10192 Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 

33According to the Exchange, FINRA surveils 

trading on the Exchange pursuant to a regulatory 

services agreement. The Exchange is responsible for 

FINRA’s performance under this regulatory services 

agreement. See Notice, supra note 3, 80 FR at 544. 

34 17 CFR 240.10A–3. 

35 15 U.S.C. 78s(b)(2). 

36 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

to the Exchange’s existing rules 

governing the trading of equity 

securities. In support of this proposal, 

the Exchange has also made the 

following representations: 

(1) The Shares will be subject to Rule 

5735, which sets forth the initial and 

continued listing criteria applicable to 

Managed Fund Shares. 

(2) The Exchange has appropriate 

rules to facilitate transactions in the 

Shares during all trading sessions. 

(3) Prior to the commencement of 

trading, the Exchange will inform its 

members in an Information Circular of 

the special characteristics and risks 

associated with trading the Shares. 

Specifically, the Information Circular 

will discuss the following: (a) The 

procedures for purchases and 

redemptions of Shares in Creation Units 

(and that Shares are not individually 

redeemable); (b) Nasdaq Rule 2111A, 

which imposes suitability obligations on 

Nasdaq members with respect to 

recommending transactions in the 

Shares to customers; (c) how 

information regarding the Intraday 

Indicative Value and Disclosed Portfolio 

is disseminated; (d) the risks involved 

in trading the Shares during the PreMarket and Post-Market Sessions when 

an updated Intraday Indicative Value 

will not be calculated or publicly 

disseminated; (e) the requirement that 

members deliver a prospectus to 

investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction; and (f) 

trading information. 

(4) Trading in the Shares will be 

subject to the existing trading 

surveillances, administered by both 

Nasdaq and FINRA,33 on behalf of the 

Exchange. The trading surveillance 

procedures are designed to detect 

violations of Exchange rules and 

applicable federal securities laws. These 

procedures are adequate to properly 

monitor Exchange trading of the Shares 

in all trading sessions and to deter and 

detect violations of Exchange rules and 

applicable federal securities laws. 

(5) For initial and continued listing, 

the Fund must be in compliance with 

Rule 10A–3 under the Act.34

(6) A minimum of 100,000 Shares will 

be outstanding at the commencement of 

trading on the Exchange. 

(7) The Fund will invest at least 80% 

of its assets under normal market 

conditions in shares of ETPs, 

individually selected U.S. exchangetraded common stocks (when the SubAdviser determines that it is more 

efficient or otherwise advantageous to 

do so), money market funds, U.S. 

treasuries, or money market 

instruments. In order to seek its 

investment objective, the Fund will not 

employ other strategies outside of the 

above-described ‘‘Principal 

Investments.’’ 

(8) The Fund may hold up to an 

aggregate amount of 15% of its net 

assets in illiquid assets (calculated at 

the time of investment) and will 

monitor its portfolio liquidity on an 

ongoing basis to determine whether, in 

light of current circumstances, an 

adequate level of liquidity is being 

maintained. The Fund will consider 

taking appropriate steps in order to 

maintain adequate liquidity if, through 

a change in values, net assets, or other 

circumstances, more than 15% of the 

Fund’s net assets are held in illiquid 

assets. 

(9) While the Fund may invest in 

leveraged ETFs (e.g., 2X or 3X), the 

Fund will not invest in inverse or 

inverse leveraged ETFs. Under normal 

circumstances, the Fund will not invest 

more than 25% of its total assets in 

leveraged ETPs. The Fund will not be 

operated in a manner designed to seek 

a multiple of the performance of an 

underlying reference index. 

(10) The Fund will not use derivative 

instruments, including options, swaps, 

forwards, and futures contracts. 

(11) The Fund’s investments will be 

consistent with the Fund’s investment 

objective. 

The Commission notes that the Fund 

and the Shares must comply with the 

requirements of Nasdaq Rule 5735 to be 

initially and continuously listed and 

traded on the Exchange. This approval 

order is based on all of the Exchange’s 

representations and description of the 

Fund, including those set forth above 

and in the Notice. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,35 that the 

proposed rule change (SR–NASDAQ– 

2014–127), be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.36

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–03812 Filed 2–24–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74312; File No. SR–CBOE– 

2015–18] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating to Exchange 

Rule 6.25 

February 19, 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 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 extend a 

pilot program related to Rule 6.25 

(Nullification and Adjustment of 

Options Transactions). 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. 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 10193 

3 15 U.S.C. 78f(b). 

4 15 U.S.C. 78f(b)(5). 5 Id. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to extend 

the effectiveness of the Exchange’s 

current rule applicable to obvious 

errors. Interpretation and Policy .06 to 

Rule 6.25, explained in further detail 

below, is currently operating on a pilot 

program set to expire on February 20, 

2015. The Exchange proposes to extend 

the pilot program to October 23, 2015. 

On April 5, 2013, the Commission 

approved, on a pilot basis, amendments 

to Exchange Rule 6.25 that stated that 

options executions will not be adjusted 

or nullified if the execution occurs 

while the underlying security is in a 

limit or straddle state as defined by the 

Plan. Under the terms of this current 

pilot program, though options 

executions will generally not be 

adjusted or nullified while the 

underlying security is in a limit or 

straddle state, such executions may be 

reviewed by the Exchange should the 

Exchange decide to do so under its own 

motion. 

Pursuant to a comment letter filed in 

connection with the order approving the 

establishment of the pilot, the Exchange 

committed to submit monthly data 

regarding the program. In addition, the 

Exchange agreed to submit an overall 

analysis of the pilot in conjunction with 

the data submitted under the Plan and 

any other data as requested by the 

Commission. Pursuant to a rule filing, 

approved on April 3, 2014, each month, 

the Exchange committed to provide 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. 

The Exchange will continue to provide 

the Commission with this data on a 

monthly basis from February 2015 

through the end of the pilot. 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. 

The Exchange is now proposing to 

extend the pilot period until October 23, 

2015. 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 provisions of Rule 6.25 

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. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.3 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 4 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5)5 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 the 

Exchange Rule 6.25. The Exchange 

believes the application of the current 

rule will be impracticable given the lack 

of a reliable NBBO 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 

CBOE 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 neither solicited nor 

received comments on the proposed 

rule change. 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
10194 Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 

6 15 U.S.C. 78s(b)(3)(A). 

7 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. 

8For 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). 9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 72492 

(June 27, 2014), 79 FR 38099 (SR–MIAX–2014–30) 

(‘‘iShares ETFs Proposal’’). 

4See Securities Exchange Act Release No. 72835, 

79 FR 49140 (August 19, 2014). 

5See Securities Exchange Act Release No. 73211, 

79 FR 59338 (October 1, 2014). 

6See Letter to Elizabeth M. Murphy, Secretary, 

Commission, from Brian O’Neill, Vice President 

and Senior Counsel, MIAX, dated October 22, 2014 

(providing comment on SR–MIAX–2014–30 and 

SR–MIAX–2014–39) (‘‘MIAX Letter’’). 

7See Securities Exchange Act Release No. 73856, 

79 FR 77075 (December 23, 2014). 

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 6 and Rule 19b–4(f)(6)(iii) 

thereunder.7

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 to 

Address Extraordinary Market 

Volatility, 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.8

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– 

CBOE–2015–18 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–2015–18. 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–CBOE– 

2015–18, and should be submitted on or 

before March 18, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–03820 Filed 2–24–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74304; File Nos. SR–MIAX– 

2014–30 and SR–MIAX–2014–39] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Order Disapproving Proposed Rule 

Changes To List and Trade Options on 

Shares of the iShares ETFs and Market 

Vectors ETFs 

February 19, 2015. 

I. Introduction 

On June 17, 2014, Miami International 

Securities Exchange LLC (‘‘MIAX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

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

of 1934 (‘‘Exchange Act’’ or ‘‘Act’’) 1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to list and trade options on 

shares of the iShares MSCI Brazil 

Capped ETF, iShares MSCI Chile 

Capped ETF, iShares MSCI Peru Capped 

ETF, and iShares MSCI Spain Capped 

ETF (collectively ‘‘iShares ETFs’’). The 

proposed rule change was published for 

comment in the Federal Register on July 

3, 2014.3 On August 13, 2014, the 

Commission extended the time period 

in which to either approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to approve or 

disapprove the proposed rule change, to 

October 1, 2014.4 On September 25, 

2014, the Commission instituted 

proceedings to determine whether to 

approve or disapprove the proposed 

rule change.5 The Commission received 

a letter from MIAX on the proposal.6 On 

December 17, 2014, the Commission 

issued a notice of designation of a 

longer period for Commission action on 

proceedings to determine whether to 

approve or disapprove the proposed 

rule change.7

In addition, on July 28, 2014, the 

Exchange filed with the Commission a 

proposed rule change to list and trade 

options on shares of the Market Vectors 


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