82_FR_9287 82 FR 9265 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 7150 (The Price Improvement Period (“PIP”))

82 FR 9265 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 7150 (The Price Improvement Period (“PIP”))

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 22 (February 3, 2017)

Page Range9265-9267
FR Document2017-02261

Federal Register, Volume 82 Issue 22 (Friday, February 3, 2017)
[Federal Register Volume 82, Number 22 (Friday, February 3, 2017)]
[Notices]
[Pages 9265-9267]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-02261]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79900; File No. SR-BOX-2017-06]


Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Rule 7150 (The Price Improvement Period (``PIP''))

January 30, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on January 18, 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 from 
interested persons.
---------------------------------------------------------------------------

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

    The Exchange proposes to amend Rule 7150 (The Price Improvement 
Period (``PIP'')). 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 purpose of the proposed rule change is to amend Rule 7150 (The 
Price Improvement Period (``PIP'')) to provide that if at the start of 
the auction the quoted NBBO spread is less than or equal to a $0.01, 
only PIP Orders for less than 50 contracts will be rejected.
    The Exchange recently filed to amend the BOX Rules to make 
permanent the pilot programs that permit the Exchange to have no 
minimum size requirement for orders entered into the PIP (``PIP Pilot 
Program'') and COPIP (``COPIP Pilot Program''), collectively known as 
the (``Programs'').\3\ As part of this filing, BOX also modified the 
requirements for the PIP to specify where the National Best Bid and 
Offer (``NBBO'') spread is less than equal to $0.01, the PIP Order and 
corresponding Primary Improvement Order will be rejected.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 79531 (December 12, 
2016), 81 FR 91227 (December 16, 2016) (SR-BOX-2016-58).
---------------------------------------------------------------------------

    The Exchange now proposes to modify the requirements of the PIP to 
specify where the NBBO spread is less than or equal to $0.01; only PIP 
Orders for less than 50 contracts will be rejected. This is a 
competitive filing based on the price improvement auction proposed 
rules of the Miami International Securities Exchange, LLC 
(``MIAX'').\4\ Specifically, under MIAX Rule 515A(a)(1)(iii), with 
respect to Agency Orders that have a size of less than 50 contracts, if 
at the receipt of the Agency Order, the NBBO has a bid/ask differential 
of $0.01, the System will reject the Agency Order. Further,

[[Page 9266]]

Agency Orders with a size of under 50 contracts will be accepted and 
processed by the MIAX System when the NBBO bid/ask differential is 
greater than $0.01.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 79500 (December 7, 
2016), 81 FR 90030 (December 13, 2016). See also MIAX Rule 
515A.(a)(1)(iii).
---------------------------------------------------------------------------

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 it is designed to promote 
just and equitable principles of trade, remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general protect investors and the public interest.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The proposed rule change will allow PIP auctions of 50 or more 
contracts to continue without restriction on NBBO spread. The Exchange 
believes this removes impediments to and better provides for a free and 
open market. As such, BOX believes the proposed rule change is in the 
public interest, and therefore, consistent with the Act. The Exchange 
also notes that the proposal would provide increased opportunities for 
increased price improvements for these types of orders which will 
benefit market participants engaging in the PIP auctions.
    Additionally, as set forth above, the Exchange believes this 
proposed change is reasonable and appropriate as it is based on the 
rules of another exchange.\7\
---------------------------------------------------------------------------

    \7\ See supra note 4.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. To the contrary, the proposal 
is pro-competitive because it will enable the Exchange to better 
compete with another options exchange that allows PIP Orders of more 
than 50 contracts to trade when the NBBO spread is $0.01 or less.\8\
---------------------------------------------------------------------------

    \8\ Id.
---------------------------------------------------------------------------

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)(iii) of the Act \9\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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. 
The Commission deems this requirement to have been met.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
Rule 19b-4(f)(6)(iii) \11\ permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. In its filing with the Commission, 
the Exchange requests that the Commission waive the 30-day operative 
delay so that the changes can be implemented immediately. The Exchange 
states that waiver of the operative delay is consistent with the 
protection of investors and the public interest because it will promote 
fair competition among the exchanges by allowing the Exchange to adjust 
the PIP rules to provide that if at the start of the auction the quoted 
NBBO spread is less than or equal to a $0.01, only PIP Orders for less 
than 50 contracts will be rejected. The Exchange also states that the 
proposed rule change is substantially similar to the rules in place at 
another options exchange.\12\ For these reasons, the Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. Therefore, the 
Commission designates the proposed rule change operative upon 
filing.\13\
---------------------------------------------------------------------------

    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ See supra note 4.
    \13\ 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 Comments

     Use 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-2017-06 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-2017-06. 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, on official 
business days between the hours of 10:00 a.m. and 3:00 p.m., located at 
100 F Street NE., Washington, DC 20549. 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-
2017-06 and should be submitted on or before February 24, 2017.


[[Page 9267]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-02261 Filed 2-2-17; 8:45 am]
 BILLING CODE 8011-01-P



                                                                                       Federal Register / Vol. 82, No. 22 / Friday, February 3, 2017 / Notices                                                    9265

                                                    provides that such an amendment will                       may be withheld from the public in                      Internet Web site at http://
                                                    be effective when the amendment is                         accordance with the provisions of 5                     boxexchange.com.
                                                    approved by the Commission or                              U.S.C. 552, will be available for Web
                                                                                                                                                                       II. Self-Regulatory Organization’s
                                                    otherwise becomes effective pursuant to                    site viewing and printing in the
                                                                                                                                                                       Statement of the Purpose of, and
                                                    Section 11A of the Act and Rule 608                        Commission’s Public Reference Room,
                                                                                                                                                                       Statutory Basis for, the Proposed Rule
                                                    thereunder.                                                100 F Street NE., Washington, DC
                                                                                                                                                                       Change
                                                                                                               20549, on official business days
                                                    II. Effectiveness of the Linkage Plan                                                                                In its filing with the Commission, the
                                                                                                               between the hours of 10:00 a.m. and
                                                    Amendment                                                                                                          self-regulatory organization included
                                                                                                               3:00 p.m. Copies of such filing also will
                                                       The foregoing Plan amendment has                        be available for inspection and copying                 statements concerning the purpose of,
                                                    become effective pursuant to Rule                          at the principal office of MIAX PEARL.                  and basis for, the proposed rule change
                                                    608(b)(3)(iii) 8 because it involves solely                All comments received will be posted                    and discussed any comments it received
                                                    technical or ministerial matters. At any                   without change; the Commission does                     on the proposed rule change. The text
                                                    time within sixty days of the filing of                    not edit personal identifying                           of these statements may be examined at
                                                    this amendment, the Commission may                         information from submissions. You                       the places specified in Item IV below.
                                                    summarily abrogate the amendment and                       should submit only information that                     The self-regulatory organization has
                                                    require that it be refiled pursuant to                     you wish to make available publicly. All                prepared summaries, set forth in
                                                    paragraph (a)(1) of Rule 608,9 if it                       submissions should refer to File                        Sections A, B, and C below, of the most
                                                    appears to the Commission that such                        Number 4–546 and should be submitted                    significant aspects of such statements.
                                                    action is necessary or appropriate in the                  on or before February 24, 2017.                         A. Self-Regulatory Organization’s
                                                    public interest, for the protection of
                                                                                                                 By the Commission.                                    Statement of the Purpose of, and
                                                    investors or the maintenance of fair and
                                                                                                               Eduardo A. Aleman,                                      Statutory Basis for, the Proposed Rule
                                                    orderly markets, to remove impediments
                                                                                                               Assistant Secretary.                                    Change
                                                    to, and perfect the mechanisms of, a
                                                    national market system or otherwise in                     [FR Doc. 2017–02265 Filed 2–2–17; 8:45 am]              1. Purpose
                                                    furtherance of the purposes of the Act.                    BILLING CODE 8011–01–P
                                                                                                                                                                          The purpose of the proposed rule
                                                    III. Solicitation of Comments                                                                                      change is to amend Rule 7150 (The
                                                       Interested persons are invited to                       SECURITIES AND EXCHANGE                                 Price Improvement Period (‘‘PIP’’)) to
                                                    submit written data, views and                             COMMISSION                                              provide that if at the start of the auction
                                                    arguments concerning the foregoing,                                                                                the quoted NBBO spread is less than or
                                                                                                               [Release No. 34–79900; File No. SR–BOX–                 equal to a $0.01, only PIP Orders for less
                                                    including whether the amendment is                         2017–06]
                                                    consistent with the Act. Comments may                                                                              than 50 contracts will be rejected.
                                                                                                                                                                          The Exchange recently filed to amend
                                                    be submitted by any of the following                       Self-Regulatory Organizations; BOX                      the BOX Rules to make permanent the
                                                    methods:                                                   Options Exchange LLC; Notice of                         pilot programs that permit the Exchange
                                                    Electronic Comments                                        Filing and Immediate Effectiveness of                   to have no minimum size requirement
                                                                                                               a Proposed Rule Change To Amend                         for orders entered into the PIP (‘‘PIP
                                                      • Use the Commission’s Internet                          Rule 7150 (The Price Improvement
                                                    comment form (http://www.sec.gov/                                                                                  Pilot Program’’) and COPIP (‘‘COPIP
                                                                                                               Period (‘‘PIP’’))                                       Pilot Program’’), collectively known as
                                                    rules/sro.shtml); or
                                                      • Send an email to rule-comments@                        January 30, 2017.                                       the (‘‘Programs’’).3 As part of this filing,
                                                    sec.gov. Please include File Number 4–                        Pursuant to Section 19(b)(1) of the                  BOX also modified the requirements for
                                                    546 on the subject line.                                   Securities Exchange Act of 1934                         the PIP to specify where the National
                                                                                                               (‘‘Act’’),1 and Rule 19b–4 thereunder,2                 Best Bid and Offer (‘‘NBBO’’) spread is
                                                    Paper Comments                                                                                                     less than equal to $0.01, the PIP Order
                                                                                                               notice is hereby given that on January
                                                       • Send paper comments in triplicate                     18, 2017, BOX Options Exchange LLC                      and corresponding Primary
                                                    to Brent J. Fields, Secretary, Securities                  (the ‘‘Exchange’’) filed with the                       Improvement Order will be rejected.
                                                    and Exchange Commission, 100 F Street                      Securities and Exchange Commission                         The Exchange now proposes to
                                                    NE., Washington, DC 20549–1090.                            (‘‘Commission’’) the proposed rule                      modify the requirements of the PIP to
                                                    All submissions should refer to File                       change as described in Items I and II                   specify where the NBBO spread is less
                                                    Number 4–546. This file number should                      below, which Items have been prepared                   than or equal to $0.01; only PIP Orders
                                                    be included on the subject line if email                   by the self-regulatory organization. The                for less than 50 contracts will be
                                                    is used. To help the Commission                            Commission is publishing this notice to                 rejected. This is a competitive filing
                                                    process and review your comments                           solicit comments on the proposed rule                   based on the price improvement auction
                                                    more efficiently, please use only one                      from interested persons.                                proposed rules of the Miami
                                                    method. The Commission will post all                                                                               International Securities Exchange, LLC
                                                    comments on the Commission’s Internet                      I. Self-Regulatory Organization’s                       (‘‘MIAX’’).4 Specifically, under MIAX
                                                    Web site (http://www.sec.gov/rules/                        Statement of the Terms of Substance of                  Rule 515A(a)(1)(iii), with respect to
                                                    sro.shtml). Copies of the submission, all                  the Proposed Rule Change                                Agency Orders that have a size of less
                                                    subsequent amendments, all written                           The Exchange proposes to amend                        than 50 contracts, if at the receipt of the
                                                                                                                                                                       Agency Order, the NBBO has a bid/ask
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                    statements with respect to the proposed                    Rule 7150 (The Price Improvement
                                                    rule change that are filed with the                        Period (‘‘PIP’’)). The text of the                      differential of $0.01, the System will
                                                    Commission, and all written                                proposed rule change is available from                  reject the Agency Order. Further,
                                                    communications relating to the                             the principal office of the Exchange, at
                                                                                                                                                                         3 See Securities Exchange Act Release No. 79531
                                                    amendment between the Commission                           the Commission’s Public Reference
                                                                                                                                                                       (December 12, 2016), 81 FR 91227 (December 16,
                                                    and any person, other than those that                      Room and also on the Exchange’s                         2016) (SR–BOX–2016–58).
                                                                                                                                                                         4 See Securities Exchange Act Release No. 79500
                                                      8 17   CFR 242.608(b)(3)(iii).                             1 15   U.S.C. 78s(b)(1).                              (December 7, 2016), 81 FR 90030 (December 13,
                                                      9 17   CFR 242.608(a)(1).                                  2 17   CFR 240.19b–4.                                 2016). See also MIAX Rule 515A.(a)(1)(iii).



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                                                    9266                             Federal Register / Vol. 82, No. 22 / Friday, February 3, 2017 / Notices

                                                    Agency Orders with a size of under 50                     III. Date of Effectiveness of the                         investors, or otherwise in furtherance of
                                                    contracts will be accepted and                            Proposed Rule Change and Timing for                       the purposes of the Act. If the
                                                    processed by the MIAX System when                         Commission Action                                         Commission takes such action, the
                                                    the NBBO bid/ask differential is greater                     Because the foregoing proposed rule                    Commission shall institute proceedings
                                                    than $0.01.                                               change does not: (i) Significantly affect                 to determine whether the proposed rule
                                                                                                              the protection of investors or the public                 should be approved or disapproved.
                                                    2. Statutory Basis
                                                                                                              interest; (ii) impose any significant                     IV. Solicitation of Comments
                                                       The Exchange believes that the                         burden on competition; and (iii) become
                                                                                                              operative for 30 days from the date on                      Interested persons are invited to
                                                    proposal is consistent with the
                                                                                                              which it was filed, or such shorter time                  submit written data, views and
                                                    requirements of Section 6(b) of the Act,5                                                                           arguments concerning the foregoing,
                                                    in general, and Section 6(b)(5) of the                    as the Commission may designate, it has
                                                                                                              become effective pursuant to Section                      including whether the proposed rule
                                                    Act,6 in particular, in that it is designed                                                                         change is consistent with the Act.
                                                                                                              19(b)(3)(A)(iii) of the Act 9 and
                                                    to promote just and equitable principles                                                                            Comments may be submitted by any of
                                                                                                              subparagraph (f)(6) of Rule 19b–4
                                                    of trade, remove impediments to and                                                                                 the following methods:
                                                                                                              thereunder.10
                                                    perfect the mechanism of a free and                          A proposed rule change filed under
                                                    open market and a national market                                                                                   Electronic Comments
                                                                                                              Rule 19b–4(f)(6) normally does not
                                                    system, and, in general protect investors                 become operative for 30 days after the                      • Use the Commission’s Internet
                                                    and the public interest.                                  date of filing. However, Rule 19b–                        comment form (http://www.sec.gov/
                                                       The proposed rule change will allow                    4(f)(6)(iii) 11 permits the Commission to                 rules/sro.shtml); or
                                                    PIP auctions of 50 or more contracts to                   designate a shorter time if such action                     • Send an email to rule-comments@
                                                    continue without restriction on NBBO                      is consistent with the protection of                      sec.gov. Please include File Number SR–
                                                    spread. The Exchange believes this                        investors and the public interest. In its                 BOX–2017–06 on the subject line.
                                                    removes impediments to and better                         filing with the Commission, the                           Paper Comments
                                                    provides for a free and open market. As                   Exchange requests that the Commission
                                                                                                              waive the 30-day operative delay so that                    • Send paper comments in triplicate
                                                    such, BOX believes the proposed rule
                                                                                                              the changes can be implemented                            to Secretary, Securities and Exchange
                                                    change is in the public interest, and
                                                                                                              immediately. The Exchange states that                     Commission, 100 F Street NE.,
                                                    therefore, consistent with the Act. The                                                                             Washington, DC 20549–1090.
                                                                                                              waiver of the operative delay is
                                                    Exchange also notes that the proposal                     consistent with the protection of
                                                    would provide increased opportunities                                                                               All submissions should refer to File
                                                                                                              investors and the public interest                         Number SR–BOX–2017–06. This file
                                                    for increased price improvements for                      because it will promote fair competition                  number should be included on the
                                                    these types of orders which will benefit                  among the exchanges by allowing the                       subject line if email is used. To help the
                                                    market participants engaging in the PIP                   Exchange to adjust the PIP rules to                       Commission process and review your
                                                    auctions.                                                 provide that if at the start of the auction               comments more efficiently, please use
                                                       Additionally, as set forth above, the                  the quoted NBBO spread is less than or                    only one method. The Commission will
                                                    Exchange believes this proposed change                    equal to a $0.01, only PIP Orders for less                post all comments on the Commission’s
                                                    is reasonable and appropriate as it is                    than 50 contracts will be rejected. The                   Internet Web site (http://www.sec.gov/
                                                    based on the rules of another exchange.7                  Exchange also states that the proposed                    rules/sro.shtml). Copies of the
                                                                                                              rule change is substantially similar to                   submission, all subsequent
                                                    B. Self-Regulatory Organization’s                         the rules in place at another options                     amendments, all written statements
                                                    Statement on Burden on Competition                        exchange.12 For these reasons, the                        with respect to the proposed rule
                                                                                                              Commission believes that waiving the                      change that are filed with the
                                                       The Exchange does not believe that                     30-day operative delay is consistent
                                                    the proposed rule change will impose                                                                                Commission, and all written
                                                                                                              with the protection of investors and the                  communications relating to the
                                                    any burden on competition not                             public interest. Therefore, the
                                                    necessary or appropriate in furtherance                                                                             proposed rule change between the
                                                                                                              Commission designates the proposed                        Commission and any person, other than
                                                    of the purposes of the Act. To the                        rule change operative upon filing.13                      those that may be withheld from the
                                                    contrary, the proposal is pro-                               At any time within 60 days of the
                                                                                                                                                                        public in accordance with the
                                                    competitive because it will enable the                    filing of the proposed rule change, the
                                                                                                                                                                        provisions of 5 U.S.C. 552, will be
                                                    Exchange to better compete with                           Commission summarily may
                                                                                                                                                                        available for Web site viewing and
                                                    another options exchange that allows                      temporarily suspend such rule change if
                                                                                                                                                                        printing in the Commission’s Public
                                                    PIP Orders of more than 50 contracts to                   it appears to the Commission that such
                                                                                                                                                                        Reference Room, on official business
                                                    trade when the NBBO spread is $0.01 or                    action is necessary or appropriate in the
                                                                                                                                                                        days between the hours of 10:00 a.m.
                                                    less.8                                                    public interest, for the protection of
                                                                                                                                                                        and 3:00 p.m., located at 100 F Street
                                                    C. Self-Regulatory Organization’s                           9 15  U.S.C. 78s(b)(3)(A)(iii).
                                                                                                                                                                        NE., Washington, DC 20549. Copies of
                                                    Statement on Comments on the                                10 17  CFR 240.19b–4(f)(6). In addition, Rule 19b–      such filing also will be available for
                                                    Proposed Rule Change Received From                        4(f)(6) requires a self-regulatory organization to give   inspection and copying at the principal
                                                    Members, Participants, or Others
                                                                                                              the Commission written notice of its intent to file       office of the Exchange. All comments
                                                                                                              the proposed rule change at least five business days      received will be posted without change;
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                                                                              prior to the date of filing of the proposed rule
                                                      The Exchange has neither solicited                      change, or such shorter time as designated by the         the Commission does not edit personal
                                                    nor received comments on the proposed                     Commission. The Commission deems this                     identifying information from
                                                    rule change.                                              requirement to have been met.                             submissions. You should submit only
                                                                                                                11 17 CFR 240.19b–4(f)(6)(iii).
                                                                                                                                                                        information that you wish to make
                                                                                                                12 See supra note 4.
                                                      5 15  U.S.C. 78f(b).                                      13 For purposes only of waiving the 30-day
                                                                                                                                                                        available publicly. All submissions
                                                      6 15  U.S.C. 78f(b)(5).                                 operative delay, the Commission has considered the
                                                                                                                                                                        should refer to File Number SR–BOX–
                                                      7 See supra note 4.
                                                                                                              proposed rule’s impact on efficiency, competition,        2017–06 and should be submitted on or
                                                      8 Id.                                                   and capital formation. See 15 U.S.C. 78c(f).              before February 24, 2017.


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                                                                                   Federal Register / Vol. 82, No. 22 / Friday, February 3, 2017 / Notices                                                     9267

                                                      For the Commission, by the Division of                Commission extended the time for                       Platform class.9 CBOE has authorized a
                                                    Trading and Markets, pursuant to delegated              Commission consideration of the                        group of series within the S&P 500
                                                    authority.14                                            proposal until March 2, 2017.5 This                    options class, trading under the symbol
                                                    Eduardo A. Aleman,                                      order provides notice of filing of                     SPXW, to trade on Hybrid.10 The SPX
                                                    Assistant Secretary.                                    Amendment No. 1 and approves the                       options series, which trade on the
                                                    [FR Doc. 2017–02261 Filed 2–2–17; 8:45 am]              proposed rule change, as modified by                   Hybrid 3.0 Platform, are a.m.-settled
                                                    BILLING CODE 8011–01–P                                  Amendment No. 1, on an accelerated                     contracts with standard third Friday
                                                                                                            basis.                                                 expirations.11 The SPXW options series,
                                                                                                                                                                   which trade on Hybrid, are p.m.-settled
                                                    SECURITIES AND EXCHANGE                                 II. Description of the Proposed Rule
                                                                                                                                                                   contracts with non-standard
                                                    COMMISSION                                              Change
                                                                                                                                                                   expirations.12
                                                                                                               Currently, there are two trading                       Currently, when CBOE receives a
                                                    [Release No. 34–79899; File No. SR–CBOE–
                                                    2016–080]
                                                                                                            platforms operating on CBOE’s trade                    complex order consisting of both SPX
                                                                                                            engine, CBOE Command: (i) Hybrid; and                  and SPXW options series (an ‘‘SPX/
                                                    Self-Regulatory Organizations;                          (ii) the Hybrid 3.0 Platform.6 For each                SPXW order’’) during regular trading
                                                    Chicago Board Options Exchange,                         Hybrid 3.0 class, CBOE may determine                   hours, the order is routed to a PAR
                                                    Incorporated; Notice of Filing of                       to authorize a group of series of the class            workstation pursuant to CBOE Rule
                                                    Amendment No. 1 and Order Granting                      for trading on Hybrid.7 CBOE may                       6.12(a)(1) to provide an opportunity for
                                                    Accelerated Approval of a Proposed                      establish Hybrid trading parameters for                the order to trade in open outcry.13 If
                                                    Rule Change, as Modified by                             such a group on a group basis to the                   CBOE receives an SPX/SPXW order
                                                    Amendment No. 1, To Amend CBOE                          extent that CBOE’s rules otherwise                     during extended trading hours, the
                                                    Rule 6.53C                                              allow CBOE to establish such trading                   order is rejected back to the sender.14
                                                                                                            parameters on a class basis.8 Currently,               CBOE handles SPX/SPXW orders in this
                                                    January 30, 2017.                                       options on the Standard & Poor’s 500                   manner because its system currently
                                                    I. Introduction                                         Index (‘‘S&P 500’’), trading under the                 cannot accept complex orders consisting
                                                                                                            symbol SPX, are the only Hybrid 3.0                    of series that trade on different trading
                                                       On November 17, 2016, Chicago
                                                                                                                                                                   platforms.15 CBOE is updating its
                                                    Board Options Exchange, Incorporated                    a comment letter to the file, which the Commission     system to accept SPX/SPXW orders so
                                                    (‘‘CBOE’’ or the ‘‘Exchange’’) filed with               posted on its Web site and placed in the public
                                                                                                                                                                   they will be able to trade with other
                                                    the Securities and Exchange                             comment file for CBOE–2016–080 (available at
                                                                                                            https://www.sec.gov/comments/sr-cboe-2016-080/         SPX/SPXW orders electronically during
                                                    Commission (‘‘Commission’’), pursuant
                                                                                                            cboe2016080-1454634-130131.pdf). CBOE also             regular trading hours and extended
                                                    to Section 19(b)(1) of the Securities                   posted a copy of its Amendment No. 1 on its Web        trading hours.16 As described in more
                                                    Exchange Act of 1934 (‘‘Act’’) 1 and Rule               site (http://www.cboe.com/framed/
                                                                                                                                                                   detail below, the proposal amends
                                                    19b–4 thereunder,2 a proposed rule                      PDFframed.aspx?content=/publish/RuleFilingsSEC/
                                                                                                            SR-CBOE-2016-080.a1.pdf&section=SEC_ABOUT_             CBOE’s rules to specify the manner in
                                                    change to amend CBOE Rule 6.53C,
                                                                                                            CBOE_BOD&title=Proposal+Regarding+Complex+             which SPX/SPXW orders, and any other
                                                    Interpretation and Policy .10, to provide               Orders+Consisting+of+SPX+Options+Series+and+           complex orders consisting of series that
                                                    for the electronic trading of complex                   SPXW+Options+Series) when it filed Amendment
                                                                                                                                                                   trade on Hybrid and on the Hybrid 3.0
                                                    orders consisting of series authorized for              No. 1 with the Commission.
                                                                                                               5 See Securities Exchange Act Release No. 79783     Platform, will be executed
                                                    trading on the Hybrid 3.0 Platform and
                                                                                                            (January 12, 2017), 82 FR 6673 (January 19, 2017).     electronically.17
                                                    series authorized for trading on the                       6 See Notice, 81 FR at 87103. As described more        CBOE Rule 6.53C, Interpretation and
                                                    Hybrid Trading System (‘‘Hybrid’’ or                    fully in the Notice, CBOE introduced Hybrid, an        Policy .10 provides rules governing the
                                                    ‘‘Hybrid Trading System’’). The                         electronic trading platform integrated with CBOE’s     execution of complex orders in Hybrid
                                                    proposed rule change was published for                  floor-based open-outcry auction market, in 2003.
                                                                                                            See Securities Exchange Act Release No. 47959          3.0 classes trading on the Hybrid 3.0
                                                    comment in the Federal Register on                      (May 30, 2003), 68 FR 34441 (June 9, 2003) (order      Platform. CBOE proposes to amend
                                                    December 2, 2016.3 The Commission                       approving File No. SR CBOE–2002–05). CBOE              CBOE Rule 6.53C, Interpretation and
                                                    received no comment letters regarding                   subsequently implemented an enhanced version of        Policy .10 to provide that if CBOE
                                                    the proposed rule change. On December                   Hybrid, known as Hybrid 2.0, which allows remote
                                                                                                            quoting in option classes. See Securities Exchange     authorizes a group of series of a Hybrid
                                                    30, 2016, the Exchange filed                            Act Release No. 50003 (July 12, 2004), 69 FR 43028     3.0 class for trading on Hybrid pursuant
                                                    Amendment No. 1 to the proposed rule                    (July 19, 2004) (order approving File No. SR–CBOE–     to CBOE Rule 8.14, Interpretation and
                                                    change.4 On January 12, 2017, the                       2004–24). CBOE later implemented the Hybrid 3.0        Policy .01, CBOE Rule 6.53C,
                                                                                                            Platform, a trading platform on Hybrid that allows
                                                      14 17                                                 one or more quoters to submit electronic quotes that   Interpretation and Policy .10 will apply
                                                             CFR 200.30–3(a)(12).
                                                      1 15
                                                                                                            represent the aggregate Market Maker quotation         to a complex order with at least one leg
                                                            U.S.C. 78s(b)(1).
                                                       2 17 CFR 240.19b–4.
                                                                                                            interest in a series for the trading crowd. See        in a series from the group authorized for
                                                                                                            Securities Exchange Act Release No. 55874 (June 7,     trading on the Hybrid 3.0 Platform,
                                                       3 See Securities Exchange Act Release No. 79406
                                                                                                            2007), 72 FR 32688 (June 13, 2007) (order approving
                                                    (November 28, 2016), 81 FR 87102 (‘‘Notice’’).          File No. SR–CBOE–2006–101). In 2008, CBOE              including if the order has another leg(s)
                                                       4 As discussed more fully below, Amendment No.       removed the distinction between Hybrid and
                                                    1 revises the proposal to describe the treatment of     Hybrid 2.0 classes and deleted references to the         9 See CBOE Rule 8.3(c)(iii).
                                                    an SPX/SPXW order resting on the complex order          Hybrid 2.0 platform because CBOE migrated all            10 See Notice, 81 FR at 87103.
                                                    book (‘‘COB’’) that becomes marketable against          option classes, other than classes traded on the         11 See id. at 87103–87104.
                                                    orders residing in the EBook for the individual legs    Hybrid 3.0 Platform, from Hybrid to Hybrid 2.0. See      12 See id. at 87104.
                                                    of the order; indicate when an incoming SPX/SPXW        Securities Exchange Act Release No. 58153 (July 14,      13 See id.
                                                                                                            2008), 73 FR 41386 (July 18, 2008) (notice of filing
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                    order will be subject to a complex order auction                                                                 14 See id. See also CBOE Rule 6.1A(b) and RG15–
                                                    (‘‘COA’’); indicate that non-customer SPX/SPXW          and immediate effectiveness of File No. SR–CBOE–
                                                    orders that are marketable upon receipt will not be     2008–067). Following the removal of the Hybrid 2.0     013.
                                                                                                                                                                     15 See Notice, 81 FR at 87104.
                                                    COA-eligible; describe the treatment of SPX/SPXW        distinction, all options classes, other than those
                                                    orders during extended trading hours; and indicate      trading on the Hybrid 3.0 Platform, have been            16 See id.

                                                    that CBOE will announce the implementation date         referred to as Hybrid classes trading on the Hybrid      17 Although the proposal focuses on SPX/SPXW

                                                    of the proposal via Regulatory Circular at least        Trading System.                                        orders, the proposed rules will apply to all complex
                                                                                                               7 See CBOE Rule 8.14, Interpretation and Policy
                                                    seven days prior to the implementation date. To                                                                orders consisting of series that trade on Hybrid and
                                                    promote transparency of its proposed amendment,         .01.                                                   series that trade on the Hybrid 3.0 Platform. See
                                                    when CBOE filed Amendment No. 1 with the                   8 See CBOE Rule 8.14, Interpretation and Policy     Notice, 81 FR at 87104. See also CBOE Rule 6.53C,
                                                    Commission, it also submitted Amendment No. 1 as        .01(c).                                                Interpretation and Policy .10.



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Document Created: 2018-02-01 14:34:52
Document Modified: 2018-02-01 14:34:52
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation82 FR 9265 

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