82 FR 9101 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 8040 (Obligations of Market Makers)
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 21 (February 2, 2017)
Federal Register Volume 82, Issue 21 (February 2, 2017)
| Page Range | 9101-9103 | |
| FR Document | 2017-02184 |
[Federal Register Volume 82, Number 21 (Thursday, February 2, 2017)] [Notices] [Pages 9101-9103] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-02184] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79891; File No. SR-BOX-2017-03] Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 8040 (Obligations of Market Makers) January 27, 2017. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ [[Page 9102]] notice is hereby given that on January 17, 2017, BOX Options Exchange LLC (the ``Exchange'') 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 self- regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to amend Rule 8040 (Obligations of Market Makers). The text of the proposed rule change is available from the principal office of the Exchange, at the Commission's Public Reference Room and also on the Exchange's Internet Web site at http://boxexchange.com. 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 these statements may be examined at the places specified in Item IV below. The self-regulatory organization 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 The Exchange proposes to amend BOX Rule 8040(a)(9) (Obligations of Market Makers) to amend the provision pertaining to trades that are more than $0.25 below parity. Additionally, the Exchange proposes to eliminate Rule 8040(a)(10), the provision providing for bids (offers) to be no more than $1 lower (higher) than the last preceding transaction plus or minus the aggregate change in the last sale price of the underlying (``the one point rule''). First, the Exchange proposes to eliminate the one point rule as various market changes have rendered the rule obsolete and unnecessary. For example, Market Makers are subject to various quotation requirements, including bid/ask quote width requirements contained in Rule 8050. The Exchange also has an obvious error rule that contains provisions on erroneous pricing errors (e.g., 7170) and has in place certain price check parameters that will not permit the automatic execution of certain orders if the execution would take place at prices inferior to the national best bid/offer (e.g., Rule 7290). Second, the Exchange is proposing to retain Rule 8040(a)(9) as a guideline but to modify it to provide that an amount larger than $0.25 may be appropriate considering the particular market conditions (not just unusual conditions as the rule currently states). Currently, Market Makers are expected ordinarily, except in unusual market conditions, to refrain from purchasing a call option or a put option at a price more than $0.25 below parity. In the case of call options, parity is measured by the bid in the underlying security, and in the case of put options, parity is measured by the offer in the underlying security (``the parity rule''). The Exchange proposes to revise the rule to provide that the $0.25 guideline may be increased, or the rule waived, by the Exchange on a series-by-series basis.\3\ The Exchange believes that revising the $0.25 parity rule in this manner modernizes the guideline to reflect market changes and will provide more flexibility to take into consideration the particular trading in a security, including but not limited to the underlying market price, market conditions, and applicable minimum bid/ask width requirements for a given options series. Additionally, the Exchange believes that the proposed change to Rule 8040(a)(9) harmonizes the Exchange's parity rule with other options exchanges' parity rules in the industry.\4\ --------------------------------------------------------------------------- \3\ The Exchange will provide Participants with notice, via Regulatory Circular, if the rule will be waived. \4\ See Chicago Board Options Exchange (``CBOE'') Rule 8.7(.02); International Securities Exchange (``ISE'') Rule 803(a)(1); Miami International Securities Exchange LLC (``MIAX'') Rule 603(a). --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act,\5\ in general, and Section 6(b)(5) of the Act,\6\ in particular in that the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \7\ requirements that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, to remove impediments to and to perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest, because it will eliminate the outdated one point rule and update the parity rule to incorporate more flexibility and recognize changing market conditions. As discussed above, the Exchange believes the proposed change to Rule 8040(a)(9) is reasonable and appropriate, as other options exchanges have similar rules currently in place at their respective exchanges.\8\ Further, the Exchange believes the proposed elimination of Rule 8040(a)(10) is reasonable and appropriate as another exchange in the industry filed to remove the language as the rule was obsolete and unnecessary.\9\ --------------------------------------------------------------------------- \5\ 15 U.S.C. 78f(b). \6\ 15 U.S.C. 78f(b)(5). \7\ Id. \8\ See supra note 4. \9\ See Securities Exchange Release No. 60897 (October 28, 2009), 74 FR 57217 (November 4, 2009) (Notice of Filing and Immediate Effectiveness SR-ISE-2009-85). --------------------------------------------------------------------------- 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. In this regard and as discussed above, the Exchange notes that the proposed rule change is substantially similar to rules at other options exchanges in the industry. As discussed above, the Exchange believes that the proposed change to revise the parity rule and eliminate the one point rule is consistent with the market maker obligations at other options exchanges. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has 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) \10\ of the Act and Rule 19b- 4(f)(6) thereunder.\11\ --------------------------------------------------------------------------- \10\ 15 U.S.C. 78s(b)(3)(A). \11\ 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. --------------------------------------------------------------------------- [[Page 9103]] A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act \12\ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) \13\ 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 30-day operative delay is consistent with the protection of investors and the public interest because it will allow the changes to be implemented immediately to update certain Market Maker guidelines to better reflect current market conditions. 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.\14\ --------------------------------------------------------------------------- \12\ 17 CFR 240.19b-4(f)(6). \13\ 17 CFR 240.19b-4(f)(6)(iii). \14\ 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). --------------------------------------------------------------------------- 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to rule-comments@sec.gov. Please include File Number SR-BOX-2017-03 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-BOX-2017-03. 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-BOX-2017-03, and should be submitted on or before February 23, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\15\ --------------------------------------------------------------------------- \15\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-02184 Filed 2-1-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 21 / Thursday, February 2, 2017 / Notices 9101
better of the Exchange’s Opening Price size of the Exchange’s BBO is consistent All submissions should refer to File
or the order’s limit price to first ensure with the Act because it clarifies the Number SR–ISE–2017–02. This file
the order’s limit price is not violated. manner in which the Exchange number should be included on the
Routing away at the Exchange’s establishes the BBO for purposes of subject line if email is used. To help the
Opening Price is intended to achieve the reference upon opening. Commission process and review your
best possible price available at the time comments more efficiently, please use
the order is received by the away B. Self-Regulatory Organization’s
only one method. The Commission will
market. Statement on Burden on Competition
post all comments on the Commission’s
Proposed Rule 701(j)(5), entitled The Exchange does not believe that Internet Web site (http://www.sec.gov/
‘‘Forced Opening,’’ provides for the the proposed rule change will impose rules/sro.shtml). Copies of the
situation where, as a last resort, in order any burden on competition not submission, all subsequent
to open an options series when the necessary or appropriate in furtherance amendments, all written statements
processes described above have not of the purposes of the Act. The proposal with respect to the proposed rule
resulted in an opening of the options does not change the intense competition change that are filed with the
series. Under a Forced Opening, the that exists among the options markets Commission, and all written
system will open the series executing as for options business including on the communications relating to the
many contracts as possible by routing to opening. Nor does the Exchange believe proposed rule change between the
away markets at prices better than the that the proposal will impose any Commission and any person, other than
Exchange Opening Price for their burden on intra-market competition; the those that may be withheld from the
disseminated size, trading available Opening Process involves many types of public in accordance with the
contracts on the Exchange at the participants and interest. provisions of 5 U.S.C. 552, will be
Exchange Opening Price bounded by available for Web site viewing and
OQR (without trading through the limit C. Self-Regulatory Organization’s
Statement on Comments on the printing in the Commission’s Public
price(s) of interest within OQR which is Reference Room, 100 F Street NE.,
unable to be fully executed at the Proposed Rule Change Received From
Members, Participants, or Others Washington, DC 20549, on official
Opening Price). The system will also business days between the hours of
route contracts to away markets at No written comments were either 10:00 a.m. and 3:00 p.m. Copies of the
prices equal to the Exchange Opening solicited or received. filing also will be available for
Price at their disseminated size. In this inspection and copying at the principal
situation, the system will price any III. Date of Effectiveness of the
Proposed Rule Change and Timing for office of the Exchange. All comments
contracts routed to away markets at the received will be posted without change;
better of the Exchange Opening Price or Commission Action
the Commission does not edit personal
the order’s limit price. Any unexecuted Within 45 days of the date of identifying information from
contracts from the imbalance not traded publication of this notice in the Federal submissions. You should submit only
or routed will be cancelled back to the Register or within such longer period information that you wish to make
entering participant if they remain up to 90 days (i) as the Commission may available publicly. All submissions
unexecuted and priced through the designate if it finds such longer period should refer to File Number SR–ISE–
Opening Price. The Exchange believes to be appropriate and publishes its 2017–02 and should be submitted on or
that this process is consistent with the reasons for so finding or (ii) as to which before February 23, 2017.
Act because after attempting to open by the self-regulatory organization
soliciting interest on ISE and consents, the Commission will: For the Commission, by the Division of
considering other away market interest (A) By order approve or disapprove Trading and Markets, pursuant to delegated
authority.53
and considering interest responding to such proposed rule change, or
Imbalance Messages, the Exchange (B) institute proceedings to determine Eduardo A. Aleman,
could not otherwise locate a fair and whether the proposed rule change Assistant Secretary.
reasonable price with which to open should be disapproved. [FR Doc. 2017–02182 Filed 2–1–17; 8:45 am]
options series. BILLING CODE 8011–01–P
The Exchange’s proposal to IV. Solicitation of Comments
memorialize the manner in which Interested persons are invited to
proposed rule will cancel and prioritize submit written data, views, and SECURITIES AND EXCHANGE
interest provides certainty to market arguments concerning the foregoing, COMMISSION
participants as to the priority scheme including whether the proposed rule
[Release No. 34–79891; File No. SR–BOX–
during the Opening Process.52 The change is consistent with the Act. 2017–03]
Exchange’s proposal to execute Market Comments may be submitted by any of
Orders first and then Limit Orders is the following methods: Self-Regulatory Organizations; BOX
consistent with the Act because these Options Exchange LLC; Notice of
orders have no specified price and Limit Electronic Comments
Filing and Immediate Effectiveness of
Orders will be executed thereafter in • Use the Commission’s Internet a Proposed Rule Change To Amend
accordance with the prices specified comment form (http://www.sec.gov/ Rule 8040 (Obligations of Market
due to the nature of these order types. rules/sro.shtml); or Makers)
This is consistent with the manner in • Send an email to rule-comments@
mstockstill on DSK3G9T082PROD with NOTICES
which these orders execute after the sec.gov. Please include File Number SR– January 27, 2017.
opening today. ISE–2017–02 on the subject line. Pursuant to Section 19(b)(1) of the
Finally, proposed Rule 701(l) Securities Exchange Act of 1934 (the
provides upon opening of the option Paper Comments
‘‘Act’’),1 and Rule 19b–4 thereunder,2
series, regardless of an execution, the • Send paper comments in triplicate
system dissemination of the price and to Secretary, Securities and Exchange 53 17 CFR 200.30–3(a)(12).
Commission, 100 F Street NE., 1 15 U.S.C. 78s(b)(1).
52 See proposed Rule 701(j)(6)(i) and (k). Washington, DC 20549–1090. 2 17 CFR 240.19b–4.
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![Federal Register / Vol. 82, No. 21 / Thursday, February 2, 2017 / Notices 9103
A proposed rule change filed Paper Comments Incident: Severe Storms, Tornadoes,
pursuant to Rule 19b–4(f)(6) under the • Send paper comments in triplicate and Straight-line Winds.
Act 12 normally does not become to Secretary, Securities and Exchange Incident Period: 01/02/2017.
operative for 30 days after the date of its Effective Date: 01/25/2017.
Commission, 100 F Street NE.,
filing. However, Rule 19b–4(f)(6)(iii) 13 Physical Loan Application Deadline
Washington, DC 20549–1090.
permits the Commission to designate a Date: 03/27/2017.
All submissions should refer to File Economic Injury (EIDL) Loan
shorter time if such action is consistent Number SR–BOX–2017–03. This file Application Deadline Date: 10/25/2017.
with the protection of investors and the number should be included on the
public interest. The Exchange has asked ADDRESSES: Submit completed loan
subject line if email is used. To help the applications to: U.S. Small Business
the Commission to waive the 30-day Commission process and review your
operative delay so that the proposal may Administration, Processing and
comments more efficiently, please use Disbursement Center, 14925 Kingsport
become operative immediately upon only one method. The Commission will
filing. The Exchange believes that Road, Fort Worth, TX 76155.
post all comments on the Commission’s
waiver of the 30-day operative delay is FOR FURTHER INFORMATION CONTACT: A.
Internet Web site (http://www.sec.gov/
consistent with the protection of rules/sro.shtml). Copies of the Escobar, Office of Disaster Assistance,
investors and the public interest submission, all subsequent U.S. Small Business Administration,
because it will allow the changes to be amendments, all written statements 409 3rd Street SW., Suite 6050,
implemented immediately to update with respect to the proposed rule Washington, DC 20416.
certain Market Maker guidelines to change that are filed with the SUPPLEMENTARY INFORMATION: Notice is
better reflect current market conditions. Commission, and all written hereby given that as a result of the
The Commission believes that waiving communications relating to the President’s major disaster declaration on
the 30-day operative delay is consistent proposed rule change between the 01/25/2017, applications for disaster
with the protection of investors and the Commission and any person, other than loans may be filed at the address listed
public interest. Therefore, the those that may be withheld from the above or other locally announced
Commission hereby waives the public in accordance with the locations.
provisions of 5 U.S.C. 552, will be The following areas have been
operative delay and designates the
available for Web site viewing and determined to be adversely affected by
proposed rule change operative upon the disaster:
filing.14 printing in the Commission’s Public
Reference Room, 100 F Street NE., Primary Counties (Physical Damage and
At any time within 60 days of the Washington, DC 20549 on official Economic Injury Loans): Dougherty.
filing of the proposed rule change, the business days between the hours of Contiguous Counties (Economic Injury
Commission summarily may 10:00 a.m. and 3:00 p.m. Copies of such Loans Only):
temporarily suspend such rule change if filing also will be available for Georgia: Baker, Calhoun, Lee,
it appears to the Commission that such inspection and copying at the principal Mitchell, Terrell, Worth.
action is necessary or appropriate in the office of the Exchange. All comments The Interest Rates are:
public interest, for the protection of received will be posted without change;
investors, or otherwise in furtherance of Percent
the Commission does not edit personal
the purposes of the Act. If the identifying information from For Physical Damage:
Commission takes such action, the submissions. You should submit only Homeowners With Credit Avail-
Commission shall institute proceedings information that you wish to make able Elsewhere ...................... 3.000
to determine whether the proposed rule available publicly. All submissions Homeowners Without Credit
should be approved or disapproved. should refer to File Number SR–BOX– Available Elsewhere .............. 1.500
2017–03, and should be submitted on or Businesses With Credit Avail-
IV. Solicitation of Comments able Elsewhere ...................... 6.250
before February 23, 2017.
Businesses Without Credit
Interested persons are invited to For the Commission, by the Division of Available Elsewhere .............. 3.125
submit written data, views, and Trading and Markets, pursuant to delegated Non-Profit Organizations With
arguments concerning the foregoing, authority.15 Credit Available Elsewhere ... 2.500
including whether the proposed rule Eduardo A. Aleman, Non-Profit Organizations With-
change is consistent with the Act. Assistant Secretary. out Credit Available Else-
Comments may be submitted by any of where ..................................... 2.500
[FR Doc. 2017–02184 Filed 2–1–17; 8:45 am]
For Economic Injury:
the following methods: BILLING CODE 8011–01–P Businesses & Small Agricultural
Electronic Comments Cooperatives Without Credit
Available Elsewhere .............. 3.125
• Use the Commission’s Internet SMALL BUSINESS ADMINISTRATION Non-Profit Organizations With-
comment form (http://www.sec.gov/ out Credit Available Else-
[Disaster Declaration #15027 and #15028] where ..................................... 2.500
rules/sro.shtml); or
• Send an email to rule-comments@ Georgia Disaster #GA–00089 The number assigned to this disaster
sec.gov. Please include File Number SR– AGENCY: U.S. Small Business for physical damage is 15027C and for
BOX–2017–03 on the subject line. Administration. economic injury is 150280.
mstockstill on DSK3G9T082PROD with NOTICES
ACTION: Notice. (Catalog of Federal Domestic Assistance
of filing of the proposed rule change, or such Number 59008)
shorter time as designated by the Commission. SUMMARY: This is a Notice of the
12 17 CFR 240.19b–4(f)(6).
Presidential declaration of a major James E. Rivera,
13 17 CFR 240.19b–4(f)(6)(iii).
disaster for the State of Georgia (FEMA– Associate Administrator for Disaster
14 For purposes only of waiving the 30-day
4294–DR), dated 01/25/2017. Assistance.
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition, [FR Doc. 2017–02231 Filed 2–1–17; 8:45 am]
and capital formation. See 15 U.S.C. 78c(f). 15 17 CFR 200.30–3(a)(12). BILLING CODE 8025–01–P
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Document Created: 2017-02-02 00:55:29
Document Modified: 2017-02-02 00:55:29
| 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 9101 |
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