Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 19.6, Series of Options Contracts Open for Trading

 
CONTENT

Federal Register, Volume 80 Issue 240 (Tuesday, December 15, 2015)

Federal Register Volume 80, Number 240 (Tuesday, December 15, 2015)

Notices

Pages 77678-77680

From the Federal Register Online via the Government Publishing Office www.gpo.gov

FR Doc No: 2015-31437

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SECURITIES AND EXCHANGE COMMISSION

Release No. 34-76596; File No. SR-BATS-2015-111

Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 19.6, Series of Options Contracts Open for Trading

December 9, 2015.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on December 2, 2015, BATS Exchange, Inc. (``Exchange'' or ``BATS'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

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

\2\ 17 CFR 240.19b-4.

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Page 77679

  1. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

    The Exchange filed a proposal for the Exchange's equity options platform (``BZX Options'') to amend Interpretation and Policy .07 (Mini Options Contracts) to Rule 19.6 (Series of Options Contracts Open for Trading).

    The text of the proposed rule change is available at the Exchange's Web site at www.batstrading.com, at the principal office of the Exchange, and at the Commission's Public Reference Room.

  2. 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

      The Exchange proposes to amend Interpretation and Policy .07 to Rule 19.6 regarding Mini Options Contracts traded on BZX Options, to replace the name ``Google Inc.'' with ``Alphabet Inc.'' Google Inc. (``Google'') recently reorganized to create a new public holding company called Alphabet Inc. (``Alphabet''). As a result of the holding company reorganization, each share of Class A Common Stock (``GOOG''), which the Exchange has listed as a Mini Options Contract, has automatically converted into an equivalent corresponding share of Alphabet Inc. stock. The Exchange also proposes to change symbol ``GOOG'' in Interpretation and Policy .07 to Rule 19.6 to ``GOOGL'' to make the BZX Options Alphabet Class A Common Stock Mini Options Contract symbol consistent with the Alphabet symbols used across the national exchanges.

      The Exchange proposes this change to Interpretation and Policy .07 to enable the Exchange to list and trade Mini Options Contract on Google, now Alphabet, Class A shares. The Exchange is proposing to make this change because, on October 5, 2015 Google reorganized and as a result underwent a name change.

      The purpose of this change is to ensure that Interpretation and Policy .07 to Rule 19.6 reflects the Exchange's intention to be able to list and trade Mini Options on an exhaustive list of underlying securities enumerated in Interpretation and Policy .07 to Rule 19.6. This change is meant to continue the inclusion of Class A shares of Google (now Alphabet) in the current list of underlying securities that Mini Options Contracts can be traded on, while making clear that Class C Capital Stock shares of Google (now Alphabet) are not part of that list as that class of options has not been approved for Mini Options Contracts trading. As a result, the proposed change will help avoid confusion.

    2. Statutory Basis

      The Exchange believes that its proposal is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.\3\ Specifically, the proposal is consistent with Section 6(b)(5) of the Act \4\ because it would promote just and equitable principles of trade, 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) \5\ requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers.

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      \3\ 15 U.S.C. 78f(b).

      \4\ 15 U.S.C. 78f(b)(5).

      \5\ Id.

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      In particular, the proposal to change the name Google to Alphabet to reflect the new ownership structure is consistent with the Act because the proposed change merely updates the current name to allow for continued Mini Options Contracts trading on Google's (now Alphabet) Class A shares and changes the symbol ``GOOG'' to ``GOOGL'' to be consistent with other national exchanges. The proposed change will allow for continued benefit to investors by enabling the Exchange to provide them with additional investment alternatives.

      (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 does not impose any burden on intra-market competition because it applies to all members and member organizations uniformly. There is no burden on inter-market competition because the exchange sic is merely attempting to continue to have the ability to list and trade Class A shares of the company formerly known as Google, now Alphabet, as a Mini Option Contract. Additionally, the changing the ``GOOG'' symbol to ``GOOGL'' will be a change in name-only. The new symbol will continue to represent shares of Google's (now Alphabet's) Class A shares. As a result, there will be no substantive changes to the Exchange's operations or its rules.

      (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.

  3. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

    Because the 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 if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-4(f)(6) thereunder.\7\

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    \6\ 15 U.S.C. 78s(b)(3)(A).

    \7\ 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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    A proposed rule change filed under Rule 19b-4(f)(6) \8\ normally does not become operative for 30 days after the date of filing. However, pursuant to Rule 19b-4(f)(6)(iii) \9\ the Commission may designate a shorter time if such

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    action is consistent with the protection of investors and the public interest.

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    \8\ 17 CFR 240.19b-4(f)(6).

    \9\ 17 CFR 240.19b-4(f)(6)(iii).

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    The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest as it will allow the Exchange to accurately reflect the new ownership structure and ticker symbol for Alphabet Class A shares and to continue to list and trade mini options on Alphabet's Class A shares, formerly Google Class A shares. For these reasons, the Commission designates the proposed rule change to be operative upon filing.\10\

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    \10\ For 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).

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    At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.

  4. 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-BATS-2015-111 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-BATS-2015-111. 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 such 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-BATS-2015-111, and should be submitted on or before January 5, 2016.

    For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\11\

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    \11\ 17 CFR 200.30-3(a)(12).

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    Robert W. Errett,

    Deputy Secretary.

    FR Doc. 2015-31437 Filed 12-14-15; 8:45 am

    BILLING CODE 8011-01-P