modified by when NYSE MKT filed Amendment No. 1 with the
2 Included in rule 203A–2(e) is a limited Commission, it also submitted Amendment No. 1 as
exception to the interactive Web site requirement Amendment No. 1, Amending Rule a comment letter to the file, which the Commission
which allows these advisers to provide investment 968NY To Make Permanent a Program posted on its Web site and placed in the public
advice to fewer than 15 clients through other means That Allows Cabinet Trade comment file for SR–NYSEMKT–2017–13 (available
on an annual basis. 17 CFR 275.203A–2(e)(1)(i). The Transactions To Take Place at a Price at https://www.sec.gov/comments/sr-nysemkt-2017-
rule also precludes advisers in a control 13/nysemkt201713.htm). The Exchange also posted
relationship with an SEC-registered Internet adviser Below $1 Per Option Contract a copy of its Amendment No. 1 on its Web site
from registering with the Commission under the (https://www.nyse.com/regulation/rule-filings)
asabaliauskas on DSK3SPTVN1PROD with NOTICES
common control exemption provided by rule 203A– May 5, 2017. when it filed it with the Commission.
2(b) (17 CFR 275.203A–2(b)). 17 CFR 275.203A– 5 See Rule 968NY. See also Notice, supra note 3,
2(e)(1)(iii).
I. Introduction
at 14936 (discussing Rule 968NY).
3 15 U.S.C. 80b–3a(a).
On March 2, 2017, NYSE MKT LLC 6 See Securities Exchange Act Release No. 63475
4 Id.
(the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed (December 8, 2010), 75 FR 77932 (December 14,
5 The five-year record retention period is a similar 2010) (SR–NYSEAmex–2010–114).
recordkeeping retention period as imposed on all
with the Securities and Exchange 7 See Commentary .01 to Rule 968NY. See also
advisers under rule 204–2 of the Advisers Act. See Commission (‘‘Commission’’), pursuant Securities Exchange Act Release No. 79564
rule 204–2 (17 CFR 275.204–2). (December 15, 2016), 81 FR 93716 (December 21,
6 17 CFR 275.203A–2(e)(1)(ii). 7 15 U.S.C. 80b–10(b). 2016) (SR–NYSEMKT–2016–116).
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![22034 Federal Register / Vol. 82, No. 90 / Thursday, May 11, 2017 / Notices
The Exchange permits sub-dollar With that systems change, and based on submitted by any of the following
cabinet trade transactions to be traded its experience with these types of trades, methods:
pursuant to the same procedures the Exchange notes that its systems now
Electronic Comments
applicable to $1 cabinet trades, except ‘‘allow it to process [c]abinet trades in
that for sub-dollar cabinet trades (i) bids a manner similar to how all other trades • Use the Commission’s Internet
and offers for opening transactions are are processed by the Exchange.’’ 15 comment form (http://www.sec.gov/
permitted only to accommodate closing In support of making the pilot rules/sro.shtml); or
transactions, and (ii) transactions in program permanent, the Exchange • Send an email to rule-
option classes participating in the represents that ‘‘there are no operational comments@sec.gov. Please include File
Penny Pilot Program are permitted.8 As issues in processing and clearing Number SR–NYSEMKT–2017–13 on the
it explained in the Notice, the Exchange [c]abinet trades in penny and sub-penny subject line.
believes that ‘‘allowing trading at a price increments.’’ 16 The Exchange also Paper Comments
of at least $0 but less than $1 better represents that ‘‘ATP Holders have not
• Send paper comments in triplicate
accommodates the closing of options raised any concerns with the current
to Secretary, Securities and Exchange
positions in series that are worthless or method of processing of [c]abinet
Commission, 100 F Street NE.,
not actively traded, particularly when trades.’’ 17 Finally, the Exchange
Washington, DC 20549–1090.
there has been a significant move in the represents that it is ‘‘not aware of the
price of the underlying security, Options Clearing Corporation (‘‘OCC’’) All submissions should refer to File
resulting in a large number of series having operational issues with Number SR–NYSEMKT–2017–13. This
being out-of-the-money.’’ 9 processing [c]abinet trades submitted by file number should be included on the
the Exchange.’’ 18 subject line if email is used. To help the
III. Discussion and Commission Commission process and review your
Based on the representations of the
Findings comments more efficiently, please use
Exchange, the Commission believes that
After careful review, the Commission permanent approval of the sub-dollar only one method. The Commission will
finds that the proposed rule change is cabinet trade pilot is consistent with the post all comments on the Commission’s
consistent with the requirements of the Act. In particular, the Commission notes Internet Web site (http://www.sec.gov/
Act 10 and the rules and regulations that the Exchange has made the rules/sro.shtml). Copies of the
thereunder applicable to a national submission, all subsequent
necessary systems changes to
securities exchange.11 In particular, the amendments, all written statements
accommodate sub-dollar cabinet trades
Commission finds that the proposed with respect to the proposed rule
into its regular trading infrastructure,
rule change is consistent with Section change that are filed with the
and thus is able to process such trades
6(b)(5) of the Act,12 which requires, Commission, and all written
in the normal course. Further, the
among other things, that the rules of a communications relating to the
Exchange has not observed any issues or
national securities exchange be proposed rule change between the
concerns with sub-dollar cabinet trades
designed to prevent fraudulent and Commission and any person, other than
at the Exchange level or with and among
manipulative acts and practices, to those that may be withheld from the
its members or in processing the trades
promote just and equitable principles of public in accordance with the
through OCC. Accordingly, the
trade, to foster cooperation and provisions of 5 U.S.C. 552, will be
Exchange’s rule appears reasonably
coordination with persons engaged in available for Web site viewing and
designed to remove impediments,
regulating, clearing, settling, processing printing in the Commission’s Public
prevent fraudulent and manipulative
information with respect to, and Reference Room, 100 F Street NE.,
acts and practices, and foster
facilitating transactions in securities, to Washington, DC 20549, on official
cooperation and coordination with
remove impediments to and perfect the business days between the hours of
persons engaged in facilitating
mechanism of a free and open market 10:00 a.m. and 3:00 p.m. Copies of the
transactions in securities. Further,
and a national market system, and, in filing also will be available for
permanent approval will continue to
general, to protect investors and the inspection and copying at the principal
provide investors with choice when
public interest. office of the Exchange. All comments
considering a cabinet trade, including
In the Notice, as amended, the received will be posted without change;
the ability to price such trades below $1
Exchange explains that it initially put the Commission does not edit personal
per contract.
the sub-dollar cabinet trade rule on a identifying information from
pilot so that it could ‘‘evaluate the IV. Solicitation of Comments on submissions. You should submit only
efficacy of the change and to address Amendment No. 1 to the Proposed Rule information that you wish to make
any operational issues that might arise Change available publicly. All submissions
in processing [c]abinet trades.’’ 13 Interested persons are invited to should refer to File Number SR–
During the course of the pilot, the submit written data, views, and NYSEMKT–2017–13, and should be
Exchange made enhancements to its arguments concerning the foregoing, submitted on or before June 1, 2017.
system to accommodate cabinet trades including whether Amendment No. 1 to V. Accelerated Approval of Proposed
at a price as small as $0.00000001.14 the proposed rule change is consistent Rule Change, as Modified by
with the Act. Comments may be Amendment No. 1
8 See Commentary .01 to Rule 968NY. See also
The Commission finds good cause to
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Notice, supra note 3, at 14937 (discussing the pilot). 15 Id. See also Notice, supra note 3, at 14937
9 Notice, supra note 3, at 14937.
(noting that ‘‘in 2016, there were a total of 222 approve the proposed rule change, as
10 15 U.S.C. 78f.
Cabinet trades. Of these, 148 trades comprising modified by Amendment No. 1, prior to
11 In approving this proposed rule change, the 112,257 contracts were executed at a price of $0.01, the thirtieth day after the date of
Commission has considered the proposed rule’s while the remaining 74 trades comprising 165,868 publication of notice of the amended
impact on efficiency, competition, and capital contracts were executed for a premium of less than
formation. See 15 U.S.C. 78c(f). $0.01’’). proposal in the Federal Register. In
12 15 U.S.C. 78f(b)(5). 16 Notice, supra note 3, at 14937. Amendment No. 1, NYSE MKT
13 Amendment No. 1, supra note 4. 17 Amendment No. 1, supra note 4. provided supplemental background
14 See id. 18 Id. detail on why the sub-dollar cabinet
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![Federal Register / Vol. 82, No. 90 / Thursday, May 11, 2017 / Notices 22035
trade provision was put on a pilot 240.15b6–1), under the Securities Please direct your written comments
initially, described the systems changes Exchange Act of 1934 (15 U.S.C 78a et to: Pamela Dyson, Director/Chief
that the Exchange made to be able to seq.). The Commission plans to submit Information Officer, Securities and
process cabinet trades, and represented this existing collection of information to Exchange Commission, c/o Remi Pavlik-
its understanding that neither OCC nor the Office of Management and Budget Simon, 100 F Street NE., Washington
the Exchange’s members have reported (‘‘OMB’’) for extension and approval. DC 20549, or send an email to: PRA_
any operational issues in connection Registered broker-dealers use Form Mailbox@sec.gov.
with cabinet trades.19 The additional BDW (17 CFR 249.501a) to withdraw Dated: May 8, 2017.
information contained in Amendment from registration with the Commission, Eduardo A. Aleman,
No. 1 provides further support for the the self-regulatory organizations, and Assistant Secretary.
Exchange’s proposal, is consistent with the states. On average, the Commission [FR Doc. 2017–09583 Filed 5–10–17; 8:45 am]
the proposal as initially filed, and does estimates that it would take a broker- BILLING CODE 8011–01–P
not introduce any new provisions or dealer approximately one hour to
novel arguments in support of the complete and file a Form BDW to
proposal. Further, the Commission withdraw from Commission registration SECURITIES AND EXCHANGE
notes that it did not receive any as required by Rule 15b6–1. The COMMISSION
comment letters on the Exchange’s Commission estimates that
proposal. Accordingly, the Commission approximately 380 broker-dealers [Release No. 34–80609; File No. SR–CBOE–
finds good cause, pursuant to Section 2017–019]
withdraw from Commission registration
19(b)(2) of the Act,20 to approve the annually 1 and, therefore, file a Form
proposed rule change, as modified by Self-Regulatory Organizations;
BDW via the internet with the Central Chicago Board Options Exchange,
Amendment No. 1, on an accelerated Registration Depository, a computer
basis. Incorporated; Notice of Designation of
system operated by the Financial a Longer Period for Commission
VI. Conclusion Industry Regulatory Authority, Inc. that Action on Proposed Rule Change
It is therefore ordered, pursuant to maintains information regarding Related to Complex Orders
Section 19(b)(2) of the Act,21 that the registered broker-dealers and their
registered personnel. The 380 broker- May 5, 2017.
proposed rule change (SR–NYSEMKT– On March 7, 2017, Chicago Board
2017–13), as modified by Amendment dealers that withdraw from registration
by filing Form BDW would incur an Options Exchange, Incorporated (the
No. 1, be, and hereby is, approved on an ‘‘Exchange’’ or ‘‘CBOE’’) filed with the
accelerated basis. aggregate annual reporting burden of
approximately 380 hours.2 Securities and Exchange Commission
For the Commission, by the Division of (the ‘‘Commission’’), pursuant to
Trading and Markets, pursuant to delegated
Written comments are invited on: (a)
Whether the proposed collection of Section 19(b)(1) of the Securities
authority.22 Exchange Act of 1934 (‘‘Act’’) 1 and Rule
Eduardo A. Aleman, information is necessary for the proper
performance of the functions of the 19b–4 thereunder,2 a proposed rule
Assistant Secretary. change to amend its rules with respect
Commission, including whether the
[FR Doc. 2017–09532 Filed 5–10–17; 8:45 am]
information shall have practical utility; to orders in open outcry to modify the
BILLING CODE 8011–01–P
(b) the accuracy of the Commission’s ratios a complex order must meet to be
estimates of the burden of the proposed considered eligible for complex order
collection of information; (c) ways to priority and permitted to be expressed
SECURITIES AND EXCHANGE in any net price increment that is not be
COMMISSION enhance the quality, utility, and clarity
of the information to be collected; and less than $0.01. The Exchange also
(d) ways to minimize the burden of the proposes to amend its rules to provide
Proposed Collection; Comment that if a complex order would trade in
Request collection of information on
respondents, including through the use open outcry at the same net debit or
Upon Written Request, Copies Available of automated collection techniques or credit price as another complex order,
From: Securities and Exchange other forms of information technology. priority would go first to public
Commission, Office of FOIA Services, customer orders in the Exchange’s
Consideration will be given to
100 F Street NE., Washington, DC complex order book (‘‘COB’’), then to
comments and suggestions submitted in
20549–2736. complex order bids and offers
writing within 60 days of this
represented in the trading crowd, and
Extension: publication.
Rule 15b6–1 and Form BDW, SEC File No. then to all other orders and quotes in
An agency may not conduct or the COB.3 Finally, the Exchange
270–17, OMB Control No. 3235–0018. sponsor, and a person is not required to proposes to simplify the definitions of
Notice is hereby given that pursuant respond to, a collection of information the complex order types that may be
to the Paperwork Reduction Act of 1995 under the PRA unless it displays a made available on a class-by-class basis
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the currently valid OMB control number. and remove references to certain
Securities and Exchange Commission specific complex order types that will
(‘‘Commission’’) is soliciting comments 1 This estimate is based on Form BDW data
no longer be defined. The proposed rule
on the existing collection of information collected over the past three years for fully
change was published for comment in
registered broker-dealers. This estimate is based on
asabaliauskas on DSK3SPTVN1PROD with NOTICES
provided for in Rule 15b6–1 (17 CFR
the numbers of forms filed; therefore, the number
1 15U.S.C. 78s(b)(1).
may include multiple forms per broker-dealer if the
19 See Amendment No. 1, supra note 4. See also broker-dealer’s initial filing was incomplete. In 2 17CFR 240.19b–4.
supra note 4 (noting that the Exchange submitted fiscal year (from 10/1 through 9/30) 2014, 454 3 The Exchange has represented that this
Amendment No. 1 as a comment letter to the file, broker-dealers withdrew from registration. In fiscal methodology for prioritizing multiple complex
which the Commission posted on its Web site and year 2015, 327 broker-dealers withdrew from orders for open outcry trading is consistent with the
placed in the public comment file). registration. In fiscal year 2016, 360 broker-dealers methodology applicable for prioritizing multiple
20 15 U.S.C. 78s(b)(2).
withdrew from registration. (454 + 327 + 360) /3 = simple orders for open outcry trading and how the
21 15 U.S.C. 78s(b)(2). 380. Exchange has interpreted and applied complex
22 17 CFR 200.30–3(a)(12). 2 (380 × 1 hour) = 380 hours. order priority. See Notice, infra note 4, at 15087.
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Document Created: 2017-05-11 00:14:42
Document Modified: 2017-05-11 00:14:42
| 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 22033 |
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