Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Notices 69903 

8See supra n. 4. 

9 15 U.S.C. 78s(b)(3)(A)(iii). 

10 17 CFR 240.19b–4(f)(6). 

11The Exchange has satisfied this requirement. 

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

13 17 CFR 240.19b–4(f)(6). 

14 Id. 

15 17 CFR 240.19b–4(f)(6)(iii). 

16 15 U.S.C. 78s(b)(3)(A). 

17 17 CFR 240.19b–4(f)(6). 

18For purposes only of accelerating the operative 

date of this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

19 15 U.S.C. 78s(b)(2)(B). 

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

that has been previously filed with the 

Commission.8

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 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 9 and Rule 

19b–4(f)(6) thereunder.10 Because the 

foregoing proposed rule 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, provided that the selfregulatory organization has given the 

Commission written notice of its intent 

to file 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,11 the proposed rule 

change has become effective pursuant to 

Section 19(b)(3)(A) of the Act 12 and 

Rule 19b–4(f)(6) thereunder.13

A proposed rule change filed under 

Rule 19b–4(f)(6) 14 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b4(f)(6)(iii),15 the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. The 

Exchange has requested that the 

Commission waive the 30-day delayed 

operative date so that the proposed rule 

change may become effective and 

operative upon filing with the 

Commission pursuant to Section 

19(b)(3)(A) of the Act 16 and Rule 19b– 

4(f)(6)17 thereunder. The Commission 

believes that the proposal raises no 

novel issues and that adding the 

description of the categories of market 

data recipients for non-display use to 

the Market Data Fee Schedule is 

consistent with the protection of 

investors and the public interest 

because it will provide more 

transparency in the Exchange’s Market 

Data Fee Schedule regarding the 

existing definitions in that schedule. 

Based on the foregoing, the Commission 

has determined to waive the 30-day 

operative date so that the proposal may 

take effect upon filing.18

At any time within 60 days of the 

filing of such 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 

under Section 19(b)(2)(B) 19 of the Act 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–2014–132 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–2014–132. 

This file number should be included on 

the subject line if email is used. To help 

the Commission process and review 

your comments more efficiently, please 

use only one method. The Commission 

will post all comments on the 

Commission’s Internet Web site (http:// 

www.sec.gov/rules/sro.shtml). Copies of 

the submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

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

filing will also be available for 

inspection and copying at the NYSE’s 

principal office and on its Internet Web 

site at www.nyse.com. 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–2014–132 and should be 

submitted on or before December 15, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–27697 Filed 11–21–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73624; File No. SR–CBOE– 

2014–086] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change to Extend the Penny Pilot 

Program through June 30, 2015 

November 18, 2014. 

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 November 

12, 2014, Chicago Board Options 

Exchange, Incorporated (the ‘‘Exchange’’ 

or ‘‘CBOE’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

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

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


asabaliauskas on DSK5VPTVN1PROD with NOTICES
69904 Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Notices 

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

4 17 CFR 240.19b–4(f)(6). 

5The month immediately preceding a 

replacement class’s addition to the Pilot Program 

(i.e. December) would not be used for purposes of 

the six-month analysis. Thus, a replacement class 

to be added on the second trading day following 

January 1, 2015 would be identified based on The 

Option Clearing Corporation’s trading volume data 

from June 1, 2014 through November 30, 2014. 6See Securities Exchange Act Release No. 60864 

(October 22, 2009), 74 FR 55876 (October 29, 2009) 

(SR–CBOE–2009–76). 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

9 Id. 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(6). 

the Act 3 and Rule 19b–4(f)(6) 

thereunder.4 The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

CBOE proposes to amend Rule 6.42 by 

extending the Penny Pilot Program 

through June 30, 2015. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

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

CBOELegalRegulatoryHome.aspx), at 

the Exchange’s Office of the Secretary, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Penny Pilot Program (the ‘‘Pilot 

Program’’) is scheduled to expire on 

December 31, 2014. CBOE proposes to 

extend the Pilot Program until June 30, 

2015. CBOE believes that extending the 

Pilot Program will allow for further 

analysis of the Pilot Program and a 

determination of how the Pilot Program 

should be structured in the future. 

During this extension of the Pilot 

Program, CBOE proposes that it may 

replace any option class that is currently 

included in the Pilot Program and that 

has been delisted with the next most 

actively traded, multiply listed option 

class that is not yet participating in the 

Pilot Program (‘‘replacement class’’). 

Any replacement class would be 

determined based on national average 

daily volume in the preceding six 

months,5 and would be added on the 

second trading day following January 1, 

2015. CBOE will employ the same 

parameters to prospective replacement 

classes as approved and applicable in 

determining the existing classes in the 

Pilot Program, including excluding 

high-priced underlying securities.6

CBOE will announce to its Trading 

Permit Holders by circular any 

replacement classes in the Pilot 

Program. 

CBOE is specifically authorized to act 

jointly with the other options exchanges 

participating in the Pilot Program in 

identifying any replacement class. 

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.7 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 8 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 facilitation 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) 9 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

In particular, the proposed rule change 

allows for an extension of the Pilot 

Program for the benefit of market 

participants. 

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 Program, the 

proposed rule change will allow for 

further analysis of the Pilot Program and 

a determination of how the Program 

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. In 

addition, the Exchange has been 

authorized to act jointly in extending 

the Pilot Program and believes the other 

exchanges will be filing similar 

extensions. 

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 

Because the foregoing proposed rule 

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, 

provided that the self-regulatory 

organization has given the Commission 

written notice of its intent to file 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, the proposed rule change 

has become effective pursuant to 

Section 19(b)(3)(A) of the Act 10 and 

Rule 19b–4(f)(6) thereunder.11

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 226 / Monday, November 24, 2014 / Notices 69905 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The proposed rule change reflects proposed 

amendments to FINRA’s equity research rules set 

forth in a companion filing to the proposed rule 

change (the ‘‘equity research filing’’). See Exchange 

Act Rel. No. 34–[] (Nov. 17, 2014) (SR–FINRA– 

2014–047). 

4See 15 U.S.C. 78c(a)(11). 

5 In contrast to FINRA’s current research rules, 

SEC Regulation Analyst Certification (‘‘Regulation 

AC’’), the SEC’s primary vehicle to foster objective 

and transparent research, applies to both debt and 

equity research. See 17 CFR 242.500 et seq. 

6NASD Rule 1050 (Registration of Research 

Analysts) and Incorporated NYSE Rule 344 

(Research Analysts and Supervisory Analysts) 

require any person associated with a member and 

who functions as a research analyst to be registered 

as such and pass the Series 86 and 87 exams, unless 

an exemption applies. FINRA is considering 

whether debt research analysts also should be 

subject to the same or a similar qualification 

requirement. 

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–2014–086 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–2014–086. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml ). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549, on official 

business days between the hours of 

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

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–CBOE– 

2014–086 and should be submitted on 

or before December 15, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–27702 Filed 11–21–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73623; File No. SR–FINRA– 

2014–048] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of a 

Proposed Rule Change To Adopt 

FINRA Rule 2242 (Debt Research 

Analysts and Debt Research Reports) 

November 18, 2014. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on November 

14, 2014, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

prepared by FINRA. 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 

FINRA is proposing to adopt new 

FINRA Rule 2242 (Debt Research 

Analysts and Debt Research Reports) to 

address conflicts of interest relating to 

the publication and distribution of debt 

research reports. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, at the principal 

office of FINRA 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, 

FINRA 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. FINRA has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Background 

The proposed rule change would 

adopt FINRA Rule 2242 to address 

conflicts of interest relating to the 

publication and distribution of debt 

research reports. Proposed FINRA Rule 

2242 would adopt a tiered approach 

that, in general, would provide retail 

debt research recipients with extensive 

protections similar to those provided to 

recipients of equity research under 

current and proposed FINRA rules, with 

modifications to reflect differences in 

the trading of debt securities.3

Currently, FINRA’s research rules, 

NASD Rule 2711 (Research Analysts 

and Research Reports) and Incorporated 

NYSE Rule 472 (Communications with 

the Public) (the ‘‘equity research rules’’), 

set forth requirements to foster 

objectivity and transparency in equity 

research and provide investors with 

more reliable and useful information to 

make investment decisions. The equity 

research rules apply only to research 

reports that include analysis of an 

‘‘equity security,’’ as that term is 

defined under the Exchange Act,4

subject to certain exceptions.5 The 

equity research rules were intended to 

restore public confidence in the 

objectivity of research and the veracity 

of research analysts, who are expected 

to function as unbiased intermediaries 

between issuers and the investors who 

buy and sell those issuers’ securities.6

The integrity of research had eroded due 

to the pervasive influences of 

investment banking and other conflicts 

during the market boom of the late 

1990s. 

In general, the equity research rules 

require disclosure of conflicts of interest 


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