Document ID: SEC-2017-1311-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: C2 Options Exchange, Inc.
Posted Date: 2017-08-03T04:00Z

[Federal Register Volume 82, Number 148 (Thursday, August 3, 2017)]
[Notices]
[Pages 36176-36178]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-16396]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81261; File No. SR-C2-2017-022]

Self-Regulatory Organizations; C2 Options Exchange, Incorporated; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Amend Rule 6.1, Days and Hours of Business, To Clarify the Trading 
Hours for Options on Index-Linked Exchangeable Notes

July 31, 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 18, 2017, C2 Options Exchange, Incorporated (the 
``Exchange'' or ``C2'') 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 Exchange filed the proposal as a ``non-controversial'' 
proposed rule change pursuant to Section 19(b)(3)(A)(iii) of 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The purpose of this filing is to amend C2 Rule 6.1 to clarify the 
trading hours for options on Index-Linked

[[Page 36177]]

Exchangeable Notes (``ETNs'').\5\ The text of the proposed rule change 
is provided below.
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    \5\ An Index-Linked Exchangeable Note is exchangeable debt 
security that is exchangeable at the option of the holder (subject 
to the requirement that the holder in most circumstances exchange a 
specified minimum amount of notes), on call by the issuer, or at 
maturity for a cash amount based on the reported market prices of 
the underlying stocks of an underlying index. See Rule 1.1.
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(additions are underlined; deletions are [bracketed])
* * * * *

C2 Options Exchange, Incorporated Rules

* * * * *

Rule 6.1. Days and Hours of Business

    The hours during which option transactions may be made on the 
Exchange shall be from 8:30 a.m. Chicago Time to 3:00 p.m. Chicago Time 
except for option contracts on Index Options, Index-Linked Exchangeable 
Notes, Index Portfolio Shares, Index Portfolio Receipts, and Trust 
Issued Receipts which may remain open for trading beyond 3:00 p.m. but 
in no case later than 3:15 p.m. Chicago Time, as designated by the 
Exchange.
* * * * *
    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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this filing is to amend C2 Rule 6.1 to clarify the 
trading hours for options on Index-Linked Exchangeable Notes 
(``ETNs'').\6\ Specifically, the Exchange seeks to amend Rule 6.1 to 
provide that options on ETNs may be traded on the Exchange until 3:15 
p.m. (CT) each business day. The Exchange notes that the proposed rule 
is based on NYSE MKT LLC (``NYSE MKT'') Rule 901NY Commentary .02.\7\
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    \6\ An Index-Linked Exchangeable Note is exchangeable debt 
security that is exchangeable at the option of the holder (subject 
to the requirement that the holder in most circumstances exchange a 
specified minimum amount of notes), on call by the issuer, or at 
maturity for a cash amount based on the reported market prices of 
the underlying stocks of an underlying index. See Rule 1.1.
    \7\ See Securities Exchange Act Release 62067 (May 10, 2010), 75 
FR 27603 (May 17, 2010) (SR-NYSEAmex-2010-41).
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    Rule 6.1 provides that the default trading hours on the Exchange 
are from 8:30 a.m. Chicago Time to 3:00 p.m. Chicago Time. However, 
Rule 6.1 provides an exception for Index Options, Index Portfolio 
Shares, Index Portfolio Receipts, and Trust Issued Receipts, which may 
remain open for trading beyond 3:00 p.m. but in no case later than 3:15 
p.m. Chicago Time, as designated by the Exchange. Rule 6.1 does not 
specifically identify ETNs in the list of products that may be traded 
beyond 3:00 p.m. Chicago Time, which suggests options on ETNs must 
close at 3:00 p.m. Chicago time. However, industry practice and the 
Exchange's current practice allow options on ETNs to trade until 3:15 
p.m. Chicago Time. This filing seeks to align C2 Rules with industry 
practice by allowing the Exchange to determine which options on ETNs 
will trade beyond 3:00 p.m. Chicago Time but no later than 3:15 p.m. 
Chicago Time.
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.\8\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \9\ 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) \10\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ Id.
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    In particular, the proposed rule change will protect investors and 
the public interest by reducing potential confusing regarding C2's 
trading hours for options on ETNs and aligning C2's Rules regarding 
trading orders for options on ETNs with industry practice. The Exchange 
notes that the proposed rule is based on NYSE MKT Rule 901NY Commentary 
.02.

B. Self-Regulatory Organization's Statement on Burden on Competition

    C2 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 proposed rule change will 
not impose any burden on intermarket or intramarket competition as the 
proposed rule change will align C2's Rules regarding trading orders for 
options on ETNs with industry practice. In addition, the proposed rule 
change does not modify the construct for trading hours but simply adds 
options on ETNs to the list of products specifically noted in Rule 6.1.

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)(iii) of the Act \11\ and 
subparagraph (f)(6) Rule 19b-4 thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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 the 
Exchange's 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.

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[[Page 36178]]

    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 
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-C2-2017-022 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-C2-2017-022. 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-C2-2017-022 and should be 
submitted on or before August 24, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-16396 Filed 8-2-17; 8:45 am]
BILLING CODE 8011-01-P