10738 Federal Register / Vol. 80, No. 39 / Friday, February 27, 2015 / Notices 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5The CBOE ‘‘Hybrid System’’ or ‘‘Hybrid Trading 

System’’ refers to the Exchange’s trading platform 

that allows Market-Makers to submit electronic 

quotes in their appointed classes. The ‘‘Hybrid 3.0 

Platform’’ is an electronic trading platform on the 

Hybrid Trading System that allows one or more 

quoters to submit electronic quotes which represent 

the aggregate Market-Maker quoting interest in a 

series for the trading crowd. Classes authorized by 

the Exchange for trading on the Hybrid Trading 

System shall be referred to as Hybrid classes. 

Classes authorized by the Exchange for trading on 

the Hybrid 3.0 Platform shall be referred to as 

Hybrid 3.0 classes. References to ‘‘Hybrid,’’ ‘‘Hybrid 

System,’’ or ‘‘Hybrid Trading System’’ in the 

Exchange’s Rules shall include all platforms unless 

otherwise provided by rule. See, e.g., Rule 1.1(aaa). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–04068 Filed 2–26–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74351; File No. SR–CBOE– 

2015–021] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating to Chicago 

Board Options Exchange, 

Incorporated’s Order Handling System 

and Order Management Terminal 

February 23, 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, Chicago Board Options 

Exchange, Incorporated (the ‘‘Exchange’’ 

or ‘‘CBOE’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 3 and Rule 19b–4(f)(6) 

thereunder.4 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 Substance of 

the Proposed Rule Change 

The Exchange is proposing to adopt a 

rule that further describes its existing 

order handling system (also referred to 

below as ‘‘OHS’’) and order 

management terminal (also referred to 

below as ‘‘OMT’’) operations, and to 

make corresponding amendments to its 

opening, automatic execution and 

complex order processing rules. The 

text of the proposed rule change is 

available on the Exchange’s Web site 

(http://www.cboe.com/AboutCBOE/

CBOELegalRegulatoryHome.aspx), at 

the Exchange’s Office of the Secretary, 

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 

The Exchange is proposing to adopt 

new Rule 6.12 to further describe its 

existing OHS and OMT operations, and 

to make corresponding amendments to 

its opening, automatic execution and 

complex order processing rules (Rules 

6.2B, 6.13, and 6.53C, respectively). The 

Exchange notes that these OHS and 

OMT operations are currently in use 

and referenced in the Exchange Rules. 

The purpose of this rule change is 

simply to codify further details of the 

existing operations within the Exchange 

Rules. 

Background 

The CBOE Hybrid System 5 is a 

trading platform that allows automatic 

executions to occur electronically and 

open outcry trades to occur on the floor 

of the Exchange. To operate in this 

‘‘hybrid’’ environment, the Exchange 

has made available to Trading Permit 

Holders (‘‘TPHs’’) a dynamic order 

handling system, also referred herein as 

OHS, that has the capability to route 

orders to the Hybrid System for 

automatic execution and book entry, to 

PAR workstations located in the trading 

crowds for open outcry and other 

manual handling by TPHs and Exchange 

PAR Officials, and/or to other order 

management terminals generally located 

in booths on the trading floor for 

manual handling. Where an order is 

routed for processing by the Exchange 

order handling system depends on 

various parameters configured by the 

Exchange and the order entry firm itself. 

Thus, the OHS provides TPHs with 

some flexibility to determine how to 

process their orders in the CBOE Hybrid 

System. 

The Exchange believes these routing 

parameters assist with the maintenance 

of a fair and orderly market and help to 

mitigate potential risks associated with 

orders executing at potentially 

erroneous prices or inconsistent with a 

particular investment strategy by 

routing certain orders to a PAR 

workstation or a booth order 

management terminal for manual 

handling based on parameters 

determined by the Exchange under Rule 

6.2B, 6.13 or 6.53C, by routing certain 

orders to an order management terminal 

based on parameters prescribed by the 

Exchange, by routing certain orders to 

an order management terminal or a PAR 

workstation or for electronic process, 

based on parameters prescribed by the 

order entry firm itself, and by routing 

certain orders to an order management 

terminal in the event of certain 

Exchange system disruptions or 

malfunctions. The order handling 

system also permits orders to be routed 

from a PAR workstation to an order 

management terminal (and vice versa) 

and from a PAR workstation or an order 

management terminal to the Hybrid 

System for automatic execution or book 

entry. The Exchange also views the 

order handling system as an important 

tool to assist order entry firms in their 

ability to efficiently manage, process 

and execute orders in a ‘‘hybrid’’ trading 

environment. The Exchange believes 

this, again, promotes fair and orderly 

markets, as well as assists the Exchange 

in its ability to effectively attract order 

flow and liquidity to its market, and 

ultimately benefits all CBOE TPHs and 

all investors. 

Regarding booth routing parameters in 

particular, an order may route to an 

order management terminal generally 

located in a booth depending on various 

circumstances. One such set of 

circumstances pertains to automatic 

execution/book ‘‘kick-outs.’’ In that 

regard, the electronic processes under 

Rules 6.2B (pertaining to opening 

transactions), 6.13 (pertaining to simple 

orders) and 6.53C (pertaining to 

complex orders), provide that an order 

that is not eligible for automatic 

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Federal Register / Vol. 80, No. 39 / Friday, February 27, 2015 / Notices 10739 

6For example, under Rule 6.13(b)(v), a 

marketable order may not be eligible for automatic 

execution because the execution would follow an 

initial partial execution on the Exchange and would 

be at a subsequent execution price that is not within 

an acceptable tick distance from the initial 

execution (the ‘‘acceptable tick distance’’ is 

determined by the Exchange on a series-by-series 

and premium basis and may not be less than 2 

minimum increment ticks). Under this ‘‘drill 

through’’ provision, for example, if the acceptable 

tick distance in a series quoted in $0.01 increments 

is set at 3 ($0.03), then a marketable buy order that 

received an initial partial execution at $1.20 would 

not automatically execute at a subsequent price of 

$1.25 (which is $0.02 beyond the acceptable tick 

distance). In such a circumstance, the execution of 

the order would be suspended and any remaining 

portion would be exposed for price improvement 

pursuant to the HAL process in Rule 6.14A, Hybrid 

Agency Liaison, using the acceptable tick distance 

as the exposure price. If a quantity remains at the 

conclusion of the HAL process, the remaining 

quantity will route to PAR or, at the order entry 

firm’s discretion, to the order entry firm’s booth, so 

that the order can be manually addressed. (In the 

event an order is not eligible to route to PAR, the 

order will be cancelled). 

7For example, assume an order entry firm has 

chosen to route its orders that are not eligible for 

automatic execution to a PAR workstation (and the 

order entry firm has also not specified that its 

orders can route to a booth order management 

terminal if PAR is unavailable). With this 

configuration, if an order is routed by that firm to 

the CBOE Hybrid System but the order is not 

eligible for automatic execution or book entry (e.g., 

because an incoming order is marketable and would 

execute at a price outside an acceptable price range 

under Rule 6.13(b)(v)), then: (i) The order would 

route to a PAR workstation so the order can be 

manually addressed, or (ii) if it is not eligible to 

route to PAR (e.g., because the particular order type 

is not eligible for PAR and the order entry firm has 

not specified that its orders can route to a booth if 

PAR is unavailable), then the remaining balance of 

the order will be cancelled. 

8Currently the Exchange has determined for all 

classes where the limit order price parameters are 

activated, except those noted below, that the limit 

order price parameters would be applied for the 

series within each class such that the Exchange 

would not accept the following simple limit orders 

for execution: (i) If the market quote is less than or 

equal to $3, limit orders to buy priced more than 

$0.50 above the offer and limit orders to sell priced 

more than $0.50 below the bid; (ii) if the market 

quote is greater than $3 and less than or equal to 

$10, limit orders to buy priced more than $1.00 

above the offer and limit orders to sell priced more 

than $1.00 below the bid; (iii) if the market quote 

is greater than $10 and less than or equal to $30, 

limit orders to buy priced more than $1.50 above 

the offer and limit orders to sell priced more than 

$1.50 below the bid; (iv) if the market quote is 

greater than $30 and less than or equal to $50, limit 

orders to buy priced more than $2.00 above the 

offer and limit orders to sell priced more than $2.00 

below the bid; or (v) if the market quote is equal 

to or greater than $50, limit orders to buy priced 

more than $3.00 above the offer and limit order to 

sell priced more than $3.00 below the bid. For the 

same classes, the Exchange has determined that 

limit orders received before a series is opened 

(including before a series is opened following a 

halt) will be checked against the previous trading 

day’s closing price using the same parameters noted 

above. Exchange Market Maker and away Market 

Maker orders received pre-open are excluded from 

this pre-opening aspect of the limit order price 

parameters. The foregoing limit order price 

parameters, which are referred to as the ‘‘Price 

Check Level A’’ or ‘‘Level A’’ settings, are in effect 

in all classes except option classes AAPL, DJX, 

NDX, OEX, RUT, SPX (which includes symbols 

SPX, SPXW and SPXQ), SPXpm, SPY andSPY7. 

There is no limit order price parameter currently 

activated for option class AAPL. (According to the 

Exchange, volume for options class AAPL is higher 

and trading is more volatile, while the price of the 

underlying stock is higher (e.g., Apple Inc. closed 

at $94.72 on July 22, 2014). The Exchange believes 

that application of the limit order price parameter 

in these circumstances may serve as more of a 

hindrance to the orderly processing orders (e.g., 

application of the parameter may result in an 

inordinate number of orders being excepted from 

automated process and instead routing for manual 

handling) and, as a result, has determined to not 

apply the parameter to option class AAPL for the 

time being.) However, the Exchange may evaluate 

whether to apply the parameter to the option class 

and any determination to do so would be 

announced via Regulatory Circular. 

For the remaining seven classes, the limit order 

price parameter levels for the premium ranges 

noted above are $1.00, $2.00, $3.00, $4.00 and 

$6.00, respectively. These limit order price 

parameters are referred to as the ‘‘Price Check Level 

B’’ or ‘‘Level B’’ settings. The Exchange has 

determined to apply the settings to immediate-orcancel orders in option classes SPX (which includes 

symbols SPX, SPXW and SPXQ), SPXpm and SRO. 

For all other classes where the limit order price 

parameter is activated, it is not applied to 

immediate-or-cancel orders. For complex limit 

orders, the limit order price parameters are the 

same as the parameters for simple orders, but the 

complex order parameter levels are based on the 

derived net market (as opposed to an individual bid 

or offer). 

See CBOE Regulatory Circular RG13–145, which 

is available at http://www.cboe.com/publish/

RegCir/RG13-145.pdf. 

The senior official in the Help Desk or two Floor 

Officials might also widen or inactivate one or more 

of these price check parameters for simple and/or 

complex orders on an intra-day basis in the interest 

of a fair and orderly market. For example, if an 

underlying stock is high priced or volatile and is 

experiencing significant price movement and the 

existing parameters would result in an inordinate 

number of limit orders not being accepted, the 

senior official in the Help Desk may determine to 

widen the parameters on an intra-day basis in the 

overlying or related options series. As another 

example, if the overall market is experiencing 

significant volatility, the senior official in the Help 

Desk or two Floor Officials may determine to widen 

the parameters for a group of series or classes. In 

that regard, the Exchange has determined that on 

any trading day where the front-month E-mini S&P 

500 Futures (symbol ES/1) are trading more than 20 

points above or below the previous day’s closing 

values by 8:00 a.m. (all times noted are Central 

Time), the Exchange will widen the Price Check 

Level A settings to the Price Check Level B settings 

for the trading day for all classes where the limit 

order price check is activated at the Level A setting 

(referred to herein as the ‘‘Standing Intraday Relief 

Condition’’). See CBOE Regulatory Circular RG13– 

145. The next trading day, the parameter levels for 

those classes would revert back to the normal Level 

A setting, unless the E-mini S&P 500 Future is more 

than 20 points above or below the previous day’s 

closing values by 8:00 a.m. 

Example of Standing Intraday Relief Condition: If 

on Monday the E-mini S&P 500 Futures close at 

1700 and by 8:00 a.m. on Tuesday the E-mini S&P 

500 Future is trading at 1730 (30 points above the 

prior day’s close of 1700), then the Exchange would 

adjust the limit order price parameter settings from 

Level A to Level B in all classes where Level A is 

the normal setting). If the E-mini S&P 500 Futures 

close on Tuesday at 1725 and by 8:00 a.m. on 

Wednesday are trading at 1720 (only 5 points below 

the prior day’s close of 1725), then the limit order 

price parameter settings would revert back to the 

Level A settings that were in place on Monday. 

However, if by 8:00 a.m. on Wednesday the E-mini 

S&P 500 Futures are trading at 1700 (25 points 

below the prior day’s close of 1725), then the limit 

order price parameter settings would remain at the 

Level B settings that were in place on Tuesday.) 

The Exchange notes that these examples are nonexhaustive and for illustrative purposes only. (For 

example, see also CBOE Regulatory Circular RG14– 

019, which is available at http://www.cboe.com/

publish/RegCir/RG14-019.pdf and which sets forth 

limit order price parameters settings for certain 

option classes on volatility index product 

settlement days.) The Exchange also notes that it 

may determine for the parameters to differ among 

classes and between pre-open and intra-day. 

9For example, a firm might establish routing 

parameters so that all its orders, or a subset of 

orders that exceed certain size, price or other 

parameters, submitted to the Exchange order 

handling system route directly to a booth OMT 

(while other orders might route directly to a PAR 

workstation or for electronic processing). 

execution or book entry due to certain 

Exchange-defined parameters may route 

to PAR or, at the order entry firm’s 

discretion, to the order entry firm’s 

booth.6 In the event an order is not 

eligible to route to PAR, the order would 

be cancelled.7 Once routed to a PAR 

workstation or a booth, an order can be 

manually addressed (e.g., an individual 

might determine to resubmit the order 

to the Hybrid System for automatic 

execution, route the order from a booth 

to a PAR workstation, represent the 

order in open outcry, cancel the order, 

etc.). Thus, as part of establishing their 

connectivity for routing orders to the 

Exchange, order entry firms designate 

PAR workstations and/or booth order 

management terminals as the 

destination for their automatic 

execution/book kick-outs. 

Apart from the foregoing processes for 

automatic execution/book kick-outs, 

orders may be routed through the order 

handling system to an order 

management terminal under various 

other circumstances. For instance, 

orders may route to an order 

management terminal from a PAR 

workstation. In addition, certain orders 

may route directly from an order entry 

firm to an order management terminal 

for manual handling based on certain 

limit order price parameter settings 

established by the Exchange 8 or based 

on certain other parameters established 

by the order entry firm itself.9 Orders 

may also route to a booth order 

management terminal in the event of 

certain system disruptions or 

malfunctions (e.g., if the Exchange’s 

experiences a system outage that 

prevents orders from routing to a 

particular PAR workstation, the order 

will route to the firm’s next available 

alternate destination listed in the order 

handling system, which is usually 

defined as an order management 

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10The Exchange notes that CBOE also utilizes the 

OMT technology as a back-up in the event of a 

system failure, malfunction or other issue where an 

order does not route to an OMT. In these 

circumstances where an order(s) fails to route to an 

OMT, the order would route to an Exchange Help 

Desk OMT. Once on the Exchange Help Desk 

terminal, orders with an immediate-or-cancel 

(‘‘IOC’’) contingency are manually cancelled and all 

other orders are manually routed by the Help Desk 

to the respective firm’s OMT. To be clear, the use 

of the Help Desk terminal is a back-up, safety 

feature that is designed to assist the Exchange in 

maintaining an orderly market. The back-up 

terminal is used by the Exchange for all order entry 

firms’ and Trading Permit Holders’ orders. 

11 15 U.S.C. 78f(b). 

12This includes halts that may occur at any time 

after the opening of trading on a particular trading 

day. The Exchange notes that this is the manner in 

which the limit order price parameter functionality 

currently operates. The Exchange believes that this 

functionality provides an additional safeguard to 

consider the reasonableness of limit order pricing 

prior to a reopening following a trading halt. 

13This parameter for limit orders received prior 

to the opening (including before a series is opened 

following a halt) is not applicable to limit orders of 

Exchange Market-Makers and away Market-Makers. 

The Exchange believes that Market-Makers actively 

evaluate the pre-opening market and utilize their 

own risk management parameters when entering, 

maintaining and cancelling orders prior to the 

opening, minimizing the likelihood of a MarketMaker order resulting from an error from being 

entered and continuing to rest prior to the opening 

of trading. In that regard, while the Exchange 

believes that the application of its limit order price 

parameters serve to promote a fair and orderly 

market, the parameters are not a substitute for a 

broker-dealer’s compliance with Rule 15c3–5 under 

the Act, 17 CFR 240.15c3–5 (commonly referred to 

as the ‘‘Market Access Rule’’). 

14See note 8, supra, for current parameter 

settings. 

15The Help Desk is sometimes referred to 

elsewhere within the Exchange Rules as the 

‘‘Control Room’’ and these two terms are used 

interchangeably. For consistency, the Exchange is 

proposing to change a reference in Rule 6.13 from 

the ‘‘Control Room’’ to the ‘‘Exchange Help Desk.’’ 

16Under proposed Rule 6.12.01, (i) notification of 

such intra-day relief will be announced as soon as 

reasonably practical via verbal message to the 

trading floor, OMT message to TPH organizations 

on the trading floor, and electronic message to TPHs 

that request to receive such messages; (ii) such 

intra-day relief will not extend beyond the trade 

day on which it is granted, unless a determination 

to extend such relief is announced to TPHs via 

Regulatory Circular; and (iii) the Exchange will 

make and keep records to document all 

determinations to grant intra-day relief under this 

terminal).10 Thus, as part of establishing 

their connectivity for routing orders to 

the Exchange, order entry firms 

designate booth order management 

terminals as a destination for routes 

from PAR, direct routes from an order 

entry firm due to Exchange settings and/ 

or optional order entry firm settings, 

and routes due to Exchange system 

disruption or malfunction. 

When it comes to selecting an order 

management terminal, some order entry 

firms elect to route orders to terminals 

located in their own booths on the floor, 

others elect to route orders to terminals 

located in another TPH’s booth, and still 

others a combination of the foregoing. 

For example, a firm that only trades 

remotely and does not maintain a 

physical presence on the Exchange 

trading floor may elect to route its 

orders to one or more TPHs’ booth order 

management terminals, or a firm might 

elect to have all equity option orders 

route to its own booth order 

management terminal and all index 

option trades route to another TPH’s 

booth order management terminal 

because the firm does not wish to 

maintain a physical presence on the 

floor for index trades. A firm may also 

elect to route orders to another TPH’s 

booth order management terminal 

because the firm may have a large 

number of orders to address or is 

experiencing system issues and has 

designated the other TPH’s booth as a 

back-up. 

Proposal 

While there are various references to 

the Exchange’s order routing system and 

order management terminal functions 

throughout the Exchange Rules (see, 

e.g., Rules 6.2B, 6.8B, 6.13, 6.53C), the 

Exchange believes it would be useful to 

have a more detailed description of the 

functionality within the rule text. 

Therefore, the Exchange is proposing to 

adopt new Rule 6.12 and amend 

existing Rules 6.2B, 6.13 and 6.53C to 

include additional information about 

the foregoing OHS and OMT 

functionality. These changes are 

intended to more fully describe the 

existing operation of the routing 

parameters and conditions necessary for 

an order entry firm to elect to route 

orders to an order management 

terminal. 

Proposed Rule 6.12 will include an 

introductory paragraph indicating that 

the rule describes the process for 

routing orders through the Exchange’s 

OHS, which is available for classes 

designated for trading on the CBOE 

Hybrid System. The introduction will 

also indicate that the OHS is a feature 

within the Hybrid System to route 

orders for automatic execution, book 

entry, open outcry, or further handling 

by a broker, agent, or PAR Official, in 

a manner consistent with Exchange 

Rules and Section 6(b) of the Act.11

Paragraph (a) of proposed Rule 6.12 

includes a general description of the 

OHS’s existing parameters for routing 

orders to OMTs. The proposed text 

provides that orders may route through 

the OHS to an OMT designated by an 

order entry firm in any of the 

circumstances described below. (The 

particular routing designations may be 

established based on various parameters 

established by the Exchange or order 

entry firm, as applicable.) 

• AutoEx and Book Kick-Outs: Under 

Rules 6.3B, 6.13 and 6.53C, orders or the 

remaining balance of orders initially 

routed from an order entry firm for 

electronic processing that are not 

eligible for automatic execution or book 

entry will by default route to a PAR 

workstation designated by the order 

entry firm. If an order entry firm has not 

designated a PAR workstation or if a 

PAR workstation is unavailable, the 

remaining balance will route to an OMT 

designated by the firm. If it is not 

eligible to route, the remaining balance 

of the order will be returned to the order 

entry firm. 

• OMT/PAR Workstation Routing: 

Orders may be routed back and forth 

between an OMT and a PAR 

workstation by TPHs. Orders may also 

be routed from a PAR workstation to an 

order management terminal by a PAR 

Official based on instructions from the 

TPH or if the PAR Official is unable to 

book or execute the order from, or 

maintain the order on, the PAR 

workstation. 

• Limit Order Price Parameter for 

Simple Orders: Limit orders will route 

directly from an order entry firm to an 

OMT designated by the order entry firm 

when initially routed to the Exchange if: 

(i) Prior to the opening (including before 

a series is opened following a halt),12

the order is to buy at more than an 

acceptable tick distance above the 

Exchange’s previous day’s close or the 

order is to sell at more than an 

acceptable tick distance below the 

Exchange’s previous day’s close (not 

applicable to Exchange Market-Makers 

or away Market-Makers),13 or (ii) once a 

series has opened, the order is to buy at 

more than an acceptable tick distance 

above the disseminated Exchange offer 

or the order is to sell at more than an 

acceptable tick distances below the 

disseminated Exchange bid. For 

purposes of this provision, an 

acceptable tick distance or ‘‘ATD’’ will 

be determined by the Exchange on a 

series by series and premium basis and 

announced to TPHs via Regulatory 

Circular, and shall be no less than 5 

minimum increment ticks. The 

Exchange may also determine on a class 

by class basis and announce via 

Regulatory Circular whether to apply 

the parameters in (i) and/or (ii) above to 

immediate-or-cancel orders.14 In 

addition, the senior official on the 

Exchange Help Desk 15 or two Floor 

Officials may widen or inactivate one or 

more of the applicable ATD parameter 

settings on an intra-day basis in the 

interest of a fair and orderly market.16

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Federal Register / Vol. 80, No. 39 / Friday, February 27, 2015 / Notices 10741 

Rule, and shall maintain those records in 

accordance with Rule 17a-1 under the Exchange 

Act. The Exchange notes that conditions when the 

Standing Intraday Relief will be instituted and the 

particular form of relief have been announced via 

Regulatory Circular. See note 8, supra. The 

announcement of the pre-established conditions 

and relief is intended to serve the circular 

notification requirement and, as such, a separate 

circular would not be issued if this relief is 

instituted over multiple days. However, if the 

Exchange would determine to modify the 

conditions for Standing Intraday Relief, then the 

Exchange would announce those changes by issuing 

another Regulatory Circular. 

The Exchange also notes that the OMT messaging 

is now used in place of former printer messaging. 

Therefore, for consistency, the Exchange is 

proposing to update a reference in Rule 6.13 from 

‘‘printer message’’ to ‘‘OMT message.’’ The 

Exchange also notes that the verbal messages to the 

trading crowds are announced over a speaker 

system which can be heard in the particular trading 

crowd as well as the trading floor. Therefore, for 

consistency, the Exchange is proposing to update a 

reference in Rule 6.13 from ‘‘trading crowd’’ to 

‘‘trading floor.’’ 

17The limit order price parameter will take 

precedence over another routing parameter to the 

extent that both are applicable to an incoming limit 

order. 

18Similar to simple orders, this parameter for 

limit priced complex orders received prior to the 

opening is not applicable to limit orders of 

Exchange Market-Makers and away Market-Makers. 

See, e.g., note 13, supra. 

19Stock-options orders are excluded from the 

calculation because the individual component stock 

leg is not traded on the Exchange and, as a result, 

calculation of a derived net market by the 

Exchange’s automated system would be a more 

complicated function. If in the future the Exchange 

would decide to enhance the limit order price 

parameter functionality to address stock-option 

orders, the Exchange would file a rule change to 

address stock-option orders. 

20See also notes 8 and 16, supra. In addition, the 

limit order price parameter takes precedence over 

other complex order routing parameters to the 

extent that others are applicable to an incoming 

limit order. Once routed to an OMT, an order can 

be manually addressed (e.g., an individual might 

determine to resubmit the order to the Hybrid 

System for automatic execution or book entry (and 

the limit order price parameter would not be 

applied to such routing), route the order from a 

booth to a PAR workstation, represent the order in 

open outcry, cancel the order, etc.) 

21See note 9, supra. 

22See pages 30–32, supra, and surrounding 

discussion. 

If a limit order is routed to an OMT 

because the ATD has not been met, the 

order can be manually addressed (e.g., 

an individual might determine to route 

the order to the Hybrid System for 

automatic execution or book entry (and 

the limit order price parameter would 

not be applied for such routing), route 

the order from a booth to a PAR 

workstation, represent the order in open 

outcry, cancel the order, etc.).17

• Limit Order Price Parameter for 

Complex Orders: Under this parameter, 

which is comparable to the parameter 

applicable to simple orders described 

above, incoming limit priced complex 

orders will route directly from an order 

entry firm to an OMT designated by the 

order entry firm if: (i) Prior to the 

opening (including before a series is 

opened following a halt), the order is 

priced at a net debit that is more than 

an acceptable tick distance above the 

derived net market using the Exchange’s 

previous day’s close in the individual 

series legs comprising the complex 

order or priced at a net credit that is 

more than an acceptable tick distance 

below the derived net market using the 

Exchange’s previous day’s close in the 

individual series legs comprising the 

complex order (such ATD will be as 

determined by the Exchange on a class 

by class and net premium basis and 

announced via Regulatory Circular); 18

or (ii) once a series has opened, the 

order is priced at a net debit that is more 

than an acceptable tick distance above 

the opposite side derived net market 

using the Exchange’s best bid or offer in 

the individual series legs comprising the 

complex order or priced at a net credit 

that is more than an acceptable tick 

distance below the opposite side 

derived net market using the Exchange’s 

best bid or offer in the individual series 

legs comprising the complex order (such 

ATD will be as determined by the 

Exchange on a class by class and net 

premium basis and announced via 

Regulatory Circular). The Exchange may 

determine on a class by class basis and 

announce via Regulatory Circular 

whether to apply the parameters in (i) 

and/or (ii) above to immediate-or-cancel 

complex orders (similar to the 

discussion above for simple orders). The 

Exchange also notes that the limit order 

price parameter is not applicable to 

stock-option orders.19 Similar to simple 

orders, the ATD for the limit order price 

parameter will be no less than 5 

minimum net price increment ticks 

(where the ‘‘minimum net price 

increment’’ is the minimum increment 

for net priced bids and offers for the 

given complex order strategy). For 

example, if the minimum net price 

increment for complex orders in a given 

series in a class is $0.01, then the ATD 

would be no less than $0.05 (5 X $0.01). 

If the minimum net price increment is 

$0.05, then the ATD would be no less 

than $0.25 (5 X $0.05). Also similar to 

simple orders, the senior official on the 

Exchange Help Desk or two Floor 

Officials may widen or inactivate one or 

more of the applicable ATD parameter 

settings for complex orders on an intraday basis in the interest of a fair and 

orderly market.20

• Direct Routing: Orders may route 

directly from an order entry firm to an 

OMT (or to a PAR workstation or to the 

Hybrid System for electronic 

processing) based on parameters 

prescribed by the order entry firm 

itself.21

• System Disruptions or 

Malfunctions: Orders will route to an 

OMT designated by the order entry firm 

or TPH, or a terminal designated and 

maintained by the Exchange as a backup to order entry firms’ and TPHs’ 

designated order management terminals, 

in the event of certain system 

disruptions or malfunctions that affect 

the ability of orders to reach or be 

processed at their intended destination. 

For example, if an order cannot route to 

a PAR workstation due to a malfunction 

of the PAR workstation, the order will 

route to an OMT either automatically or 

by Exchange personnel, as necessary.22

Paragraph (b) of proposed Rule 6.12 

would provide that each order entry 

firm must designate an OMT(s) for 

receiving routed orders and would 

reflect the Exchange’s current practice 

that permits an order entry firm to elect 

to have its orders routed to a booth OMT 

operated by the order entry firm itself 

and/or a booth OMT operated by 

another TPH. 

In conjunction with the foregoing, 

various corresponding changes to Rules 

6.2B, 6.13 and 6.53C are being 

proposed. In particular, existing 

references in the rule text to routing 

orders to ‘‘. . . PAR or, at the order 

entry firm’s discretion, to the order 

entry firm’s booth [and, if] an order is 

not eligible to route to PAR, then the 

remaining balance will be cancelled’’ (or 

substantially similar wording) will be 

replaced with references to routing 

orders ‘‘. . . via the order handling 

system pursuant to Rule 6.12’’ (or 

substantially similar wording).) [sic] 

Given the above-described proposal to 

further describe the routing process in 

proposed Rule 6.12 and to include 

cross-references to proposed Rule 6.12 

within Rules 6.2B, 6.13 and 6.53C, the 

Exchange does not believe it is 

necessary to continue to include the 

routing process descriptions within 

Rules 6.2B, 6.13 and 6.53C. 

The Exchange is proposing various 

miscellaneous changes to the existing 

text of Rule 6.13. In particular, the 

Exchange is proposing to include a title 

for each type of price check parameter 

within the existing rule text (i.e., the 

existing market width and drill through 

price parameters). The addition of these 

titles is non-substantive and is intended 

for ease of reference only. In addition, 

the existing text in Rule 6.13(b)(v)(A) 

provides that the ‘‘acceptable price 

range’’ or ‘‘APR’’ for the national best 

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10742 Federal Register / Vol. 80, No. 39 / Friday, February 27, 2015 / Notices 

23See note 16, supra. 

24 17 CFR 240.17a–1. The Exchange notes that 

determinations to grant intra-day relief under Rule 

6.13(b)(v) will be made in compliance with the 

provisions of the Act and the rules thereunder, 

including, but not limited to, the requirements in 

Section 6(b)(5) of the Act, 15 U.S.C. 78f(b), that the 

rules of a national securities exchange not be 

designed to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

25Specifically, paragraphs (b) (credit-to-debit 

parameters), (c) (same expiration strategy 

parameters), and (e) (percentage distance 

parameters) of Rule 6.53C.08 are not applicable to 

stock-option orders. 

26 15 U.S.C. 78f(b). 

27 15 U.S.C. 78f(b)(5). 

28The Exchange notes that limit order price 

parameters are in effect in all classes except options 

on Apple Inc. (AAPL). There is no limit order price 

parameter currently activated for option class 

AAPL. See CBOE Regulatory Circular RG13–145, 

which is available at http://www.cboe.com/publish/ 

RegCir/RG13-145.pdf. According to the Exchange, 

volume for options class AAPL is higher and 

trading is more volatile, while the price of the 

bid and national best offer width price 

check parameter (for market orders and/ 

or marketable limit orders) shall be 

determined by the Exchange on a class 

by class basis, and also indicates 

elsewhere in the existing rule text that 

the parameters for each class are applied 

on a series by series basis. The Exchange 

is proposing to replace this class by 

class reference in Rule 6.13(b)(v)(A) 

with series by series for consistency. 

The existing rule text also provides that, 

as soon as reasonably practicable, the 

senior official in the Help Desk or two 

Floor Officials may grant intra-day relief 

by widening the APR and ATD 

parameter settings for one or more 

option series and that notification of 

intraday relief will be announced via 

verbal message to the trading crowd, 

printer message to TPH organizations on 

the trading floor, and electronic message 

to TPHs that request to receive such 

messages. The Exchange is proposing to 

amend this provision to replace 

references from ‘‘trading crowd’’ to 

‘‘trading floor’’ and from ‘‘printer 

message’’ to ‘‘OMT message.’’ 23 The 

Exchange is also proposing to make 

clear that the relief can be granted intraday by widening or inactivating the 

applicable APR and/or ATD setting in 

the interest of a fair and orderly market. 

The Exchange believes including the 

reference to inactivating the applicable 

settings is not substantive because an 

applicable APR or ATD parameter could 

be widened to such a level that it would 

be in effect inactive. Similar to proposed 

Rule 6.12.01, the Exchange is also 

proposing to provide within the text of 

Rule 6.13(b)(v) that the intra-day relief 

granted in the interest of a fair and 

orderly market by the senior official in 

the Help Desk or two Floor Officials will 

not extend beyond the trade day on 

which it is granted, unless a 

determination to extend such relief is 

announced to TPHs via Regulatory 

Circular. The Exchange is also 

proposing to provide within the rule 

text that the Exchange will make and 

keep records to document all 

determinations to grant intra-day relief 

under Rule 6.13(b)(v), and shall 

maintain those records in accordance 

with Rule 17a–1 under the Act.24 The 

rule text will also provide that the 

Exchange will periodically review 

determinations to grant intra-day relief 

for consistency with the interest of a fair 

and orderly market. The Exchange is 

also proposing to make clear that, for 

purposes of the drill through price 

parameters, if an order has already been 

subject to the HAL process or if the 

order is not eligible for HAL, then the 

remaining quantity of the order will 

route via the OHS pursuant to proposed 

Rule 6.12. 

Finally, the Exchange is proposing a 

miscellaneous change to Rule 6.53C.08 

(pertaining to complex order price 

check parameters) to specifically 

identify the price check parameters that 

are not applicable to stock-option orders 

in the introductory text to this 

provision. The particular parameters to 

which stock-option orders may be 

subjected are already identified within 

the rule text. This proposed change is 

simply to include a list of those 

parameters which are not applicable to 

stock-option orders in the introductory 

paragraph for ease of reference.25

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the Act 26

in general and furthers the objectives of 

Section 6(b)(5) of the Act 27 in particular 

in that it should promote just and 

equitable principles of trade, serve to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and 

protect investors and the public interest, 

and it is not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Exchange views these routing 

parameters as important tools that assist 

order entry firms in their ability to 

efficiently manage, process and execute 

orders in a ‘‘hybrid’’ trading 

environment. In addition, the Exchange 

believes these routing parameters assist 

with the maintenance of fair and orderly 

markets and help to mitigate potential 

risks associated with orders executing at 

potentially erroneous prices or 

inconsistent with a particular 

investment strategy by routing certain 

orders to PAR or an OMT for manual 

handling based on parameters 

determined by the Exchange under Rule 

6.2B, 6.13 or 6.53C, by routing certain 

orders directly from an order entry firm 

to an order management terminal based 

on parameters prescribed by the 

Exchange (and announced via 

regulatory circular) or to an order 

management terminal or PAR 

workstation or for electronic processing 

based on parameters prescribed by the 

order entry firm itself, and by routing 

certain orders to an OMT in the event 

of certain Exchange system disruptions 

or malfunctions. The OHS also permits 

orders to be routed from a PAR to an 

OMT (and vice versa) and from either 

PAR or an OMT to the Hybrid System 

for automatic execution or book entry. 

In addition, the Exchange believes that 

the routing parameters generally are not 

unfairly discriminatory because they are 

made available to all order entry firms 

on an equal basis. Further, as discussed 

above, they are intended to assist order 

entry firms in their ability to efficiently 

manage, process and execute orders in 

a ‘‘hybrid’’ trading environment, which 

promotes fair and orderly markets, as 

well as assists the Exchange in its ability 

to effectively attract order flow and 

liquidity to its market, and ultimately 

benefits all CBOE TPHs and all 

investors. 

Furthermore, the Exchange believes 

the proposed rule change furthers the 

objective of Section 6(b)(5) of the Act in 

that it permits the Exchange to address 

the entry of simple and complex limit 

orders that are priced significantly away 

from the market that may likely have 

resulted from human or operational 

error. By being able to quickly and 

efficiently address orders that likely 

resulted from such error, the proposed 

use of the limit order price parameter 

checks would promote a fair and orderly 

market. Additionally, by having the 

flexibility to determine the series or 

classes where the limit order price 

parameter checks would be applied (or 

not applied) and the levels at which the 

ATD settings would be applied, and to 

grant relief on an intra-day basis, the 

Exchange is able to effectively structure 

and efficiently react to particular option 

characteristics and market conditions— 

including (without limitation) price, 

volatility, and significant price 

movements—which contributes to its 

ability to maintain a fair and orderly 

market. Accordingly, the Exchange 

believes that this proposal is designed to 

promote just and equity principles of 

trade, remove impediments to, and 

perfect the mechanism of, a free and 

open market.28

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Federal Register / Vol. 80, No. 39 / Friday, February 27, 2015 / Notices 10743 

underlying stock is higher (e.g., Apple Inc. closed 

at $128.715 on February 18, 2015). The Exchange 

believes that application of the limit order price 

parameters in these circumstances may serve as 

more of a hindrance to the orderly processing 

orders (e.g., application of the parameters may 

result in an inordinate number of orders being 

excepted from automated process and instead 

routing for manual handling) and, as a result, has 

determined to not apply the parameter to option 

class AAPL for the time being. The Exchange 

believes that because of these factors different 

treatment of the AAPL class is warranted. However, 

the Exchange may evaluate whether to apply the 

parameters to the option class and any 

determination to do so would be announced via 

Regulatory Circular. 

29 15 U.S.C. 78s(b)(3)(A). 

30 17 CFR 240.19b–4(f)(6). 31 17 CFR 200.30–3(a)(12). 

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. The 

Exchange believes that the proposed 

rule change will promote competition in 

that the routing parameters assist with 

the maintenance of a fair and orderly 

market and help to mitigate potential 

risks associated with orders executing at 

potentially erroneous prices or 

inconsistent with a particular 

investment strategy by routing certain 

orders based on various parameters 

prescribed by the Exchange or the order 

entry firm itself. The Exchange also 

views these routing parameters as 

important tools to assist order entry 

firms in their ability to efficiently 

manage, process and execute orders in 

a ‘‘hybrid’’ trading environment. The 

Exchange believes this, again, promotes 

fair and orderly markets, as well as 

assists the Exchange in its ability to 

effectively attract order flow and 

liquidity to its market, and ultimately 

benefits all CBOE TPHs and all 

investors. Thus, the Exchange does not 

believe the proposal creates any 

significant impact on competition. 

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 foregoing proposed rule 

change does not: 

A. Significantly affect the protection 

of investors or the public interest; 

B. impose any significant burden on 

competition; and 

C. 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 29 and Rule 19b–4(f)(6) 30

thereunder. 

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 will institute proceedings 

to determine whether the proposed rule 

change 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– 

CBOE–2015–021 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–CBOE–2015–021. 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 the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–CBOE– 

2015–021 and should be submitted on 

or before March 20, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–04067 Filed 2–26–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[File No. 500–1] 

In the Matter of Energiz Renewable, 

Inc., Iron Eagle Group, Inc., and 

MedClean Technologies, Inc.; Order of 

Suspension of Trading 

February 25, 2015. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Energiz 

Renewable, Inc. because it has not filed 

any periodic reports since the period 

ended September 30, 2011. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Iron Eagle 

Group, Inc. because it has not filed any 

periodic reports since the period ended 

June 30, 2012. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of MedClean 

Technologies, Inc. because it has not 

filed any periodic reports since the 

period ended September 30, 2012. 

The Commission is of the opinion that 

the public interest and the protection of 

investors require a suspension of trading 

in the securities of the above-listed 

companies. Therefore, it is ordered, 

pursuant to Section 12(k) of the 

Securities Exchange Act of 1934, that 

trading in the securities of the abovelisted companies is suspended for the 

period from 9:30 a.m. EST on February 

25, 2015, through 11:59 p.m. EDT on 

March 10, 2015. 

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