37626 Federal Register / Vol. 82, No. 154 / Friday, August 11, 2017 / Notices 

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

11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of its intent to file the 

proposed rule change, along with a brief description 

and text of the proposed rule change, at least five 

business days prior to the date of filing of the 

proposed rule change, or such shorter time as 

designated by the Commission. The Exchange has 

satisfied this requirement. 12 17 CFR 200.30–3(a)(12). 

adding clarity as to which rules are 

operative and when, thereby reducing 

potential confusion, and making the 

Exchange’s rules easier to navigate. The 

Exchange also believes that eliminating 

obsolete material from its rulebook also 

removes impediments to and perfects 

the mechanism of a free and open 

market by removing confusion that may 

result from having obsolete material in 

the Exchange’s rulebook. The Exchange 

believes that eliminating such obsolete 

material would not be inconsistent with 

the public interest and the protection of 

investors because investors will not be 

harmed and in fact would benefit from 

increased transparency, thereby 

reducing potential confusion. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

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. The 

proposed change is not designed to 

address any competitive issue but rather 

facilitate the industry’s transition to a 

T+2 regular-way settlement cycle. The 

Exchange also believes that the 

proposed rule change will serve to 

promote clarity and consistency, 

thereby reducing burdens on the 

marketplace and facilitating investor 

protection. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (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 

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 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–2017–82 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–2017–82. 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– 

NYSEARCA–2017–82 and should be 

submitted on or before September 1, 

2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–16928 Filed 8–10–17; 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 an Open Meeting 

on Tuesday, August 15, 2017 at 1:00 

p.m., in the Auditorium (L–002) at the 

Commission’s headquarters building, to 

hear oral argument in an appeal from an 

initial decision of an administrative law 

judge by respondents Frank H. 

Chiappone, Andrew G. Guzzetti, 

William F. Lex, Thomas E. Livingston, 

Brian T. Mayer, and Philip S. 

Rabinovich, formerly registered 

representatives associated with former 

broker-dealer McGinn, Smith & Co., Inc. 

On February 25, 2015, the ALJ found 

that Chiappone, Lex, Livington, Mayer, 

and Rabinovich violated antifraud 

provisions of the federal securities laws 

by recommending that customers 

purchase securities without conducting 

a reasonable investigation into the 

offerings as well as provisions of the 

securities laws prohibiting unregistered 

offers and sales of securities. The ALJ 

barred or suspended these respondents 

from certain associations in the 

securities industry and ordered them to 

pay third-tier civil money penalties, to 

pay disgorgement of commissions 

received for their sales in violation of 

the antifraud provisions plus 

prejudgment interest, and to cease and 

desist from further violations of the 

securities laws. The ALJ found that 

Guzzetti failed reasonably to supervise 

the other respondents, ordered him to 

pay a third-tier civil money penalty, and 

suspended him from association in 

certain capacities in the securities 

industry. 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
Federal Register / Vol. 82, No. 154 / Friday, August 11, 2017 / Notices 37627 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 34– 

74896 (May 7, 2015); 80 FR 27373 (May 13, 2015) 

(SR–ISE–2015–18) (the ‘‘Initial Filing’’). 

4See Securities Exchange Act Release No. 34– 

81084 (July 6, 2017) (granting approval of Bats BZX 

proposal), 82 FR 32216 (July 12, 2017); 82 FR 23684 

(May 23, 2017) (SR–BatsBZX–2017–035) (notice of 

filing of Bats BZX proposal). 

Respondents appealed the ALJ’s 

findings of liability and the sanctions 

imposed to the Commission. The issues 

likely to be considered at oral argument 

include, among other things, whether 

the findings of liability should be 

sustained, and what sanctions, if any, 

are appropriate in the public interest, as 

well as respondents’ arguments that the 

proceeding violated various 

Constitutional, statutory, and regulatory 

requirements. 

For further information, please 

contact Brent J. Fields from the Office of 

the Secretary at (202) 551–5400. 

Dated: August 8, 2017. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2017–17070 Filed 8–9–17; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81322; File No. SR–ISE– 

2017–76] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 720, 

Nullification and Adjustment of 

Options Transactions Including 

Obvious Errors 

August 7, 2017. 

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 July 26, 

2017, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rule 720, Nullification and Adjustment 

of Options Transactions including 

Obvious Errors. 

While these amendments are effective 

upon filing, the Exchange has 

designated the proposed amendments to 

be operative on a date that is within 

ninety (90) days after the Commission 

approved a similar proposal filed by 

Bats BZX on July 6, 2017. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at www.ise.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 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange and other options 

exchanges recently adopted a new, 

harmonized rule related to the 

adjustment and nullification of 

erroneous options transactions, 

including a specific provision related to 

coordination in connection with largescale events involving erroneous 

options transactions.3 The Exchange 

believes that the changes the options 

exchanges implemented with the new, 

harmonized rule have led to increased 

transparency and finality with respect to 

the adjustment and nullification of 

erroneous options transactions. 

However, as part of the initial initiative, 

the Exchange and other options 

exchanges deferred a few specific 

matters for further discussion. 

Specifically, as described in the Initial 

Filing, the Exchange and all other 

options exchanges have been working to 

further improve the review of 

potentially erroneous transactions as 

well as their subsequent adjustment by 

creating an objective and universal way 

to determine Theoretical Price in the 

event a reliable NBBO is not available. 

Because this initiative required 

additional exchange and industry 

discussion as well as additional time for 

development and implementation, the 

Exchange and the other options 

exchanges determined to proceed with 

the Initial Filing and to undergo a 

secondary initiative to complete any 

additional improvements to the 

applicable rule. In this filing, the 

Exchange proposes to adopt procedures 

that will lead to a more objective and 

uniform way to determine Theoretical 

Price in the event a reliable NBBO is not 

available. In addition to this change, the 

Exchange has proposed two additional 

minor changes to its rules. The 

Exchange’s proposal mirrors that of Bats 

BZX, which the Exchange [sic] 

approved on July 6, 2017,4 and those 

that the other options exchanges intend 

to file, except that it omits the section 

of the proposal that pertains to trading 

halts due to the fact that the 

Supplementary Material to Exchange 

Rule 702 already includes the 

applicable language. 

Calculation of Theoretical Price Using a 

Third Party Provider 

Under the harmonized rule, when 

reviewing a transaction as potentially 

erroneous, the Exchange needs to first 

determine the ‘‘Theoretical Price’’ of the 

option, i.e., the Exchange’s estimate of 

the correct market price for the option. 

Pursuant to Rule 720, if the applicable 

option series is traded on at least one 

other options exchange, then the 

Theoretical Price of an option series is 

the last national best bid (‘‘NBB’’) just 

prior to the trade in question with 

respect to an erroneous sell transaction 

or the last national best offer (‘‘NBO’’) 

just prior to the trade in question with 

respect to an erroneous buy transaction 

unless one of the exceptions described 

below exists. Thus, whenever the 

Exchange has a reliable NBB or NBO, as 

applicable, just prior to the transaction, 

then the Exchange uses this NBB or 

NBO as the Theoretical Price. 

The Rule also contains various 

provisions governing specific situations 

where the NBB or NBO is not available 

or may not be reliable. Specifically, the 

Rule specifies situations in which there 

are no quotes or no valid quotes for 

comparison purposes, when the 

national best bid or offer (‘‘NBBO’’) is 

determined to be too wide to be reliable, 

and at the open of trading on each 

trading day. In each of these 

circumstances, in turn, because the NBB 

or NBO is not available or is deemed to 

be unreliable, the Exchange determines 

Theoretical Price. Under the current 

Rule, when determining Theoretical 

Price, Exchange personnel generally 

consult and refer to data such as the 

prices of related series, especially the 

closest strikes in the option in question. 

Exchange personnel may also take into 


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