Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 43629 

18 15 U.S.C. 78s(b)(3)(A)(ii). 

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. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) 18 of the Act. 

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 

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– 

IEX–2017–29 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–IEX–2017–29. 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–IEX– 

2017–29, and should be submitted on or 

before October 10, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–19811 Filed 9–15–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81586; File No. SR–CBOE– 

2017–059] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating to the On-Floor 

Lead Market-Maker Program 

September 12, 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 August 

31, 2017, Chicago Board Options 

Exchange, Incorporated (the ‘‘Exchange’’ 

or ‘‘CBOE’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

On-Floor Lead Market-Maker (‘‘LMM’’) 

program. The text of the proposed rule 

change is provided below. 

(additions are italicized; deletions are 

[bracketed]) 

* * * * * 

Chicago Board Options Exchange, 

Incorporated 

Rules 

* * * * * 

Rule 8.15. Lead Market-Makers 

(a) No change. 

(b) LMM Obligations: Each LMM must 

fulfill all the obligations of a MarketMaker under the Rules and satisfy each 

of the following requirements: 

(i) Provide continuous electronic 

quotes (as defined in Rule 1.1 (ccc)) in 

at least the lesser of 99% of the nonadjusted option series or 100% of the 

non-adjusted option series minus one 

call-put pair, with the term ‘‘call-put 

pair’’ referring to one call and one put 

that cover the same underlying 

instrument and have the same 

expiration date and exercise price. This 

obligation does not apply to intra-day 

add-on series on the day during which 

such series are added for trading. 

Compliance with this quoting obligation 

applies to all of an LMM’s appointed 

classes on each platform collectively. 

The Exchange will determine 

compliance by an LMM with this 

quoting obligation on a monthly basis. 

However, determining compliance with 

this obligation on a monthly basis does 

not relieve an LMM from meeting this 

obligation on a daily basis, nor does it 

prohibit the Exchange from taking 

disciplinary action against an LMM for 

failing to meet this obligation each 

trading day. In option classes in which 

both an On-Floor LMM and an Off-Floor 

DPM or Off-Floor LMM have been 

appointed, the On-Floor LMM will not 

be obligated to comply with this 

paragraph (b)(i) and instead will be 

obligated to comply with the obligations 

of Market-Makers in Rule 8.7(d). In an 

option class in which the Exchange 

appointed an On-Floor LMM that has 

open-outcry obligations only, that OnFloor LMM will not be obligated to 

comply with this paragraph (b)(i) and 

instead will be obligated to comply with 

the obligations of Market-Makers in Rule 

8.7(d) and have a designee in the class’s 

crowd on the trading floor for the entire 

trading day (except for a de minimis 

amount of time); 

(ii)–(iv) No change. 

(v) enter opening quotes within one 

minute of the initiation of an opening 

rotation in any series that is not open 

due to the lack of a quote (see Rule 

6.2B(d)(i)(A) or (ii)(A)) and participate 

in other rotations described in Rule 6.2B 

(including the modified opening 

rotation set forth in Interpretation and 

Policy .01) or 24.13, as applicable. In 

option classes in which both an OnFloor LMM and an Off-Floor DPM or 


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3 See Rule 8.15(d). 

4 Generally, LMMs and DPMs must provide 

continuous electronic quotes (for 90% of the time) 

in at least the lesser of 99% of the non-adjusted 

series or 100% of the non-adjusted series minus one 

call-put pair, while Market-Makers must provide 

continuous electronic quotes (for 90% of the time) 

in at least 60% of the series in their appointed 

classes. 

Off-Floor LMM have been appointed, 

the obligation set forth in this paragraph 

(b)(v) will be that of the Off-Floor DPM 

or Off-Floor LMM and not the On-Floor 

LMM. In an option class in which the 

Exchange appointed an On-Floor LMM 

that has open-outcry obligations only, 

that On-Floor LMM will not be obligated 

to comply with this paragraph (b)(v); 

(vi)–(viii) No change. 

(c)–(d) No change. 

. . . Interpretations and Policies: 

.01 An LMM generally will operate 

on CBOE’s trading floor (‘‘On-Floor 

LMM’’). However, as provided below, 

an LMM can request that the Exchange 

authorize the LMM to function remotely 

away from CBOE’s trading floor (‘‘OffFloor LMM’’) on a class-by-class basis. 

(a)–(b) No change. 

(c) Notwithstanding Rule 8.15(a)[,]: (i) 

in an option class in which an Off-Floor 

LMM or Off-Floor DPM has been 

appointed in accordance with this Rule 

8.15 or Rule 8.83, as applicable, the 

Exchange in its discretion may also 

appoint an On-Floor LMM, which will 

be eligible to receive a participation 

entitlement under this Rule 8.15 with 

respect to orders represented in open 

outcry; and (ii) in a class in which the 

Exchange does not grant an electronic 

participation entitlement pursuant to 

Rule 6.45(a)(ii) and in which the 

Exchange did not appoint an Off-Floor 

LMM or Off-Floor DPM, the Exchange 

may appoint an On-Floor LMM that has 

open-outcry obligations only. If the 

Exchange in its discretion determines to 

reallocate a class in which an Off-Floor 

LMM or Off-Floor DPM has been 

appointed, the On-Floor LMM 

appointment will automatically 

terminate. 

.02–.04 No change. 

* * * * * 

The text of the proposed rule change 

is also 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 Exchange proposes to amend the 

On-Floor LMM program. Currently, Rule 

8.15, Interpretation and Policy .01 

permits an LMM that is approved to 

operate as an Off-Floor LMM in one or 

more classes can request the Exchange 

authorize it to operate as an On-Floor 

LMM in those classes. Additionally, in 

an option class in which an Off-Floor 

LMM or Off-Floor Designated Primary 

Market-Maker (‘‘DPM’’) has been 

appointed in accordance with Rule 8.15 

or Rule 8.83, respectively, the Exchange 

in its discretion may appoint an OnFloor LMM (which may be the same 

firm or different firm serving as the OffFloor LMM or Off-Floor DPM), which 

will be eligible to receive a participation 

entitlement under Rule 8.15 with 

respect to orders represented in open 

outcry. Pursuant to Rule 8.15(b), in an 

option class in which both an On-Floor 

LMM and an Off-Floor DPM or Off-Floor 

LMM have been appointed, the OnFloor LMM will not be obligated to 

comply with the continuous electronic 

quoting obligation in subparagraph (i) or 

opening quoting obligation in 

subparagraph (v) (the Off-Floor LMM or 

Off-Floor DPM would be required to 

comply with those quoting obligations). 

Pursuant to Rule 6.45(a)(ii), which 

permits the exchange to determine, on 

a class-by-class basis, certain priority 

overlays, including participation 

entitlements to LMMs (as well as DPMs 

and Preferred Market-Makers). The 

Exchange may grant an LMM a 

participation entitlement only if it has 

applied the priority customer overlay. 

LMMs operating on the trading floor 

may also receive a participation 

entitlement.3 In exchange for eligibility 

to receive a participation entitlement, 

LMMs must, among other things, satisfy 

a heightened quoting obligation.4 If the 

Exchange does not grant an electronic 

participation entitlement to a class, 

currently an LMM that operates off the 

floor is required to continue to satisfy 

the heightened electronic quoting 

obligation under the rules, even though 

it does not receive the benefit of an 

electronic participation entitlement 

(although it would continue to receive 

an open outcry participation entitlement 

if it also operates on the floor). 

Therefore, under current Rules, the 

Exchange may appoint an On-Floor 

LMM in a class if there is also an OffFloor LMM or Off-Floor DPM in that 

class (which, as noted above, the same 

firm or different firms may be operating 

as the On-Floor LMM and Off-Floor 

LMM or Off-Floor DPM). Additionally, 

the Rules provide an On-Floor LMM 

does not have to satisfy heightened 

electronic quoting standards if there is 

also an Off-Floor LMM or Off-Floor 

DPM in that class, who must satisfy 

those standards. However, the Rules do 

not expressly contemplate the Exchange 

appointing an On-Floor LMM in a class 

if it has not appointed an Off-Floor DPM 

or Off-Floor LMM in that class. 

Additionally, current Rules do not 

explicitly permit the Exchange to not 

impose a heightened electronic quoting 

obligation on an On-Floor LMM if there 

is no Off-Floor LMM or Off-Floor DPM 

(in other words, if the Exchange were to 

appoint an On-Floor LMM who operates 

only on the floor, and no Off-Floor LMM 

or Off-Floor DPM, the On-Floor LMM 

would still be required to satisfy 

heightened quoting standards). The 

proposed rule change explicitly states 

the Exchange may appoint an On-Floor 

LMM in a class, under specific 

circumstances (as further discussed 

below), even if there is no Off-Floor 

LMM or Off-Floor DPM in that class, 

which On-Floor LMM must satisfy 

certain floor-based obligations and is 

eligible for an open outcry participation 

entitlement, but will not have to satisfy 

heightened electronic quoting 

obligations and will not be eligible for 

an electronic participation entitlement. 

The proposed rule change merely 

expands the Exchange’s flexibility with 

respect to appointing On-Floor LMMs in 

a circumstance not currently 

contemplated in the Rules—in classes in 

which it has not appointed an Off-Floor 

DPM or Off-Floor LMM—and specifies 

the obligations and entitlement in such 

a circumstance. 

Specifically, the Exchange proposes to 

amend Rule 8.15, Interpretation and 

Policy .01 to permit the Exchange to 

appoint an On-Floor LMM to operate 

only on the trading floor with openoutcry obligations only in a class in 

which the Exchange appointed no OffFloor LMM or Off-Floor DPM and does 

not grant an electronic participation 

entitlement pursuant to Rule 6.45(a)(ii) 

(in addition to classes in which the 

Exchange has appointed an Off-Floor 


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5The Exchange may remove an On-Floor LMM in 

accordance with Rule 8.15 in the same manner as 

it may remove any other LMM appointed pursuant 

to Rule 8.15, including current On-Floor LMMs. 

6For example, a de minimis time period may be 

the brief time during which a designee leaves the 

trading floor to purchase a beverage. 

7 See Rule 6.45(b)(i). 

8 If an On-Floor LMM has no designee on the 

trading floor at any time during the trading day, it 

could not receive an entitlement, as there is no one 

present to participate on any trade during that time. 

On-Floor LMMs may have multiple designees in the 

trading crowd. 

9Exchange regulatory staff are present on the 

trading floor and may detect violations of this 

obligation. Additionally, pursuant to Rule 17.2(a), 

Trading Permit Holders (including those in a 

trading crowd) may submit complaints to the 

Regulatory Division alleging violations of this 

obligation. 

10See Rule 8.15(a)(i) (a factor to be considered by 

the Exchange when selecting LMMs includes 

presence in the trading crowd). 11 15 U.S.C. 78f(b). 12 15 U.S.C. 78f(b)(5). 13 Id. 

DPM or LMM).5 The proposed rule 

change also amends Rule 8.15(b)(i) and 

(v) to provide an On-Floor LMM with 

open-outcry obligations only will not be 

obligated to comply with the continuous 

electronic quoting obligation in 

subparagraph (i) or opening quoting 

obligation in subparagraph (v), but must 

comply with the obligations of MarketMakers in Rule 8.7(d) and have a 

designee in the class’s crowd on the 

trading floor for the entire trading day 

(except for a de minimis amount of 

time).6

The Exchange believes it is reasonable 

for an On-Floor LMM with open-outcry 

obligations only to be eligible for an 

open outcry entitlement, because 

priority customer orders in the book 

always receive priority over in-crowd 

market participants, including LMMs 

who may be eligible for an open outcry 

entitlement. Additionally, as proposed, 

the On-Floor LMM must satisfy the 

proposed heightened standard to be in 

the crowd for the entire trading day to 

be eligible for the open outcry 

entitlement.7 The Exchange believes 

this standard is reasonable, as it 

understands On-Floor LMMs currently 

have designees present on the floor 

during the entire trading, because a 

designee must be present to participate 

in open outcry trades and receive open 

outcry participation entitlements on 

trades.8

If the Exchange eliminates an 

electronic participation entitlement 

from a class, the Exchange believes 

there is no incentive for a Market-Maker 

to satisfy a heightened electronic 

quoting standard in that class due to the 

allocation algorithm determined by the 

Exchange. The Exchange does not 

believe the open outcry participation 

entitlement is a sufficient benefit to 

balance the requirement to satisfy the 

heightened electronic quoting obligation 

(due to the significant electronic trading 

volume) if an LMM or DPM is not also 

receiving an electronic participation 

entitlement. However, the Exchange 

believes it will benefit price discovery 

in the trading crowd for an LMM to be 

present in that class if it is eligible to 

receive a participation entitlement, even 

though there may be no LMM streaming 

quotes remotely. The proposed rule 

change will permit the Exchange to 

appoint an LMM to a trading crowd in 

this circumstance with an appropriate 

balance of floor-based benefits and 

obligations, consistent with the LMM’s 

on-floor role. 

The proposed rule change permits the 

Exchange to appoint an On-Floor LMM 

as it already can do pursuant to current 

Rules, which is appoint an On-Floor 

LMM that must satisfy regular marketmaker quoting obligations rather than 

heightened LMM quoting obligations 

and only receive an open outcry 

participation entitlement (with the 

expectation a designee of the LMM will 

have a presence on the trading floor for 

the entire trading day). The proposed 

rule change merely provides the 

Exchange with discretion to make such 

an appointment in a different 

circumstance not currently 

contemplated in the Rules—in a class 

with no Off-Floor DPM or Off-Floor 

LMM. The Exchange may make such an 

appointment in the limited 

circumstance of classes in which it does 

not grant an electronic participation 

entitlement, and it will consider, among 

other factors, electronic liquidity in the 

class prior to making such an 

appointment. An On-Floor LMM in 

such a class will be subject to the same 

obligations and receive the same 

benefits as current On-Floor LMMs in 

other classes, subject to a different 

heightened quoting standard of 

maintaining a floor presence all day 

(subject to a de minimis exception) 

(which is expected of current On-Floor 

LMMs). Any violation of the proposed 

heightened quoting standard will be 

subject to potential discipline under 

Chapter XVII.9

The Exchange notes current On-Floor 

LMMs in classes in which there is a 

different Off-Floor DPM or Off-Floor 

LMM, as well as On-Floor LMMs in 

classes with no Off-Floor DPM or OffFloor LMM pursuant to the proposed 

rule change, are not subject to the 

heightened electronic quoting obligation 

or opening quoting obligation in Rule 

8.15(b), but receive the participation 

entitlement in Rule 8.15(d). While there 

is no current obligation in the rules 

requiring an On-Floor LMM to have a 

designee on the floor during the entire 

trading day, the Exchange expects 

current On-Floor LMMs to do so and 

may consider trading floor presence 

when determining whether to renew an 

On-Floor LMM’s term.10

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.11 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 12 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 13 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 promotes just and equitable 

principles of trade by creating a balance 

between the obligations imposed on and 

benefits provided to On-Floor LMMs 

that only operate on the trading floor 

and only have open-outcry obligations. 

The Exchange believes if an On-Floor 

LMM was obligated to satisfy a 

heightened continuous electronic 

quoting standard in a class in which 

there was no electronic participation 

entitlement, the obligations would 

outweigh the benefit of an open outcry 

entitlement. The proposed rule change 

imposes a more reasonable heightened 

open outcry obligation that balances the 

eligibility of the open outcry benefit, as 

the proposed rule change imposes an 

on-floor requirement to be eligible for 

the on-floor entitlement rather than an 

electronic quoting obligation unrelated 

to the corresponding potential 

entitlement. 

The proposed rule change permits the 

Exchange to appoint an On-Floor LMM 

as it does pursuant to current Rules; it 

merely provides the Exchange with 

discretion to appoint an On-Floor LMM 


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14 15 U.S.C. 78s(b)(3)(A). 

15 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change, along with a brief 

description and the text of the proposed rule 

change, at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. The 

Exchange has satisfied this requirement. 

16 17 CFR 240.19b–4(f)(6). 

17 17 CFR 240.19b–4(f)(6)(iii). 

18For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

in a different circumstance—in a class 

with no Off-Floor DPM or Off-Floor 

LMM. Current rules do not contemplate 

an On-Floor LMM in a class with no 

Off-Floor DPM or Off-Floor LMM. An 

On-Floor LMM in such a class will be 

subject to the same obligations and 

receive the same benefits as current OnFloor LMMs in other classes, subject to 

a different heightened quoting standard 

of maintaining a floor presence for the 

entire trading day (subject to a de 

minimis exception), although current 

On-Floor LMMs are similarly expected 

have a designee present on the trading 

floor for the entire trading day. The 

proposed rule change removes 

impediments to and perfects the 

mechanism of a free and open market by 

providing flexibility to have an LMM in 

the trading crowd, which enhances 

price discovery and provides potential 

price improvement, in a class in which 

there is no incentive for a Market-Maker 

to satisfy a heightened electronic 

quoting standard due to the allocation 

algorithm determined by the Exchange 

in that class. 

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. The 

Exchange believes it is appropriate to 

limit its ability to appoint an On-Floor 

LMM with open-outcry obligations only 

in classes in which it determines to 

have no electronic participation 

entitlement, as it wants to incentivize 

firms to remain LMMs (and provide 

liquidity) in the trading crowd when 

there is no incentive for firms to satisfy 

heightened electronic quoting 

standards. The Exchange will, among 

other factors, consider electronic 

liquidity in the class prior to making 

such an appointment. The Exchange 

believes the continued presence of an 

LMM in the trading crowd enhances 

price discovery and provides potential 

price improvement, and such 

requirement creates a balance with 

eligibility for an open outcry 

participation entitlement. The Exchange 

believes requiring an On-Floor LMM 

that operates only on the trading floor 

to satisfy heightened electronic quoting 

standards would outweigh the benefit of 

an open outcry only entitlement. The 

proposed rule change has no impact on 

intermarket competition, as it relates 

solely to the presence of an LMM on 

CBOE’s trading floor. 

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 

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) 14 of the Act and Rule 19b– 

4(f)(6) thereunder.15

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 16 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 17

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. The Exchange has asked 

the Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Exchange states that waiver 

of the 30-day operative delay would 

permit the Exchange to appoint an OnFloor LMM as of September 1, 2017, 

which in turn would permit the market 

to benefit sooner from enhanced price 

discovery and the potential for price 

improvement. Based on the foregoing, 

the Commission believes the waiver of 

the operative delay is consistent with 

the protection of investors and the 

public interest. Therefore, the 

Commission hereby waives the 

operative delay and designates the 

proposal operative upon filing.18

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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CBOE–2017–059 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–2017–059. 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– 


sradovich on DSKBBY8HB2PROD with NOTICES
Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 43633 

19 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The term ‘‘Lead Market Maker’’ is defined in 

Rule 1.1(w) to mean a registered Market Maker that 

is the exclusive Designated Market Maker in listings 

for which the Exchange is the primary market. 

5The Exchange defines ‘‘affiliate’’ to ‘‘mean any 

ETP Holder under 75% common ownership or 

control of that ETP Holder.’’ See Fee Schedule, 

NYSE Arca Marketplace: General. 

2017–059, and should be submitted on 

or before October 10, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–19712 Filed 9–15–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81601; File No. SR– 

NYSEARCA–2017–104] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the NYSE Arca 

Equities Fees and Charges 

September 13, 2017. 

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 

September 1, 2017, 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, II, and III below, which Items 

have been prepared by the selfregulatory 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 Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

NYSE Arca Equities Fees and Charges 

(the ‘‘Fee Schedule’’) to (i) adopt an 

additional tiered credit applicable to 

Lead Market Makers (‘‘LMMs’’) 4 and to 

ETP Holders and Market Makers 

affiliated with the LMM that provide 

displayed liquidity to the NYSE Arca 

Book in Tape B Securities; and (ii) add 

a second way by which an ETP Holder 

or Market Maker could qualify for the 

Step Up Tier. The Exchange proposes to 

implement the proposed fee change on 

September 1, 2017.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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend the 

Fee Schedule to adopt an additional 

tiered credit applicable to LMMs and to 

ETP Holders and Market Makers 

affiliated with the LMM that provide 

displayed liquidity to the NYSE Arca 

Book in Tape B Securities; and (ii) add 

a second way by which an ETP Holder 

or Market Maker could qualify for the 

Step Up Tier. The Exchange proposes to 

implement the proposed fee changes on 

September 1, 2017. 

LMM Transaction Fees and Credits 

The Exchange proposes to amend the 

Fee Schedule to adopt an additional 

tiered credit applicable to LMMs and to 

ETP Holders and Market Makers 

affiliated with the LMM that provide 

displayed liquidity to the NYSE Arca 

Book in Tape B Securities. The 

Exchange currently provides tier-based 

incremental credits for orders that 

provide displayed liquidity to the NYSE 

Arca Book in Tape B Securities. 

Specifically, LMMs that are registered as 

the LMM in Tape B Securities that have 

a consolidated average daily volume 

(‘‘CADV’’) in the previous month of less 

than 100,000 shares, or 0.0070% of 

Consolidated Tape B ADV, whichever is 

greater (‘‘Less Active ETP Securities’’), 

and the ETP Holders and Market Makers 

affiliated with such LMMs, currently 

receive an additional credit for orders 

that provide displayed liquidity to the 

Book in any Tape B Securities that trade 

on the Exchange.5 The current 

incremental credits and volume 

thresholds are as follows: 

• An additional credit of $0.0004 per 

share if an LMM is registered as the 

LMM in at least 300 Less Active ETP 

Securities 

• An additional credit of $0.0003 per 

share if an LMM is registered as the 

LMM in at least 200 but less than 300 

Less Active ETP Securities 

• An additional credit of $0.0002 per 

share if an LMM is registered as the 

LMM in at least 100 but less than 200 

Less Active ETP Securities 

The number of Less Active ETP 

Securities for the billing month is based 

on the number of Less Active ETP 

Securities in which an LMM is 

registered as the LMM on the last 

business day of the previous month. The 

incremental credits also apply to ETP 

Holders and Market Makers affiliated 

with the LMM whose orders in Tape B 

Securities provide displayed liquidity to 

the NYSE Arca Book. 

The Exchange proposes to adopt an 

additional tier pursuant to which LMMs 

and ETP Holders and Market Makers 

affiliated with the LMM that provide 

displayed liquidity to the NYSE Arca 

Book in Tape B Securities would receive 

an additional credit of $0.0001 per share 

if the LMM is registered as the LMM in 

at least 75 but less than 100 Less Active 

ETP Securities. 

For example, currently, a LMM that 

provides liquidity to the NYSE Arca 

Book in a security for which the LMM 

is registered as the LMM which has a 

CADV in the previous month of at least 

5,000,000 shares would receive a credit 

of $0.0033 per share. If that LMM is also 

registered as an LMM in 80 Less Active 

ETP Securities, the LMM would receive 

an incremental credit of $0.0001 per 

share under the proposed new rebate 

structure, for a total credit of $0.0034 

per share. Additionally, if the affiliated 

ETP Holders and Market Makers of such 

LMM that provide displayed liquidity in 

Tape B Securities are a Tier 1 firm, they 

would receive a total credit of $0.0024 

per share, i.e., $0.0023 per share Tier 1 

credit for orders that provide liquidity 

to the NYSE Arca Book plus $0.0001 per 

share for being registered as a LMM in 

80 Less Active ETP Securities. 

With the proposed additional tier, the 

Exchange hopes to provide incentives 

for increased trading in Less Active ETP 

Securities for the benefit of all market 

participants. 

Step-Up Tier 

The Exchange proposes to add a 

second way by which an ETP Holder or 

Market Maker could qualify for the 

existing Step Up Tier. Currently, to 

qualify for the Step Up Tier, ETP 


sradovich on DSKBBY8HB2PROD with NOTICES