Federal Register / Vol. 80, No. 38 / Thursday, February 26, 2015 / Notices 10549 

124 17 CFR 200.30–3(a)(57). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 69329 

(April 5, 2013), 78 FR 21657 (April 11, 2014) (SR– 

ISE–2013–22) (Approval Order); 69110 (March 11, 

2013) 78 FR 16726 (March 18, 2013) (SR–ISE–2013– 

22) (Notice of Filing). 

4See Securities Exchange Act Release No. 67091 

(May 31, 2012), 77 FR 33498 (June 6, 2012) (the 

‘‘Limit Up-Limit Down Release’’). 

5The term ‘‘Limit State’’ means the condition 

when the national best bid or national best offer for 

an underlying security equals an applicable price 

band, as determined by the primary listing 

exchange for the underlying security. See Rule 

703A. 

6The term ‘‘Straddle State’’ means the condition 

when the national best bid or national best offer for 

an underlying security is non-executable, as 

determined by the primary listing exchange for the 

underlying security, but the security is not in a 

Limit State. See Rule 703A. 

7See Securities Exchange Act Release No. 71884 

(April 7, 2014), 79 FR 20269 (April 11, 2014) (SR– 

ISE–2014–22). 

8See Exchange Act Release No. 74110 (January 

21, 2015), 80 FR 4321 (January 27, 2015) (Eighth 

Amendment to the Limit-Up Limit-Down Plan). 9 15 U.S.C. 78f(b). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.124

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–03963 Filed 2–25–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74335; File No. SR–ISE– 

2015–07] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Extend the Limit Up-Limit 

Down Obvious Error Pilot 

February 20, 2015. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

19, 2015, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) 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 selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The ISE proposes to extend a pilot 

program under Rule 703A(d) that 

suspends Rule 720 regarding obvious 

errors during Limit and Straddle States 

in securities that underlie options 

traded on the Exchange. The text of the 

proposed rule change is available on the 

Exchange’s Web site (http://

www.ise.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 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 

On April 5, 2013,3 the Commission 

approved a proposed rule change 

designed to address certain issues 

related to the Plan to Address 

Extraordinary Market Volatility 

Pursuant to Rule 608 of Regulation NMS 

under the Act (the ‘‘Limit Up-Limit 

Down Plan’’ or the ‘‘Plan’’).4 The rules 

adopted in that filing established a one 

year pilot program to exclude 

transactions executed during a Limit 

State 5 or Straddle State 6 from the 

obvious error provisions of Rule 720. On 

April 4, 2014 the Exchange filed to 

extend this pilot program to its current 

end date of February 20, 2015.7 The 

purpose of this filing is to extend the 

effectiveness of the pilot program to 

coincide with the proposed extension of 

the Limit Up-Limit Down Plan to 

October 23, 2015.8

The Exchange believes the benefits to 

market participants from this provision 

should continue on a pilot basis. The 

Exchange continues to believe that 

adding certainty to the execution of 

orders in Limit or Straddle States will 

encourage market participants to 

continue to provide liquidity to the 

Exchange, and, thus, promote a fair and 

orderly market during these periods. 

Barring this provision, the obvious error 

provisions of Rule 720 would likely 

apply in many instances during Limit 

and Straddle States. The Exchange 

believes that continuing the pilot will 

protect against any unanticipated 

consequences in the options markets 

during a Limit or Straddle State. Thus, 

the Exchange believes that the 

protections of current rule should 

continue while the industry gains 

further experience operating the Plan. 

In connection with this proposed 

extension, each month the Exchange 

shall provide to the Commission, and 

the public, a dataset containing the data 

for each Straddle and Limit State in 

optionable stocks that had at least one 

trade on the Exchange. For each trade 

on the Exchange, the Exchange will 

provide (a) the stock symbol, option 

symbol, time at the start of the Straddle 

or Limit State, an indicator for whether 

it is a Straddle or Limit State, and (b) 

for the trades on the Exchange, the 

executed volume, time-weighted quoted 

bid-ask spread, time-weighted average 

quoted depth at the bid, time-weighted 

average quoted depth at the offer, high 

execution price, low execution price, 

number of trades for which a request for 

review for error was received during 

Straddle and Limit States, an indicator 

variable for whether those options 

outlined above have a price change 

exceeding 30% during the underlying 

stock’s Limit or Straddle State compared 

to the last available option price as 

reported by OPRA before the start of the 

Limit or Straddle State (1 if observe 

30% and 0 otherwise), and another 

indicator variable for whether the 

option price within five minutes of the 

underlying stock leaving the Limit or 

Straddle State (or halt if applicable) is 

30% away from the price before the start 

of the Limit or Straddle State. 

In addition, the Exchange will 

provide to the Commission, and the 

public, no later than May 29, 2015, 

assessments relating to the impact of the 

operation of the obvious error rules 

during Limit and Straddle States 

including: (1) An evaluation of the 

statistical and economic impact of Limit 

and Straddle States on liquidity and 

market quality in the options markets, 

and (2) an assessment of whether the 

lack of obvious error rules in effect 

during the Straddle and Limit States are 

problematic. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with the 

requirements of the Act and the rules 

and regulations thereunder that are 

applicable to a national securities 

exchange, and, in particular, with the 

requirements of Section 6(b) of the Act.9

In particular, the proposal is consistent 


rmajette on DSK2VPTVN1PROD with NOTICES
10550 Federal Register / Vol. 80, No. 38 / Thursday, February 26, 2015 / Notices 

10 15 U.S.C. 78f(b)(5). 

11 Id. 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(6)(iii). 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. 

14For 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). 

with Section 6(b)(5) of the Act,10

because it is designed to promote just 

and equitable principles of trade, 

remove impediments to and perfect the 

mechanisms of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. Additionally, the 

Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 11 requirement that the rules of 

an exchange not be designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

In particular, the Exchange further 

believes that it is necessary and 

appropriate in the interest of promoting 

fair and orderly markets to exclude 

transactions executed during a Limit or 

Straddle State from certain aspects of 

Rule 720. The Exchange believes the 

application of the current rule will be 

impracticable given the lack of a reliable 

national best bid or offer in the options 

market during Limit and Straddle 

States, and that the resulting actions 

(i.e., nullified trades or adjusted prices) 

may not be appropriate given market 

conditions. Extension of this pilot 

would ensure that limit orders that are 

filled during a Limit or Straddle State 

would have certainty of execution in a 

manner that promotes just and equitable 

principles of trade, removes 

impediments to, and perfects the 

mechanism of a free and open market 

and a national market system. Thus, the 

Exchange believes that the protections 

of the pilot should continue while the 

industry gains further experience 

operating the Plan. 

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 that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Specifically, 

the Exchange believes that, by extending 

the expiration of the pilot, the proposed 

rule change will allow for further 

analysis of the pilot and a determination 

of how the pilot shall be structured in 

the future. In doing so, the proposed 

rule change will also serve to promote 

regulatory clarity and consistency, 

thereby reducing burdens on the 

marketplace and facilitating investor 

protection. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

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 if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 12 and Rule 19b–4(f)(6)(iii) 

thereunder.13

The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest, as it 

will allow the obvious error pilot 

program to continue uninterrupted 

while the industry gains further 

experience operating under the Plan, 

and avoid any investor confusion that 

could result from a temporary 

interruption in the pilot program. For 

this reason, the Commission designates 

the proposed rule change to be operative 

upon filing.14

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– 

ISE–2015–07 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–ISE–2015–07. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–ISE– 

2015–07, and should be submitted on or 

before March 19, 2015. 


rmajette on DSK2VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 38 / Thursday, February 26, 2015 / Notices 10551 

15 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 34–73980 

(Jan. 5, 2015), 80 FR 1466 (Jan. 9, 2015) (SR–ICC– 

2014–24). 

4 15 U.S.C. 78s(b)(2). 

5 15 U.S.C. 78s(b)(2). 

6 17 CFR 200.30–3(a)(31). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 69341 

(April 8, 2013), 78 FR 21996 (April 12, 2013) (SR– 

NASDAQ–2013–048). 

4The Plan was extended until February 20, 2015. 

The Plan was initially approved for a one-year pilot 

period, which began on April 8, 2013. Securities 

Exchange Act Release No. 71649 (March 5, 2014), 

79 FR 13696 (March 11, 2014). 

5Unless otherwise specified, capitalized terms 

used in this rule filing are based on the defined 

terms of the Plan. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–03958 Filed 2–25–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74341; File No. SR–ICC– 

2014–24] 

Self-Regulatory Organizations; ICE 

Clear Credit, LLC; Notice of 

Designation of Longer Period for 

Commission Action on Proposed Rule 

Change To Revise the ICC Risk 

Management Framework 

February 20, 2015. 

On December 22, 2014, ICE Clear 

Credit LLC (‘‘ICC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

make revisions to the ICC Risk 

Management Framework (SR–ICC– 

2014–24). The proposed rule change 

was published for comment in the 

Federal Register on January 9, 2015.3 To 

date, the Commission has not received 

comments on the proposal. 

Section 19(b)(2) of the Act 4 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day from the 

publication of notice of filing of this 

proposed rule change is February 23, 

2015. The Commission is extending this 

45-day time period. 

ICC’s proposed rule change would 

revise the ICC Risk Management 

Framework to, among other things, 

incorporate risk model changes related 

to Recovery Rate Sensitivity 

Requirements, anti-procyclicality, and 

ICC’s Guaranty Fund allocation 

methodology. In order to provide the 

Commission with sufficient time to 

consider the proposed rule change, the 

Commission finds it is appropriate to 

designate a longer period within which 

to take action on the proposed rule 

change. 

Accordingly, the Commission, 

pursuant to Section 19(b)(2) of the Act,5

designates April 9, 2015, as the date by 

which the Commission should either 

approve or disapprove, or institute 

proceedings to determine whether to 

disapprove, the proposed rule change 

(File No. SR–ICC–2014–24). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–03964 Filed 2–25–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74336; File No. SR– 

NASDAQ–2015–016] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend 

Chapter V, Regulation of Trading on 

NOM, To Extend the Pilot Program 

Under Section 3(d)(iv) 

February 20, 2015. 

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 February 

19, 2015, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

the proposed rule change as described 

in Items I and II below, which Items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend 

Chapter V, Regulation of Trading on 

NOM, to extend the pilot program under 

Section 3(d)(iv), which provides for how 

the Exchange treats obvious and 

catastrophic options errors in response 

to the Plan to Address Extraordinary 

Market Volatility Pursuant to Rule 608 

of Regulation NMS under the Act (the 

‘‘Limit Up-Limit Down Plan’’ or the 

‘‘Plan’’).3 The Exchange proposes to 

extend the pilot period until October 23, 

2015. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaq.cchwallstreet.com, at 

the principal office of the Exchange, and 

at the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

In April 2013, the Commission 

approved a proposal, on a one year pilot 

basis, to adopt Chapter V, Section 

3(d)(iv) to provide for how the Exchange 

will treat obvious and catastrophic 

options errors in response to the Plan, 

which is applicable to all NMS stocks, 

as defined in Regulation NMS Rule 

600(b)(47).4 The Plan is designed to 

prevent trades in individual NMS stocks 

from occurring outside of specified 

Price Bands.5 The requirements of the 

Plan are coupled with Trading Pauses to 

accommodate more fundamental price 

moves (as opposed to erroneous trades 

or momentary gaps in liquidity). 

The Exchange extended the operation 

of Chapter V, Section 3(d)(iv), which 

provides that trades are not subject to an 

obvious error or catastrophic error 

review pursuant to Chapter V, Sections 

6(b) or 6(f) during a Limit State or 


rmajette on DSK2VPTVN1PROD with NOTICES