Document ID: SEC-2016-1720-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2016-09-26T04:00Z

[Federal Register Volume 81, Number 186 (Monday, September 26, 2016)]
[Notices]
[Pages 66105-66109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-23044]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78885; File No. SR-CBOE-2016-064]

Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing of a Proposed Rule Change Relating to 
SPX Combo Orders

September 20, 2016.
    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 September 8, 2016, 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 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange seeks to amend its rules related to SPX Combo Orders. 
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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rules 24.20, SPX Combo Orders, and 
6.42, Minimum Increment for Bids and Offers, to specify the manner in 
which the minimum increment provision of Rule 6.42 applies to SPX Combo 
Orders.
Background
    An SPX Combo Order consists of an order to purchase or sell one or 
more SPX option series (hereinafter the ``non-SPX combination'') and 
the offsetting number of ``SPX combinations'' defined by the delta.\3\ 
For purposes of an SPX Combo Order, an SPX combination is a purchase 
(sale) of an SPX call and sale (purchase) of an SPX put having the same 
expiration date and strike price. Additionally, the delta is the 
positive (negative) number of SPX combinations that must be sold 
(bought) to establish a market neutral hedge with one or more SPX 
option series (i.e., the non-SPX combination).\4\
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    \3\ See Rule 24.20(a)(3).
    \4\ See Rule 24.20(a)(1) and (2).
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    SPX traders commonly hedge their options positions with SPX 
combinations, also called ``synthetic futures,'' which, as the above 
definition provides, are created by combining long(short) SPX calls 
with short(long) SPX puts of the same series, in lieu of hedging with 
the actual S&P 500 futures contract trading at CME. The individual legs 
of the SPX combination are priced such that a value for the SPX 
combination is established which is equivalent to the value of a future 
at a level at which the trader wishes to make the underlying futures 
market ``static.'' Then, based on the static value established by the 
SPX combination that has been quoted, the trader will request a market 
for the non-SPX combination that he wishes to trade, and will indicate 
the delta of the non-SPX combination. An SPX trader will execute the 
SPX combination in conjunction with the non-SPX combination, taking 
into account the delta of the particular options making up the non-SPX 
combination, such that the combined positions will create a

[[Page 66106]]

``delta neutral'' hedge.\5\ For example, a customer that wants to 
purchase 100 SPX calls that have a delta of ``30'' (30% or .30) may 
hedge against a downward movement in the S&P 500 Index by selling 30 
SPX combinations (.30 x 100). In other words, the SPX combination in 
this example will be to sell 30 SPX calls and buy 30 SPX puts with the 
same strike price and expiration date.
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    \5\ The entire SPX Combo Order consisting of the SPX combination 
portion and the non-SPX combination portion must be executed as a 
package.
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    When the non-SPX combination is paired with an SPX combination the 
non-SPX combination can be described as being ``tied'' to the value of 
a future because the non-SPX combination is tied to an SPX combination 
that is equivalent to the value of a future. The concept of an option 
being ``tied'' to an underlying value extends to stock-option 
orders.\6\ For example, floor brokers may represent an order to buy an 
AAPL call tied to the sale of AAPL stock at a specified price. The 
price at which the crowd is willing to sell the call is dependent on 
the specified price of the AAPL stock. For purposes of this example, 
assume the specified price is $99. The crowd may be willing to sell the 
call for $5.00 tied to AAPL stock at $99. If the specified price of 
AAPL stock was instead $100, the crowd's market for the call would 
change. If the broker is unable to execute the stock portion of the 
order at the specified price of $99, the option portion of the order 
also cannot be executed. Similarly, a broker representing an SPX Combo 
Order may be unable to execute the SPX combination portion of the order 
at the desired futures level because the individual leg prices of the 
SPX combination that would create the equivalent futures value are 
outside the market for the leg prices.
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    \6\ A stock-option order is an order to buy or sell a stated 
number of units of an underlying or a related security coupled with 
either (a) the purchase or sale of option contract(s) on the 
opposite side of the market representing either the same number of 
units of the underlying or related security or the number of units 
of the underlying security necessary to create a delta neutral 
position or (b) the purchase or sale of an equal number of put and 
call option contracts, each having the same exercise price, 
expiration date and each representing the same number of units of 
stock as, and on the opposite side of the market from, the 
underlying or related security portion of the order. Rule 1.1(ii).
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Minimum Increment Applicable to SPX Combo Orders
    Currently, SPX Combo Orders are treated as complex orders for the 
purposes of the minimum increment provision of Rule 6.42(4).\7\ 
Although Rule 24.20 does not explicitly specify the minimum increment 
applicable to SPX Combo Orders,\8\ or reference how the minimum 
increment provision of Rule 6.42(4) applies to SPX Combo Orders, the 
Exchange believes the original intent was for SPX Combo Orders to be 
considered ``complex orders'' for the purposes of the minimum 
increment. In support of this conclusion the Exchange notes that Rule 
6.42(4)(b) states that ``complex orders are subject to special priority 
requirements as described in Rules 6.45, 6.45A, 6.45B, 6.53C, 24.19 and 
24.20.'' \9\ The Exchange believes referencing Rule 24.20 in this 
manner demonstrates the intent to include SPX Combo Orders as complex 
orders for purposes of the minimum increment provision.
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    \7\ Rule 6.42(4) states that except as provided in Rule 6.53C, 
bids and offers on complex orders, as defined in Interpretation and 
Policy .01 [to Rule 6.42], may be expressed in any net price 
increment (that may not be less than $0.01) that may be determined 
by the Exchange on a class-by-class basis and announced to the 
Trading Permit Holders via Regulatory Circular, regardless of the 
minimum increments otherwise appropriate to the individual legs of 
the order. Notwithstanding the foregoing sentence, bids and offers 
on complex orders in options on the S&P 500 Index (SPX), p.m.-
settled S&P 500 Index (SPXPM) or on the S&P 100 Index (OEX and XEO), 
except for box/roll spreads, shall be expressed in decimal 
increments no smaller than $0.05 or in any increment, as determined 
by the Exchange on a class-by-class basis and announced to the 
Trading Permit Holders via Regulatory Circular. In addition: (a) The 
legs of a complex order may be executed in $0.01 increments; and (b) 
complex orders are subject to special priority requirements as 
described in Rules 6.45, 6.45A, 6.45B, 6.53C, 24.19 and 24.20.
    \8\ Rule 24.20(b)(2) uses the term ``minimum increment'' but 
only in reference to the priority requirements for SPX Combo Orders, 
stating that: ``[w]hen a Trading Permit Holder holding an SPX Combo 
Order with the required combo indicator and bidding or offering in a 
multiple of the minimum increment on the basis of a total debit or 
credit for the order has determined that the order may not be 
executed by a combination of transaction with the bids and offers 
displayed in the SPX limit order book or by the displayed quotes of 
the crowd, then the order may be executed at the best net debit or 
credit so long as (A) no leg of the order would trade at a price 
outside the currently displayed bids or offers in the trading crowd 
or bids or offers in the SPX limit order book and (B) at least on 
leg of the order would trade at a price that is better than the 
corresponding bid or offer in the SPX limit order book.''
    \9\ See Rule 6.42(4)(b).
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    Although the Exchange believes the intent was to include SPX Combo 
Orders as complex orders for purposes of the minimum increment, the 
Exchange also believes there is confusion amongst members of the 
trading crowd regarding the applicable minimum increment. The Exchange 
believes the confusion has arisen because Interpretation and Policy .01 
to Rule 6.42 does not specifically identify SPX Combo Orders as complex 
orders; rather, Rule 6.42.01 states:

    For purposes of this rule [6.42], ``complex order'' means a 
spread, straddle, combination or ratio order as defined in Rule 
6.53,\10\ a stock-option order as defined in Rule 1.1(ii), a 
security future-option order as defined in Rule 1.1(zz), or any 
other complex order as defined in Rule 6.53C.\11\
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    \10\ A spread order is defined as ``an order to buy a stated 
number of option contracts and to sell the same number of option 
contracts, or contracts representing the same number of shares at 
option, of the same class of options.'' See Rule 6.53(d). A 
combination order is defined as ``an order involving a number of 
call option contracts and the same number of put option contracts in 
the same underlying security. In the case of adjusted option 
contracts, a combination order need not consist of the same number 
of put and call contracts if such contracts both represent the same 
number of shares at option.'' See Rule 6.53(e). A straddle order is 
defined as ``an order to buy a number of call option contracts and 
the same number of put option contracts on the same underlying 
security which contracts have the same exercise price and expiration 
date; or an order to sell a number of call option contracts and the 
same number of put option contracts on the same underlying security 
which contracts have the same exercise price and expiration date. 
(E.g., an order to buy two XYZ July 50 calls and to buy two July 50 
XYZ puts is a straddle order.) In the case of adjusted option 
contracts, a straddle order need not consist of the same number of 
put and call contracts if such contracts both represent the same 
number of shares at option.'' See Rule 6.53(f). A ratio order is 
defined as ``a spread, straddle, or combination order in which the 
stated number of option contracts to buy (sell) is not equal to the 
stated number of option contracts to sell (buy), provided that the 
number of contracts differ by a permissible ratio. For purposes of 
this section, a permissible ratio is any ratio that is equal to or 
greater than one-to-three (.333) and less than or equal to three-to-
one (3.00). For example, a one-to-two (.5) ratio, a two-to-three 
(.667) ratio, or a two-to-one (2.00) ratio is permissible, whereas a 
one-to-four (.25) ratio or a four-to-one (4.0) ratio is not.'' See 
Rule 6.53(n).
    \11\ Rule 6.53C is inapplicable to SPX Combo Orders because SPX 
Combo Orders may be executed in open outcry only whereas Rule 6.53C 
governs complex orders submitted to the Hybrid System for electronic 
handling.

    As the definitions of spread, straddle, combination and ratio order 
do not specifically identify SPX Combo Orders, the Exchange believes 
confusion has arisen with respect to whether an SPX Combo Order is a 
complex order for purposes of the minimum increment.
    In addition, the current interpretation that an SPX Combo Order is 
technically a complex order for purposes of the minimum increment 
(meaning all legs can be executed in $0.01 increments) does not fit how 
SPX Combo Orders are generally executed. In general, the only time legs 
of an SPX Combo Order are executed in $0.01 increments is in relation 
to a non-SPX combination with multiple legs. When the non-SPX 
combination is a single leg, the trading crowd generally executes the 
non-SPX combination in $0.05 or $0.10 increments, even though the 
current interpretation allows the legs to be executed in $0.01 
increments. The Exchange notes that it is not a violation to execute a 
single leg non-SPX combination in $0.01, $0.05 or $.10

[[Page 66107]]

increments. To illustrate, if the legs were required to be executed in 
$0.05 increments, for example, and the legs were instead executed in 
$0.01 increments, it would be a violation. Here, however, the situation 
is reversed--$0.01 increments are allowed, which automatically allows 
larger increment executions. Furthermore, the Exchange believes the 
reason single legged non-SPX combinations are generally executed in 
$0.05 or $0.10 increments is because executing a single leg non-SPX 
combination portion in $0.01 increments makes it difficult to attain a 
net execution price in $0.05 increments for the entire package.\12\ For 
example, if the net execution price of the SPX combination is $5.00, 
the execution price of a single leg non-SPX combination portion cannot 
be $1.01, $1.02, $1.03, or $1.04 for example, because the net execution 
price for the entire package would be in a net price increment less 
than $0.05. Additionally, a single legged non-SPX combination that is 
tied to an SPX combination is thought of in the same way as any single 
leg SPX option that is tied to an S&P 500 futures position. That is--an 
SPX option that is tied to an actual S&P 500 futures position would 
have to execute in $0.05 or $0.10 increments. Similarly, a single 
legged non-SPX combination is tied to an SPX combination that is 
equivalent to the futures; thus, it follows that the single legged non-
SPX combination should be executed in the same increment that would be 
applicable if a customer was using the actual S&P 500 futures instead 
of the SPX combination. Customers reasonably should expect to receive 
an execution price on an individual leg that is in $0.05 or $0.10 
increments.
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    \12\ Because the current interpretation is an SPX Combo Order is 
a complex order for purposes of the minimum increment, the entire 
SPX Combo Order package must be executed in net price increments no 
smaller than $0.05 in accordance with Rule 6.42(4).
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    Thus, in order to provide clarity regarding the minimum increment 
applicable to SPX Combo Orders, as well as to modify the Exchange's 
above interpretation in order to match the general practice of 
executing SPX Combo Orders, the Exchange proposes to add Rule 24.20.02 
to provide as follows:

    The minimum increment applicable to SPX Combo Orders under Rule 
6.42 is as follows:
    (a) The legs of the SPX combination portion of an SPX Combo 
Order may be executed in $0.01 increments and the entire SPX 
combination must be executed in net price increments no smaller than 
$0.05.\13\
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    \13\ Paragraph (a) will have no effect on customers as the 
current practice is in accordance with paragraph (a).
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    (b) If the non-SPX combination portion of an SPX Combo Order 
consists of one leg, the leg must be executed in increments no 
smaller than $0.05 if the execution price is below $3.00 and 
increments no smaller than $0.10 if the execution price is at or 
above $3.00.\14\
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    \14\ Paragraph (b) is unlikely to have any effect on customers 
as the current practice is generally in accordance with paragraph 
(b); however, on very rare occasions members of the trading crowd 
currently execute a single legged non-SPX combination portion of an 
SPX Combo Order in $0.01 increments.
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    (c) If the non-SPX combination portion of an SPX Combo Order 
consists of multiple legs, the individual legs may be executed in 
$0.01 increments and the entire non-SPX combination portion of the 
SPX Combo Order must be executed in net price increments no smaller 
than $0.05.\15\
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    \15\ Paragraph (c) will have no effect on customers as the 
current practice is in accordance with paragraph (c).

    When an SPX Combo Order is treated as a complex order for purposes 
of the minimum increment, as is currently the case, then the entire 
package may be executed at $0.05 increments and each individual leg may 
be executed at $0.01 increments.\16\ For example, an SPX Combo Order 
consisting of the purchase of one SPX 2000 call for $41.35 and the 
offsetting SPX combination consisting of a sale of one SPX 2065 call 
for $23.02 and the purchase of one SPX 2065 put for $21.02 would have a 
net debit price of $39.35.
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    \16\ See Rule 6.42(4) (stating that bids and offers on complex 
orders in options on the S&P 500 Index (SPX), p.m.-settled S&P 500 
Index (SPXPM) or on the S&P 100 Index (OEX and XEO), except for box/
roll spreads, shall be expressed in decimal increments no smaller 
than $0.05 and that the legs of a complex order may be executed in 
$0.01 increments).
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    Applying the proposed rule to the above example provides that the 
non-SPX combination (the SPX 2000 call) is one leg that executes above 
$3.00; thus, it must be executed in $0.10 increments, which means it 
would have to execute at $41.30 or $41.40, instead of $41.35. The 
Exchange notes that the customer may in fact receive a better execution 
price because of this rule change because, in the above example, market 
participants may be willing to sell to a customer at $41.30 instead of 
$41.35. If instead the SPX Combo Order contained a non-SPX combination 
with two legs--one leg to buy an SPX 2000 call and one leg to buy an 
SPX 2010 call--tied to an SPX combination, each leg of the non-SPX 
combination could be executed in $0.01 increments, and the net 
execution price of the non-SPX combination package could be in net 
price increments of $0.05.\17\
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    \17\ This is similar to how complex orders must be executed in 
net price increments no smaller than $0.05. See Rule 6.42(4).
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    The Exchange notes that the priority requirements of Rule 
24.20(b)(2) will still apply to the entire SPX Combo Order. Thus, an 
SPX Combo Order will still be able to execute at the best net debit or 
credit so long as (A) no leg of the order would trade at a price 
outside the currently displayed bids or offers in the trading crowd or 
bids or offers in the SPX limit order book and (B) at least one leg of 
the order would trade at a price that is better than the corresponding 
bid or offer in the SPX limit order book.
    Furthermore, as noted above, for an SPX Combo Order comprised of a 
non-SPX combination portion with one leg, the trading crowd's practice 
is generally to execute the non-SPX combination portion of an SPX Combo 
Order in $0.05 or $0.10 increments, because executing a single leg non-
SPX combination portion in $0.01 increments makes it difficult to 
attain a net execution price in $0.05 increments for the entire 
package. As noted above, if the net execution price of the SPX 
combination is $5.00, the execution price of a single leg non-SPX 
combination portion cannot be $1.01, $1.02, $1.03, or $1.04 for 
example, because the net execution price for the entire package would 
be in a net price increment less than $0.05. Thus, the practice for the 
non-SPX combination portion, which is completely reasonable, is to 
provide markets in increments of $0.05 and $0.10 to ensure that the 
entire package is executed in a net execution price of $0.05 
increments. Thus, the Exchange believes customers will not be adversely 
impacted by this rule change. The rules are simply being modified to 
meet the existing, general practice of the trading crowd. The Exchange 
notes that it is the trading crowd and their practices that have 
created a vibrant ecosystem for customers to execute SPX Combo Orders 
and modifying the rules to match the practice that has helped to create 
this ecosystem is logical and desirable.
Conclusion
    The Exchange believes this proposal will provide clarity with 
regards to the minimum increment applicable to SPX Combo Orders and 
will prevent the inconsistent application of the minimum increment. 
Also, customers that want to hedge a single leg SPX option order with 
S&P 500 futures would be required to execute the SPX option in either 
$0.05 or $0.10 increments; therefore, customers reasonably should 
expect to be required to execute a single leg SPX option in either 
$0.05 or $0.10 increments when the single leg SPX option is tied to an 
SPX combination because the SPX

[[Page 66108]]

combination is equivalent to an underlying futures level.
    Upon approval of this rule change, the Exchange will announce the 
implementation date of the proposed rule change in a Regulatory 
Circular to be published no later than 90 days following the approval 
date. The implementation date will be no later than 180 days following 
the approval date.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act'').\18\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \19\ 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) \20\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(5).
    \20\ Id.
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    In particular, the Exchange believes it is not clear from the rules 
what minimum increment applies to SPX Combo Orders and that specifying 
the minimum increment applicable to SPX Combo Orders will help to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. Furthermore, the Exchange believes 
that essentially treating the non-SPX combination portion and the SPX 
combination as separate orders for purposes of the applicable minimum 
increment is consistent with the nature of SPX Combo Orders, which 
consist of a non-SPX combination tied to an underlying S&P Index value 
via the SPX combination. The Exchange believes maintaining consistency 
throughout its rules in this manner helps eliminate confusion in the 
marketplace, which helps to protect investors and the public interest 
generally. The consistency and clarity provided by this amendment will 
help to protect investors and the public interest generally. Finally, 
the Commission has already determined that it's consistent with the Act 
to require orders in SPX with only one leg (i.e., orders that are not 
complex orders or SPX Combo Orders) to be executed in increments no 
smaller than $0.05 for option series below $3.00 and $.10 for all 
options series at or above $3.00.\21\ Thus, it follows that requiring a 
one legged non-SPX combination portion of an SPX Combo Order to be 
executed in $0.05 and $0.10 in the same manner is consistent with the 
Act.
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    \21\ See Rule 6.42(1)-(3).
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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 proposed rule change 
will apply to all SPX Combo Orders, and all TPHs that represent and 
compete for those orders, in the same manner. The Exchange believes 
that specifying the minimum increment applicable to SPX Combo Orders, 
and clarifying the manner in which these orders execute on the 
Exchange, promotes fair and orderly markets, as well as assists the 
Exchange in its ability to effectively attract order flow and liquidity 
to its market, and ultimately benefits all TPHs and all investors. 
Furthermore, any perceived burden on customers due to the fact that the 
single legged non-SPX combination portion of an SPX Combo Order must be 
executed in $0.05 or $0.10 increments pursuant to this rule (instead of 
$0.01 increments as is currently the Exchange's interpretation) is 
outweighed by the fact that the current practice of the trading crowd 
is to execute the single legged non-SPX combination in $0.05 or $0.10 
increments and that the current practice enables the trading crowd to 
more quickly provide bids and offers that meet the minimum increment 
requirements. Furthermore, customers may in fact receive a better 
execution price on their SPX Combo Orders because TPHs competing for 
the order may improve their market by $0.05 or $0.10 instead of just 
$0.01. This rule change will only prevent the rare situation where a 
member is determined to execute a single legged non-SPX combination 
portion of an SPX Combo Order in $0.01 increments, which, again, is not 
a frequent occurrence. Furthermore, customers that want to hedge a 
single leg SPX option order with S&P 500 futures would be required to 
execute the SPX option in either $0.05 or $0.10 increments; therefore, 
customers reasonably should expect to be required to execute a single 
leg SPX option in either $0.05 or $0.10 increments when the single leg 
SPX option is tied to an SPX combination because the SPX combination is 
equivalent to an underlying futures level. Finally, the Commission has 
already determined that it's not unduly burdensome to competition to 
require orders in SPX with only one leg (i.e., orders that are not 
complex orders or SPX Combo Orders) to be executed in increments no 
smaller than $0.05 for option series below $3.00 and $.10 for all 
options series at or above $3.00.\22\ Thus, it follows that requiring a 
one legged non-SPX combination portion of an SPX Combo Order to be 
executed in $0.05 and $0.10 in the same manner is also not unduly 
burdensome on competition.
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    \22\ See Rule 6.42(1)-(3).
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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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    A. By order approve or disapprove such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule 
change should be 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

[[Page 66109]]

     Send an email to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2016-064 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-2016-064. 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-2016-064 and should be 
submitted on or before October 17, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-23044 Filed 9-23-16; 8:45 am]
 BILLING CODE 8011-01-P