82 FR 28198 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 21.5 of Bats BZX Exchange, Inc. To Extend Through December 31, 2017, the Penny Pilot Program in Options Classes in Certain Issues

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 117 (June 20, 2017)

Page Range		28198-28200
FR Document		2017-12768
Federal Register, Volume 82 Issue 117 (Tuesday, June 20, 2017)
[Federal Register Volume 82, Number 117 (Tuesday, June 20, 2017)]
[Notices]
[Pages 28198-28200]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-12768]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80927; File No. SR-BatsBZX-2017-40]


Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 
21.5 of Bats BZX Exchange, Inc. To Extend Through December 31, 2017, 
the Penny Pilot Program in Options Classes in Certain Issues

June 14, 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 June 13, 2017, Bats BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The Exchange 
has designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with 
the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to extend through December 31, 2017, 
the Penny Pilot Program (``Penny Pilot'') in options classes in certain 
issues (``Pilot Program'') previously approved by the Commission.\5\
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    \5\ The rules of BZX Options, including rules applicable to BZX 
Options' participation in the Penny Pilot, were approved on January 
26, 2010. See Securities Exchange Act Release No. 61419 (January 26, 
2010), 75 FR 5157 (February 1, 2010) (SR-BATS-2009-031). BZX Options 
commenced operations on February 26, 2010. The Penny Pilot was most 
recently extended for BZX Options through June 30, 2017. See 
Securities Exchange Act Release No. 34-79523 (December 9, 2016), 81 
FR 90895 (December 16, 2016) (SR-BatsBZX-2016-84).
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    The text of the proposed rule change is available at the Exchange's 
Web site at www.batstrading.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant parts of such 
statements.

(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this filing is to extend the Penny Pilot, which was 
previously approved by the Commission, through December 31, 2017, and 
to provide revised dates for adding replacement

[[Page 28199]]

issues to the Pilot Program. The Exchange proposes that any Pilot 
Program issues that have been delisted may be replaced on the second 
trading day following July 1, 2017. The replacement issues will be 
selected based on trading activity for the most recent six month period 
excluding the month immediately preceding the replacement (i.e., 
beginning December 1, 2016, and ending May 31, 2017).
    The Exchange represents that the Exchange has the necessary system 
capacity to continue to support operation of the Penny Pilot. The 
Exchange believes the benefits to public customers and other market 
participants who will be able to express their true prices to buy and 
sell options have been demonstrated to outweigh the increase in quote 
traffic.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with the 
requirements of the Act and the rules and regulations thereunder that 
are applicable to a national securities exchange, and, in particular, 
with the requirements of Section 6(b) of the Act.\6\ In particular, the 
proposal is consistent with Section 6(b)(5) of the Act \7\ because it 
would promote just and equitable principles of trade, remove 
impediments to, and perfect the mechanism of, a free and open market 
and a national market system. The Exchange believes that the Pilot 
Program promotes just and equitable principles of trade by enabling 
public customers and other market participants to express their true 
prices to buy and sell options. Accordingly, the Exchange believes that 
the proposal is consistent with the Act because it will allow the 
Exchange to extend the Pilot Program prior to its expiration on June 
30, 2017. The Exchange notes that this proposal does not propose any 
new policies or provisions that are unique or unproven, but instead 
relates to the continuation of an existing program that operates on a 
pilot basis.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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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 that is not necessary or appropriate 
in furtherance of the purposes of the Act. In this regard, the Exchange 
notes that the rule change is being proposed in order to continue the 
Pilot Program, which is a competitive response to analogous programs 
offered by other options exchanges. The Exchange believes this proposed 
rule change is necessary to permit fair competition among the options 
exchanges.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any written comments from members or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (A) 
Significantly affect the protection of investors or the public 
interest; (B) impose any significant burden on competition; and (C) by 
its terms, 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 \8\ and 
paragraph (f)(6) of Rule 19b-4 thereunder,\9\ the Exchange has 
designated this rule filing as non-controversial. The Exchange has 
given the Commission written notice of its intent to file the proposed 
rule change, along with a brief description and 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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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of the filing.\10\ 
However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. Without a waiver of 
the 30-day operative delay, CBOE's Pilot Program will expire before the 
extension of the Pilot Program is operative. The Commission believes 
that waiving the 30-day operative delay for the instant filing is 
consistent with the protection of investors and the public interest 
because doing so will allow the Pilot Program to continue without 
interruption in a manner that is consistent with the Commission's prior 
approval of the extension and expansion of the Pilot Program and will 
allow the Exchange and the Commission additional time to analyze the 
impact of the Pilot Program. Accordingly, the Commission designates the 
proposed rule change as operative upon filing with the Commission.\12\
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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: (1) 
Necessary or appropriate in the public interest; (2) for the protection 
of investors; or (3) otherwise in furtherance of the purposes of the 
Act. If the Commission takes such action, the Commission shall 
institute proceedings to determine whether the proposed rule should be 
approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposal 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 No. SR-BatsBZX-2017-40 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 No. SR-BatsBZX-2017-40. 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

[[Page 28200]]

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 
such filing will also 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 No. SR-BatsBZX-2017-40 and should be submitted on or before July 
11, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-12768 Filed 6-19-17; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 117 / Tuesday, June 20, 2017 / Notices 28199

issues to the Pilot Program. The exchanges. The Exchange believes this additional time to analyze the impact of
Exchange proposes that any Pilot proposed rule change is necessary to the Pilot Program. Accordingly, the
Program issues that have been delisted permit fair competition among the Commission designates the proposed
may be replaced on the second trading options exchanges. rule change as operative upon filing
day following July 1, 2017. The with the Commission.12
(C) Self-Regulatory Organization’s At any time within 60 days of the
replacement issues will be selected
Statement on Comments on the filing of the proposed rule change, the
based on trading activity for the most
recent six month period excluding the Proposed Rule Change Received From Commission summarily may
month immediately preceding the Members, Participants or Others temporarily suspend such rule change if
replacement (i.e., beginning December The Exchange has not solicited, and it appears to the Commission that such
1, 2016, and ending May 31, 2017). does not intend to solicit, comments on action is: (1) Necessary or appropriate in
The Exchange represents that the this proposed rule change. The the public interest; (2) for the protection
Exchange has the necessary system Exchange has not received any written of investors; or (3) otherwise in
capacity to continue to support comments from members or other furtherance of the purposes of the Act.
operation of the Penny Pilot. The interested parties. If the Commission takes such action, the
Exchange believes the benefits to public Commission shall institute proceedings
III. Date of Effectiveness of the
customers and other market participants to determine whether the proposed rule
Proposed Rule Change and Timing for
who will be able to express their true should be approved or disapproved.
prices to buy and sell options have been Commission Action
Because the foregoing proposed rule IV. Solicitation of Comments
demonstrated to outweigh the increase
in quote traffic. change does not: (A) Significantly affect Interested persons are invited to
the protection of investors or the public submit written data, views and
2. Statutory Basis interest; (B) impose any significant arguments concerning the foregoing,
The Exchange believes that its burden on competition; and (C) by its including whether the proposal is
proposal is consistent with the terms, become operative for 30 days consistent with the Act. Comments may
requirements of the Act and the rules from the date on which it was filed or be submitted by any of the following
and regulations thereunder that are such shorter time as the Commission methods:
applicable to a national securities may designate it has become effective Electronic Comments
exchange, and, in particular, with the pursuant to Section 19(b)(3)(A) of the
requirements of Section 6(b) of the Act.6 Act 8 and paragraph (f)(6) of Rule 19b– • Use the Commission’s Internet
In particular, the proposal is consistent 4 thereunder,9 the Exchange has comment form (http://www.sec.gov/
with Section 6(b)(5) of the Act 7 because designated this rule filing as non- rules/sro.shtml); or
it would promote just and equitable controversial. The Exchange has given • Send an email to rule-comments@
principles of trade, remove the Commission written notice of its sec.gov. Please include File No. SR-
impediments to, and perfect the BatsBZX–2017–40 on the subject line.
intent to file the proposed rule change,
mechanism of, a free and open market along with a brief description and text Paper Comments
and a national market system. The of the proposed rule change at least five • Send paper comments in triplicate
Exchange believes that the Pilot business days prior to the date of filing to Secretary, Securities and Exchange
Program promotes just and equitable of the proposed rule change, or such Commission, 100 F Street NE.,
principles of trade by enabling public shorter time as designated by the Washington, DC 20549–1090.
customers and other market participants Commission. All submissions should refer to File No.
to express their true prices to buy and A proposed rule change filed under
SR-BatsBZX–2017–40. This file number
sell options. Accordingly, the Exchange Rule 19b–4(f)(6) normally does not
should be included on the subject line
believes that the proposal is consistent become operative prior to 30 days after
if email is used. To help the
with the Act because it will allow the the date of the filing.10 However,
Commission process and review your
Exchange to extend the Pilot Program pursuant to Rule 19b–4(f)(6)(iii),11 the
comments more efficiently, please use
prior to its expiration on June 30, 2017. Commission may designate a shorter
only one method. The Commission will
The Exchange notes that this proposal time if such action is consistent with the
post all comments on the Commission’s
does not propose any new policies or protection of investors and the public
Internet Web site (http://www.sec.gov/
provisions that are unique or unproven, interest. Without a waiver of the 30-day
rules/sro.shtml). Copies of the
but instead relates to the continuation of operative delay, CBOE’s Pilot Program
submission, all subsequent
an existing program that operates on a will expire before the extension of the
amendments, all written statements
pilot basis. Pilot Program is operative. The
with respect to the proposed rule
Commission believes that waiving the
(B) Self-Regulatory Organization’s change that are filed with the
30-day operative delay for the instant
Statement on Burden on Competition Commission, and all written
filing is consistent with the protection
The Exchange does not believe that communications relating to the
of investors and the public interest
the proposed rule change will impose proposed rule change between the
because doing so will allow the Pilot
any burden on competition that is not Commission and any person, other than
Program to continue without
necessary or appropriate in furtherance those that may be withheld from the
interruption in a manner that is
of the purposes of the Act. In this public in accordance with the
consistent with the Commission’s prior
provisions of 5 U.S.C. 552, will be
sradovich on DSK3GMQ082PROD with NOTICES

regard, the Exchange notes that the rule approval of the extension and expansion
change is being proposed in order to available for Web site viewing and
of the Pilot Program and will allow the
continue the Pilot Program, which is a printing in the Commission’s Public
Exchange and the Commission
competitive response to analogous
12 For purposes only of waiving the operative
programs offered by other options 8 15 U.S.C. 78s(b)(3)(A). delay for this proposal, the Commission has
9 17 CFR 240.19b–4. considered the proposed rule’s impact on
6 15 U.S.C. 78f(b). 10 17 CFR 240.19b–4(f)(6).
efficiency, competition, and capital formation. See
7 15 U.S.C. 78f(b)(5). 11 17 CFR 240.19b–4(f)(6)(iii). 15 U.S.C. 78c(f).

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28200 Federal Register / Vol. 82, No. 117 / Tuesday, June 20, 2017 / Notices

Reference Room, 100 F Street NE., NYSE Listed Company Manual (the commitment underwritten IPO, upon
Washington, DC 20549, on official ‘‘Manual’’) to modify the provisions transfer from another market, or
business days between the hours of relating to the qualification of pursuant to a spin-off. Companies
10:00 a.m. and 3:00 p.m. Copies of such companies listing without a prior listing in connection with an IPO must
filing will also be available for Exchange Act registration; (ii) Rule 15 to demonstrate that they have $40 million
inspection and copying at the principal add a Reference Price for when a in market value of publicly-held
office of the Exchange. All comments security is listed under Footnote (E) to shares,4 while companies that are listing
received will be posted without change; Section 102.01B; (iii) Rule 104 to upon transfer from another exchange or
the Commission does not edit personal specify DMM requirements when a the over-the counter market or pursuant
identifying information from security is listed under Footnote (E) to to a spin-off must demonstrate that they
submissions. You should submit only Section 102.01B and there has been no have $100 million in market value of
information that you wish to make trading in the private market for such publicly-held shares.
available publicly. All submissions security; and (iv) Rule 123D to specify Section 102.01B currently contains a
should refer to File No. SR-BatsBZX– that the Exchange may declare a provision under which the Exchange
2017–40 and should be submitted on or regulatory halt in a security that is the recognizes that some companies that
before July 11, 2017. subject of an initial public offering have not previously had their common
For the Commission, by the Division of (‘‘IPO’’) or initial listing on the equity securities registered under the
Trading and Markets, pursuant to delegated Exchange. The proposed rule change is Exchange Act, but which have sold
authority.13 available on the Exchange’s Web site at common equity securities in a private
Eduardo A. Aleman, www.nyse.com, at the principal office of placement, may wish to list their
Assistant Secretary. the Exchange, and at the Commission’s common equity securities on the
[FR Doc. 2017–12768 Filed 6–19–17; 8:45 am] Public Reference Room. Exchange at the time of effectiveness of
BILLING CODE 8011–01–P
a registration statement filed solely for
II. Self-Regulatory Organization’s the purpose of allowing existing
Statement of the Purpose of, and shareholders to sell their shares.
Statutory Basis for, the Proposed Rule Footnote (E) to Section 102.01B
SECURITIES AND EXCHANGE Change
COMMISSION provides that the Exchange will, on a
In its filing with the Commission, the case by case basis, exercise discretion to
[Release No. 34–80933; File No. SR–NYSE–
self-regulatory organization included list such companies. In exercising this
2017–30]
statements concerning the purpose of, discretion, Footnote (E) provides that
Self-Regulatory Organizations; New and basis for, the proposed rule change the Exchange will determine that such
York Stock Exchange LLC; Notice of and discussed any comments it received company has met the $100 million
Filing of Proposed Rule Change To on the proposed rule change. The text aggregate market value of publicly-held
Amend Section 102.01B of the NYSE of those statements may be examined at shares requirement based on a
Listed Company Manual To Provide for the places specified in Item IV below. combination of both (i) an independent
the Listing of Companies That List The Exchange has prepared summaries, third-party valuation (a ‘‘Valuation’’) of
Without a Prior Exchange Act set forth in sections A, B, and C below, the company and (ii) the most recent
Registration and That Are Not Listing of the most significant parts of such trading price for the company’s common
in Connection With an Underwritten statements. stock in a trading system for
Initial Public Offering and Related unregistered securities operated by a
A. Self-Regulatory Organization’s
Changes to Rules 15, 104, and 123D national securities exchange or a
Statement of the Purpose of, and the
registered broker-dealer (a ‘‘Private
June 15, 2017. Statutory Basis for, the Proposed Rule
Placement Market’’). The Exchange will
Pursuant to Section 19(b)(1) 1 of the Change
attribute a market value of publicly-held
Securities Exchange Act of 1934 (the 1. Purpose shares to the company equal to the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 lesser of (i) the value calculable based
The Exchange proposes to amend: (i)
notice is hereby given that, on June 13, on the Valuation and (ii) the value
Footnote (E) to Section 102.01B of the
2017, New York Stock Exchange LLC calculable based on the most recent
Manual to modify the provisions
(‘‘NYSE’’ or the ‘‘Exchange’’) filed with trading price in a Private Placement
relating to the qualification of
the Securities and Exchange Market.
companies listing without a prior
Commission (the ‘‘Commission’’) the Any Valuation used for purposes of
Exchange Act registration; (ii) Rule 15 to
proposed rule change as described in Footnote (E) must be provided by an
add a Reference Price for when a
Items I and II below, which Items have entity that has significant experience
security is listed under Footnote (E) to
been prepared by the self-regulatory and demonstrable competence in the
Section 102.01B; (iii) Rule 104 to
organization. The Commission is provision of such valuations. The
specify DMM requirements when a
publishing this notice to solicit Valuation must be of a recent date as of
security is listed under Footnote (E) to
comments on the proposed rule change the time of the approval of the company
Section 102.10B and there has been no
from interested persons. for listing and the evaluator must have
trading in the private market for such
I. Self-Regulatory Organization’s considered, among other factors, the
security; and (iv) Rule 123D to specify
Statement of the Terms of Substance of annual financial statements required to
that the Exchange may declare a
be included in the registration
sradovich on DSK3GMQ082PROD with NOTICES

the Proposed Rule Change regulatory halt in a security that is the
statement, along with financial
The Exchange proposes to amend: (i) subject of an IPO or initial listing on the
statements for any completed fiscal
Footnote (E) to Section 102.01B of the Exchange
quarters subsequent to the end of the
Amendments to Footnote (E) to Section
13 17 CFR 200.30–3(a)(12).
1 15
102.01B 4 Shares held by directors, officers, or their
U.S.C.78s(b)(1). immediate families and other concentrated holdings
2 15 U.S.C. 78a. Generally, the Exchange expects to of 10 percent or more are excluded in calculating
3 17 CFR 240.19b–4. list companies in connection with a firm the number of publicly-held shares.

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Document Created: 2017-06-20 02:20:38
Document Modified: 2017-06-20 02:20:38
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 28198