49912 Federal Register / Vol. 82, No. 207 / Friday, October 27, 2017 / Notices 

27 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6)(iii). 

5See Securities Exchange Act Release No. 79585 

(December 16, 2016), 81 FR 93988 (December 22, 

2016) (SR–BatsBZX–2016–68; SR–BatsBYX–2016– 

29; SR–BatsEDGA–2016–24; SR–BatsEDGX–2016– 

60). 

6 ‘‘Market Orders’’ are orders to buy or sell at the 

best price available at the time of execution. Market 

Orders to buy or sell an option traded on are 

rejected if they are received when the underlying 

security is subject to a ‘‘Limit State’’ or ‘‘Straddle 

State’’ as defined in the Plan to Address 

Extraordinary Market Volatility Pursuant to Rule 

608 of Regulation NMS under the Act (the ‘‘Limit 

Up-Limit Down Plan’’). Any portion of a Market 

Order that would execute at a price more than $0.50 

or 5 percent worse than the NBBO at the time the 

order initially reaches BZX Options, whichever is 

greater, will be cancelled. See Exchange Rule 

21.1(d)(5). 

7See CBOE Rule 6.53, Interpretation and Policy 

.01C. 

8See C2 Rule 6.10, Interpretation and Policy .01C. 

9See Exchange Rule 21.1(d)(5). 

to make available publicly. All 

submissions should refer to File 

Number SR–MSRB–2017–08 and should 

be submitted on or before November 17, 

2017. 

For the Commission, pursuant to delegated 

authority.27

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–23374 Filed 10–26–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81920; File No. SR– 

BatsEDGX–2017–39] 

Self-Regulatory Organizations; Bats 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change to Rule 21.1, 

Definitions, To Modify Stop Orders and 

Stop Limit Orders Applicable to the 

Exchange’s Equity Options Platform in 

Preparation for the C2 Options 

Exchange, Incorporated Technology 

Migration 

October 23, 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 October 

10, 2017, Bats EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGX’’) 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 Exchange has 

designated this proposal as a ‘‘noncontroversial’’ proposed rule change 

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

Act 3 and Rule 19b–4(f)(6)(iii) 

thereunder,4 which renders it effective 

upon filing with the Commission. 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 filed a proposal to 

update Rule 21.1 to make modifications 

to the Exchange’s rules and 

functionality applicable to the 

Exchange’s options platform (‘‘EDGX 

Options’’) in preparation for the 

technology migration of the Exchange’s 

affiliated options exchange, C2 Options 

Exchange, Incorporated (‘‘C2’’), onto the 

same technology as the Exchange. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at www.bats.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 parts of such 

statements. 

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

In 2016, the Exchange and its 

affiliates Bats BZX Exchange, Inc. 

(‘‘BZX’’), Bats BYX Exchange, Inc. 

(‘‘BYX’’), and Bats EDGA Exchange, Inc. 

(‘‘EDGA’’) received approval to affect a 

merger (the ‘‘Merger’’) of the Exchange’s 

indirect parent company, Bats Global 

Markets, Inc. (‘‘BGM’’), with CBOE 

Holdings, Inc. (‘‘CBOE Holdings’’), the 

direct parent of Chicago Board Options 

Exchange, Incorporated (‘‘CBOE’’) and 

C2 Options Exchange, Incorporated 

(‘‘C2’’, and together with the Exchange, 

BZX, BYX, EDGA, and CBOE the ‘‘CBOE 

Affiliated Exchanges’’).5 The CBOE 

Affiliated Exchanges are working to 

align certain system functionality, 

retaining only intended differences 

between the CBOE Affiliated Exchanges, 

in the context of a technology migration. 

Thus, the proposals set forth below are 

intended to add certain system 

functionality that is more similar to 

functionality offered by CBOE and C2 in 

order to ultimately provide a consistent 

technology offering for market 

participants who interact with the CBOE 

Affiliated Exchanges. Although the 

Exchange intentionally offers certain 

features that differ from those offered by 

its affiliates and will continue to do so, 

the Exchange believes that offering 

similar functionality to the extent 

practicable will reduce potential 

confusion for Users. 

The Exchange adopt Stop Orders and 

Stop Limit Orders, to be defined in 

Rules 21.1(d)(11) and (d)(12), 

respectively. In order to adopt such 

rules, the Exchange also proposes to renumber current Rule 21.1(d)(10) (related 

to ‘‘Intermarket Sweep Orders’’) as Rule 

21.1(d)(9) (currently reserved), and 

current Rule 21.1(d)(11) (related to 

‘‘Qualified Continent Cross Orders’’) as 

Rule 21.1(d)(10). 

A Stop Order would be defined in 

Rule 21.1(d)(11) as an order that 

becomes a Market Order 6 when the stop 

price is elected. A Stop Order to buy 

would be elected when the consolidated 

last sale in the option occurs at or 

above, or the NBB is equal to or higher 

than, the specified stop price. A Stop 

Order to sell would be elected when the 

consolidated last sale in the option 

occurs at or below, or the NBO is equal 

to or lower than, the specified stop 

price. 

In addition, the Exchange proposes to 

restrict Stop Orders, which, as described 

above, are converted to Market Orders 

when elected, from being elected when 

the underlying security is in a Limit 

State, as defined in the Limit Up-Limit 

Down Plan. Such an order would be 

held until the end of the Limit State, at 

which point the order would again 

become eligible to be elected. This 

aspect of the proposal is also based on 

the rules of CBOE 7 and C2 8 and is 

consistent with the Exchange’s current 

handling of Market Orders, which are 

not accepted when the underlying 

security is in a Limit State.9 As Stop 

Orders become Market Orders when 

elected, the Exchange believes that this 

change is merely an extension of its 

existing functionality. 

A Stop Limit Order would be defined 

in Rule 21.1(d)(12) as an order that 

becomes a limit order when the stop 

price is elected. A Stop Limit Order to 

buy would be elected and would 

become a buy limit order when the 

consolidated last sale in the option 


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Federal Register / Vol. 82, No. 207 / Friday, October 27, 2017 / Notices 49913 

10See CBOE Rules 6.53(c)(iii) and (c)(iv) and C2 

Rules 6.10(c)(3) and (c)(4). 

11Simultaneous with this proposal, the 

Exchange’s affiliate, BZX, is filing a proposal to 

elect Stop Orders and Stop Limit Orders based on 

consolidated quotations. As such, the Exchange’s 

rules, as proposed, would be identical to the rules 

of BZX. BZX currently elects Stop Orders and Stop 

Limit Orders based on consolidated trades only. See 

BZX Rules 21.1(d)(11) and (d)(12). 

12 15 U.S.C. 78f(b). 

13 15 U.S.C. 78f(b)(5). 

14The Exchange notes that its affiliate, EDGX, 

also intends to adopt Stop Orders and Stop Limit 

Orders that would function identical to Stop Orders 

and Stop Limit Orders on the Exchange, as 

amended by this proposal. In addition, as CBOE 

and C2 migrate to the same technology platform as 

the Exchange, CBOE and C2 intend to modify rules 

and functionality to be consistent with the 

Exchange and EDGX, unless the retention of 

differences is intended. 

15See supra, notes 8–10. 

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

17 17 CFR 240.19b–4. 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 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. 

occurs at or above, or the NBB is equal 

to or higher than, the specified stop 

price. A Stop Limit Order to sell would 

be elected and would become a sell 

limit order when the consolidated last 

sale in the option occurs at or below, or 

the NBO is equal to or lower than, the 

specified stop price. 

The Exchange notes that CBOE and 

C2 also trigger stop orders based trades 

and quotations.10 The Exchange further 

notes that it has proposed to elect Stop 

Orders and Stop Limit Orders based on 

consolidated quotations (the NBB and 

NBO) rather than quotations only on the 

Exchange.11

Below are examples of the proposed 

functionality for Stop Orders and Stop 

Limit Orders. 

Example 1A—Stop Order Is Triggered 

(Trade) 

Assume the NBBO is 7.80 × 8.00. 

Assume that a User submits a Stop 

Order to buy 500 shares with a stop 

price of 8.05. 

• Assume the NBBO updates to 8.00 

by 8.05. An execution reported by 

another exchange at 8.05 will trigger the 

stop price of the Stop Order, which will 

convert into a Market Order to buy. 

Example 1B—Stop Order Is Triggered 

(Quotation) 

Assume the NBBO is 7.80 × 8.00. 

Assume that a User submits a Stop 

Order to buy 500 shares with a stop 

price of 8.05. 

• Assume the NBBO updates to 8.05 

by 8.10. The NBB equal to the stop price 

of the order will trigger the stop price 

of the Stop Order, which will convert 

into a Market Order to buy. The result 

would be the same if the NBB were 

instead higher than the stop price, such 

as with an NBBO of 8.10 by 8.15. 

Example 2A—Stop Limit Order Is 

Triggered (Trade) 

Assume the NBBO is 7.80 × 8.00. 

Assume that a User submits a Stop 

Limit Order to buy 500 shares at 8.04 

with stop limit price of 8.05. 

• Assume the NBBO updates to 8.03 

by 8.05. An execution reported by 

another exchange at 8.05 will trigger the 

stop price of the Stop Limit Order, 

which will convert into a limit order to 

buy at 8.04. 

Example 2B—Stop Limit Order Is 

Triggered (Quotation) 

Assume the NBBO is 7.80 × 8.00. 

Assume that a User submits a Stop 

Limit Order to buy 500 shares at 8.04 

with stop limit price of 8.05. 

• Assume the NBBO updates to 8.05 

by 8.10. The NBB equal to the stop price 

of the order will trigger the stop price 

of the Stop Limit Order, which will 

convert into a limit order to buy at 8.04. 

The result would be the same if the NBB 

were instead higher than the stop price, 

such as with an NBBO of 8.10 by 8.15. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 12 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 13

in particular, in that it is designed 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. In 

particular, consistent rules and 

functionality between the Exchange and 

its affiliated exchanges will reduce 

complexity and help avoid potential 

confusion by the Users of the Exchange 

that are also participants on other CBOE 

Affiliated Exchanges.14

The Exchange believes the proposed 

amendment will reduce complexity and 

increase the understanding of the 

Exchange’s operations for all Users of 

the Exchange. In particular, by offering 

Stop Orders and Stop Limit Orders, the 

Exchange’s functionality will be more 

similar to that of CBOE and C2. In turn, 

when CBOE and C2 are migrated to the 

same technology as that of the 

Exchange, Users of the Exchange and 

other CBOE Affiliated Exchanges will 

have access to similar functionality. As 

such, the proposed rule change would 

foster cooperation and coordination 

with persons engaged in facilitating 

transactions in securities and would 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system. 

With respect to Stop Orders not being 

elected when the underlying security is 

in a Limit State, this proposal is based 

on the rules of CBOE and C2 and is also 

consistent with the Exchange’s current 

handling of Market Orders, which are 

not accepted when the underlying 

security is in a Limit State.15 As Stop 

Orders become Market Orders when 

elected, the Exchange believes that this 

change is merely an extension of its 

existing functionality in the context of 

the Exchange’s adoption of Stop Orders. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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 notes that the proposal will 

further promote consistency between 

the Exchange and its affiliated 

exchanges, and is part of a larger 

technology integration that will 

ultimately reduce complexity for Users 

of the Exchange that are also 

participants on other CBOE Affiliated 

Exchanges. The Exchange does not 

believe that the proposed changes will 

have any direct impact on competition. 

Thus, the Exchange does not believe 

that the proposal creates any significant 

impact on competition. 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any written 

comments from members or other 

interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (A) Significantly affect 

the protection of investors or the public 

interest; (B) impose any significant 

burden on competition; and (C) by its 

terms, 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 16 and paragraph (f)(6) of Rule 19b– 

4 thereunder,17 the Exchange has 


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49914 Federal Register / Vol. 82, No. 207 / Friday, October 27, 2017 / Notices 

18 17 CFR 240.19b–4(f)(6). 

19 17 CFR 240.19b–4(f)(6)(iii). 

20For 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). 21 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. 

4 15 U.S.C. 78s(b)(1). 

5 17 CFR 240.19b–4. 

6 17 CFR 240.19b–4(f)(6)(iii). 

designated this rule filing as noncontroversial. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 18 normally does not 

become operative prior to 30 days after 

the date of the filing. However, Rule 

19b–4(f)(6)(iii) 19 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 proposed 

rule change may become operative 

immediately upon filing. The Exchange 

notes that the proposed rule change will 

promote consistency between the 

Exchange and CBOE Affiliated 

Exchanges, and is part of a larger 

technology integration that will 

ultimately reduce complexity for Users 

of the Exchange that are also 

participants on other CBOE Affiliated 

Exchanges. 

The Commission believes that waiver 

of the 30-day operative delay is 

consistent with the protection of 

investor and the public interest. The 

Commission notes that the proposed 

rule change is based on rules of its 

affiliated exchanges, CBOE and C2, and 

thus does not raise any new or novel 

issues. Accordingly, the Commission 

hereby waives the 30-day operative 

delay and designates the proposed rule 

change as operative upon filing.20

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: (1) Necessary or appropriate in 

the public interest; (2) for the protection 

of investors; or (3) 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– 

BatsEDGX–2017–39 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–BatsEDGX–2017–39. 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. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–BatsEDGX–2017–39 and 

should be submitted on or before 

November 17, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–23373 Filed 10–26–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81922; File No. SR–IEX– 

2017–37] 

Self-Regulatory Organizations; 

Investors Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Rule 

11.152 To Add Provisions Related to 

Market Maker Withdrawals of 

Quotations in Securities Listed on the 

Investors Exchange 

October 23, 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 October 

19, 2017, the Investors Exchange LLC 

(‘‘IEX’’ or the ‘‘Exchange’’) 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 Substance of 

the Proposed Rule Change 

Pursuant to the provisions of Section 

19(b)(1) under the Securities Exchange 

Act of 1934 (‘‘Act’’),4 and Rule 19b–4 

thereunder,5 Investors Exchange LLC 

(‘‘IEX’’ or ‘‘Exchange’’) is filing with the 

Commission a proposed rule change to 

amend Rule 11.152 to add provisions 

related to Market Maker withdrawals of 

quotations in securities listed on IEX, 

remove an incorrect cross reference in 

paragraph (c), and to correct a 

typographical error in a cross-reference 

in paragraph (d). The Exchange has 

designated this proposal as ‘‘noncontroversial’’ and provided the 

Commission with the notice required by 

Rule 19b–4(f)(6)(iii) under the Act.6 The 

text of the proposed rule change is 

available at the Exchange’s Web site at 

www.iextrading.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 


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