82 FR 25034 - Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Market-Maker Reports of Executed Orders

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 103 (May 31, 2017)

Page Range		25034-25035
FR Document		2017-11148
Federal Register, Volume 82 Issue 103 (Wednesday, May 31, 2017)
[Federal Register Volume 82, Number 103 (Wednesday, May 31, 2017)]
[Notices]
[Pages 25034-25035]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-11148]



[[Page 25034]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80759; File No. SR-C2-2017-019]


Self-Regulatory Organizations; C2 Options Exchange, Incorporated; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating To Market-Maker Reports of Executed Orders

May 24, 2017.
    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 May 15, 2017, C2 Options Exchange, Incorporated (the 
``Exchange'' or ``C2'') 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 
Exchange. The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend outdated rule language contained in 
Rule 8.7(b) related to Market-Maker reports of orders. 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
    C2 Rule 8.7(b) currently provides that:

``Each Market-Maker shall, in the prescribed form, report to the 
Exchange every order entered by the Market-Maker for the purchase or 
sale of (i) a security underlying options traded on the Exchange, or 
(ii) a security convertible into or exchangeable for such underlying 
security, as well as opening and closing positions in all such 
securities held in each account reported pursuant to paragraph (a) of 
this Rule. The report pertaining to orders must include the terms of 
each order, identification of the brokerage firms through which the 
orders were entered, the times of entry or cancellation, the times 
report of execution were received and, if all or part of the order was 
executed, the quantity and execution price.''

    The Exchange is amending Rule 8.7(b) so that it is substantially 
similar to that of the International Securities Exchange, LLC [sic] 
(``ISE''); ISE Gemini, LLC [sic] (``ISE Gemini''); BATS Options Market 
(``BZX''); BOX Options Exchange, LLC (``BOX'); NASDAQ Options Market 
(``NOM''); and NASDAQ OMX BX, Inc. (``BX'').\3\
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    \3\ See ISE Rule 807(b); ISE Gemini Rule 807(b); BZX Rule 
22.7(b); BOX Rule 8060(b), NOM Rules Chapter 7, Section 7(b); BX 
Rules Chapter 7, Section 7(b).
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    As a result of the rule change, Market-Makers will no longer be 
required to submit daily reports of orders entered and/or opening and 
closing positions in underlying securities. Instead, the proposed rule 
will provide that orders, entered by Market-Makers for the purchase of 
(i) a security underlying options on the Exchange, or (ii) a security 
convertible into or exchangeable for such underlying security, as well 
as opening and closing positions in all such securities shall be 
provided to the Exchange by Market-Makers upon request in a form 
prescribed by the Exchange. The obligation to provide order and 
position reports will only be required on an as needed basis.
    The Exchange believes current Rule 8.7(b) is outdated and 
operationally obsolete. The Exchange does not currently use the daily 
order and position reports from Market-Makers. The daily order and 
position reports from Market-Makers are no longer needed to conduct any 
routine regulatory surveillances or examinations or fulfill any other 
of the Exchange's regulatory obligations. Any regulatory surveillance 
or examination that previously used the daily order and position 
reports can be operated without the information due to the development 
of effective workarounds. As such, the rule, as currently written, 
presents an undue burden on Market-Makers.
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.\4\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \5\ 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 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) \6\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ Id.
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    In particular, the Exchange believes the proposed rule change 
removes impediments and perfects the mechanism of a free and open 
market by amending obsolete rule requirements related to daily order 
and position reports provided to the Exchange by Market-Makers. The 
daily order and position reports are no longer needed in the normal 
course of the Exchange fulfilling its regulatory responsibilities. In 
the event order or position information related to Market-Maker 
activity in securities underlying options traded on the exchange is 
needed, the proposed rule provides that Market-Makers must provide 
those reports to the Exchange upon request. In addition, the proposed 
rule change is substantially similar to rules of other options 
exchanges.\7\
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    \7\ See supra note 1 [sic].
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule raises 
neither intermarket nor intermarket competition issues, as it

[[Page 25035]]

relates to the submission of reports to the Exchange for regulatory 
purposes. The proposed rule amends obsolete rule language. The daily 
order and position reports from Market-Makers are no longer needed to 
conduct any routine regulatory surveillances or examinations or fulfill 
any other of the Exchange's regulatory obligations. The proposed rule 
change removes this undue burden on Market-Makers and replaces it with 
a requirement substantially similar to that of other options 
exchanges.\8\ The proposed requirement will apply to equally to all 
Market-Makers on the Exchange.
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    \8\ Id.
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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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) \10\ thereunder. At any time within 60 days of the filing of 
the proposed rule change, the Commission summarily may temporarily 
suspend such rule change if it appears to the Commission that such 
action is necessary or appropriate in the public interest, for the 
protection of investors, or otherwise in furtherance of the purposes of 
the Act.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
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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-C2-2017-019 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-C2-2017-019. 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-C2-2017-019 and should be 
submitted on or before June 21, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-11148 Filed 5-30-17; 8:45 am]
BILLING CODE 8011-01-P
25034 Federal Register / Vol. 82, No. 103 / Wednesday, May 31, 2017 / Notices

SECURITIES AND EXCHANGE ‘‘Each Market-Maker shall, in the rule, as currently written, presents an
COMMISSION prescribed form, report to the Exchange undue burden on Market-Makers.
every order entered by the Market-
[Release No. 34–80759; File No. SR–C2– 2. Statutory Basis
Maker for the purchase or sale of (i) a
2017–019] security underlying options traded on The Exchange believes the proposed
the Exchange, or (ii) a security rule change is consistent with the
Self-Regulatory Organizations; C2 Securities Exchange Act of 1934 (the
convertible into or exchangeable for
Options Exchange, Incorporated; ‘‘Act’’) and the rules and regulations
such underlying security, as well as
Notice of Filing and Immediate thereunder applicable to the Exchange
opening and closing positions in all
Effectiveness of a Proposed Rule and, in particular, the requirements of
such securities held in each account
Change Relating To Market-Maker Section 6(b) of the Act.4 Specifically,
reported pursuant to paragraph (a) of
Reports of Executed Orders the Exchange believes the proposed rule
this Rule. The report pertaining to
May 24, 2017. orders must include the terms of each change is consistent with the Section
Pursuant to Section 19(b)(1) of the order, identification of the brokerage 6(b)(5) 5 requirements that the rules of
Securities Exchange Act of 1934 (the firms through which the orders were an exchange be designed to prevent
‘‘Act’’),1 and Rule 19b–4 thereunder,2 entered, the times of entry or fraudulent and manipulative acts and
notice is hereby given that on May 15, cancellation, the times report of practices, to promote just and equitable
2017, C2 Options Exchange, execution were received and, if all or principles of trade, to foster cooperation
Incorporated (the ‘‘Exchange’’ or ‘‘C2’’) part of the order was executed, the and coordination with persons engaged
filed with the Securities and Exchange quantity and execution price.’’ in regulating, clearing, settling,
Commission (the ‘‘Commission’’) the The Exchange is amending Rule 8.7(b) processing information with respect to,
proposed rule change as described in so that it is substantially similar to that and facilitating transactions in
Items I and II below, which Items have of the International Securities Exchange, securities, to remove impediments to
been prepared by the Exchange. The LLC [sic] (‘‘ISE’’); ISE Gemini, LLC [sic] and perfect the mechanism of a free and
Commission is publishing this notice to (‘‘ISE Gemini’’); BATS Options Market open market and a national market
solicit comments on the proposed rule (‘‘BZX’’); BOX Options Exchange, LLC system, and, in general, to protect
change from interested persons. (‘‘BOX’); NASDAQ Options Market investors and the public interest.
(‘‘NOM’’); and NASDAQ OMX BX, Inc. Additionally, the Exchange believes the
I. Self-Regulatory Organization’s (‘‘BX’’).3 proposed rule change is consistent with
Statement of the Terms of Substance of As a result of the rule change, Market- the Section 6(b)(5) 6 requirement that
the Proposed Rule Change Makers will no longer be required to the rules of an exchange not be designed
The Exchange proposes to amend submit daily reports of orders entered to permit unfair discrimination between
outdated rule language contained in and/or opening and closing positions in customers, issuers, brokers, or dealers.
Rule 8.7(b) related to Market-Maker underlying securities. Instead, the In particular, the Exchange believes
reports of orders. The text of the proposed rule will provide that orders, the proposed rule change removes
proposed rule change is available on the entered by Market-Makers for the impediments and perfects the
Exchange’s Web site (http://www.cboe. purchase of (i) a security underlying mechanism of a free and open market by
com/AboutCBOE/CBOELegalRegulatory options on the Exchange, or (ii) a amending obsolete rule requirements
Home.aspx), at the Exchange’s Office of security convertible into or related to daily order and position
the Secretary, and at the Commission’s exchangeable for such underlying reports provided to the Exchange by
Public Reference Room. security, as well as opening and closing Market-Makers. The daily order and
positions in all such securities shall be position reports are no longer needed in
II. Self-Regulatory Organization’s provided to the Exchange by Market- the normal course of the Exchange
Statement of the Purpose of, and Makers upon request in a form fulfilling its regulatory responsibilities.
Statutory Basis for, the Proposed Rule prescribed by the Exchange. The In the event order or position
Change obligation to provide order and position information related to Market-Maker
In its filing with the Commission, the reports will only be required on an as activity in securities underlying options
Exchange included statements needed basis. traded on the exchange is needed, the
concerning the purpose of and basis for The Exchange believes current Rule proposed rule provides that Market-
the proposed rule change and discussed 8.7(b) is outdated and operationally Makers must provide those reports to
any comments it received on the obsolete. The Exchange does not the Exchange upon request. In addition,
proposed rule change. The text of these currently use the daily order and the proposed rule change is
statements may be examined at the position reports from Market-Makers. substantially similar to rules of other
places specified in Item IV below. The The daily order and position reports options exchanges.7
Exchange has prepared summaries, set from Market-Makers are no longer B. Self-Regulatory Organization’s
forth in sections A, B, and C below, of needed to conduct any routine Statement on Burden on Competition
the most significant aspects of such regulatory surveillances or examinations
statements. or fulfill any other of the Exchange’s The Exchange does not believe that
regulatory obligations. Any regulatory the proposed rule change will impose
A. Self-Regulatory Organization’s surveillance or examination that any burden on competition not
Statement of the Purpose of, and previously used the daily order and necessary or appropriate in furtherance
Statutory Basis for, the Proposed Rule of the purposes of the Act. The
nlaroche on DSK30NT082PROD with NOTICES

position reports can be operated without
Change the information due to the development proposed rule raises neither intermarket
1. Purpose of effective workarounds. As such, the nor intermarket competition issues, as it
C2 Rule 8.7(b) currently provides that: 3 See ISE Rule 807(b); ISE Gemini Rule 807(b);
4 15 U.S.C. 78f(b).
5 15 U.S.C. 78f(b)(5).
BZX Rule 22.7(b); BOX Rule 8060(b), NOM Rules
1 15 U.S.C. 78s(b)(1). 6 Id.
Chapter 7, Section 7(b); BX Rules Chapter 7, Section
2 17 CFR 240.19b–4. 7(b). 7 See supra note 1 [sic].

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Federal Register / Vol. 82, No. 103 / Wednesday, May 31, 2017 / Notices 25035

relates to the submission of reports to Electronic Comments SECURITIES AND EXCHANGE
the Exchange for regulatory purposes. COMMISSION
The proposed rule amends obsolete rule • Use the Commission’s Internet
language. The daily order and position comment form (http://www.sec.gov/
[Release No. 34–80761; File No. SR–GEMX–
reports from Market-Makers are no rules/sro.shtml); or
2017–16]
longer needed to conduct any routine • Send an email to rule-comments@
regulatory surveillances or examinations sec.gov. Please include File Number SR– Self-Regulatory Organizations; Nasdaq
or fulfill any other of the Exchange’s C2–2017–019 on the subject line. GEMX, LLC; Notice of Filing and
regulatory obligations. The proposed Immediate Effectiveness of Proposed
Paper Comments
rule change removes this undue burden Rule Change To Amend Cancel and
on Market-Makers and replaces it with • Send paper comments in triplicate Replace Rule
a requirement substantially similar to to Secretary, Securities and Exchange
May 24, 2017.
that of other options exchanges.8 The Commission, 100 F Street NE.,
proposed requirement will apply to Washington, DC 20549–1090. Pursuant to Section 19(b)(1) of the
equally to all Market-Makers on the Securities Exchange Act of 1934
All submissions should refer to File (‘‘Act’’),1 and Rule 19b–4 thereunder,2
Exchange.
Number SR–C2–2017–019. This file notice is hereby given that on May 11,
C. Self-Regulatory Organization’s number should be included on the 2017, Nasdaq GEMX, LLC (‘‘GEMX’’ or
Statement on Comments on the subject line if email is used. To help the ‘‘Exchange’’) filed with the Securities
Proposed Rule Change Received From Commission process and review your and Exchange Commission
Members, Participants, or Others comments more efficiently, please use (‘‘Commission’’) the proposed rule
only one method. The Commission will change as described in Items I, II, and
The Exchange neither solicited nor post all comments on the Commission’s
received comments on the proposed III, below, which Items have been
Internet Web site (http://www.sec.gov/ prepared by the Exchange. The
rule change. rules/sro.shtml). Copies of the Commission is publishing this notice to
III. Date of Effectiveness of the submission, all subsequent solicit comments on the proposed rule
Proposed Rule Change and Timing for amendments, all written statements change from interested persons.
Commission Action with respect to the proposed rule
change that are filed with the I. Self-Regulatory Organization’s
Because the foregoing proposed rule Commission, and all written Statement of the Terms of Substance of
change does not: (i) Significantly affect communications relating to the the Proposed Rule Change
the protection of investors or the public proposed rule change between the
interest; (ii) impose any significant Commission and any person, other than The Exchange proposes to conform its
burden on competition; and (iii) become those that may be withheld from the cancel and replace rule change with that
operative for 30 days from the date on public in accordance with the of Nasdaq ISE, LLC (‘‘ISE’’) which was
which it was filed, or such shorter time provisions of 5 U.S.C. 552, will be recently filed.3
as the Commission may designate, it has available for Web site viewing and The text of the proposed rule change
become effective pursuant to Section printing in the Commission’s Public is available on the Exchange’s Web site
19(b)(3)(A) of the Act 9 and Rule 19b– Reference Room, 100 F Street NE., at www.ise.com, at the principal office
4(f)(6) 10 thereunder. At any time within Washington, DC 20549 on official of the Exchange, and at the
60 days of the filing of the proposed rule business days between the hours of Commission’s Public Reference Room.
change, the Commission summarily may 10:00 a.m. and 3:00 p.m. Copies of the
temporarily suspend such rule change if II. Self-Regulatory Organization’s
filing also will be available for Statement of the Purpose of, and
it appears to the Commission that such inspection and copying at the principal
action is necessary or appropriate in the Statutory Basis for, the Proposed Rule
office of the Exchange. All comments Change
public interest, for the protection of received will be posted without change;
investors, or otherwise in furtherance of the Commission does not edit personal In its filing with the Commission, the
the purposes of the Act. identifying information from Exchange included statements
IV. Solicitation of Comments submissions. You should submit only concerning the purpose of and basis for
information that you wish to make the proposed rule change and discussed
Interested persons are invited to available publicly. All submissions any comments it received on the
submit written data, views, and should refer to File Number SR–C2– proposed rule change. The text of these
arguments concerning the foregoing, 2017–019 and should be submitted on statements may be examined at the
including whether the proposed rule or before June 21, 2017. places specified in Item IV below. The
change is consistent with the Act. For the Commission, by the Division of Exchange has prepared summaries, set
Comments may be submitted by any of Trading and Markets, pursuant to delegated forth in sections A, B, and C below, of
the following methods: authority.11 the most significant aspects of such
Eduardo A. Aleman, statements.
8 Id.
Assistant Secretary.
nlaroche on DSK30NT082PROD with NOTICES

9 15 U.S.C. 78s(b)(3)(A). 1 15 U.S.C. 78s(b)(1).
10 17 CFR 240.19b–4(f)(6)(iii). As required under [FR Doc. 2017–11148 Filed 5–30–17; 8:45 am] 2 17 CFR 240.19b–4.
Rule 19b–4(f)(6)(iii), the Exchange provided the BILLING CODE 8011–01–P 3 See Securities Exchange Act Release No. 80432
Commission with written notice of its intent to file
the proposed rule change, along with a brief (April 11, 2017), 82 FR 18191 (April 17, 2017) (SR–
description and the text of the proposed rule ISE–2017–03) (Order Approving Proposed Rule
change, at least five business days prior to the date Change, as Modified by Amendment No. 1, to
of filing of the proposed rule change, or such Amend Various Rules in Connection with a System
shorter time as designated by the Commission. 11 17 CFR 200.30–3(a)(12). Migration to Nasdaq INET Technology).

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Document Created: 2017-05-31 05:59:28
Document Modified: 2017-05-31 05:59:28
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 25034