Federal Register / Vol. 80, No. 46 / Tuesday, March 10, 2015 / Notices 12675 

25 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

specifically, the Exchange does not 

believe that the proposed rule changes 

will impose any [sic] intramarket 

competition because it [sic] will be 

applicable to all TPHs trading on the 

Exchange trading floor. In addition, the 

Exchange does not believe the proposed 

changes will impose any intermarket 

burden because the Exchange trading 

floor will operate in a similar manner 

only with more relevant equipment and 

communication requirements. 

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. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the Exchange consents, the Commission 

will: 

A. By order approve or disapprove 

such proposed rule change, or 

B. institute proceedings to determine 

whether the proposed rule change 

should be 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. In 

particular, the Commission invites 

comment on CBOE’s proposal to no 

longer require a member to obtain prior 

approval from CBOE before using a new 

communication device on the CBOE 

floor and instead adopt the open-ended 

approach in proposed paragraph (c) of 

Rule 6.23 under which a member would 

be permitted to use any communication 

device unless specifically otherwise 

prohibited and would not be required to 

seek Exchange approval or otherwise 

register the communication devices 

with the Exchange in advance of using 

them on the CBOE floor. 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–2015–022 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–CBOE–2015–022. 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– 

2015–022, and should be submitted on 

or before March 31, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–05484 Filed 3–9–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74430; File No. SR–CBOE– 

2015–023] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing of 

Proposed Rule Change To List and 

Trade Options on the MSCI EAFE Index 

and on the MSCI Emerging Markets 

Index 

March 4, 2015. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’ or ‘‘Exchange Act’’),1 and Rule 

19b–4 thereunder,2 notice is hereby 

given that on February 26, 2015, the 

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 

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 

CBOE proposes to list and trade 

options that overlie the MSCI EAFE 

Index and the MSCI Emerging Markets 

Index (‘‘EAFE options’’ and ‘‘EM 

options’’). EAFE and EM options would 

be P.M., cash-settled contracts with 

European-style exercise. 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. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of 

and basis for the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

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

of the most significant parts of such 

statements. 

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12676 Federal Register / Vol. 80, No. 46 / Tuesday, March 10, 2015 / Notices 

3CBOE’s proposed rule change is substantially 

similar to approved filings made by NASDAQ OMX 

Phlx (‘‘Phlx’’) in 2011 and 2012 to list and trade EM 

and EAFE options, respectively. See Securities 

Exchange Act Release Nos. 66420 (February 17, 

2012), 77 FR 11177 (February 24, 2012) (approving 

SR–Phlx–2011–179 to list EM options) and 66861 

(April 26, 2012), 77 FR 26056 (May 2, 2012) 

(approving SR–Phlx–2012–28 to list EAFE options). 

4See MSCI EAFE Index fact sheet (dated 

December 31, 2014) located at: http://

www.msci.com/resources/factsheets/index_fact_

sheet/msci-eafe-index-usd-price.pdf. 

5Summary and comprehensive information about 

the GIMI methodology may be reviewed at: 

http://www.msci.com/products/indexes/size/all_

cap/methodology.html. 

6See MSCI EAFE Index fact sheet (dated 

December 31, 2014) located at: http://

www.msci.com/resources/factsheets/index_fact_

sheet/msci-eafe-index-usd-price.pdf. 

7See EAFE futures contract specifications located 

at: https://globalderivatives.nyx.com/node/10864. 

8See MSCI EM Index fact sheet (dated December 

31, 2014) located at: http://www.msci.com/

resources/factsheets/index_fact_sheet/msciemerging-markets-index-usd-price.pdf. 

9Summary and comprehensive information about 

the GIMI methodology may be reviewed at: 

http://www.msci.com/products/indexes/size/all_

cap/methodology.html. 

10See MSCI EM Index fact sheet (dated December 

31, 2014) located at: http://www.msci.com/

resources/factsheets/index_fact_sheet/msciemerging-markets-index-usd-price.pdf. 

11See EM futures contract specifications located 

at: https://globalderivatives.nyx.com/node/10846. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this proposed rule 

change is to permit the Exchange to list 

and trade options that overlie the MSCI 

EAFE Index and the MSCI Emerging 

Markets Index (‘‘EAFE options’’ and 

‘‘EM options’’). EAFE and EM options 

would be P.M., cash-settled contracts 

with European-style exercise.3

MSCI EAFE Index Design, Methodology 

and Dissemination 

The MSCI EAFE Index (Europe, 

Australasia, Far East) is a free, [sic] 

float-adjusted market capitalization 

index that is designed to measure the 

equity market performance of developed 

markets, excluding the U.S. & Canada. 

The MSCI EAFE Index consists of the 

following 21 developed market country 

indexes: Australia, Austria, Belgium, 

Denmark, Finland, France, Germany, 

Hong Kong, Ireland, Israel, Italy, Japan, 

the Netherlands, New Zealand, Norway, 

Portugal, Singapore, Spain, Sweden, 

Switzerland, and the United Kingdom. 

The MSCI EAFE Index consists of large 

and midcap components, has 910 

constituents and ‘‘covers approximately 

85% of the free float-adjusted market 

capitalization in each country.’’ 4

The MSCI EAFE Index was launched 

on December 31, 1969 and is calculated 

by MSCI Inc. (‘‘MSCI’’), which is a 

provider of investment support tools. 

The MSCI EAFE Index is calculated in 

U.S. dollars on a real-time basis from 

the open of the first market on which 

the components are traded to the closing 

of the last marked [sic] on which the 

components are traded. The 

methodology used to calculate the MSCI 

EAFE Index is similar to the 

methodology used to calculate the value 

of other benchmark marketcapitalization weighted indexes. 

Specifically, the MSCI EAFE Index is 

based on the MSCI Global Investable 

Market Indexes (‘‘GIMI’’) Methodology.5

The level of the MSCI EAFE Index 

reflects the free float-adjusted market 

value of the component stocks relative 

to a particular base date and is 

computed by dividing the total market 

value of the companies in the MSCI 

EAFE Index by the index divisor. 

The MSCI EAFE Index is monitored 

and maintained by MSCI. Adjustments 

to the MSCI EAFE Index are made on a 

daily basis with respect to corporate 

events and dividends. MSCI reviews the 

MSCI EAFE Index quarterly (February, 

May, August and November) ‘‘with the 

objective of reflecting change in the 

underlying equity markets in a timely 

manner, while limiting undue index 

turnover. During the May and November 

reviews, the [MSCI EAFE Index] is 

rebalanced and the large and mid 

capitalization cutoff points are 

recalculated.’’ 6

Real-time data is distributed 

approximately every 15 seconds while 

the index is being calculated using 

MSCI’s real-time calculation engine to 

Bloomberg L.P. (‘‘Bloomberg’’), FactSet 

Research Systems, Inc. (‘‘FactSet’’) and 

Thomson Reuters (‘‘Reuters’’). End of 

day data is distributed daily to clients 

through MSCI as well as through major 

quotation vendors, including 

Bloomberg, FactSet, and Reuters. 

The Exchange notes that the iShares 

MSCI EAFE exchange traded fund 

(‘‘ETF’’) is an actively traded product. 

CBOE also lists options overlying that 

ETF (‘‘EFA options’’) and those options 

are actively traded as well. MSCI EAFE 

Mini Index (‘‘EAFE’’) futures contracts 

are listed for trading on the 

Intercontinental Exchange, Inc. (‘‘ICE’’) 7

and other derivatives contracts on the 

MSCI EAFE Index are listed for trading 

in Europe. 

EM Index Design and Calculation 

The MSCI EM Index is a free floatadjusted market capitalization index 

that is designed to measure equity 

market performance of emerging 

markets. The MSCI EM Index consists of 

the following 23 emerging market 

country indexes: Brazil, Chile, China, 

Colombia, Czech Republic, Egypt, 

Greece, Hungary, India, Indonesia, 

Korea, Malaysia, Mexico, Peru, 

Philippines, Poland, Qatar, Russia, 

South Africa, Taiwan, Thailand, Turkey 

and United Arab Emirates. The MSCI 

EM Index consists of large and midcap 

components, has 834 constituents and 

‘‘covers approximately 85% of the free 

float-adjusted market capitalization in 

each country.’’ 8

The MSCI EM Index was launched on 

June 30, 1988 and is calculated by 

MSCI. The MSCI EM Index is calculated 

in U.S. dollars on a real-time basis from 

the open of the first market on which 

the components are traded to the closing 

of the last marked [sic] on which the 

components are traded. The 

methodology used to calculate the MSCI 

EM Index is similar to the methodology 

used to calculate the value of other 

benchmark market-capitalization 

weighted indexes. Specifically, the 

MSCI EM Index is based on the MSCI 

GIMI Methodology.9 The level of the 

MSCI EM Index reflects the free floatadjusted market value of the component 

stocks relative to a particular base date 

and is computed by dividing the total 

market value of the companies in the 

MSCI EM Index by the index divisor. 

The MSCI EM Index is monitored and 

maintained by MSCI. Adjustments to 

the MSCI EM Index are made on a daily 

basis with respect to corporate events 

and dividends. MSCI reviews the MSCI 

EM Index quarterly (February, May, 

August and November) ‘‘with the 

objective of reflecting change in the 

underlying equity markets in a timely 

manner, while limiting undue index 

turnover. During the May and November 

reviews, the [MSCI EM Index] is 

rebalanced and the large and mid 

capitalization cutoff points are 

recalculated.’’ 10

Real-time data is distributed 

approximately every 15 seconds using 

MSCI’s real-time calculation engine to 

Bloomberg, FactSet and Reuters. End of 

day data is distributed daily to clients 

through MSCI as well as through major 

quotation vendors, including 

Bloomberg, FactSet, and Reuters. 

The Exchange notes that the iShares 

MSCI Emerging Markets ETF is an 

actively traded product. CBOE also lists 

options overlying that ETF (‘‘EEM 

options’’) and those options are actively 

traded as well. MSCI Emerging Markets 

Mini Index (‘‘EM’’) futures contracts are 

listed for trading on ICE 11 and other 

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Federal Register / Vol. 80, No. 46 / Tuesday, March 10, 2015 / Notices 12677 

12Rule 24.2(i)(1) [sic] defines a broad-based index 

to mean an index designed to representative [sic] 

of a stock market as a whole or of a range of 

companies in unrelated industries. 

13The trading hours for multiply listed EFA 

options are from 8:30 a.m. (Chicago time) to 3:15 

p.m. (Chicago time). See EFA Options Product 

Specifications located at: http://www.cboe.com/

micro/efa/specifications.aspx. 

14The trading hours for EAFE futures are from 

6:16 p.m. (Chicago time) to 4:00 p.m. (Chicago time) 

the following day, Sunday through Friday. See 

MSCI EAFE Mini Index Future Contract 

specifications located at: https://

globalderivatives.nyx.com/node/10864. 

15Late prices indicate that while the last real-time 

stock tick come [sic] in at approximately 3:00 p.m. 

(Chicago time), the MSCI EM Index will stay open 

for a few minutes longer to allow any late price 

information to be obtained. At approximately 3:30 

p.m. (Chicago time), the final foreign currency rates 

are applied and the last real-time MSCI EM Index 

value is disseminated. 

derivatives contracts on the MSCI EM 

Index are listed for trading in Europe. 

Initial and Maintenance Listing Criteria 

The MSCI EAFE Index and MSCI EM 

Index each meet the definition of a 

broad-based index as set forth in Rule 

24.1(i)(1).12 In addition, the Exchange 

proposes to create specific initial and 

maintenance listing criteria for options 

on the MSCI EAFE Index and on the 

MSCI EM Index. Specifically, the 

Exchange proposes to add new 

Interpretation and Policy .01(a) to Rule 

24.2, Designation of the Index, to 

provide that he [sic] Exchange may 

trade EAFE and EM options if each of 

the following conditions is satisfied: (1) 

The index is broad-based, as defined in 

Rule 24.1(i)(1); (2) Options on the index 

are designated as P.M.-settled index 

options; (3) The index is capitalizationweighted, price-weighted, modified 

capitalization-weighted or equal dollarweighted; (4) The index consists of 500 

or more component securities; (5) All of 

the component securities of the index 

will have a market capitalization of 

greater than $100 million; (6) No single 

component security accounts for more 

than fifteen percent (15%) of the weight 

of the index, and the five highest 

weighted component securities in the 

index do not, in the aggregate, account 

for more than fifty percent (50%) of the 

weight of the index; (7) Non-U.S. 

component securities (stocks or ADRs) 

that are not subject to comprehensive 

surveillance agreements do not, in the 

aggregate, represent more than: (i) 

Twenty percent (20%) of the weight of 

the EAFE Index, and (ii) twenty-two and 

a half percent (22.5%) of the weight of 

the EM Index; (8) During the time 

options on the index are traded on the 

Exchange, the current index value is 

widely disseminated at least once every 

fifteen (15) seconds by one or more 

major market data vendors. However, 

the Exchange may continue to trade 

EAFE options after trading in all 

component securities has closed for the 

day and the index level is no longer 

widely disseminated at least once every 

fifteen (15) seconds by one or more 

major market data vendors, provided 

that EAFE futures contracts are trading 

and prices for those contracts may be 

used as a proxy for the current index 

value; (9) The Exchange reasonably 

believes it has adequate system capacity 

to support the trading of options on the 

index, based on a calculation of the 

Exchange’s current Independent System 

Capacity Advisor (ISCA) allocation and 

the number of new messages per second 

expected to be generated by options on 

such index; and (10) The Exchange has 

written surveillance procedures in place 

with respect to surveillance of trading of 

options on the index. 

Additionally, the Exchange proposes 

to add new Interpretation and Policy 

.01(b) to Rule 24.2, Designation of the 

Index, to set forth the following 

maintenance listing standards for 

options on the MSCI EAFE Index and on 

the MSCI EM Index: (1) The conditions 

set forth in subparagraphs .01(a)(1), (2), 

(3), (4), (7), (8), (9) and (10) must 

continue to be satisfied. The conditions 

set forth in subparagraphs .01(a)(5) and 

(6) must be satisfied only as of the first 

day of January and July in each year; 

and (2) the total number of component 

securities in the index may not increase 

or decrease by more than thirty-five 

percent (35%) from the number of 

component securities in the index at the 

time of its initial listing. In the event a 

class of index options listed on the 

Exchange fails to satisfy the 

maintenance listing standards set forth 

herein, the Exchange shall not open for 

trading any additional series of options 

of that class unless the continued listing 

of that class of index options has been 

approved by the Commission under 

Section 19(b)(2) of the Exchange Act. 

The Exchange believes that P.M. 

settlement is appropriate for EAFE and 

EM options due to the natures of these 

indexes that encompass multiple 

markets around the world. As to the 

MSCI EAFE Index, the components 

open with the start of trading in certain 

parts of Asia at approximately 5:00 p.m. 

(Chicago time) (prior day) and close 

with the end of trading in Europe at 

approximately 11:30 a.m. (Chicago time) 

(next day) as closing prices from Ireland 

are accounting [sic] for in the closing 

calculation. The closing MSCI EAFE 

Index level is distributed by MSCI 

between approximately 1:00 p.m. and 

2:00 p.m. (Chicago time) each trading 

day. 

As a result, there will not be a current 

MSCI EAFE Index level calculated and 

disseminated during a portion of the 

time during which EAFE options would 

be traded (from approximately 11:30 

a.m. (Chicago time) to 3:15 p.m. 

(Chicago time)).13 However, the EAFE 

futures contract that trades on ICE will 

be trading during this time period.14

The Exchange believes that the EAFE 

futures prices would be a proxy for the 

current MSCI EAFE Index level. 

Therefore, the Exchange believes that 

EAFE options should be permitted to 

trade after trading in all component 

securities has closed for the day and the 

index level is no longer widely 

disseminated at least once every fifteen 

(15) seconds by one or more major 

market data vendors, provided that 

EAFE futures contracts are trading and 

prices for those contracts may be used 

as a proxy for the current index value. 

As to the MSCI EM index, the 

components open with the start of 

trading in certain parts of Asia at 

approximately 6:00 p.m. (Chicago time) 

(prior day) and close with the end of 

trading in Mexico and Peru at 

approximately 3:30 p.m. (Chicago time) 

(next day) as closing prices from Brazil, 

Chile, Peru and Mexico, including late 

prices, are accounted for in the closing 

calculation. The closing MSCI EM Index 

level is distributed at approximately 

5:00 p.m. (Chicago time) each trading 

day.15

Because the MSCI EAFE Index and on 

[sic] the MSCI EM Index each has a 

large number of component securities, 

representative of many countries, the 

Exchange believes that the initial listing 

requirements are appropriate to trade 

options on this index [sic]. In addition, 

similar to other broad based indexes, the 

Exchange proposes various maintenance 

requirements, which require continual 

compliance and periodic compliance. 

Options Trading 

Generally, the proposed trading rules 

for EAFE and EM options would be the 

same except for their respective trading 

hours, which the Exchange will describe 

separately below. Exhibit 3 presents 

contract specifications for EAFE and EM 

options. 

The contract multiplier for EAFE and 

EM options would be $100. EAFE and 

EM options would be quoted in index 

points and one point would equal $100. 

The minimum tick size for series trading 

below $3 would be 0.05 ($5.00) and 

above $3 will be 0.10 ($10.00). 

Initially, the Exchange would initially 

list in-, at- and out-of-the-money strike 

prices. Additional series may be opened 

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12678 Federal Register / Vol. 80, No. 46 / Tuesday, March 10, 2015 / Notices 

16See Rules 24.9(c) [sic] and 24.9.04. These rules 

set forth the criteria for listing additional series of 

the same class as the current value of the 

underlying index moves. Generally, additional 

series must be ‘‘reasonably related’’ to the current 

index value, which means that strike prices must 

be within 30% of the current index value. Series 

exceeding the 30% range may be listed based on 

demonstrated customer interest. 

17See proposed amendments to Rule 24.9.01(a) 

adding EAFE and EM as classes eligible for 2.5 

point minimum strikes if the strike price is below 

200. 

18See Rule 24.9.01(c). 

19See proposed amendments to Rule 24.9(a)(2). 

The Exchange is proposing to allow the listing of 

up to twelve expiration months at any one time for 

EAFE and EM options. 

20See, e.g., Rules 24.9(b) (LEAPS), 24.9(e) (End of 

Week/End of Month Expirations), 24.9(a)(2)(A) 

(Short Term Option Series) and 24.9(a)(2)(B) 

(Quarterly Option Series). 

21See EAFE futures contract specifications 

located at: https://globalderivatives.nyx.com/node/

10864. See also Securities Exchange Act Release 

No. 67070 [sic] (May 29, 2012), 77 FR 33013 (June 

4, 2012) (Notice of SR-Phlx-2012–67 to close the 

trading of expiring EAFE options at 10:00 a.m. 

(Chicago time) on their expiration date). 

22See proposed amendment to Rule 24.1.01(a) 

[sic] to identify MSCI Inc. as the Reporting 

Authority for the MSCI EAFE Index (EAFE) and the 

MSCI Emerging Markets Index (EM). As the 

designated Reporting Authority for each of these 

indexes, the disclaimers set forth in Rule 24.14 

(Disclaimers) would apply to MSCI Inc. 

23See Rule 24.7. 

24See Chapter IX (Doing Business with the 

Public). 

25See Chapter XII (Margins). 

26See, e.g., Chapters IV (Business Conduct), VI 

(Doing Business on the Trading Floor), Chapter VIII 

(Market-Makers, Trading Crowds and Modified 

Trading Systems) and Chapter XXIV (Index 

Options). 

27See proposed amendments to Rules 24A.7, 

Position Limits and Reporting Requirements, and 

24B.7, Position Limits and Reporting Requirements, 

providing that the position limits for FLEX Index 

options on the MSCI EAFE Index and on the MSCI 

Emerging Market [sic] Index would be equal to the 

position limits for Non-FLEX options on those 

indexes. Per existing Rules 24A.8, Exercise Limits, 

and 24B.8, Exercise Limits, the exercise limits for 

FLEX EAFE and EM option would be equivalent to 

the position limits for FLEX EAFE and EM options. 

for trading as the underlying index level 

moves up or down.16 The minimum 

strike price interval for EAFE and EM 

series would be 2.5 points if the strike 

price is less than 200. When the strike 

price is 200 or above, strike price 

intervals would be no less than 5 

points.17 New series would be permitted 

to be added up to the fifth business day 

prior to expiration.18

The Exchange would be permitted to 

list up to twelve near-term expiration 

months.19 The Exchange would also be 

permitted to list up to ten expirations in 

Long-Term Index Option Series 

(‘‘LEAPS’’) on the EAFE and EM 

indexes and those indexes would be 

eligible for all other expirations 

permitted for other broad-based indexes, 

e.g., End of Week/End of Month 

Expirations, Short Term Option Series 

and Quarterly Option Series.20

The trading hours for EAFE options 

would be from 8:30 a.m. (Chicago time) 

to 3:15 p.m. (Chicago time), except that 

trading in expiring EAFE options would 

end at 10:00 a.m. (Chicago time) on their 

expiration date. The Exchange is 

proposing that EAFE options trade only 

during a portion of the day on their 

expiration date to align the trading 

hours of expiring EAFE options with 

expiring EAFE futures. EAFE futures 

trade on ICE and stop trading at 10:00 

a.m. (Chicago time) on the third Friday 

of the futures contract month.21

The trading hours for EM options 

would be from 8:30 a.m. to 3:15 p.m. 

(Chicago time). 

Exercise and Settlement 

The proposed EAFE and EM options 

would expire on the third Friday of the 

expiring month. Trading in expiring 

EAFE options would cease at 10:00 a.m. 

(Chicago time) on their expiration date 

and trading in expiring EM options 

would cease at 3:15 p.m. (Chicago time) 

on their expiration date. When the last 

trading day/expiration date is moved 

because of an Exchange holiday or 

closure, the last trading day/expiration 

date for expiring options would be the 

immediately preceding business day. 

Exercise would result in delivery of 

cash on the business day following 

expiration. EAFE and EM options would 

be P.M.-settled. The exercise settlement 

value would be the official closing 

values of the MSCI EAFE Index and the 

MSCI EM Index as reported by MSCI on 

the last trading day of the expiring 

contract.22

The exercise settlement amount 

would be equal to the difference 

between the exercise-settlement value 

and the exercise price of the option, 

multiplied by the contract multiplier 

($100). 

If the exercise settlement value is not 

available or the normal settlement 

procedure cannot be utilized due to a 

trading disruption or other unusual 

circumstance, the settlement value 

would be determined in accordance 

with the rules and bylaws of The 

Options Clearing Corporation 

(‘‘OCC’’).23

Position and Exercise Limits 

The Exchange proposes to apply the 

default position limits for broad-based 

index options to EAFE and EM options. 

Specifically, the chart set forth in Rule 

24.4(a), Position Limits for Broad-Based 

Index Options, provides that the 

positions limits applicable to ‘‘other 

broad-based indexes’’ is 25,000 

contracts (standard limit/on the same 

side of the market) and 15,000 contracts 

(near-term limit). Pursuant to Rule 24.5, 

Exercise Limits, the exercise limits for 

EAFE and EM options would be 

equivalent to the position limits for 

EAFE and EM options. All position 

limit hedge exemptions would apply. 

Margin 

The Exchange proposes that EAFE 

and EM options be margined as ‘‘broadbased index’’ options, and under CBOE 

rules, especially, Rule 12.3(c)(5)(A), the 

margin requirement for a short put or 

call shall be 100% of the current market 

value of the contract plus 15% of the 

‘‘product of the current index group 

value and the applicable index 

multiplier,’’ reduced by any out-of-themoney amount. There would be a 

minimum margin requirement of 100% 

of the current market value of the 

contract plus: 10% of the aggregate put 

exercise price amount in the case of 

puts, and 10% of the product of the 

current index group value and the 

applicable index multiplier in the case 

of calls. Additional margin may be 

required pursuant to Rules 12.3(h) and 

12.10 (Margin Required is Minimum). 

Exchange Rules Applicable 

Except as modified herein, the rules 

in Chapters I through XIX, XXIV, 

XXIVA, and XXIVB would equally 

apply to EAFE and EM options. EAFE 

and EM options would be subject to the 

same rules that currently govern other 

CBOE index options, including sales 

practice rules,24 margin requirements 25

and trading rules.26

The Exchange hereby designates 

EAFE and EM options as eligible for 

trading as Flexible Exchange Options as 

provided for in Chapters XXIVA 

(Flexible Exchange Options) and XXIVB 

(FLEX Hybrid Trading System).27

Surveillance and Capacity 

The Exchange represents that is [sic] 

has an adequate surveillance program in 

place for EAFE and EM options and 

intends to use the same surveillance 

procedures currently utilized for each of 

the Exchange’s other index options to 

monitor trading in EAFE and EM 

options. 

The Exchange is a member of the 

Intermarket Surveillance Group (‘‘ISG’’), 

which ‘‘covers major self-regulatory 

bodies across the world.’’ ‘‘The purpose 

of the ISG is to provide a framework for 

the sharing of information and the 

coordination of regulatory efforts among 

exchanges trading securities and related 

products to address potential 

intermarket manipulations and trading 

abuses. The ISG plays a crucial role in 

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Federal Register / Vol. 80, No. 46 / Tuesday, March 10, 2015 / Notices 12679 

28There are three categories of IOSCO members: 

ordinary, associate and affiliate. In general, the 

ordinary members (124) are the national securities 

commissions in their respective jurisdictions. 

Associate members (12) are usually agencies or 

branches of government, other than the principal 

national securities regulator in their respective 

jurisdictions that have some regulatory competence 

over securities markets, or intergovernmental 

international organizations and other international 

standard-setting bodies, such as the IMF and the 

World Bank, with a mission related to either the 

development or the regulation of securities markets. 

Affiliate members (62) are self-regulatory 

organizations, stock exchanges, financial market 

infrastructures, investor protection funds and 

compensation funds, and other bodies with an 

appropriate interest in securities regulation. See 

IOSCO Fact Sheet located at: http://www.iosco.org/ 

about/pdf/IOSCO-Fact-Sheet.pdf. 

29 15 U.S.C. 78f(b). 

30 15 U.S.C. 78f(b)(5). 

31See Chapter IX (Doing Business with the 

Public). 

32See Chapter XII (Margins). 

33See, e.g., Chapters IV (Business Conduct), VI 

(Doing Business on the Trading Floor), Chapter VIII 

(Market-Makers, Trading Crowds and Modified 

Trading Systems) and Chapter XXIV (Index 

Options). 

information sharing among markets that 

trade securities, options on securities, 

security futures products, and futures 

and options on broad-based security 

indexes.’’ A list identifying the current 

ISG members is available at: https://

www.isgportal.org/home.html. 

The Exchange is also an affiliate 

member of the International 

Organization of Securities Commissions 

(‘‘IOSCO’’), which has members from 

over 100 different countries. Each of the 

countries from which there is a 

component security in the [sic] both the 

MSCI EAFE and MSCI EM Indexes is a 

member of IOSCO.28 A list identifying 

the current ordinary IOSCO members is 

available at: http://www.iosco.org/

about/

?subsection=membership&memid=1. 

Finally, the Exchange has entered into 

various comprehensive surveillance 

agreements (‘‘CSAs’’) and/or 

Memoranda of Understanding with 

various stock exchanges. Given the 

capitalization of the EAFE and EM 

Indexes and the deep and liquid 

markets for the securities underlying 

these Indexes, the concerns for market 

manipulation and/or disruption in the 

underlying markets are greatly reduced. 

The Exchange notes that the EFA and 

EM ETFs are actively traded products. 

CBOE also lists options overlying those 

ETFS (EFA and EEM options) and those 

options are actively traded as well. 

CBOE has analyzed its capacity and 

represents that it believes the Exchange 

and the Options Price Reporting 

Authority (‘‘OPRA’’) have the necessary 

systems capacity to handle the 

additional traffic associated with the 

listing of new series that would result 

from the introduction of EAFE and EM 

options. Because the proposal is limited 

to two new classes, the Exchange 

believes that the additional traffic that 

would be generated from the 

introduction of EAFE and EM options 

would be manageable. 

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.29 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 30 requirements that the rules of 

an exchange be designed to promote just 

and equitable principles of trade, to 

prevent fraudulent and manipulative 

acts, to remove impediments to and to 

perfect the mechanism for a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

The Exchange believes that the 

proposed rule change will further the 

Exchange’s goal of introducing new and 

innovative products to the marketplace. 

Currently, the Exchange believes that 

there is unmet market demand for 

exchange-listed security options listed 

on these two popular cash indexes. 

(CBOE understands that Phlx no longer 

lists EAFE and EM options). As 

described above, the iShares MSCI 

EAFE ETF and iShares MSCI Emerging 

Markets ETF are actively traded 

products, as are the options on those 

ETFs. EAFE and EM futures are listed 

for trading on ICE. In addition, other 

derivatives contracts on the MSCI EAFE 

Index and the MSCI EM Index are listed 

for trading in Europe. As a result, CBOE 

believes that EAFE and EM options are 

designed to provide different and 

additional opportunities for investors to 

hedge or speculate on the market risk on 

the MSCI EAFE Index and the MSCI EM 

Index by listing an option directly on 

these indexes. 

The Exchanges believes that both the 

MSCI EAFE Index and the MSCI EM 

Index are not easily susceptible to 

manipulation. Both indexes are broadbased indexes and have high market 

capitalizations. The MSCI EAFE Index 

is comprised of 910 component stocks 

and no single component comprises 

more than 5% of the index, making it 

not easily subject to market 

manipulation. Similarly, the MSCI EM 

Index is comprised of 834 components 

stocks and no single component 

comprises more than 3% to 5% of the 

index, making it not easily subject to 

market manipulation. 

Additionally, the iShares MSCI EAFE 

and iShares MSCI Emerging Markets 

ETFs are actively traded products, as are 

options on those ETFs. Because both 

indexes have large numbers of 

component securities, are representative 

of many countries and trade a large 

volume with respect to ETFs and 

options on those ETFs, the Exchange 

believes that the initial listing 

requirements are appropriate to trade 

options on these indexes. In addition, 

similar to other broad-based indexes, 

the Exchange proposes to adopt various 

maintenance criteria, which would 

require continual compliance and 

periodic compliance. 

EAFE and EM options would be 

subject to the same rules that currently 

govern other CBOE index options, 

including sales practice rules,31 margin 

requirements 32 and trading rules.33 The 

Exchange would apply the same default 

position limits for broad-based index 

options to EAFE and EM options. 

Specifically, the applicable position 

limits would be 25,000 contracts 

(standard limit/on the same side of the 

market) and 15,000 contracts (near-term 

limit). The exercise limits for EAFE and 

EM options would be equivalent to the 

position limits for EAFE and EM 

options. These same position and 

exercise limits would apply to FLEX 

trading. All position limit hedge 

exemptions would apply. The Exchange 

would apply existing index option 

margin requirements for the purchase 

and sale of EAFE and EM options. 

The Exchange represents that is [sic] 

has an adequate surveillance program in 

place for EAFE and EM options. The 

Exchange also represents that it has the 

necessary systems capacity to support 

the new option series. 

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 not necessary or 

appropriate in furtherance of the 

purposes of the Act. Specifically, CBOE 

believes that the introduction of new 

cash index options will enhance 

competition among market participants 

and will provide a new type of options 

to compete with domestic products such 

as EFA and EEM options, EAFE and EM 

futures and European-traded derivatives 

on the MSCI EAFE Index and the MSCI 

EM Index to the benefit of investors and 

the marketplace. 

mstockstill on DSK4VPTVN1PROD with NOTICES

12680 Federal Register / Vol. 80, No. 46 / Tuesday, March 10, 2015 / Notices 

34 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the Exchange consents, the Commission 

will: 

A. by order approve or disapprove 

such proposed rule change, or 

B. institute proceedings to determine 

whether the proposed rule change 

should be 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–2015–023 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–2015–023. 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 CBOE. 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– 

2015–023 and should be submitted on 

or before March 31, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–05477 Filed 3–9–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[File No. 500–1] 

Order of Suspension of Trading; In the 

Matter of Aspire International, Inc., 

Border Management, Inc., and 

Landmark Energy Enterprises, Inc. 

March 5, 2015. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Aspire 

International, Inc. because it has not 

filed any periodic reports since the 

period ended December 31, 2010. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Border 

Management, 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 Landmark 

Energy Enterprises, Inc. because it has 

not filed any periodic reports since the 

period ended July 31, 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 above-listed companies 

is suspended for the period from 9:30 

a.m. EST on March 5, 2015, through 

11:59 p.m. EDT on March 18, 2015. 

By the Commission. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–05516 Filed 3–6–15; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74422; File No SR–CBOE– 

2015–020] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Its Fees 

Schedule To Adopt Fees for Extended 

Trading Hours 

March 4, 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 

18, 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 

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 proposes to adopt fees 

for its Extended Trading Hours session. 

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 

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