82 FR 58668 - Joint Industry Plan; Order Approving the Fourth Amendment to the Plan for the Purpose of Developing and Implementing Procedures Designed To Facilitate the Listing and Trading of Standardized Options

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 238 (December 13, 2017)

Page Range		58668-58670
FR Document		2017-26818

Federal Register, Volume 82 Issue 238 (Wednesday, December 13, 2017)

[Federal Register Volume 82, Number 238 (Wednesday, December 13, 2017)]
[Notices]
[Pages 58668-58670]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2017-26818]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82235; File No. 4-443]

Joint Industry Plan; Order Approving the Fourth Amendment to the
Plan for the Purpose of Developing and Implementing Procedures Designed
To Facilitate the Listing and Trading of Standardized Options

December 7, 2017.

I. Introduction

On August 16, 2017, Chicago Board Options Exchange, Incorporated
(now known as Cboe Exchange, Inc.), on behalf of the BATS Exchange,
Inc. (now known as Cboe BZX Exchange, Inc.); Box Options Exchange, LLC;
C2 Exchange, Incorporated (now known as Cboe C2 Exchange, Inc.); EDGX
Exchange, Inc. (now known as Cboe EDGX Exchange, Inc.); Miami
International Securities Exchange, LLC; MIAX PEARL, LLC; Nasdaq BX,
Inc.; Nasdaq GEMX, LLC; Nasdaq ISE, LLC; Nasdaq MRX, LLC; Nasdaq
Options Market, LLC; Nasdaq PHLX, LLC; NYSE American, LLC; NYSE Arca,
Inc.; and the Options Clearing Corporation (``OCC'') (together, the
``Plan Sponsors''), filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') pursuant to Section 11A(a)(3) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 608
thereunder,\2\ a proposal to amend the Plan for the Purpose of
Developing and Implementing Procedures Designed to Facilitate the
Listing and Trading of Standardized Options (``OLPP'' or ``Plan'').\3\
The proposed amendment (``Amendment'' or ``Amendment No. 4'')

[[Page 58669]]

was published for comment in the Federal Register on October 24,
2017.\4\ No comment letters were received in response to the Notice.
This order approves proposed Amendment No. 4 to the Plan.
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\1\ 15 U.S.C. 78k-1(a)(3).
\2\ 17 CFR 242.608.
\3\ The full text of the OLPP is available at: https://www.theocc.com/components/docs/clearing/services/options_listing_procedures_plan.pdf. See also Securities Exchange
Act Release No. 44521, 66 FR 36809 (July 13, 2001) (order approving
the OLPP).
\4\ Securities Exchange Act Release No. 81893 (October 18,
2017), 82 FR 49249 (``Notice'').
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II. Description of the Amendment

The Plan Sponsors propose to amend the Plan to: (1) Change the
earliest date on which new January Long-term Equity AnticiPation
(``LEAP'') series on equity options, options on Exchange Traded Funds
(``ETF''), or options on Trust Issued Receipts (``TIR'') may be added
to a single date (from three separate months); (2) allow equity, ETF,
and TIR option series to be added based on trading after regular
trading hours; (3) make technical and procedural changes to the
certification processes for new option classes and communication
provisions; and (4) correct a cross-referencing error in the Plan.\5\
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\5\ See Notice, supra note 4, for a more detailed description of
the proposed changes.
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III. Discussion and Commission Findings

The Commission finds that the Amendment is consistent with the
requirements of the Act and the rules and regulations thereunder.
Specifically, the Commission finds that the Amendment is consistent
with Section 11A(a)(1) of the Act \6\ and Rule 608 thereunder \7\ in
that it is appropriate in the public interest, for the protection of
investors and the maintenance of fair and orderly markets, and that it
removes impediments to, and perfects the mecahnsims of, a national
market system.
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\6\ 15 U.S.C. 78k-1(a)(1).
\7\ 17 CFR 240.608.
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The Plan Sponsors propose to consolidate the addition of new
January LEAP options series so that they all may be added in September.
Because the addition of new January LEAP options historically has been
a manual process, to avoid potential operational issues, the Plan
currently requires that the addition of these LEAP options series take
place over three calendar months (September, October, and November).
The Plan Sponsors state that today, however, new January LEAP options
now can be added in bulk electronically and, therefore, the operational
concerns relating to the historic manual process have been alleviated.
Thus, the Plan Sponsors propose to consolidate the addition of new
January LEAP options series so that they all may be added in
September.\8\ The Plan Sponsors believe that this change would simplify
the process for adding new January LEAP options series because all new
January LEAP options would be made available beginning at the same
time. The Commission believes that it is appropriate in the public
interest, for the protection of investors, and the maintenance of a
fair and orderly market to approve this change to the timing of when
January LEAP options series may be added because it should simplify and
help clarify the process by which new January LEAP options may be
added.
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\8\ Specifically, the Plan would be revised to move the addition
of the new January LEAP options to a specific date no earlier than
the Monday before the September expiration. See Notice, supra note
4, at 49249.
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The Plan Sponsors also propose to amend the Plan to add options
series based on trading of the underlying securities after regular
trading hours (``post-market''), based on the most recent share price
reported by all national securities exchanges between 3:15 p.m. and
5:00 p.m. CT. This change would allow an options exchange to add a new
options series in response to post-market trading activity the same day
as when the post-market trading occurred, with the series available for
trading on the opening of the regular trading session (i.e., 8:30 a.m.
CT) of the options markets the following trading day. The Commission
believes that it is appropriate in the public interest, for the
protection of investors, and the maintenance of a fair and orderly
market to approve this proposed change because allowing options series
to be added based on post-market trading should provide market
participants with earlier notice regarding what options series will be
available for trading the following day, and should help to enhance
investors' ability to plan their options trading.
In addition, the Amendment proposes to streamline the processes by
which the options exchanges seek to trade a new option class.
Currently, the OLPP requires an options exchange to submit a
certificate containing certain specified information to the OCC
(``Certificate'') when it seeks to trade an option class that is not
currently trading on another registered options exchange or that has
not been previously certified for listing and trading on any registered
options exchange. Because sometimes more than one options exchange will
submit a Certificate to the OCC seeking to list and trade the same
selected option class, the OLPP requires the OCC to determine which
Certificate was submitted first among all the Certificates it
received,\9\ and then to notify the applicable options exchanges of
certain information regarding the option.\10\ The Amendment would
require that, after the OCC receives and processes a Certificate from
an options exchange, the OCC would make publicly available on its
website the underlying security name, options symbol, and all options
exchanges eligible to trade such option class, instead of requiring the
OCC to send a customized email to each options exchange. In addition,
the OCC would notify all options exchanges that the list of option
classes covered by such Certificate is available on the OCC website.
The Plan Sponsors believe that these changes would eliminate
administrative burdens for the OCC and streamline the notification
process, while ensuring that all of the information currently required
to be available to options exchanges would continue to be available to
them. Therefore, for the reasons stated, the Commission believes that
it is appropriate in the public interest, for the protection of
investors, and the maintenance of a fair and orderly market to approve
these proposed changes.
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\9\ Specifically, the Plan currently requires the OCC to
determine the options symbol, initial exercise prices, expiration
cycle, and position and exercise limits for the selected option
class as provided in the Certificate that the OCC determined was
first submitted. Under the proposed amendment, the OCC would remove
the reference to ``options symbol'' from this list as it is no
longer necessary because, with the implementation of the Options
Symbology Initiative in 2010, all options now generally have the
same symbol as the underlying security and, as a result, conflicting
options symbol submissions is no longer an issue. See Notice, supra
note 4, at 49250.
\10\ The required information includes the options symbol,
initial exercise prices, expiration cycle, and position and exercise
limits for the selected option class, as well as the identity of
each options exchange that has also submitted a Certificate to list
and trade the selected option class. See Notice, supra note 4, at
49250-51.
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In addition, the Amendment would allow Certificates and any
associated information and/or documentation to be submitted to the OCC
via electronic means that is reasonably agreed upon by the Plan
Sponsors, rather than via telefacsimile, as is currently required. The
proposed amendment would also allow all other notices required under
the terms of the OLPP to be given through ``electronic mail or other
electronic means reasonably agreed upon by the Plan Sponsors.'' \11\
Because implementing these changes would allow for more efficient
processes for certifications and communications among Plan Sponsors,
the Commission believes that approving these changes is

[[Page 58670]]

appropriate in the public interest, for the protection of investors,
and the maintenance of a fair and orderly market.
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\11\ See Section 5 of the Plan.
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Finally, the Plan Sponsors propose to amend the Plan to make a non-
substantive edit to correct an inaccurate cross-reference to ``Section
8'' in Section 7(ii) of the Plan with ``Section 9.'' The Commission
believes that it is appropriate in the public interest, for the
protection of investors and the maintenance of a fair and orderly
market to approve this proposed change because it will clarify and
correct an inaccuracy in the Plan.
For the reasons discussed above, the Commission finds that
Amendment No. 4 is consistent with Section 11A of the Act \12\ and Rule
608 thereunder.\13\
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\12\ 15 U.S.C. 78k-1.
\13\ 17 CFR 242.608.
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IV. Conclusion

It is therefore ordered, pursuant to Section 11A of the Act,\14\
and Rule 608 thereunder,\15\ that Amendment No. 4 to the OLPP (File No.
4-443) be, and hereby is, approved.
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\14\ 15 U.S.C. 78k-1.
\15\ 17 CFR 242.608.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(29).
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Eduardo Aleman,
Assistant Secretary.
[FR Doc. 2017-26818 Filed 12-12-17; 8:45 am]
BILLING CODE 8011-01-P

58668 Federal Register / Vol. 82, No. 238 / Wednesday, December 13, 2017 / Notices

period will allow the Commission and action is necessary or appropriate in the comment submissions. You should
the Exchange to continue to monitor the public interest, for the protection of submit only information that you wish
Program for its potential effects on investors, or otherwise in furtherance of to make available publicly.
public price discovery, and on the the purposes of the Act. If the All submissions should refer to File
broader market structure. Commission takes such action, the Number SR–NYSE–2017–64 and should
Commission shall institute proceedings be submitted on or before January 3,
B. Self-Regulatory Organization’s under Section 19(b)(2)(B) 14 of the Act to 2018.
Statement on Burden on Competition determine whether the proposed rule For the Commission, by the Division of
The Exchange does not believe that change should be approved or Trading and Markets, pursuant to delegated
the proposed rule change will impose disapproved. authority.15
any burden on competition that is not Eduardo A. Aleman,
IV. Solicitation of Comments
necessary or appropriate in furtherance Assistant Secretary.
of the purposes of the Act. The Interested persons are invited to
[FR Doc. 2017–26821 Filed 12–12–17; 8:45 am]
proposed rule change simply extends an submit written data, views, and
BILLING CODE 8011–01–P
established pilot program for an arguments concerning the foregoing,
additional six months, thus allowing the including whether the proposed rule
Retail Liquidity Program to enhance change is consistent with the Act. SECURITIES AND EXCHANGE
competition for retail order flow and Comments may be submitted by any of COMMISSION
contribute to the public price discovery the following methods:
process. [Release No. 34–82235; File No. 4–443]
Electronic Comments
C. Self-Regulatory Organization’s • Use the Commission’s internet Joint Industry Plan; Order Approving
Statement on Comments on the comment form (http://www.sec.gov/ the Fourth Amendment to the Plan for
Proposed Rule Change Received From rules/sro.shtml); or the Purpose of Developing and
Members, Participants, or Others • Send an email to rule-comments@ Implementing Procedures Designed To
sec.gov. Please include File Number SR– Facilitate the Listing and Trading of
No written comments were solicited
NYSE–2017–64 on the subject line. Standardized Options
or received with respect to the proposed
rule change. Paper Comments December 7, 2017.
III. Date of Effectiveness of the • Send paper comments in triplicate I. Introduction
Proposed Rule Change and Timing for to Secretary, Securities and Exchange
On August 16, 2017, Chicago Board
Commission Action Commission, 100 F Street NE,
Options Exchange, Incorporated (now
Washington, DC 20549–1090.
The Exchange has filed the proposed known as Cboe Exchange, Inc.), on
rule change pursuant to Section All submissions should refer to File behalf of the BATS Exchange, Inc. (now
19(b)(3)(A)(iii) of the Act 10 and Rule Number SR–NYSE–2017–64. This file known as Cboe BZX Exchange, Inc.);
19b–4(f)(6) thereunder.11 Because the number should be included on the Box Options Exchange, LLC; C2
proposed rule change does not: (i) subject line if email is used. To help the Exchange, Incorporated (now known as
Significantly affect the protection of Commission process and review your Cboe C2 Exchange, Inc.); EDGX
investors or the public interest; (ii) comments more efficiently, please use Exchange, Inc. (now known as Cboe
impose any significant burden on only one method. The Commission will EDGX Exchange, Inc.); Miami
competition; and (iii) become operative post all comments on the Commission’s International Securities Exchange, LLC;
prior to 30 days from the date on which internet website (http://www.sec.gov/ MIAX PEARL, LLC; Nasdaq BX, Inc.;
it was filed, or such shorter time as the rules/sro.shtml). Copies of the Nasdaq GEMX, LLC; Nasdaq ISE, LLC;
Commission may designate, if submission, all subsequent Nasdaq MRX, LLC; Nasdaq Options
consistent with the protection of amendments, all written statements Market, LLC; Nasdaq PHLX, LLC; NYSE
investors and the public interest, the with respect to the proposed rule American, LLC; NYSE Arca, Inc.; and
proposed rule change has become change that are filed with the the Options Clearing Corporation
effective pursuant to Section 19(b)(3)(A) Commission, and all written (‘‘OCC’’) (together, the ‘‘Plan
of the Act and Rule 19b–4(f)(6)(iii) communications relating to the Sponsors’’), filed with the Securities
thereunder. proposed rule change between the and Exchange Commission
A proposed rule change filed under Commission and any person, other than (‘‘Commission’’ or ‘‘SEC’’) pursuant to
Rule 19b–4(f)(6) 12 normally does not those that may be withheld from the Section 11A(a)(3) of the Securities
become operative prior to 30 days after public in accordance with the Exchange Act of 1934 (‘‘Act’’) 1 and Rule
the date of the filing. However, pursuant provisions of 5 U.S.C. 552, will be 608 thereunder,2 a proposal to amend
to Rule 19b–4(f)(6)(iii),13 the available for website viewing and the Plan for the Purpose of Developing
Commission may designate a shorter printing in the Commission’s Public and Implementing Procedures Designed
time if such action is consistent with the Reference Room, 100 F Street NE, to Facilitate the Listing and Trading of
protection of investors and the public Washington, DC 20549 on official Standardized Options (‘‘OLPP’’ or
interest. business days between the hours of ‘‘Plan’’).3 The proposed amendment
At any time within 60 days of the 10:00 a.m. and 3:00 p.m. Copies of the (‘‘Amendment’’ or ‘‘Amendment No. 4’’)
filing of such proposed rule change, the filing also will be available for
sradovich on DSK3GMQ082PROD with NOTICES

Commission summarily may inspection and copying at the principal 15 17 CFR 200.30–3(a)(12).
temporarily suspend such rule change if office of the Exchange. All comments 1 15 U.S.C. 78k–1(a)(3).
it appears to the Commission that such received will be posted without change. 2 17 CFR 242.608.

Persons submitting comments are 3 The full text of the OLPP is available at: https://

10 15 cautioned that we do not redact or edit www.theocc.com/components/docs/clearing/
U.S.C. 78s(b)(3)(A)(iii). services/options_listing_procedures_plan.pdf. See
11 17 CFR 240.19b–4(f)(6). personal identifying information from also Securities Exchange Act Release No. 44521, 66
12 17 CFR 240.19b–4(f)(6).
FR 36809 (July 13, 2001) (order approving the
13 17 CFR 240.19b–4(f)(6)(iii). 14 15 U.S.C. 78s(b)(2)(B). OLPP).

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58670 Federal Register / Vol. 82, No. 238 / Wednesday, December 13, 2017 / Notices

appropriate in the public interest, for comments on the proposed rule change manner in which the Exchange
the protection of investors, and the from interested persons. calculates the Crossing Fee Cap is not
maintenance of a fair and orderly changing.
I. Self-Regulatory Organization’s
market. The Exchange proposes to make clear
Statement of the Terms of Substance of
Finally, the Plan Sponsors propose to how it attributes eligible volume for
the Proposed Rule Change
amend the Plan to make a non- purposes of the Crossing Fee Cap. The
substantive edit to correct an inaccurate The Exchange proposes to amend the Exchange proposes to add the following
cross-reference to ‘‘Section 8’’ in Section Exchange’s Schedule of Fees to clarify language to the rule text, ‘‘For purposes
7(ii) of the Plan with ‘‘Section 9.’’ The the application of the Crossing Fee Cap. of the Crossing Fee Cap the Exchange
Commission believes that it is The text of the proposed rule change will attribute eligible volume to the ISE
appropriate in the public interest, for is available on the Exchange’s website at Member on whose behalf the Crossing
the protection of investors and the http://ise.cchwallstreet.com/, at the Order was executed.’’ Only ISE
maintenance of a fair and orderly principal office of the Exchange, and at Members are subject to the Crossing Fee
market to approve this proposed change the Commission’s Public Reference Cap. This is the manner in which the
because it will clarify and correct an Room. Exchange attributes eligible volume for
inaccuracy in the Plan. II. Self-Regulatory Organization’s purposes of the Crossing Fee Cap today.
For the reasons discussed above, the Statement of the Purpose of, and To provide greater transparency to the
Commission finds that Amendment No. Statutory Basis for, the Proposed Rule Schedule of Fees, the Exchange
4 is consistent with Section 11A of the Change proposes to include this language in the
Act 12 and Rule 608 thereunder.13 rule text. While the Exchange is not
In its filing with the Commission, the aware of any confusion with respect to
IV. Conclusion Exchange included statements this fee with its Members, the Exchange
It is therefore ordered, pursuant to concerning the purpose of and basis for believes this specificity will avoid any
Section 11A of the Act,14 and Rule 608 the proposed rule change and discussed confusion.
thereunder,15 that Amendment No. 4 to any comments it received on the
the OLPP (File No. 4–443) be, and proposed rule change. The text of these 2. Statutory Basis
hereby is, approved. statements may be examined at the The Exchange believes that its
For the Commission, by the Division of
places specified in Item IV below. The proposal is consistent with Section 6(b)
Trading and Markets, pursuant to delegated Exchange has prepared summaries, set of the Act,5 in general, and furthers the
authority.16 forth in sections A, B, and C below, of objectives of Sections 6(b)(4) and 6(b)(5)
Eduardo Aleman, the most significant aspects of such of the Act,6 in particular, in that it
Assistant Secretary.
statements. provides for the equitable allocation of
[FR Doc. 2017–26818 Filed 12–12–17; 8:45 am] A. Self-Regulatory Organization’s reasonable dues, fees, and other charges
Statement of the Purpose of, and among members and issuers and other
BILLING CODE 8011–01–P
Statutory Basis for, the Proposed Rule persons using any facility, and is not
Change designed to permit unfair
SECURITIES AND EXCHANGE discrimination between customers,
COMMISSION 1. Purpose issuers, brokers, or dealers.
The purpose of the proposed rule The Exchange’s proposal to add the
[Release No. 34–82229; File No. SR–ISE– change is to provide greater clarity as to clarifying language regarding the
2017–95] the manner in which the Exchange Crossing Fee Cap to the Schedule of
applies the Crossing Fee Cap. Fees is reasonable because the proposed
Self-Regulatory Organizations; Nasdaq By way of background, Crossing rule text will bring greater clarity to the
ISE, LLC; Notice of Filing and Orders are contracts that are submitted manner in which the Exchange
Immediate Effectiveness of Proposed as part of a Facilitation, Solicitation, attributes eligible volume for purposes
Rule Change To Clarify the Application PIM, Block or QCC Order. Crossing of the Crossing Fee Cap today and
of the Crossing Fee Cap Order fees are capped at $90,000 per applies the Crossing Fee Cap. The
month per member on all Firm calculation and the application of the
December 7, 2017. Crossing Fee Cap are not changing with
Proprietary and Non-Nasdaq ISE Market
Pursuant to Section 19(b)(1) of the this proposal. This rule text is intended
Maker transactions that are part of the
Securities Exchange Act of 1934 to provide additional clarity to the
originating or contra side of a Crossing
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 current rule to describe who benefits
Order.3 The following fees are not
notice is hereby given that on November from the volume for purposes of the
included in the calculation of the
28, 2017, Nasdaq ISE, LLC (‘‘ISE’’ or application of the cap.
monthly Crossing Fee Cap: (1) Fees for
‘‘Exchange’’) filed with the Securities The Exchange’s proposal to add the
Responses to Crossing Orders; (2)
and Exchange Commission clarifying language regarding the
surcharge fees for licensed products and
(‘‘Commission’’) the proposed rule Crossing Fee Cap to the Schedule of
the fees for index options as set forth in
change as described in Items I and II Fees is equitable and not unfairly
Section I; and (3) service fee.4 The
below, which Items have been prepared discriminatory because the Exchange
by the Exchange. The Commission is 3 Members that elect prior to the start of the
publishing this notice to solicit month to pay $65,000 per month will have these the fee cap level and does apply to every contract
sradovich on DSK3GMQ082PROD with NOTICES

crossing fees capped at that level instead. All side above the fee cap. A Member who does not
12 15 eligible volume from affiliated Members is reach the monthly fee cap will not be charged the
U.S.C. 78k–1.
13 17 aggregated for purposes of the Crossing Fee Cap, service fee. Once the fee cap is reached, the service
CFR 242.608. fee applies to eligible Firm Proprietary and Non-
14 15 U.S.C. 78k–1.
provided there is at least 75% common ownership
between the Members as reflected on each Nasdaq ISE market Maker orders in all Nasdaq ISE
15 17 CFR 242.608.
Member’s Form BD, Schedule A. products. The service fee is not calculated in
16 17 CFR 200.30–3(a)(29). 4 A service fee of $0.00 per side applies to all reaching the cap.
1 15 U.S.C. 78s(b)(1). 5 15 U.S.C. 78f(b).
order types that are eligible for the fee cap. The
2 17 CFR 240.19b–4. service fee does not apply once a Member reaches 6 15 U.S.C. 78f(b)(4) and (5).

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Document Created: 2017-12-13 01:23:38
Document Modified: 2017-12-13 01:23:38

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 58668