82 FR 32906 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Commentary .07 To Rule 904 to Extend the Pilot Program That Eliminated the Position Limits for Options on SPDR S&P 500 ETF

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 136 (July 18, 2017)

Page Range		32906-32907
FR Document		2017-14983
Federal Register, Volume 82 Issue 136 (Tuesday, July 18, 2017)
[Federal Register Volume 82, Number 136 (Tuesday, July 18, 2017)]
[Notices]
[Pages 32906-32907]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-14983]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81130; File No. SR-NYSEMKT-2017-42]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change To Amend Commentary .07 
To Rule 904 to Extend the Pilot Program That Eliminated the Position 
Limits for Options on SPDR S&P 500 ETF

July 12, 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 July 10, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend Commentary .07 to Rule 904 to extend 
the pilot program that eliminated the position limits for options on 
SPDR S&P 500 ETF (``SPY'') (``SPY Pilot Program''). 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Commentary .07 to Rule 904 to extend 
the time period of the SPY Pilot Program,\4\ which is currently 
scheduled to expire on July 12, 2017, through July 12, 2018.
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    \4\ See Securities Exchange Act Release No. 67672 (August 15, 
2012), 77 FR 50750 (August 22, 2012). The SPY Pilot Program was 
subsequently extended. See Securities Exchange Release Nos. 70734 
(October 22, 2013), 78 FR 64255 (October 28, 2013); 73847 (December 
16, 2014), 79 FR 76426 (December 22, 2014); 75416 (July 9, 2015), 80 
FR 41521 (July 15, 2015); and 78241 (July 7, 2016), 81 FR 45325 
(July 13, 2016) (the ``July 2016 Extension'').
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    This filing does not propose any substantive changes to the SPY 
Pilot Program. In proposing to extend the SPY Pilot Program, the 
Exchange reaffirms its consideration of several factors that supported 
the original proposal of the SPY Pilot Program, including (1) the 
availability of economically equivalent products and their respective 
position limits, (2) the liquidity of the option and the underlying 
security, (3) the market capitalization of the underlying security and 
the related index, (4) the reporting of large positions and 
requirements surrounding margin, and (5) the potential for market on 
close volatility.
    In the July 2016 Extension, the Exchange stated that if it were to 
propose an extension, permanent approval or termination of the program, 
the Exchange would submit, along with any filing proposing such 
amendments to the program, a report providing an analysis of the SPY 
Pilot Program covering the period since the previous extension (the 
``Pilot Report''). Accordingly, the Exchange is submitting a Pilot 
Report detailing the Exchange's experience with the SPY Pilot Program 
for the period covering twelve (12) months from June 2016 to May 2017. 
The Pilot Report is attached as Exhibit 3 to this filing [sic]. The 
Exchange notes that it is unaware of any problems created by the SPY 
Pilot Program and does not foresee any as a result of the proposed 
extension. In extending the SPY Pilot Program, the Exchange states that 
if it were to propose another extension, permanent approval or 
termination of the program, the Exchange will submit another Pilot 
Report covering the period since the previous extension, which will be 
submitted at least 30 days before the end of the proposed extension. If 
the SPY Pilot Program is not extended or

[[Page 32907]]

adopted on a permanent basis by July 12, 2018, the position limits for 
SPY would revert to limits in effect at the commencement of the pilot 
program. The proposed extension will allow the Exchange and the 
Commission additional time to further evaluate the SPY Pilot Program 
and its effect on the market.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \5\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \6\ in particular, in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, 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. The Exchange 
believes that extending the SPY Pilot Program promotes just and 
equitable principles of trade by permitting market participants, 
including market makers, institutional investors and retail investors, 
to establish greater positions when pursuing their investment goals and 
needs.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 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 not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule change is not 
designed to address any aspect of competition, whether between the 
Exchange and its competitors, or among market participants. Instead, 
the proposed rule change is designed to allow the SPY Pilot Program to 
continue uninterrupted. Additionally, the Exchange expects all other 
SROs that currently have rules regarding the SPY Pilot Program to also 
extend the pilot program for an additional year.

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

    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 and Rule 19b-
4(f)(6) thereunder.\7\
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    \7\ 17 CFR 240.19b-4(f)(6). 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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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \8\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \9\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. The Exchange 
believes that waiver of the operative delay is consistent with the 
protection of investors and the public interest because it will allow 
the SPY Pilot Program to continue without interruption. The Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. Therefore, the 
Commission hereby waives the operative delay and designates the 
proposed rule change operative upon filing.\10\
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    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 17 CFR 240.19b-4(f)(6)(iii).
    \10\ For purposes only of waiving the 30-day operative delay, 
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 necessary or 
appropriate in the public interest, for the protection of investors, or 
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 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-NYSEMKT-2017-42 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEMKT-2017-42. 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 such 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-2017-42, and should 
be submitted on or before August 8, 2017.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2017-14983 Filed 7-17-17; 8:45 am]
BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 136 / Tuesday, July 18, 2017 / Notices 32907

adopted on a permanent basis by July the protection of investors or the public Comments may be submitted by any of
12, 2018, the position limits for SPY interest; (ii) impose any significant the following methods:
would revert to limits in effect at the burden on competition; and (iii) become
commencement of the pilot program. operative for 30 days from the date on Electronic Comments
The proposed extension will allow the which it was filed, or such shorter time • Use the Commission’s Internet
Exchange and the Commission as the Commission may designate, it has comment form (http://www.sec.gov/
additional time to further evaluate the become effective pursuant to Section rules/sro.shtml); or
SPY Pilot Program and its effect on the 19(b)(3)(A) of the Act and Rule 19b–
market. 4(f)(6) thereunder.7 • Send an email to rule-comments@
A proposed rule change filed sec.gov. Please include File Number SR–
2. Statutory Basis NYSEMKT–2017–42 on the subject line.
pursuant to Rule 19b–4(f)(6) under the
The Exchange believes that its Act 8 normally does not become
proposal is consistent with Section 6(b) Paper Comments
operative for 30 days after the date of its
of the Act 5 in general, and furthers the filing. However, Rule 19b–4(f)(6)(iii) 9 • Send paper comments in triplicate
objectives of Section 6(b)(5) of the Act 6 permits the Commission to designate a to Brent J. Fields, Secretary, Securities
in particular, in that it is designed to shorter time if such action is consistent and Exchange Commission, 100 F Street
prevent fraudulent and manipulative with the protection of investors and the NE., Washington, DC 20549–1090.
acts and practices, to promote just and public interest. The Exchange has asked
equitable principles of trade, to remove the Commission to waive the 30-day All submissions should refer to File
impediments to and perfect the operative delay so that the proposal may Number SR–NYSEMKT–2017–42. This
mechanism of a free and open market become operative immediately upon file number should be included on the
and a national market system, and, in filing. The Exchange believes that subject line if email is used. To help the
general, to protect investors and the waiver of the operative delay is Commission process and review your
public interest. The Exchange believes consistent with the protection of comments more efficiently, please use
that extending the SPY Pilot Program investors and the public interest only one method. The Commission will
promotes just and equitable principles because it will allow the SPY Pilot post all comments on the Commission’s
of trade by permitting market Program to continue without Internet Web site (http://www.sec.gov/
participants, including market makers, interruption. The Commission believes rules/sro.shtml). Copies of the
institutional investors and retail that waiving the 30-day operative delay submission, all subsequent
investors, to establish greater positions is consistent with the protection of amendments, all written statements
when pursuing their investment goals investors and the public interest. with respect to the proposed rule
and needs. Therefore, the Commission hereby change that are filed with the
B. Self-Regulatory Organization’s waives the operative delay and Commission, and all written
Statement on Burden on Competition designates the proposed rule change communications relating to the
operative upon filing.10 proposed rule change between the
The Exchange does not believe that
the proposed rule change will impose At any time within 60 days of the Commission and any person, other than
any burden on competition not filing of the proposed rule change, the those that may be withheld from the
necessary or appropriate in furtherance Commission summarily may public in accordance with the
of the purposes of the Act. The temporarily suspend such rule change if provisions of 5 U.S.C. 552, will be
proposed rule change is not designed to it appears to the Commission that such available for Web site viewing and
address any aspect of competition, action is necessary or appropriate in the printing in the Commission’s Public
whether between the Exchange and its public interest, for the protection of Reference Room, 100 F Street NE.,
competitors, or among market investors, or otherwise in furtherance of Washington, DC 20549 on official
participants. Instead, the proposed rule the purposes of the Act. If the business days between the hours of
change is designed to allow the SPY Commission takes such action, the 10:00 a.m. and 3:00 p.m. Copies of such
Pilot Program to continue Commission shall institute proceedings
filing also will be available for
uninterrupted. Additionally, the to determine whether the proposed rule
inspection and copying at the principal
Exchange expects all other SROs that should be approved or disapproved.
office of the Exchange. All comments
currently have rules regarding the SPY IV. Solicitation of Comments received will be posted without change;
Pilot Program to also extend the pilot the Commission does not edit personal
program for an additional year. Interested persons are invited to
identifying information from
submit written data, views, and
C. Self-Regulatory Organization’s arguments concerning the foregoing, submissions. You should submit only
Statement on Comments on the including whether the proposed rule information that you wish to make
Proposed Rule Change Received From change is consistent with the Act. available publicly. All submissions
Members, Participants, or Others should refer to File Number SR–
No written comments were solicited 7 17 CFR 240.19b–4(f)(6). As required under Rule NYSEMKT–2017–42, and should be
or received with respect to the proposed 19b–4(f)(6)(iii), the Exchange provided the submitted on or before August 8, 2017.
Commission with written notice of its intent to file
rule change. the proposed rule change, along with a brief
For the Commission, by the Division of
description and the text of the proposed rule Trading and Markets, pursuant to delegated
III. Date of Effectiveness of the
sradovich on DSK3GMQ082PROD with NOTICES

change, at least five business days prior to the date authority.11
Proposed Rule Change and Timing for of filing of the proposed rule change, or such
Commission Action Jill M. Peterson,
shorter time as designated by the Commission.
8 17 CFR 240.19b–4(f)(6). Assistant Secretary.
Because the foregoing proposed rule 9 17 CFR 240.19b–4(f)(6)(iii). [FR Doc. 2017–14983 Filed 7–17–17; 8:45 am]
change does not: (i) Significantly affect 10 For purposes only of waiving the 30-day
BILLING CODE 8011–01–P
operative delay, the Commission has considered the
5 15 U.S.C. 78f(b). proposed rule’s impact on efficiency, competition,
6 15 U.S.C. 78f(b)(5). and capital formation. See 15 U.S.C. 78c(f). 11 17 CFR 200.30–3(a)(12).

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Document Created: 2018-10-24 11:26:25
Document Modified: 2018-10-24 11:26:25
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 32906