82 FR 9259 - Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing of Proposed Rule Change To Permit the Listing and Trading of P.M.-Settled NASDAQ-100 Index® Options on a Pilot Basis
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 22 (February 3, 2017)
Federal Register Volume 82, Issue 22 (February 3, 2017)
| Page Range | 9259-9263 | |
| FR Document | 2017-02258 |
[Federal Register Volume 82, Number 22 (Friday, February 3, 2017)] [Notices] [Pages 9259-9263] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-02258] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79894; File No. SR-Phlx-2017-04] Self-Regulatory Organizations; NASDAQ PHLX LLC; Notice of Filing of Proposed Rule Change To Permit the Listing and Trading of P.M.- Settled NASDAQ-100 Index[supreg] Options on a Pilot Basis January 30, 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 January 18, 2017, NASDAQ PHLX LLC (``Phlx'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to [[Page 9260]] 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 Substance of the Proposed Rule Change The Exchange proposes to permit the listing and trading of P.M.- settled NASDAQ-100 Index[supreg] options on a pilot basis. The text of the proposed rule change is available on the Exchange's Web site at http://nasdaqphlx.cchwallstreet.com/ 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 aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose (i) New P.M.-Settled NASDAQ-100 Index Options The purpose of this rule filing is to permit the listing and trading, on a pilot basis, of NASDAQ-100 Index[supreg] (``NASDAQ-100'') options with third-Friday-of-the-month (``Expiration Friday'') expiration dates, whose exercise settlement value will be based on the closing index value, symbol XQC, of the NASDAQ-100 on the expiration day (``P.M.- settled'') for an initial period of twelve months (the ``Pilot Program'') from the date of approval of this proposed rule change. The NASDAQ-100, a modified market capitalization-weighted index, includes 100 of the largest non-financial companies listed on The Nasdaq Stock Market, based on market capitalization. It does not contain securities of financial companies including investment companies. Security types generally eligible for the NASDAQ-100 include common stocks, ordinary shares, American Depository Receipts, and tracking stocks. Security or company types not included in the NASDAQ- 100 are closed-end funds, convertible debentures, exchange traded funds, limited liability companies, limited partnership interests, preferred stocks, rights, shares or units of beneficial interest, warrants, units and other derivative securities.\3\ --------------------------------------------------------------------------- \3\ A description of the NASDAQ-100 is available on Nasdaq's Web site at https://indexes.nasdaqomx.com/docs/methodology_NDX.pdf. --------------------------------------------------------------------------- The conditions for listing the proposed contract (``NDXPM'') on Phlx will be similar to those for Full Value Nasdaq 100 Options (``NDX''), which are already listed and trading on Phlx, except that NDXPM will be P.M.-settled.\4\ The proposed contract would use a $100 multiplier, and the minimum trading increment would be $0.05 for options trading below $3.00 and $0.10 for all other series.\5\ Strike price intervals would be set at no less than $5.00.\6\ Consistent with existing rules for index options, the Exchange would allow up to nine near-term expiration months \7\ as well as LEAPS.\8\ The product would have European-style exercise, and because it is based on the NASDAQ- 100, there would be no position limits.\9\ The Exchange has the flexibility to open for trading additional series in response to customer demand. --------------------------------------------------------------------------- \4\ The Exchange currently lists an A.M. Reduced Value Nasdaq 100 Option, but does not at this time propose to list a reduced value P.M. settled option based on the NASDAQ-100. \5\ See Rule 1034. \6\ See Rule 1101A, Terms of Option Contracts, section (a). \7\ The Exchange wishes to give the same expiration month options for NDXPM as are given for NDX, since both options classes are derived from the NASDAQ-100. \8\ Exchange Rule 1101A(b)(i) provides that after a particular class of stock index options has been approved for listing and trading on the Exchange, the Exchange shall from time to time open for trading series of options therein. Within each approved class of stock index options, the Exchange shall open for trading a minimum of one expiration month and series for each class of approved stock index options and may also open for trading series of options having not less than nine and up to 60 months to expiration (long-term options series) as provided in Rule 1101A(b)(iii). Rule 1101A(b)(iii) provides that The Exchange may list, with respect to any class of stock index options, series of options having not less than nine and up to 60 months to expiration, adding up to ten expiration months. Such series of options may be opened for trading simultaneously with series of options trading pursuant to Rule 1101A. Strike price interval, bid/ask differential and continuity rules shall not apply to such options series until the time to expiration is less than nine months. \9\ See proposed amendment to Rule 1001A(a)(ii). --------------------------------------------------------------------------- As with NDX, in determining compliance with Rule 1001A, Position Limits, there will be no position limits for broad-based index option contracts in the NDXPM class.\10\ Each member or member organization (other than Registered Options Traders) that maintains a position on the same side of the market in excess of 100,000 contracts for its own account, or for the account of a customer, in the aggregate of (i) Full Value Nasdaq 100 Options and (ii) NDXPM options, would be required to file a report with the Exchange that includes, but is not limited to, data related to the option positions, whether such positions are hedged and if applicable, a description of the hedge and information concerning collateral used to carry the positions.\11\ As with NDX, there would be no exercise limits for NDXPM.\12\ --------------------------------------------------------------------------- \10\ See proposed amendment to Rule 1079(d). \11\ See Rule 1001A(c) as proposed to be revised. \12\ See Rule 1002A which provides that exercise limits for index option contracts are equivalent to the position limits described in Rule 1001A. --------------------------------------------------------------------------- As with NDX, whenever the Exchange determines that additional margin is warranted in light of the risks associated with an under- hedged NDXPM option position, the Exchange may consider imposing additional margin upon the account maintaining such under-hedged position pursuant to its authority under Exchange Rules 1003(b) (for non-FLEX options) and 1079(d)(2) (for FLEX options). The trading hours for NDXPM will be from 9:30 a.m. ET to 4:00 p.m. ET.\13\ --------------------------------------------------------------------------- \13\ Note that the trading hours for NDX end at 4:15 p.m. ET rather than at 4:00 p.m. ET. --------------------------------------------------------------------------- Regarding NDXPM FLEX Options, there would be no position limits (as with NDX FLEX Options). As with NDX FLEX Options, each member or member organization (other than a Specialist or Registered Options Trader) that maintains a position on the same side of the market in excess of 100,000 contracts for NDXPM FLEX Options, for its own account or for the account of a customer, would be required to report information on the FLEX equity option position, positions in any related instrument, the purpose or strategy for the position and the collateral used by the account. The report would be required to be in the form and manner prescribed by the Exchange. Like NDX FLEX Options, there would be no exercise limits for NDXPM FLEX Options (including reduced-value option contracts).\14\ --------------------------------------------------------------------------- \14\ See Rule 1079(d), as proposed to be revised. --------------------------------------------------------------------------- In addition, whenever the Exchange determined that a higher margin requirement was necessary in light of the risks associated with a NDXPM FLEX Option position in excess of the standard limit for NDXPM non-FLEX options of the same class, the Exchange could consider imposing additional margin upon the account maintaining such under-hedged position. Additionally, the clearing firm carrying the account would be subject to capital charges under SEC rule 15c3-1 to the [[Page 9261]] extent of any margin deficiency resulting from the higher margin requirement.\15\ --------------------------------------------------------------------------- \15\ See Rule 1079(d)(2). --------------------------------------------------------------------------- To explain the basic adoption of NDXPM, the Exchange proposes to add Commentary .05 to Rule 1101A, Terms of Options Contracts. This proposed new Commentary would provide that in addition to A.M.-settled Full Value Nasdaq 100 Options approved for trading on the Exchange pursuant to Rule 1101A Commentary .01, the Exchange may also list options on the NASDAQ-100 Index whose exercise settlement value is the closing value of the NASDAQ-100 Index on the expiration day.\16\ NDXPM options would be listed for trading for an initial pilot period ending twelve months from the date of approval of the proposed rule change. --------------------------------------------------------------------------- \16\ Note that the closing value of the NASDAQ-100 may change up until 17:15 ET due to corrections to prices of the underlying component securities. --------------------------------------------------------------------------- Precedent exists for P.M. settlement of broad-based index options. SPXPM (a P.M. settled index option contract based on the Standard & Poor's 500 index) is traded on the Chicago Board Options Exchange (``CBOE''). Further, OEX (an index option contract based on the Standard & Poor's 100 index) is also traded on CBOE and has been P.M.- settled since 1983. The Exchange does not believe that any market disruptions will be encountered with the introduction of P.M.-settled NASDAQ-100 index options. The Exchange will monitor for any such disruptions or the development of any factors that could cause such disruptions. The Exchange also notes that P.M.-settled options predominate in the OTC market, and Phlx is not aware of any adverse effects in the stock market attributable to the P.M.-settlement feature. Phlx is merely proposing to offer a P.M.-settled product in an exchange environment which offers the benefit of added transparency, price discovery, and stability. In response to any potential concerns that disruptive trading conduct could occur as a result of the concurrent listing and trading of two index option products based on the same index but for which different settlement methodologies exist (i.e., one is A.M.-settled and one is P.M.-settled), the Exchange notes that CBOE lists and trades both the A.M.-settled S&P 500 index option called SPX and a P.M.-settled S&P 500 index option, SPXPM. Phlx is not aware of any market disruptions occurring as a result of CBOE offering both products. The adoption of trading of P.M.-settled options on the NASDAQ-100 Index on the same exchange that lists A.M.-settled options on the NASDAQ-100 Index would provide greater spread opportunities. This manner of trading in different products allows a market participant to take advantage of the different expiration times, providing expanded trading opportunities. In the options market currently, market participants regularly trade similar or related products in conjunction with each other, which contributes to overall market liquidity. The Exchange represents that it has sufficient capacity to handle additional traffic associated with this new listing, and that it has in place adequate surveillance procedures to monitor trading in these options thereby helping to ensure the maintenance of a fair and orderly market. (ii) Pilot Program Reports As proposed, the proposal would become effective on a Pilot Program basis for period of twelve months. If the Exchange were to propose an extension of the program or should the Exchange propose to make the program permanent, then the Exchange would submit a filing proposing such amendments to the program. The Exchange notes that any positions established under the pilot would not be impacted by the expiration of the pilot. For example, a position in a P.M.-settled series that expires beyond the conclusion of the pilot period could be established during the 12-month pilot. If the Pilot Program were not extended, then the position could continue to exist. However, the Exchange notes that any further trading in the series would be restricted to transactions where at least one side of the trade is a closing transaction. The Exchange proposes to submit a Pilot Program report to Commission at least two months prior to the expiration date of the Pilot Program (the ``annual report''). The annual report would contain an analysis of volume, open interest, and trading patterns. The analysis would examine trading in the proposed option product as well as trading in the securities that comprise the NASDAQ-100 index. In addition, for series that exceed certain minimum open interest parameters, the annual report would provide analysis of index price volatility and share trading activity. In addition to the annual report, the Exchange would provide the Commission with periodic interim reports while the pilot is in effect that would contain some, but not all, of the information contained in the annual report. The annual report would be provided to the Commission on a confidential basis. The annual report would contain the following volume and open interest data: (1) Monthly volume aggregated for all trades; (2) monthly volume aggregated by expiration date; (3) monthly volume for each individual series; (4) month-end open interest aggregated for all series; (5) month-end open interest for all series aggregated by expiration date; and (6) month-end open interest for each individual series. In addition to the annual report, the Exchange would provide the Commission with interim reports of the information listed in Items (1) through (6) above periodically as required by the Commission while the pilot is in effect. These interim reports would also be provided on a confidential basis. The annual report would also contain the information noted in Items (1) through (6) above for Expiration Friday, A.M.-settled NASDAQ-100 index options traded on Phlx. In addition, the annual report would contain the following analysis of trading patterns in Expiration Friday, P.M.-settled NASDAQ-100 index option series in the pilot: (1) A time series analysis of open interest; and (2) an analysis of the distribution of trade sizes. Also, for series that exceed certain minimum parameters, the annual report would contain the following analysis related to index price changes and underlying share trading volume at the close on Expiration Fridays: A comparison of index price changes at the close of trading on a given Expiration Friday with comparable price changes from a control sample. The data would include a calculation of percentage price changes for various time intervals and compare that information to the respective control sample. The Exchange would provide a calculation of share volume for a sample set of the component securities representing an upper limit on share trading that could be attributable to expiring in- the-money series. The data would include a comparison of the calculated share volume for securities in the sample set to the average daily trading volumes of those securities over a sample period. The minimum open interest parameters, control sample, time intervals, method for randomly selecting the component securities, and sample periods would be determined by the Exchange and the Commission. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with [[Page 9262]] the provisions of Section 6 of the Act,\17\ in general, and with Section 6(b)(5) of the Act,\18\ in that it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest; and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers, or to regulate by virtue of any authority conferred by the Act matters not related to the purposes of the Act or the administration of the Exchange. The Exchange believes that the proposed rule change is also consistent with Section 6(b)(8) of the Act \19\ in that it does not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Specifically, the Exchange believes that the introduction of NDXPM options will attract order flow to the Exchange, increase the variety of listed options to investors, and provide a valuable hedge tool to investors. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78f. \18\ 15 U.S.C. 78f(b)(5). \19\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- The Commission has previously stated that when cash-settled index options were first introduced in the 1980s, they generally utilized closing-price settlement procedures (i.e., P.M. settlement). The Commission stated it became concerned about the impact of P.M. settlement on cash-settled index options on the markets for the underlying stocks at the close on expiration Fridays especially during the quarterly expirations of the third Friday of March, June, September and December when options, index futures, and options on index futures all expire simultaneously. The Commission expressed concerns that p.m.- settlement was believed to have contributed to above-average volume and added market volatility on those days, which sometimes led to sharp price movements during the last hour of trading, as a consequence of which the close of trading on the quarterly expiration Friday became known as the ``triple witching hour.'' The Commission observed that besides contributing to investor anxiety, heightened volatility during the expiration periods created the opportunity for manipulation and other abusive trading practices in anticipation of the liquidity constraints.\20\ --------------------------------------------------------------------------- \20\ See Securities Exchange Act Release No. 65256 (September 2, 2011), 76 FR 55569 (September 9, 2011) (approving SR-C2-2011-008). --------------------------------------------------------------------------- However, the Exchange believes that the above concerns that have led to the transition to a.m. settlement for index derivatives have been largely mitigated. It believes that expiration pressure in the underlying cash markets at the close has been greatly reduced with the advent of multiple primary listing and unlisted trading privilege markets, and that trading is now widely dispersed among many market centers. Additionally, the Exchange notes that opening procedures in the 1990s were deemed acceptable to mitigate one-sided order flow driven by index option expiration and that Nasdaq uses an automated closing cross procedure and has a closing order type that facilitates orderly closings. The Nasdaq closing procedures are well-equipped to mitigate imbalance pressure at the close. In addition, after-hours trading now provides market participants with an alternative to help offset market-on-close imbalances.\21\ --------------------------------------------------------------------------- \21\ C2 made similar arguments to justify Commission approval of listing of SPXPM. See id. --------------------------------------------------------------------------- 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. NDXPM options would be available for trading to all market participants. The proposed rule change will facilitate the listing and trading of a novel option product that will enhance competition among market participants, to the benefit of investors and the marketplace. The listing of NDXPM will enhance competition by providing investors with an additional investment vehicle, in a fully-electronic trading environment, through which investors can gain and hedge exposure to NASDAQ-100 stocks. Further, this product could offer a competitive alternative to other existing investment products that seek to allow investors to gain broad market exposure. Also, the Exchange notes that it is possible for other exchanges to develop or license the use of a new or different index to compete with the NASDAQ-100 and seek Commission approval to list and trade options on such an index. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents, the Commission shall: (a) By order approve or disapprove such proposed rule change, or (b) institute proceedings to determine whether the proposed rule change should be 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 [email protected]. Please include File Number SR-Phlx-2017-04 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-Phlx-2017-04. 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 [[Page 9263]] printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-Phlx-2017-04 and should be submitted on or before February 24, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\22\ --------------------------------------------------------------------------- \22\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-02258 Filed 2-2-17; 8:45 am] BILLING CODE 8011-01-P
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amendments would reflect the those of other NYSE Exchanges.17 The outlier among the NYSE Exchanges. The
Exchange’s proposed new ownership Exchange has represented to the Commission also notes that it received
and, in certain cases, align the Commission that the proposed rule no comments on the proposed rule
Exchange’s governance provisions to change presents no novel issues, as all change. Finally, the Commission
those of other NYSE Exchanges.11 of the substantive and/or procedural believes that uniformity of terminology
III. Discussion and Commission changes are derived from existing rules as well as corporate governance
Findings of other NYSE Exchanges. Furthermore, structure among the wholly owned
the Exchange has made the following subsidiaries of NYSE Group, including
After careful review, the Commission representations: the NYSE Exchanges and the Exchange,
finds that the proposed rule change, as • The proposed rule change would to the extent possible, should allow for
modified by Amendment No. 1, is continue the requirement in the a more streamlined, consistent, and
consistent with the requirements of Exchange’s Bylaws that an independent effective approach to both compliance
Section 6 of the Act 12 and the rules and board committee oversees the adequacy and surveillance in furtherance of the
regulations thereunder applicable to a and effectiveness of the performance of rules of the Exchange and the federal
national securities exchange.13 In the Exchange’s self-regulatory securities laws.
particular, the Commission finds that responsibilities; 18
the proposed rule change is consistent • The Regulatory Oversight IV. Conclusion
with Sections 6(b)(1) and (3) of the Committee would be similar in For the foregoing reasons, the
Act,14 which, among other things, composition and function to committees Commission finds that the proposed
require a national securities exchange to of other self-regulatory organizations, rule change, as modified by Amendment
be so organized and have the capacity and would be similarly designed to (i) No. 1, is consistent with the Act and the
to be able to carry out the purposes of ensure the adequacy and effectiveness rules and regulations thereunder
the Act, and to enforce compliance by of the Exchange’s regulatory and self- applicable to a national securities
its members and persons associated regulatory responsibilities; and (ii) to exchange.
with its members with the provisions of assist the Board and any other It is therefore ordered, pursuant to
the Act, the rules and regulations committees of the Board in reviewing Section 19(b)(2) of the Act 23 that the
thereunder, and the rules of the the regulatory plan and the overall proposed rule change (SR–NSX–2016–
exchange, and assure the fair effectiveness of the Exchange’s 16), as modified by Amendment No.1,
representation of its members in the regulatory functions.19 be, and hereby is, approved.
selection of its directors and • The proposed rule change is not
administration of its affairs, and provide For the Commission, by the Division of
inconsistent with the Order Instituting Trading and Markets, pursuant to delegated
that one or more directors shall be Administrative and Cease-and-Desist authority.24
representative of issuers and investors Proceedings Pursuant to Sections 19(h) Eduardo A. Aleman,
and not be associated with a member of and 21C of the Securities Exchange Act
the exchange, broker, or dealer. The Assistant Secretary.
of 1934, Making Findings, and Imposing [FR Doc. 2017–02263 Filed 2–2–17; 8:45 am]
Commission also finds that the proposal Remedial Sanctions and Cease-and-
is consistent with Section 6(b)(5) of the Desist Order, entered by the
BILLING CODE 8011–01–P
Act,15 which requires that the rules of Commission on May 19, 2005.20
an exchange be designed to promote just • The changes to the corporate and
and equitable principles of trade, to SECURITIES AND EXCHANGE
governance structure will place the COMMISSION
remove impediments to and perfect the Exchange in a better position to improve
mechanism of a free and open market its technology and engage in value- [Release No. 34–79894; File No. SR–Phlx–
and a national market system, and, in enhancing transactions that will enable 2017–04]
general, to protect investors and the the Exchange to more effectively
public interest.16 participate and compete in the Self-Regulatory Organizations;
According to the Exchange, the NASDAQ PHLX LLC; Notice of Filing of
marketplace.21
proposed rule change consists of (i) non-
• The Exchange’s proposed changes Proposed Rule Change To Permit the
substantive changes that will conform Listing and Trading of P.M.-Settled
to its corporate governance structure are
terminology of the Exchange to that of NASDAQ–100 Index® Options on a
designed to align its structure with that
the NYSE Exchanges, and (ii) Pilot Basis
of the NYSE Exchanges to promote a
substantive and/or procedural changes
consistent approach to corporate
that are designed to conform the January 30, 2017.
governance, and to simplify and create
Exchange’s rules and procedures to Pursuant to Section 19(b)(1) of the
greater consistency with the
organizational documents and Securities Exchange Act of 1934 (the
11 See note 9. The proposed changes to the
governance practices of the NYSE ‘‘Act’’),1 and Rule 19b–4 thereunder,2
governance documents, NSX Rules and fee
schedule are set forth in greater detail in the Notice. Exchange.22 notice is hereby given that on January
See Notice, supra note 4, at 96553–63. The Exchange has represented to the 18, 2017, NASDAQ PHLX LLC (‘‘Phlx’’
12 15 U.S.C. 78f.
Commission that it believes that the or ‘‘Exchange’’) filed with the Securities
13 In approving this proposed rule change, the
benefits of aligning its corporate and Exchange Commission (‘‘SEC’’ or
Commission has considered the proposed rule’s ‘‘Commission’’) the proposed rule
impact on efficiency, competition, and capital documents to those of other NYSE
asabaliauskas on DSK3SPTVN1PROD with NOTICES
formation. See 15 U.S.C. 78c(f). Exchanges outweigh the costs, if any, to change as described in Items I, II, and
14 15 U.S.C. 78f(b)(1) and (b)(3).
leaving its rules as is and being the sole III below, which Items have been
15 15 U.S.C. 78f(b)(5). prepared by the Exchange. The
16 The text of the proposed rule change is
17 See Notice, supra note 4, at 96563–64. Commission is publishing this notice to
consistent with Sections 6(b)(1), (3) and (5) of the 18 See id. at 96563.
Act. However, the Commission notes that the 19 See id. 23 15
Exchange must continue to comply with the U.S.C. 78s(b)(2).
20 See id. at 96553. See also note 16. 24 17 CFR 200.30–3(a)(12).
provisions of the Commission’s Cease and Desist
21 See id. at 96554. 1 15 U.S.C. 78s(b)(1).
Order. See Securities Exchange Act Release No.
51714 (May 19, 2005). 22 See id. at 96552–53. 2 17 CFR 240.19b–4.
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printing in the Commission’s Public SECURITIES AND EXCHANGE PEARL as a Sponsor 5 of the OLPP.6 The
Reference Room, 100 F Street NE., COMMISSION Commission is publishing this notice to
Washington, DC 20549 on official solicit comments on the amendment
business days between the hours of [Release No. 34–79897; File No. 4–443] from interested persons.
10:00 a.m. and 3:00 p.m. Copies of the
Joint Industry Plan; Notice of Filing I. Description and Purpose of the
filing also will be available for
and Immediate Effectiveness of Amendment
inspection and copying at the principal
office of the Exchange. All comments Amendment to the Plan for the The OLPP establishes procedures
received will be posted without change; Purpose of Developing and designed to facilitate the listing and
the Commission does not edit personal Implementing Procedures Designed To trading of standardized options
identifying information from Facilitate the Listing and Trading of
contracts on the options exchanges. The
submissions. You should submit only Standardized Options To Add MIAX
amendment to the OLPP adds MIAX
information that you wish to make PEARL, LLC as a Plan Sponsor
PEARL as a Sponsor. The other OLPP
available publicly. All submissions January 30, 2017. Sponsors are Amex, BATS, BOX, BX,
should refer to File Number SR–Phlx– Pursuant to Section 11A(a)(3) of the CBOE, C2, EDGX, ISE, ISE Mercury,
2017–04 and should be submitted on or Securities Exchange Act of 1934 MIAX, Nasdaq, NYSE Arca, OCC, Phlx,
before February 24, 2017. (‘‘Act’’) 1 and Rule 608 thereunder,2 and Topaz. MIAX PEARL has submitted
For the Commission, by the Division of notice is hereby given that on January an executed copy of the OLPP to the
Trading and Markets, pursuant to delegated 17, 2017, MIAX PEARL, LLC (‘‘MIAX Commission in accordance with the
authority.22 PEARL’’ or ‘‘Exchange’’) filed with the procedures set forth in the OLPP
Eduardo A. Aleman, Securities and Exchange Commission regarding new Sponsors. Section 7 of
(‘‘Commission’’) an amendment to the the OLPP provides for the entry of new
Assistant Secretary.
Plan for the Purpose of Developing and Sponsors to the OLPP. Specifically,
[FR Doc. 2017–02258 Filed 2–2–17; 8:45 am]
Implementing Procedures Designed to Section 7 of the OLPP provides that an
BILLING CODE 8011–01–P Facilitate the Listing and Trading of Eligible Exchange 7 may become a
Standardized Options (‘‘OLPP’’).3 The Sponsor of the OLPP by: (i) Executing a
Commission approved the application copy of the OLPP, as then in effect; (ii)
SECURITIES AND EXCHANGE of MIAX PEARL to register as a national
COMMISSION providing each current Sponsor with a
securities exchange on December 13,
copy of such executed OLPP; and (iii)
2016.4 One of the conditions of the
effecting an amendment to the OLPP, as
[Release No. 34–79806; File No. SR–NSX– Commission’s approval was the
2017–01] requirement for MIAX PEARL to join specified in Section 7(ii) of the OLPP.
the OLLP. The amendment adds MIAX Section 7(ii) of the OLPP sets forth the
Self-Regulatory Organizations; process by which an Eligible Exchange
National Stock Exchange, Inc.; Notice 1 15 U.S.C. 78k–1(a)(3). may effect an amendment to the OLPP.
of Filing and Immediate Effectiveness 2 17 CFR 242.608. Specifically, an Eligible Exchange must:
of a Proposed Rule Change To Amend 3 On July 6, 2001, the Commission approved the
(a) Execute a copy of the OLPP with the
Exchange Rule 11.26 Regarding the OLPP, which was proposed by the American Stock
Exchange LLC (‘‘Amex’’), Chicago Board Options
only change being the addition of the
Data Collection Requirements of the Exchange, Incorporated (‘‘CBOE’’), International new Sponsor’s name in Section 8 of the
Regulation NMS Plan To Implement a Securities Exchange LLC (‘‘ISE’’), Options Clearing OLPP; 8 and (b) submit the executed
Tick Size Pilot Program Corporation (‘‘OCC’’), Philadelphia Stock Exchange, OLPP to the Commission. The OLPP
Inc. (‘‘Phlx’’), and Pacific Exchange, Inc. (‘‘PCX’’)
(n/k/a NYSE Arca). See Securities Exchange Act then provides that such an amendment
January 17, 2017.
Release No. 44521, 66 FR 36809 (July 13, 2001). See will be effective when the amendment
Correction also Securities Exchange Act Release Nos. 49199 is approved by the Commission or
(February 5, 2004), 69 FR 7030 (February 12, 2004)
(adding Boston Stock Exchange, Inc. as a Sponsor otherwise becomes effective pursuant to
In notice document 2017–01461, to the OLPP); 57546 (March 21, 2008), 73 FR 16393 Section 11A of the Act and Rule 608
appearing on pages 8249–8252, in the (March 27, 2008) (adding Nasdaq Stock Market, LLC thereunder.
issue of Tuesday, January 24, 2017, (‘‘Nasdaq’’) as a Sponsor to the OLPP); 61528
(February 17, 2010), 75 FR 8415 (February 24, 2010)
make the following correction: (adding BATS Exchange, Inc. (‘‘BATS’’) as a
5 A ‘‘Sponsor’’ is an Eligible Exchange whose
participation in the OLPP has become effective
On page 8249, in the second column, Sponsor to the OLPP); 63162 (October 22, 2010), 75
FR 66401 (October 28, 2010) (adding C2 Options pursuant to Section 7 of the OLPP.
the heading is corrected to read as set 6 See Letter from Barbara J. Comly, EVP, General
Exchange Incorporated (‘‘C2’’) as a sponsor to the
forth above. OLPP); 66952 (May 9, 2012), 77 FR 28641 (May 15, Counsel and Corporate Secretary, MIAX PEARL, to
[FR Doc. C1–2017–01461 Filed 2–2–17; 8:45 am] 2012) (adding BOX Options Exchange LLC (‘‘BOX’’) Brent J. Fields, Secretary, Commission, dated
as a Sponsor to the OLPP); 67327 (June 29, 2012), January 13, 2017.
BILLING CODE 1301–00–D 77 FR 40125 (July 6, 2012) (adding Nasdaq OMX 7 The OLPP defines an ‘‘Eligible Exchange’’ as a
BX, Inc. (‘‘BX’’) as a Sponsor to the OLPP); 70765 national securities exchange registered with the
(October 28, 2013), 78 FR 65739 (November 1, 2013) Commission pursuant to Section 6(a) of the Act, 15
(adding Topaz Exchange, LLC as a Sponsor to the
U.S.C. 78f(a), that (1) has effective rules for the
OLPP (‘‘Topaz’’); 70764 (October 28, 2013), 78 FR
trading of options contracts issued and cleared by
65733 (November 1, 2013) (adding Miami
asabaliauskas on DSK3SPTVN1PROD with NOTICES
the OCC approved in accordance with the
International Securities Exchange, LLC (‘‘MIAX’’) as
a Sponsor to the OLPP); 76822 (January 1, 2016), provisions of the Act and the rules and regulations
81 FR 1251 (January 11, 2016) (adding EDGX thereunder and (2) is a party to the Plan for
Exchange, Inc. (‘‘EDGX’’) as a Sponsor to the OLPP); Reporting Consolidated Options Last Sale Reports
77323 (March 8, 2016), 81 FR 13433 (March 14, and Quotation Information (the ‘‘OPRA Plan’’).
2016) (adding ISE Mercury, LLC (‘‘ISE Mercury’’) as MIAX PEARL has represented that it has met both
a Sponsor to the OLPP). the requirements for being considered an Eligible
4 See Securities and Exchange Act Release No. Exchange. See supra note 5.
79543 (Dec. 13, 2016), 81 FR 92901 (Dec. 20, 2016) 8 The Commission notes that the list of plan
22 17 CFR 200.30–3(a)(12). (File No. 10–227). sponsors is set forth in Section 9 of the OLPP.
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Document Created: 2018-02-01 14:35:14
Document Modified: 2018-02-01 14:35:14
| 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 9259 |
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