6908 Federal Register / Vol. 81, No. 26 / Tuesday, February 9, 2016 / Notices 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 56251 

(August 14, 2007), 72 FR 46523 (August 20, 2007) 

(SR–Amex–2004–27) (Order approving listing of 

Fixed Return Options (‘‘FROs’’)); see also Securities 

Exchange Act Release No. 71957 (April 16, 2014), 

79 FR 22563 (April 22, 2014) (SR–NYSEMKT– 

2014–06) (Order approving name change from FROs 

to Binary Return Derivatives (ByRDs) and re-launch 

of these products, with certain modification, and 

amending Obvious Errors rules to include ByRDs). 

5See proposed Rules 5.82(b)(1). 

57(b) persons. Thus, the issuance of 

shares of Restricted Stock could be 

deemed to involve a joint transaction 

involving a BDC and a 57(b) person in 

contravention of section 57(a)(4). Rule 

17d–1(b) provides that, in considering 

relief pursuant to the rule, the 

Commission will consider (i) whether 

the participation of the company in a 

joint enterprise is consistent with the 

Act’s policies and purposes and (ii) the 

extent to which that participation is on 

a basis different from or less 

advantageous than that of other 

participants. 

8. The Company requests an order 

pursuant to section 57(a)(4) and rule 

17d–1 to permit the Company to grant 

shares of Restricted Stock pursuant to 

the Plan. The Company states that the 

Plan, although benefiting the 

Participants and the Company in 

different ways, is in the interests of the 

Company’s stockholders because the 

Plan will help align the interests of the 

Company’s employees and officers with 

those of its stockholders, which will 

encourage conduct on the part of those 

employees and officers designed to 

produce a better return for the 

Company’s stockholders. 

Applicant’s Conditions 

Applicant agrees that the order 

granting the requested relief will be 

subject to the following conditions: 

1. The Plan will be authorized by the 

Company’s stockholders. 

2. Each issuance of Restricted Stock to 

a Participant will be approved by the 

required majority, as defined in section 

57(o) of the Act, of the Company’s 

directors on the basis that such issuance 

is in the best interest of the Company 

and its stockholders. 

3. The amount of voting securities 

that would result from the exercise of all 

of the Company’s outstanding warrants, 

options, and rights, together with any 

Restricted Stock issued pursuant to the 

Plan, at the time of issuance shall not 

exceed 25% of the outstanding voting 

securities of the Company, except that if 

the amount of voting securities that 

would result from the exercise of all of 

the Company’s outstanding warrants, 

options, and rights issued to the 

Company’s directors, officers, and 

employees, together with any Restricted 

Stock issued pursuant to the Plan, 

would exceed 15% of the outstanding 

voting securities of the Company, then 

the total amount of voting securities that 

would result from the exercise of all 

outstanding warrants, options, and 

rights, together with any Restricted 

Stock issued pursuant to the Plan, at the 

time of issuance shall not exceed 20% 

of the outstanding voting securities of 

the Company. 

4. The maximum amount of shares of 

Restricted Stock that may be issued 

under the Plan will be 10% of the 

outstanding shares of common stock of 

the Company on the effective date of the 

Plan plus 10% of the number of shares 

of the Company’s common stock issued 

or delivered by the Company (other than 

pursuant to compensation plans) during 

the term of the Plan. 

5. The Board will review the Plan at 

least annually. In addition, the Board 

will review periodically the potential 

impact that the issuance of Restricted 

Stock under the Plan could have on the 

Company’s earnings and NAV per share, 

such review to take place prior to any 

decisions to grant Restricted Stock 

under the Plan, but in no event less 

frequently than annually. Adequate 

procedures and records will be 

maintained to permit such review. The 

Board will be authorized to take 

appropriate steps to ensure that the 

grant of Restricted Stock under the Plan 

would not have an effect contrary to the 

interests of the Company’s stockholders. 

This authority will include the authority 

to prevent or limit the granting of 

additional Restricted Stock under the 

Plan. All records maintained pursuant 

to this condition will be subject to 

examination by the Commission and its 

staff. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2016–02442 Filed 2–8–16; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–77044; File No. SR– 

NYSEArca–2016–16] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To List and Trade Binary 

Return Derivatives 

February 3, 2016. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),2 and Rule 19b–4 thereunder,3

notice is hereby given that on January 

27, 2016, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to list and 

trade Binary Return Derivatives 

(‘‘ByRDs’’). The proposed rule change is 

available on the Exchange’s Web site at 

www.nyse.com, at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

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

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to list and 

trade ByRDs. The Exchange proposes to 

model its ByRDs rules after the 

approved rules of another options 

exchange—namely NYSE MKT LLC 

(‘‘NYSE MKT’’).4

ByRDs Generally 

ByRDs are European-style option 

contracts on individual stocks, 

exchange-traded funds (‘‘ETFs’’) and 

Index-Linked Securities that have a 

fixed return in cash based on a set strike 

price; satisfy specified listing criteria; 

and may only be exercised at expiration 

pursuant to the Rules of the Options 

Clearing Corporation (the ‘‘OCC’’).5

ByRDs are binary options and, as such, 

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6See proposed Rule 5.82(b)(2) and (3). 7See proposed Rule 5.83. 8See proposed Rule 5.85(a). 9See proposed Rule 5.85(b). 10See id. The Exchange believes that including 

instances when an Exchange holiday falls on a 

Thursday would allow the Exchange to add new 

series during Thanksgiving week or anytime 

Christmas or New Year’s falls on a Thursday, which 

increased flexibility would benefit market 

participants. 

11See proposed Rule 5.85(c). 

12See proposed Rule 5.85(c)(1). 

13See id. 

14See proposed Rule 5.85(c)(2). 

15See proposed Rule 5.90, Commentary .01. 

16See proposed Rule 5.90, Commentary .02. 

17See proposed Rule 5.91, Commentary .01. For 

purposes of this Rule, the market price of an 

underlying security is (i) for intra-day series 

additions, the last reported trade in the primary 

listed market in which the underlying security 

trades at the time the Exchange determines to add 

these additional series; and (ii) for next-day and 

expiration series additions, the closing price 

reported in the primary listed market in which the 

underlying security traded on the last trading day 

before the series are added. See proposed Rule 5.91, 

Commentary .02. 

18See proposed Rule 5.91, Commentary .03. 19See proposed Rule 5.89. The VWAP for an 

underlying security is the sum of the dollar value 

of reported trades (price multiplied by the number 

of shares traded), divided by the total number of 

shares traded during the entire last day of trading 

prior to expiration. See Rule 5.82(b)(4)–(5). 

20See proposed Rule 5.89(a). Composite prices 

are prices reported to the consolidated tape from 

any participating exchange or market. The 

Exchange notes that the OCC currently uses 

composite pricing in connection with the 

settlement of expiring equity options. The 

composite closing price is the last reported sale 

price from any eligible trade source (i.e., primary 

listing market or participating regional market). It 

is not an average price. See Securities Exchange Act 

Release No. 49045 (January 8, 2004), 69 FR 2377 

(January 15, 2004) (notice of filing and immediate 

effectiveness of File No. SR–OCC–2003– 01). 

21See proposed Rule 5.89, Commentary .01. 

22See proposed Rule 5.89, Commentary .02. 

differ from traditional options traded on 

U.S. options exchanges by providing a 

discontinuous or non-linear payout. An 

in-the-money ByRD will pay a fixed 

sum at expiration regardless of the 

magnitude of the difference between the 

option’s exercise price and the 

settlement price. The Exchange 

proposes to list ‘‘Finish High’’ ByRDs, 

which will return $100 per contract if 

the settlement price of the underlying 

security is above the strike price at 

expiration, and ‘‘Finish Low’’ ByRDs, 

which will return $100 per contract if 

the settlement price of the underlying 

security is below the strike price at 

expiration.6

The Exchange proposes to specify 

which series of ByRDs options contracts 

may open for trading and the 

permissible strike price intervals.7 After 

a particular class of ByRDs has been 

approved for listing on the Exchange (as 

described below), except for consecutive 

week expiration series, at the 

commencement of trading for a 

particular class of ByRDs, the Exchange 

shall open a minimum of one expiration 

month for each class of ByRDs open for 

trading on the Exchange.8 The Exchange 

also proposes that consecutive week 

expiration series expire at the end of the 

week, normally a Friday, with 

consecutive week expirations covering 

the next five calendar weeks.9 New 

expiration week series will be added for 

trading on Thursday each week, unless 

Thursday or Friday is an Exchange 

holiday, in which case new expiration 

series would be added for trading on 

Wednesday.10 Further, the Exchange 

proposes that the strike price interval 

for ByRDs contracts will be $1 for strike 

prices between $3 and $200, and $5 for 

strike prices over $200.11 The Exchange 

proposes to initially list series that are 

no more than 30% away from the price 

of the underlying security, and may list 

additional series if the furthest out of 

the money strike is less than 10% out 

of the money.12 At such time, the 

Exchange could list additional series 

that are not more than 30% away from 

the price of the underlying security.13

At the time the Exchange is adding 

additional series, it may proactively 

delist any existing series without open 

interest.14

Listing Standards 

The initial listing criteria for ByRDs 

require that an individual stock 

underlying a ByRDs contract meet the 

criteria for underlying securities in Rule 

5.3, ‘‘Criteria for Underlying Securities,’’ 

and, in addition, have: (1) Minimum 

market capitalization of at least $40 

billion; (2) minimum trading volume, in 

all markets in which the security trades, 

of at least one billion shares in the 

preceding 12 months; (3) minimum 

average daily trading volume of four 

million shares; (4) minimum average 

daily trading value of at least $200 

million during the previous six months; 

and (5) a minimum market price per 

share of at least $10, as measured by the 

closing price reported in the primary 

listed market in which the security is 

traded, over the previous five 

consecutive business days preceding the 

date on which the Exchange submits a 

certificate to the OCC for listing and 

trading.15 An ETF or Index-Linked 

Security underlying a ByRDs contract 

would have to meet these five 

additional criteria along with the 

requirements of Rule 5.3, except for the 

minimum market capitalization 

requirement.16

The continued listing criteria for 

ByRDs require that an individual stock 

underlying a ByRDs contract satisfy the 

requirements of Rule 5.4, ‘‘Withdrawal 

of Approval of Underlying Securities,’’ 

and, in addition, have: (1) Minimum 

market capitalization of at least $30 

billion; (2) minimum trading volume, in 

all markets trading the security, of at 

least one billion shares in the preceding 

12 months; (3) minimum average daily 

trading volume of four million shares; 

(4) minimum average daily trading 

value of at least $125 million during the 

last six months; and (5) an underlying 

market price per share of at least $5 at 

the time additional series are listed for 

trading.17 An ETF or Index-Linked 

Security underlying a ByRDs contract 

would have to meet these five 

additional criteria along with the 

requirements of Rule 5.4, except for the 

minimum market capitalization 

requirement.18

Volume Weighted Average Price 

Settlement 

To reduce concerns regarding 

potential price manipulation at 

expiration due to the ‘‘all-or-nothing’’ 

return provided by a ByRDs contract, 

the Exchange proposes to settle ByRDs 

using an all-day volume weighted 

average price (‘‘VWAP’’) based on 

trading in the underlying security on the 

last trading day prior to expiration.19 To 

calculate the VWAP, the Exchange will 

use composite prices during regular 

trading hours as reported by industry 

price vendors.20 If the security 

underlying a ByRDs contract does not 

trade or is unavailable during regular 

trading hours at expiration, the 

settlement price may be fixed pursuant 

to the OCC’s rules on a basis that the 

OCC believes is appropriate under the 

circumstances, including using the last 

sale price during regular trading hours 

on the most recent trading day for 

which a last sale price is available.21

The Exchange will publish and 

disseminate the current value of the 

VWAP calculation for ByRDs at least 

every 15 seconds throughout the last 

trading day prior to expiration. The 

Exchange will disseminate the VWAP 

settlement price as the official 

settlement price for ByRDs and will 

make it publicly available through 

various market data vendors and on the 

Exchange Web site. 

The Exchange also proposes to 

provide that the settlement price will be 

calculated such that it will always 

round up $.01 in those instances when 

the settlement price exactly equals an 

expiring strike price.22 For example, if 

the calculated settlement price is 

$20.00, and there are expiring ByRDs 

Finish High and Finish Low contracts 

with a strike price of $20.00, the 

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6910 Federal Register / Vol. 81, No. 26 / Tuesday, February 9, 2016 / Notices 

23See proposed Rule 5.86(a) and (b). 24See proposed Rule 5.94. 

25See proposed Rule 5.87. 

26See proposed Rule 5.87. In computing 

reportable ByRDs positions under Rule 6.6, ByRDs 

on underlying securities shall not be aggregated 

with non-ByRDs option contracts. See id. 

27The Exchange notes that hedge information for 

member firm and customer accounts with 200 or 

more contracts are reported electronically via the 

Large Options Position Report. In addition, the 

Exchange notes that Market Maker account 

information is reported to the Exchange by the 

member’s clearing firm. 

28See proposed Rule 5.88. 

29See proposed Rule 4.16(d)(10)(A)(i). 

30See proposed Rule 4.16(d)(10)(A)(ii). 

31See proposed Rule 4.16(d)(10)(A)(iii). 

32See proposed Rule 4.16(d)(10)(B). 

33See proposed Rule 4.16(d)(10)(A)(iv). 

34See proposed Rule 5.93. 

35See proposed Rule 5.93, Commentary .01. 

36See Rule 6.72(a)(1)–(2). 

37See Rule 6.72(a)(3). In addition, options on the 

Power Shares QQQ Trust trade at an MPV of $0.01 

for all options premiums. See id. 

38See proposed Rule 5.92. 

39See proposed Rule 6.87(c)(6). 

40See proposed Rule 6.87(d)(3)(A). 

settlement price will be rounded up to 

$20.01 so that the Finish High options 

will pay off. The effect of rounding will 

be to have long $20.00 strike Finish 

High holders receiving $100.00 and long 

$20.00 strike Finish Low holders 

receiving $0. Absent this rounding, a 

participant may potentially have a 

position that appears to guarantee a payoff of $100 at expiration, but would 

instead receive $0. For example, if an 

investor holds both a $20.00 strike 

Finish High contract and a $20.00 strike 

Finish Low contract, the investor would 

receive $0 if the settlement price was 

calculated to exactly equal the $20.00 

strike price. Although the risk of the 

settlement price equaling the strike 

price is small, the Exchange believes 

that this could cause problems both for 

hedging and explaining to investors 

what would happen in the unusual 

circumstance where the settlement price 

matched the strike price of an expiring 

ByRDs contract exactly. The Exchange 

believes this proposed rounding method 

will ensure that either the Finish High 

or the Finish Low ByRDs option 

contracts will always pay off at 

expiration. The Exchange believes this 

will result in less opportunity for 

investor confusion and less uncertainty 

for participants as a whole. 

Position and Exercise Limits of ByRDs 

The position limits for ByRDs will be 

25,000 contracts on the same side of the 

market, and positions in ByRDs will not 

be aggregated with positions in other 

options on the same underlying security 

for purposes of determining compliance 

with the position limits.23 The Exchange 

is not proposing exercise limits for 

ByRDs because ByRDs will be exercised 

automatically at expiration if the 

settlement price of the underlying 

security is greater than the strike price 

of a Finish High ByRDs or less than the 

strike price of a Finish Low ByRDs.24

ByRDs will not be subject to any 

qualified hedge exemptions from 

position limits. Positions in ByRDs must 

be reported to the Exchange when an 

account establishes an aggregate 

position on the same side of the market 

of 200 or more contracts,25 and the 

provisions of Rule 6.6, ‘‘Reporting of 

Options Positions,’’ will apply to 

ByRDs.26 Rule 6.6(b) requires that a 

member, other than an Exchange Market 

Maker, that maintains a position in 

excess of 10,000 Non-FLEX equity 

options contracts on the same side of 

the market, for its own account or the 

account of its customer, report certain 

information to the Exchange, including 

whether the position is hedged, a 

description of the hedge, and, if 

applicable, a description of the 

collateral. The Exchange believes that 

the reporting requirements under Rule 

5.87 and the surveillance procedures for 

hedged positions will enable the 

Exchange to closely monitor sizable 

ByRDs positions and corresponding 

hedges.27 The Exchange notes that Rule 

6.11 regarding Other Restrictions on 

Exchange Option Transactions and 

Exercises, shall be applicable to 

ByRDs.28

Margins 

A customer account with a long 

position in a ByRDs contract must 

initially deposit and maintain margin 

equal to at least 100% of the purchase 

price of the ByRD.29 A customer account 

with a short position in a ByRD contract 

must initially deposit and maintain 

margin equal to the exercise settlement 

amount.30 No margin is required for a 

ByRD position carried short against an 

existing long position in the same 

ByRD,31 or when the writer’s obligation 

is secured by a specific deposit or 

escrow deposit meeting the entire 

obligation under the ByRD.32 In 

addition when a Finish High ByRDs 

option is carried short in a customer’s 

account and there is also carried a short 

Finish Low ByRDs option for the same 

underlying security or instrument that 

expires at the same time and has an 

exercise price that is less than or equal 

to the exercise price of the short Finish 

High, the initial and maintenance 

margin required is the exercise 

settlement amount applicable to one 

contract.33

Bid-Ask Differentials and Minimum 

Price Variations 

A Market Maker is expected to quote 

with no more than $0.25 between the 

bid and the offer for each ByRD 

contract, except during the last trading 

day prior to expiration, when the 

maximum width may be $0.50.34 The 

Exchange may, however, establish 

permissible price differences other than 

those noted above for one or more series 

or classes of ByRDs as warranted by 

market conditions.35

Rule 6.72, ‘‘Trading Differentials,’’ 

generally provides that MPV for an 

option is: (i) $0.05 for options quoted 

under $3 a contract; and (ii) $0.10 for 

options quoted at $3 a contract or 

greater.36 For the options classes 

included in the Penny Quoting Pilot 

Program, the MPV is: (i) $0.01 for 

options quoted under $3 a contract; and 

(ii) $0.05 for options quoted at $3 a 

contract or greater.37 The Exchange 

proposes that the minimum price 

variation (‘‘MPV’’) for quoting and 

trading of ByRDs contracts will be $0.01 

for all series.38

Obvious Errors and Catastrophic Errors 

Related to the adoption of ByRDs, the 

Exchange also proposes to revise Rule 

6.87, Nullification and Adjustment of 

Options Transactions including Obvious 

Errors, to include a new subsection 

(c)(6) that addresses the handling of 

transactions in ByRDs option contracts 

that are subject to the Obvious Error 

provisions of Rule 6.87. Proposed Rule 

6.87(c)(6) provides that any transaction 

in a ByRDs contract that is higher or 

lower than the Theoretical Price by 

$0.25 or more shall be deemed an 

obvious error, subject to the adjustment 

procedures of Rule 6.87(c)(4), unless 

such adjustment would result in a price 

higher than $1.02, in which case the 

adjustment price shall be $1.02.39 As 

ByRDs will either pay $0 or $100 at 

expiration, a single ByRDs contract 

should not have a value greater than 

$1.00, therefore the Exchange believes 

that any adjustment under the 

provisions of the Obvious Error rule 

should be capped at a price no higher 

than $1.02. The Exchange also proposes 

to amend Rule 6.87(d)(3) to add a 

reference to proposed paragraph 

(d)(3)(A). The Exchange also proposes to 

amend Rule 6.87(d) to state that 

transactions in ByRDs contracts over 

$1.02 shall qualify as catastrophic errors 

if participants request a review under 

the existing provisions of paragraph 

(d)(2).40 Transactions in ByRDs 

contracts that qualify as catastrophic 

errors will be adjusted in accordance 

with the procedures of proposed 

paragraph (d)(3)(A), which states that 

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41See proposed Rule 6.87(d)(3)(A). 

42See Rule 6.87 (c)(6). 

43The Exchange notes that ByRDs contracts were 

outside of the scope of the industry wide effort to 

harmonize Obvious and Catastrophic Error rules, 

and the proposed change therefore does not impact 

the harmonization effort. See Securities Exchange 

Act Release No. 74920 (May 8, 2015), 80 FR 27816, 

27822 (May 14, 2015) (SR–NYSEMKT–2015–39). 

44 15 U.S.C. 78f(b). 

45 15 U.S.C. 78f(b)(5). 

46See supra n. 4. 

47See supra n. 4, 72 FR at 46524 (Order 

approving listing of Fixed Return Options, later 

renamed ByRDs). 

48 15 U.S.C. 78f(b)(8). 

49See supra n. 4. 

any transaction in ByRDs that is higher 

or lower than the Theoretical Price by 

$.50 or more shall be deemed a 

Catastrophic Error, subject to the 

adjustment procedures of paragraph 

(d)(3) unless such adjustment would 

result in a price higher than $1.02, in 

which case the adjustment price shall be 

$1.02.41 Thus, as proposed, the 

transaction would only be adjusted to 

$1.02 if the adjustment would result in 

a price greater than $1.02. As ByRDs 

will either pay $0 or $100 at expiration, 

a single ByRDs contract should not have 

a value greater than $1.00, therefore the 

Exchange believes that any adjustment 

under the provisions of the Catastrophic 

Error rule should be capped at a price 

no higher than $1.02. Capping the 

adjustment price at $1.02 for 

Catastrophic Errors involving ByRDs 

options is consistent with the 

adjustment process for obvious errors 

involving ByRDs option, which are also 

capped at $1.02.42 The proposed change 

would ensure that ByRDs trades that are 

deemed Catastrophic Errors are 

appropriately adjusted.43

Trading Halts and Suspensions of 

Binary Return Derivatives 

The Exchange also proposes to adopt 

Rule 5.95 to make clear that the 

Exchange would halt or suspend trading 

for a ByRDs contract to the same extent 

that it halts or suspends trading under 

Rule 6.65 in an option contract on the 

same underlying security. In other 

words, trading in ByRDs contracts 

would be treated the same as other 

options contracts in the event that 

trading in options contracts is halted or 

suspended on the same underlying 

security. 

Implementation 

The Exchange proposes to announce 

the implementation of the proposed rule 

change via Trader Update. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 44 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 45

in particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

As noted above, this proposal is 

designed to mirror the approved ByRDs 

rules that are in place on NYSE MKT, 

a competing options exchange.46 The 

Exchange believes that introducing 

ByRDs would provide investors with a 

potentially useful investment choice 

that is already available on NYSE MKT, 

which aids in perfecting the mechanism 

of a free and open market and a national 

market system. In addition, and 

consistent with the Commission’s 

findings when approving for listing 

ByRDs on NYSE MKT, listing ByRDs on 

Arca, ‘‘will extend to certain binary 

options the benefits of a listed exchange 

market, which include: A centralized 

forum for price discovery; pre- and posttrade transparency; standardized 

contract specifications; and the 

guarantee of the OCC.’’ 47

The Exchange believes that the 

proposed changes to the obvious and 

catastrophic error rule (i.e., Rule 6.87) 

are consistent with the Act as they 

would protect investors and the public 

interest by providing certainty about 

how obvious and catastrophic errors in 

ByRDs would be treated. Specifically, 

the new provisions in the obvious and 

catastrophic error rule describe how to 

determine whether transactions in 

ByRDs contracts should be treated as 

errors and, if so, how they should be 

adjusted and the maximum adjustment 

price for such errors. The new 

provisions still require that the 

transactions be erroneous, as provided 

in Rule 6.87, and set forth specific 

criteria and procedures for the handling 

of such errors. The Exchange believes 

the specific and objective criteria to 

determine how and when to adjust 

transactions involving obvious or 

catastrophic errors provides certainty to 

market participants and reduces 

potential confusion, which serves to 

protect investors and the public interest. 

The Exchange also believes that the 

proposed rule to make clear that ByRDs 

would be treated the same as other 

options contracts, in the event of a 

trading halt or suspension, would 

remove impediments to, and perfect the 

mechanisms of, a free and open market 

because it would add clarity and 

transparency to Exchange rules. 

Moreover, this proposed change would 

ensure consistent treatment of ByRDs 

contracts in the event of a halt or 

suspension of trading in options 

contracts on the same underlying 

security. 

Finally, the Exchange has in place an 

adequate surveillance program to 

monitor trading in ByRDs and intends to 

largely apply its existing surveillance 

program for options to the trading of 

ByRDs. The Exchange also has the 

necessary systems capacity to support 

the new options series that would result 

from the introduction of ByRDs. In 

addition, (ii) the Exchange and the 

Options Price Reporting Authority 

(‘‘OPRA’’) have the necessary systems 

capacity to handle additional traffic 

associated with the listing and trading 

of ByRDs. The OCC has represented that 

it is able to accommodate the clearing 

and settlement of ByRDs contracts. 

Finally, the Exchange will monitor any 

increased trading volume associated 

with the listing of new series of ByRDs 

and will analyze the effect, if any, that 

the additional volume has on the 

capacity of the Exchange’s, OPRA’s, and 

the OCC’s automated systems. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,48 the Exchange does not believe 

that the proposed rule change would 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

To the contrary, the Exchange believes 

that the proposal will enhance 

competition by introducing a potentially 

useful investment choice, which is 

already available on competing options 

exchanges.49

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the proposed rule change 

does not (i) significantly affect the 

protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

mstockstill on DSK4VPTVN1PROD with NOTICES

6912 Federal Register / Vol. 81, No. 26 / Tuesday, February 9, 2016 / Notices 

50 15 U.S.C. 78s(b)(3)(A). 

51 17 CFR 240.19b–4(f)(6). As required under Rule 

19b–4(f)(6)(iii), the Exchange provided the 

Commission with written notice of its intent to file 

the proposed rule change, along with a brief 

description and the text of the proposed rule 

change, at least five business days prior to the date 

of filing of the proposed rule change. 52 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 Nos. 75556 

(July 30, 2015), 80 FR 46628 (SR–NYSE–2015–31) 

and 75559 (July 30, 2015), 80 FR 46642 (SR– 

NYSEMKT–2015–56). 

4Letter from Eric S. Hunsader, Nanex, LLC, dated 

August 14, 2015; Letter from John Ramsay, Chief 

Market Policy Officer, IEX Group, Inc., to Brent J. 

Fields, Secretary, Commission, dated August 20, 

2015; Letter from Lorenzo Ferlazzo, Acquaequity to 

the Commission, dated October 1, 2015; Elliot 

Grossman, Managing Director, Dinosaur Securities, 

LLC, to Brent J. Fields, Secretary, Commission, 

dated October 13, 2015; Melissa MacGregor, 

Managing Director and Associate General Counsel, 

SIFMA, to Brent J. Fields, Secretary, Commission, 

dated October 14, 2015; Elizabeth K. King, General 

Counsel and Corporate Secretary, NYSE, to Brent J. 

Fields, Secretary, Commission, dated November 12, 

2015. 

5See Securities Exchange Act Release No. 75937, 

80 FR 57408 (Sept. 23, 2015). 

19(b)(3)(A) of the Act 50 and Rule 19b– 

4(f)(6) thereunder.51

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 

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– 

NYSEArca–2016–16 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–NYSEArca–2016–16. 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– 

NYSEArca–2016–16, and should be 

submitted on or before March 1, 2016. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.52

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2016–02439 Filed 2–8–16; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Closed Meeting 

on Thursday, February 11, 2016 at 2:00 

p.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or her designee, has 

certified that, in her opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) 

and 17 CFR 200.402(a)(3), (5), (7), 9(ii) 

and (10), permit consideration of the 

scheduled matter at the Closed Meeting. 

Chair White, as duty officer, voted to 

consider the items listed for the Closed 

Meeting in closed session. 

The subject matter of the Closed 

Meeting will be: 

Institution and settlement of injunctive 

actions; 

Institution and settlement of 

administrative proceedings; and 

Other matters relating to enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted or postponed, please 

contact the Office of the Secretary at 

(202) 551–5400. 

Dated: February 4, 2016. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2016–02600 Filed 2–5–16; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–77047; File Nos. SR–NYSE– 

2015–31 and SR–NYSEMKT–2015–56] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; NYSE MKT 

LLC; Notice of Withdrawal of Proposed 

Rule Changes Amending the NYSE 

Trades Market Data and NYSE MKT 

Trades Market Data Product Offerings 

February 3, 2016. 

On July 16, 2015, New York Stock 

Exchange LLC (‘‘NYSE’’) and, on July 

24, 2015, NYSE MKT LLC (‘‘NYSE 

MKT’’) (together with NYSE, the 

‘‘Exchanges’’) each filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) pursuant to Section 

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

of 1934 (‘‘Act’’) 1 and Rule 19b-4 

thereunder,2 proposed rule changes to 

amend, respectively, the NYSE Trades 

market data and NYSE MKT Trades 

market data product offerings. The 

proposed rule changes were published 

for comment in the Federal Register on 

August 5, 2015.3 Six comments on the 

proposals were received.4 On September 

17, 2015, the Commission issued an 

order instituting proceedings to 

determine whether to disapprove the 

proposed rule changes.5 On November 

16, 2015, the Exchanges withdrew the 

mstockstill on DSK4VPTVN1PROD with NOTICES