83 FR 11573 - Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 915
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 51 (March 15, 2018)
Federal Register Volume 83, Issue 51 (March 15, 2018)
| Page Range | 11573-11576 | |
| FR Document | 2018-05210 |
[Federal Register Volume 83, Number 51 (Thursday, March 15, 2018)] [Notices] [Pages 11573-11576] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-05210] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-82852; File No. SR-NYSEAMER-2018-09] Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 915 March 9, 2018. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the ``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that on March 6, 2018, NYSE American LLC (the ``Exchange'' or ``NYSE American'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to amend Rule 915 (Criteria for Underlying Securities). The proposed rule change is available on the Exchange's website at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to amend Rule 915 to modify the criteria for listing options on an underlying security as defined in Section 18(b)(1)(A) of the Securities Act of 1933 (each a ``covered security''; collectively, ``covered securities''). In particular, the Exchange proposes to modify Rule 915, Commentary .01(4)(a), which currently requires that to list an option, the underlying covered security has to have a market price of at least $3.00 per share for the previous five consecutive business days preceding the date on which the Exchange submits a certificate to the Options Clearing Corporation (``OCC'') for listing and trading. The proposal would shorten the current ``look back'' period of five consecutive business days to three consecutive business days.\4\ The Exchange does not intend to amend any other criteria in Rule 915 and the accompanying Commentary to list an option on the Exchange. This proposed rule change is substantively identical to a recently-approved rule change by Nasdaq PHLX LLC (``Phlx''),\5\ and would align Exchange listing rules with those of other options markets. --------------------------------------------------------------------------- \4\ See proposed Rule 915, Commentary .01(4)(a) (providing that the market price per share of an covered security is ``at least $3.00 for the previous three consecutive business days preceding the date on which the Exchange submits a certificate to [the OCC] for listing and trading, as measured by the closing price reported in the primary market in which the underlying security is traded''). \5\ See Securities Exchange Act Release No. 82474 (January 9, 2018), 83 FR 2240 (January 16, 2018) (SR-Phlx-2017-75) (Order approving amendment to Rule 1009 to modify the criteria for listing an option on an underlying covered security). --------------------------------------------------------------------------- The Exchange acknowledges that the Options Listing Procedures Plan (``OLPP'') \6\ requires that the listing certificate be provided to OCC no earlier than 12:01 a.m. and no later than 11:00 a.m. (Chicago time) on the trading day prior to the day on which trading is to begin.\7\ The proposed amendment would still comport with that requirement. For example, if an initial public offering (``IPO'') occurs at 11 a.m. on Monday, the earliest date the Exchange could submit its listing certificate to OCC would be on Thursday by 12:01 a.m. (Chicago time), with the market price determined by the closing price over the three- day period [[Page 11574]] from Monday through Wednesday. The option on the IPO would then be eligible for trading on the Exchange on Friday. The proposed amendment would essentially enable options trading within four business days of an IPO becoming available instead of six business days (five consecutive days, plus the day the listing certificate is submitted to OCC). --------------------------------------------------------------------------- \6\ The OLPP (a/k/a the Plan for the Purpose of Developing and Implementing Procedures Designed to Facilitate the Listing and Trading of Standardized Options Submitted Pursuant to Section 11a(2)(3)(B) of the Securities Exchange Act of 1934) is a national market system plan that, among other things, sets forth procedures governing the listing of new options series. See Securities Exchange Act Release No. 44521 (July 6, 2001), 66 FR 36809 (July 13, 2001) (Order approving OLPP). The sponsors of OLPP include the Exchange; OCC; BATS Exchange, Inc.; BOX Options Exchange LLC; C2 Options Exchange, Inc.; Chicago Board Options Exchange, Inc.; EDGX Exchange, Inc.; Miami International Securities Exchange, LLC; MIAX PEARL, LLC; Phlx; Nasdaq BX, Inc.; Nasdaq GEMX, LLC; Nasdaq ISE, LLC; Nasdaq MRX, LLC; and NYSE Arca, Inc. \7\ See OLPP at page 3. --------------------------------------------------------------------------- At the time the options industry adopted the ``look back'' period of five consecutive business days, it was determined that the five-day period was sufficient to protect against attempts to manipulate the market price of the underlying security and would provide a reliable test for stability.\8\ Surveillance technologies and procedures concerning manipulation have evolved since then to provide adequate prevention or detection of rule or securities law violations within the proposed time frame, and the Exchange represents that its existing trading surveillances are adequate to monitor the trading in the underlying security and subsequent trading of options on the Exchange.\9\ --------------------------------------------------------------------------- \8\ See Securities Exchange Act Release Nos. 47190 (January 15, 2003), 68 FR 3072 (January 22, 2003) (SR-CBOE-2002-62); 47352 (February 11, 2003), 68 FR 8319 (February 20, 2003) (SR-PCX-2003- 06); 47483 (March 11, 2003), 68 FR 13352 (March 19, 2003) (SR-ISE- 2003-04); 47613 (April 1, 2003), 68 FR 17120 (April 8, 2003) (SR- Amex-2003-19); and 47794 (May 5, 2003), 68 FR 25076 (May 9, 2003) (SR-Phlx-2003-27). \9\ Such surveillance procedures generally focus on detecting securities trading subject to opening price manipulation, closing price manipulation, layering, spoofing or other unlawful activity impacting an underlying security, the option, or both. As it relates to IPOs, the Exchange has price movement alerts, unusual market activity and order book alerts active for all trading symbols. These real-time patterns are active for the new security as soon as the IPO begins trading. The NYSE Regulation group, which provides such real-time surveillance on the Exchange and its affiliated markets, monitors trading activity in IPOs to see whether the new issue moves substantially above or below the public offering price in the first day or several days of trading. --------------------------------------------------------------------------- Furthermore, the Exchange notes that the regulatory program operated by and overseen by NYSE Regulation includes cross-market surveillances designed to identify manipulative and other improper trading that may occur on the Exchange and other markets. In particular, the Financial Industry Regulatory Authority (``FINRA''), pursuant to a regulatory services agreement and other arrangements, operates a range of cross-market equity and options surveillance patterns on behalf of the Exchange to identify a variety of potentially manipulative trading activities. These cross-market patterns incorporate relevant data from the Exchange, its affiliates (including the New York Stock Exchange), and markets not affiliated with the Exchange. In addition, NYSE Regulation operates an array of surveillances to identify potentially manipulative trading of options on the Exchange and its affiliated markets. That surveillance coverage is initiated once options begin trading on the Exchange or an options exchange affiliated with the Exchange. Accordingly, the Exchange believes that the cross-market surveillance performed by FINRA on behalf of the Exchange and NYSE Regulation's own monitoring for violative activity on the Exchange and its affiliated markets comprise a comprehensive surveillance program that is adequate to monitor for manipulation of options and their underlying equity securities that could occur during the proposed three-day look back period. Furthermore, the Exchange notes that the proposed listing criteria would still require that the underlying security be listed on NYSE, the American Stock Exchange (now known as NYSE American), or the Nasdaq Global Market (collectively, the ``Named Markets''), as provided for in the definition of ``covered security'' from Section 18(b)(1)(A) of the 1933 Act.\10\ Accordingly, the Exchange believes that the proposed rule change would still ensure that the underlying security meets the high listing standards of a Named Market, and would also ensure that the underlying is covered by the regulatory protections (including market surveillance, investigation and enforcement) offered by these exchanges for trading in covered securities conducted on their facilities. --------------------------------------------------------------------------- \10\ See 15 U.S.C. 77r(b)(1)(A). --------------------------------------------------------------------------- The Exchange also believes that the proposed look back period can be implemented in connection with the other initial listing criteria for underlying covered securities. In particular, the Exchange recognizes that it may be difficult to verify the number of shareholders in the days immediately following an IPO due to the fact that stock trades generally clear within two business days (T+2) of their trade date and therefore the shareholder count would generally not be known until T+2.\11\ The Exchange notes that the current T+2 settlement cycle was recently reduced from T+3 on September 5, 2017 in connection with the Commission's amendments to Exchange Rule 15c6-1(a) to adopt the shortened settlement cycle,\12\ and the look back period of three consecutive business days proposed herein reflects this shortened T+2 settlement period. As proposed, stock trades would clear within T+2 of their trade date (i.e., within three business days) and therefore the number of shareholders could be verified within three business days, thereby enabling options trading within four business days of an IPO (three consecutive business days, plus the day the listing certificate is submitted to OCC). --------------------------------------------------------------------------- \11\ The number of shareholders of record can be verified from large clearing agencies such as The Depository Trust and Clearing Corporation (``DTCC'') upon the settlement date (i.e., T+2). \12\ See Securities Exchange Act Release No. 80295 (March 22, 2017), 82 FR 15564 (March 29, 2017) (release adopting amendment to securities transaction settlement cycle) (File No. S7- 22-16). See also Exchange Act Release No. 78962 (Sep. 28, 2016), 81 FR 69240 (Oct. 5, 2016) (release proposing amendment to securities transaction settlement cycle) (File No. S7- 22-16). --------------------------------------------------------------------------- Furthermore, the Exchange notes that it can verify the shareholder count with various brokerage firms that have a large retail customer clientele. Such firms can confirm the number of individual customers who have a position in the new issue. The earliest that these firms can provide confirmation is usually the day after the first day of trading (T+1) on an unsettled basis, while others can confirm on the third day of trading (T+2). The Exchange has confirmed with some of these brokerage firms who provide shareholder numbers to the Exchange that they are able to provide these numbers within T+2 after an IPO. For the foregoing reasons, the Exchange believes that basing the proposed three business day look back period on the T+2 settlement cycle would allow for sufficient verification of the number of shareholders. The proposed rule change would apply to all covered securities that meet the relevant criteria in Rule 915. Pursuant to Rule 915(b), the Exchange's Board of Directors (the ``Board'') establishes guidelines to be considered in evaluating the potential underlying securities for Exchange options transactions.\13\ However, the fact that a particular security may meet the standards established by the Board does not necessarily mean that it will be selected as an underlying security.\14\ As part of the established criteria, the issuer must be in compliance with any applicable requirements of the Act.\15\ The Exchange believes that these measures, together with its existing surveillance procedures, provide adequate safeguards in the review of any [[Page 11575]] covered security that may meet the proposed criteria for consideration of the option within the timeframe contained in this proposal. --------------------------------------------------------------------------- \13\ See Rule 915(b). The Board established specific criteria to consider by the Exchange in evaluating potential underlying securities for Exchange option transactions in its Commentary .01 to Rule 915. \14\ Id. \15\ See Rule 915, Commentary .01(5). --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\16\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\17\ in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest. --------------------------------------------------------------------------- \16\ 15 U.S.C. 78f(b). \17\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that the proposed changes to its listing standards for covered securities would allow the Exchange to more quickly list options on a qualifying covered security that has met the $3.00 eligibility price without sacrificing investor protection. As discussed above, the Exchange believes that its existing trading surveillances provide a sufficient measure of protection against potential price manipulation within the proposed three consecutive business day timeframe. Furthermore, the established guidelines to be considered by the Exchange in evaluating the potential underlying securities for Exchange option transactions,\18\ together with existing trading surveillances, provide adequate safeguards in the review of any covered security that may meet the proposed criteria for consideration of the option within the proposed timeframe. --------------------------------------------------------------------------- \18\ See supra notes 13-15. --------------------------------------------------------------------------- In addition, the Exchange believes that basing the proposed timeframe on the T+2 settlement cycle adequately addresses the potential difficulties in confirming the number of shareholders of the underlying covered security. Having some of the largest brokerage firms that provide these shareholder counts to the Exchange confirm that they are able to provide these numbers within T+2 further demonstrates that the 2,000 shareholder requirement can be sufficiently verified within the proposed timeframe. For the foregoing reasons, the Exchange believes that the proposed amendments will remove and perfect the mechanism of a free and open market and a national market system by providing an avenue for investors to swiftly hedge their investment in the stock in a shorter amount of time than what is currently in place.\19\ --------------------------------------------------------------------------- \19\ This proposed rule change does not alter any obligations of issuers or other investors of an IPO that may be subject to a lock- up or other restrictions on trading related securities. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change reduces the number of days to list options on an underlying security, and is intended to bring new options listings to the marketplace quicker. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act \20\ and Rule 19b-4(f)(6) thereunder.\21\ --------------------------------------------------------------------------- \20\ 15 U.S.C. 78s(b)(3)(A). \21\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b- 4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. --------------------------------------------------------------------------- A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act \22\ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) \23\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposed rule change may become effective and operative upon filing. The Exchange states that waiver of the operative delay would be consistent with the protection of investors and the public interest because it would allow the Exchange to implement the modified rule, which aligns with the rules of other options exchanges,\24\ without delay. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the operative delay and designates the proposal as operative upon filing.\25\ --------------------------------------------------------------------------- \22\ 17 CFR 240.19b-4(f)(6). \23\ 17 CFR 240.19b-4(f)(6)(iii). \24\ See supra note 5. \25\ For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-NYSEAMER-2018-09 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-NYSEAMER-2018-09. 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 website (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 [[Page 11576]] available for website viewing and printing in the Commission's Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR- NYSEAMER-2018-09, and should be submitted on or before April 5, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\26\ --------------------------------------------------------------------------- \26\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-05210 Filed 3-14-18; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 83, No. 51 / Thursday, March 15, 2018 / Notices 11573
has the largest exposures in extreme but SECURITIES AND EXCHANGE of 1933 (each a ‘‘covered security’’;
plausible market conditions.26 As COMMISSION collectively, ‘‘covered securities’’). In
described above, the proposed rule particular, the Exchange proposes to
[Release No. 34–82852; File No. SR–
change would amend certain NYSEAMER–2018–09]
modify Rule 915, Commentary .01(4)(a),
assumptions in ICC’s Guaranty Fund which currently requires that to list an
Methodology, and the calculation of the Self-Regulatory Organizations; NYSE option, the underlying covered security
Specific Wrong Way Risk component, American LLC; Notice of Filing and has to have a market price of at least
by incorporating the new Risk Factor Immediate Effectiveness of Proposed $3.00 per share for the previous five
Group level analysis. Specifically, ICC Rule Change To Amend Rule 915 consecutive business days preceding the
would expand its current approach to date on which the Exchange submits a
assume that credit events used in the March 9, 2018. certificate to the Options Clearing
guaranty fund analysis occur at the Risk Pursuant to Section 19(b)(1) 1 of the Corporation (‘‘OCC’’) for listing and
Factor Group level, and would also base Securities Exchange Act of 1934 (the trading. The proposal would shorten the
the specific wrong-way risk component ‘‘Act’’),2 and Rule 19b–4 thereunder,3 current ‘‘look back’’ period of five
of its guaranty fund methodology on the notice is hereby given that on March 6, consecutive business days to three
Risk Factor Group approach. 2018, NYSE American LLC (the consecutive business days.4 The
As with the changes to the LGD ‘‘Exchange’’ or ‘‘NYSE American’’) filed Exchange does not intend to amend any
approach, the Commission believes that with the Securities and Exchange other criteria in Rule 915 and the
the proposed changes to ICC’s Guaranty Commission (the ‘‘Commission’’) the accompanying Commentary to list an
Fund Methodology will permit ICC to proposed rule change as described in option on the Exchange. This proposed
consider the particular risks associated Items I and II below, which Items have rule change is substantively identical to
with the products it clears, including been prepared by the self-regulatory a recently-approved rule change by
the Standard European Senior Non- organization. The Commission is Nasdaq PHLX LLC (‘‘Phlx’’),5 and would
Preferred Financial Corporate publishing this notice to solicit align Exchange listing rules with those
transaction type that will be cleared as comments on the proposed rule change of other options markets.
a result of the proposed changes to ICC’s from interested persons. The Exchange acknowledges that the
Rules described above. As a result, the I. Self-Regulatory Organization’s Options Listing Procedures Plan
Commission believes that the proposed Statement of the Terms of the Substance (‘‘OLPP’’) 6 requires that the listing
changes will enable ICC’s to more of the Proposed Rule Change certificate be provided to OCC no earlier
accurately measure the risks of than 12:01 a.m. and no later than 11:00
The Exchange proposes to amend a.m. (Chicago time) on the trading day
associated with the products it clears Rule 915 (Criteria for Underlying
and thereby improve ICC’s ability to prior to the day on which trading is to
Securities). The proposed rule change is begin.7 The proposed amendment
collect and maintain the level of available on the Exchange’s website at
financial resources necessary to address would still comport with that
www.nyse.com, at the principal office of requirement. For example, if an initial
the risk of default by its participants. the Exchange, and at the Commission’s
Therefore, the Commission finds that public offering (‘‘IPO’’) occurs at 11 a.m.
Public Reference Room. on Monday, the earliest date the
the proposed rule change is consistent
with Rule 17Ad–22(b)(3).27 II. Self-Regulatory Organization’s Exchange could submit its listing
Statement of the Purpose of, and certificate to OCC would be on
IV. Conclusion Statutory Basis for, the Proposed Rule Thursday by 12:01 a.m. (Chicago time),
On the basis of the foregoing, the Change with the market price determined by the
Commission finds that the proposed closing price over the three-day period
In its filing with the Commission, the
rule change is consistent with the self-regulatory organization included 4 See proposed Rule 915, Commentary .01(4)(a)
requirements of the Act and in statements concerning the purpose of, (providing that the market price per share of an
particular with the requirements of and basis for, the proposed rule change covered security is ‘‘at least $3.00 for the previous
Section 17A of the Act,28 and Rules and discussed any comments it received three consecutive business days preceding the date
17Ad–22(b)(2) and (3) thereunder.29 on which the Exchange submits a certificate to [the
on the proposed rule change. The text OCC] for listing and trading, as measured by the
It is therefore ordered pursuant to of those statements may be examined at closing price reported in the primary market in
Section 19(b)(2) of the Act 30 that the the places specified in Item IV below. which the underlying security is traded’’).
proposed rule change (SR–ICC–2018– The Exchange has prepared summaries,
5 See Securities Exchange Act Release No. 82474
001) be, and hereby is, approved.31 (January 9, 2018), 83 FR 2240 (January 16, 2018)
set forth in sections A, B, and C below, (SR–Phlx–2017–75) (Order approving amendment
For the Commission, by the Division of of the most significant parts of such to Rule 1009 to modify the criteria for listing an
Trading and Markets, pursuant to delegated statements. option on an underlying covered security).
6 The OLPP (a/k/a the Plan for the Purpose of
authority.32
A. Self-Regulatory Organization’s Developing and Implementing Procedures Designed
Eduardo A. Aleman, to Facilitate the Listing and Trading of
Statement of the Purpose of, and
Assistant Secretary. Standardized Options Submitted Pursuant to
Statutory Basis for, the Proposed Rule Section 11a(2)(3)(B) of the Securities Exchange Act
[FR Doc. 2018–05295 Filed 3–14–18; 8:45 am] Change of 1934) is a national market system plan that,
BILLING CODE 8011–01–P among other things, sets forth procedures governing
1. Purpose the listing of new options series. See Securities
26 17 CFR 240.17Ad–22(b)(3). The purpose of the proposed rule Exchange Act Release No. 44521 (July 6, 2001), 66
FR 36809 (July 13, 2001) (Order approving OLPP).
sradovich on DSK3GMQ082PROD with NOTICES
27 Id.
change is to amend Rule 915 to modify The sponsors of OLPP include the Exchange; OCC;
28 15 U.S.C. 78q–1. the criteria for listing options on an BATS Exchange, Inc.; BOX Options Exchange LLC;
29 17 CFR 240.17Ad–22(b)(2) and (3).
30 15 U.S.C. 78s(b)(2).
underlying security as defined in C2 Options Exchange, Inc.; Chicago Board Options
Section 18(b)(1)(A) of the Securities Act Exchange, Inc.; EDGX Exchange, Inc.; Miami
31 In approving the proposed rule change, the International Securities Exchange, LLC; MIAX
Commission considered the proposal’s impact on PEARL, LLC; Phlx; Nasdaq BX, Inc.; Nasdaq GEMX,
1 15 U.S.C. 78s(b)(1).
efficiency, competition, and capital formation. 15 LLC; Nasdaq ISE, LLC; Nasdaq MRX, LLC; and
U.S.C. 78c(f). 2 15 U.S.C. 78a. NYSE Arca, Inc.
32 17 CFR 200.30–3(a)(12). 3 17 CFR 240.19b–4. 7 See OLPP at page 3.
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![11576 Federal Register / Vol. 83, No. 51 / Thursday, March 15, 2018 / Notices
available for website viewing and the Exchange, and at the Commission’s (‘‘OLPP’’) 6 requires that the listing
printing in the Commission’s Public Public Reference Room. certificate be provided to OCC no earlier
Reference Room, 100 F Street NE, than 12:01 a.m. and no later than 11:00
II. Self-Regulatory Organization’s a.m. (Chicago time) on the trading day
Washington, DC 20549 on official
Statement of the Purpose of, and prior to the day on which trading is to
business days between the hours of
Statutory Basis for, the Proposed Rule begin.7 The proposed amendment
10:00 a.m. and 3:00 p.m. Copies of such
Change would still comport with that
filing also will be available for
inspection and copying at the principal In its filing with the Commission, the requirement. For example, if an initial
office of the Exchange. All comments self-regulatory organization included public offering (‘‘IPO’’) occurs at 11 a.m.
received will be posted without change. statements concerning the purpose of, on Monday, the earliest date the
Persons submitting comments are and basis for, the proposed rule change Exchange could submit its listing
cautioned that we do not redact or edit and discussed any comments it received certificate to OCC would be on
personal identifying information from on the proposed rule change. The text Thursday by 12:01 a.m. (Chicago time),
comment submissions. You should of those statements may be examined at with the market price determined by the
submit only information that you wish the places specified in Item IV below. closing price over the three-day period
to make available publicly. All The Exchange has prepared summaries, from Monday through Wednesday. The
submissions should refer to File set forth in sections A, B, and C below, option on the IPO would then be
Number SR–NYSEAMER–2018–09, and of the most significant parts of such eligible for trading on the Exchange on
should be submitted on or before April statements. Friday. The proposed amendment
5, 2018. would essentially enable options trading
A. Self-Regulatory Organization’s within four business days of an IPO
For the Commission, by the Division of
Trading and Markets, pursuant to delegated Statement of the Purpose of, and becoming available instead of six
authority.26 Statutory Basis for, the Proposed Rule business days (five consecutive days,
Eduardo A. Aleman, Change plus the day the listing certificate is
submitted to OCC).
Assistant Secretary. 1. Purpose At the time the options industry
[FR Doc. 2018–05210 Filed 3–14–18; 8:45 am]
The purpose of the proposed rule adopted the ‘‘look back’’ period of five
BILLING CODE 8011–01–P consecutive business days, it was
change is to amend Rule 5.3–O to
modify the criteria for listing options on determined that the five-day period was
an underlying security as defined in sufficient to protect against attempts to
SECURITIES AND EXCHANGE
Section 18(b)(1)(A) of the Securities Act manipulate the market price of the
COMMISSION
of 1933 (each a ‘‘covered security’’; underlying security and would provide
[Release No. 34–82851; File No. SR– collectively, ‘‘covered securities’’). In a reliable test for stability.8 Surveillance
NYSEArca–2018–16] particular, the Exchange proposes to technologies and procedures concerning
modify Rule 5.3–(a)(4)(A), which manipulation have evolved since then
Self-Regulatory Organizations; NYSE currently requires that to list an option, to provide adequate prevention or
Arca, Inc.; Notice of Filing and the underlying covered security has to detection of rule or securities law
Immediate Effectiveness of Proposed have a market price of at least $3.00 per violations within the proposed time
Rule Change To Amend Rule 5.3–O share for the previous five consecutive frame, and the Exchange represents that
business days preceding the date on its existing trading surveillances are
March 9, 2018. adequate to monitor the trading in the
Pursuant to Section 19(b)(1) 1 of the which the Exchange submits a
certificate to the Options Clearing underlying security and subsequent
Securities Exchange Act of 1934 (the trading of options on the Exchange.9
‘‘Act’’),2 and Rule 19b–4 thereunder,3 Corporation (‘‘OCC’’) for listing and
notice is hereby given that on March 6, trading. The proposal would shorten the 6 The OLPP (a/k/a the Plan for the Purpose of
2018, NYSE Arca, Inc. (the ‘‘Exchange’’ current ‘‘look back’’ period of five Developing and Implementing Procedures Designed
or ‘‘NYSE Arca’’) filed with the consecutive business days to three to Facilitate the Listing and Trading of
Securities and Exchange Commission consecutive business days.4 The Standardized Options Submitted Pursuant to
Exchange does not intend to amend any Section 11a(2)(3)(B) of the Securities Exchange Act
(the ‘‘Commission’’) the proposed rule of 1934) is a national market system plan that,
change as described in Items I and II other criteria in Rule 5.3–O. This among other things, sets forth procedures governing
below, which Items have been prepared proposed rule change is substantively the listing of new options series. See Securities
by the self-regulatory organization. The identical to a recently-approved rule Exchange Act Release No. 44521 (July 6, 2001), 66
change by Nasdaq PHLX LLC (‘‘Phlx’’),5 FR 36809 (July 13, 2001) (Order approving OLPP).
Commission is publishing this notice to The sponsors of OLPP include the Exchange; OCC;
solicit comments on the proposed rule and would align Exchange listing rules BATS Exchange, Inc.; BOX Options Exchange LLC;
change from interested persons. with those of other options markets. C2 Options Exchange, Inc.; Chicago Board Options
The Exchange acknowledges that the Exchange, Inc.; EDGX Exchange, Inc.; Miami
I. Self-Regulatory Organization’s Options Listing Procedures Plan
International Securities Exchange, LLC; MIAX
Statement of the Terms of the Substance PEARL, LLC; Phlx; Nasdaq BX, Inc.; Nasdaq GEMX,
LLC; Nasdaq ISE, LLC; Nasdaq MRX, LLC; and
of the Proposed Rule Change 4 See proposed Rule 5.3–O(a)(4)(A) (providing NYSE American LLC.
7 See OLPP at page 3.
The Exchange proposes to amend that the market price per share of an covered
Rule 5.3–O (Criteria for Underlying security is ‘‘at least $3.00 for the previous three 8 See Securities Exchange Act Release Nos. 47190
consecutive business days preceding the date on (January 15, 2003), 68 FR 3072 (January 22, 2003)
sradovich on DSK3GMQ082PROD with NOTICES
Securities). The proposed rule change is which the Exchange submits a certificate to [the (SR–CBOE–2002–62); 47352 (February 11, 2003), 68
available on the Exchange’s website at OCC] for listing and trading, as measured by the FR 8319 (February 20, 2003) (SR–PCX–2003–06);
www.nyse.com, at the principal office of closing price reported in the primary market in 47483 (March 11, 2003), 68 FR 13352 (March 19,
which the underlying security is traded’’). 2003) (SR–ISE–2003–04); 47613 (April 1, 2003), 68
5 See Securities Exchange Act Release No. 82474 FR 17120 (April 8, 2003) (SR–Amex–2003–19); and
26 17 CFR 200.30–3(a)(12). (January 9, 2018), 83 FR 2240 (January 16, 2018) 47794 (May 5, 2003), 68 FR 25076 (May 9, 2003)
1 15 U.S.C. 78s(b)(1). (SR–Phlx–2017–75) (Order approving amendment (SR–Phlx–2003–27).
2 15 U.S.C. 78a.
to Rule 1009 to modify the criteria for listing an 9 Such surveillance procedures generally focus on
3 17 CFR 240.19b–4. option on an underlying covered security). detecting securities trading subject to opening price
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Document Created: 2018-03-15 02:38:02
Document Modified: 2018-03-15 02:38:02
| 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 | 83 FR 11573 |
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