[Federal Register Volume 87, Number 22 (Wednesday, February 2, 2022)]
[Notices]
[Pages 5831-5832]
[FR Doc No: 2022-02120]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

[Docket No. USCG-2022-0045]

Information Collection Request to Office of Management and
Budget; OMB Control Number: 1625-0001

AGENCY: Coast Guard, DHS.

ACTION: Sixty-day notice requesting comments.

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SUMMARY: In compliance with the Paperwork Reduction Act of 1995, the
U.S. Coast Guard intends to submit an Information Collection Request
(ICR) to the Office of Management and Budget (OMB), Office of
Information and Regulatory Affairs (OIRA), requesting an extension of
its approval for the following collection of information: 1625-0001,
Report of Marine Casualty & Chemical Testing of Commercial Vessel
Personnel; without change. Our ICR describes the information we seek to
collect from the public. Before submitting this ICR to OIRA, the Coast
Guard is inviting comments as described below.

DATES: Comments must reach the Coast Guard on or before April 4, 2022.

ADDRESSES: You may submit comments identified by Coast Guard docket
number [USCG-2022-0045] to the Coast Guard using the Federal
eRulemaking Portal at https://www.regulations.gov. See the ``Public
participation and request for comments'' portion of the SUPPLEMENTARY
INFORMATION section for further instructions on submitting comments.
    A copy of the ICR is available through the docket on the internet
at https://www.regulations.gov. Additionally, copies are available
from: Commandant (CG-6P), Attn: Paperwork Reduction Act Manager, U.S.
Coast Guard, 2703 Martin Luther King Jr. Ave. SE, Stop 7710,
Washington, DC 20593-7710.

FOR FURTHER INFORMATION CONTACT: A.L. Craig, Office of Privacy
Management, telephone<PHONE_NUMBER>, or fax<PHONE_NUMBER>, for questions
on these documents.

SUPPLEMENTARY INFORMATION:

Public Participation and Request for Comments

    This notice relies on the authority of the Paperwork Reduction Act
of 1995; 44 U.S.C. 3501 et seq., chapter 35, as amended. An ICR is an
application to OIRA seeking the approval, extension, or renewal of a
Coast Guard collection of information (Collection). The ICR contains
information describing the

Collection's purpose, the Collection's likely burden on the affected
public, an explanation of the necessity of the Collection, and other
important information describing the Collection. There is one ICR for
each Collection.
    The Coast Guard invites comments on whether this ICR should be
granted based on the Collection being necessary for the proper
performance of Departmental functions. In particular, the Coast Guard
would appreciate comments addressing: (1) The practical utility of the
Collection; (2) the accuracy of the estimated burden of the Collection;
(3) ways to enhance the quality, utility, and clarity of information
subject to the Collection; and (4) ways to minimize the burden of the
Collection on respondents, including the use of automated collection
techniques or other forms of information technology.
    In response to your comments, we may revise this ICR or decide not
to seek an extension of approval for the Collection. We will consider
all comments and material received during the comment period.
    We encourage you to respond to this request by submitting comments
and related materials. Comments must contain the OMB Control Number of
the ICR and the docket number of this request, [USCG-2022-0045], and
must be received by April 4, 2022.

Submitting Comments

    We encourage you to submit comments through the Federal eRulemaking
Portal at https://www.regulations.gov. If your material cannot be
submitted using https://www.regulations.gov, contact the person in the
FOR FURTHER INFORMATION CONTACT section of this document for alternate
instructions. Documents mentioned in this notice, and all public
comments, are in our online docket at https://www.regulations.gov and
can be viewed by following that website's instructions. Additionally,
if you go to the online docket and sign up for email alerts, you will
be notified when comments are posted.
    We accept anonymous comments. All comments received will be posted
without change to https://www.regulations.gov and will include any
personal information you have provided. For more about privacy and
submissions in response to this document, see DHS's eRulemaking System
of Records notice (85 FR 14226, March 11, 2020).

Information Collection Request

    Title: Report of Marine Casualty & Chemical Testing of Commercial
Vessel Personnel.
    OMB Control Number: 1625-0001.
    Summary: Marine casualty information is needed for CG
investigations of commercial vessel casualties involving death, vessel
damage, etc., as mandated by Congress. Chemical testing information is
needed to improve CG detection/reduction of drug use by mariners.
    Need: Section 6101 of 46 U.S. Code, as delegated by the Secretary
of Homeland Security to the Commandant, authorizes the Coast Guard to
prescribe regulations for the reporting of marine casualties involving
death, serious injury, material loss of property, material damage
affecting the seaworthiness of a vessel, or significant harm to the
environment. It also requires information on the use of alcohol be
included in a marine casualty report. Section 7503 of 46 U.S.C.
authorizes the Coast Guard to deny the issuance of licenses,
certificates of registry, and merchant mariner's documents (seaman's
papers) to users of dangerous drugs. Similarly, 46 U.S.C. 7704 requires
the Coast Guard to revoke such papers unless a holder provides
satisfactory proofs that the holder has successfully completed a
rehabilitation program acceptable to the U.S. Coast Guard and is
determined to be, by a competent substance abuse professional, free
from misuse of chemical substances and that the risk of subsequent
misuse of chemical substances is sufficiently low to justify returning
to safety-sensitive positions.
    Forms:
     CG-2692, Report of Marine Casualty, Commercial Diving
Casualty, or OCS-related Casualty;
     CG-2692A, Barge Addendum;
     CG-2692B, Report of Mandatory Chemical Testing Following a
Serious Marine Incident Involving Vessels in Commercial Service;
     CG-2692C, Personnel Casualty Addendum;
     CG-2692D, Involved Persons and Witnesses Addendum.
    Respondents: Vessel owners and operators.
    Frequency: On occasion.
    Hour Burden Estimate: The estimated burden has decreased from
28,597 hours to 21,525 hours a year, due to a decrease in the estimated
number of responses.
    Authority: The Paperwork Reduction Act of 1995; 44 U.S.C. chapter
35, as amended.

    Dated: January 27, 2022.
Kathleen Claffie,
Chief, Office of Privacy Management, U.S. Coast Guard.
[FR Doc. 2022-02120 Filed 2-1-22; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 77, Number 208 (Friday, October 26, 2012)]
[Notices]
[Pages 65380-65381]
[FR Doc No: 2012-26432]

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ENVIRONMENTAL PROTECTION AGENCY

[FRL-9745-2]

Notice of Proposed Administrative Settlement Pursuant to the
Comprehensive Environmental Response, Compensation, and Liability Act

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice; request for public comment.

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SUMMARY: In accordance with Section 122(i) of the Comprehensive
Environmental Response, Compensation, and Liability Act, as amended
(``CERCLA''), notice is hereby

given of a proposed administrative settlement concerning the Gulf State
Utilities--North Ryan Street Superfund Site, Lake Charles, Calcasieu
Parish, Louisiana.
    The settlement requires the two (2) settling parties to pay a total
of $275,000.00 as payment of response costs to the Hazardous Substances
Superfund. The settlement includes a covenant not to sue pursuant to
Section 107 of CERCLA.
    For thirty (30) days following the date of publication of this
notice, the Agency will receive written comments relating to this
notice and will receive written comments relating to the settlement.
The Agency will consider all comments received and may modify or
withdraw its consent to the settlement if comments received disclose
facts or considerations which indicate that the settlement is
inappropriate, improper, or inadequate. The Agency's response to any
comments received will be available for public inspection at 1445 Ross
Avenue, Dallas, Texas 75202-2733.

DATES: Comments must be submitted on or before November 26, 2012.

ADDRESSES: The proposed settlement and additional background
information relating to the settlement are available for public
inspection at 1445 Ross Avenue, Dallas, Texas 75202-2733. A copy of the
proposed settlement may be obtained from Stephen Capuyan at 1445 Ross
Avenue, Dallas, Texas 75202-2733 or by calling<PHONE_NUMBER>. Comments
should reference the Gulf State Utilities--North Ryan Street Superfund
Site, Lake Charles, Calcasieu Parish, Louisiana and EPA Docket Number
06-10-12, and should be addressed to Stephen Capuyan at the address
listed above.

FOR FURTHER INFORMATION CONTACT: Edwin Quinones, Assistant Regional
Counsel, 1445 Ross Avenue, Dallas, Texas 75202-2733 or call (214) 665-
8035.

    Dated: October 17, 2012.
Ron Curry,
Regional Administrator (6RA).
[FR Doc. 2012-26432 Filed 10-25-12; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 81, Number 62 (Thursday, March 31, 2016)]
[Notices]
[Pages 18668-18671]
[FR Doc No: 2016-07204]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77450; File No. SR-CBOE-2016-005]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of Amendment No. 1 and Order Granting
Accelerated Approval of a Proposed Rule Change, as Modified by
Amendment No. 1, To Amend Interpretation and Policy .01 to Rule
1.1(ggg) Relating to the Professional Customer Definition

March 25, 2016.

I. Introduction

    On January 27, 2016, Chicago Board Options Exchange, Incorporated
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend the methodology for
counting average daily order submissions in listed options to determine
whether a person or entity meets the definition of a Professional \3\
(``Professional order counting''). The Commission published the
proposed rule change for comment in the Federal Register on February
10, 2016.\4\ The Commission received one comment letter on the proposed
rule change.\5\ The Exchange filed Amendment No. 1 to the proposed rule
change on March 15, 2016,\6\ and submitted a response to comments on
March 18, 2016.\7\ This order provides notice of filing of Amendment
No. 1 and approves the proposal, as modified by Amendment No. 1, on an
accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Under CBOE rules, the term ``Professional'' means any person
or entity that (i) is not a broker or dealer in securities, and (ii)
places more than 390 orders in listed options per day on average
during a calendar month for its own beneficial account(s). See CBOE
Rule 1.1(ggg).
    \4\ See Securities Exchange Act Release No. 77049 (February 4,
2016), 81 FR 7173 (``Notice'').
    \5\ See Joint Letter from SpiderRock EXC, LLC and SpiderRock
Advisors, LLC, to Brent J. Fields, Secretary, Commission, dated
February 22, 2016 (``SpiderRock Letter'').
    \6\ In Amendment No. 1, the Exchange changed how complex orders
will be computed with respect to Professional order counting.
Amendment No. 1 modified the proposal to provide that a complex
order compromised of nine legs or more will count as multiple orders
with each option leg counting as its own separate order while
complex orders with eight legs or less will count as a single order.
The Exchange previously proposed that complex orders compromised of
five legs or more would count as multiple orders while complex
orders with four legs or less would count as a single order. In
addition, Amendment No. 1 provided that any complex order with nine
or more legs that is canceled and replaced would count as multiple
new orders unless the child orders resulting from the parent order
were canceled and replaced on the same side and series as the parent
order. The Exchange previously proposed that complex orders with
five legs or more that were canceled and replaced would count as
multiple new orders. To promote transparency of its proposed
amendment, when CBOE filed Amendment No. 1 with the Commission, it
also submitted Amendment No. 1 as a comment letter to the file,
which the Commission posted on its Web site and placed in the public
comment file for SR-CBOE-2016-005 (available at http://www.sec.gov/comments/sr-cboe-2016-005/cboe2016005-2.pdf). The Exchange also
posted a copy of its Amendment No. 1 on its Web site (http://www.cboe.com/aboutcboe/legal/submittedsecfilings.aspx) when it filed
the amendment with the Commission.
    \7\ See Letter from William P. Wallenstein, Senior Counsel,
CBOE, to Brent J. Fields, Secretary, Commission, dated March 18,
2016 (``CBOE Response Letter'').
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II. Description of the Proposal

    The Exchange proposes to amend Interpretation and Policy .01 to
Rule 1.1(ggg) relating to the definition of Professionals.
Specifically, the Exchange proposes to delete current Interpretation
and Policy .01 to Rule 1.1(ggg) and adopt new Interpretation and Policy
.01 to Rule 1.1(ggg), setting forth a new methodology for calculating
average daily order submissions for Professional order counting
purposes.\8\
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    \8\ See Notice, supra note 4, at 7173.
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Background

    Prior to 2009, the Exchange designated all orders as either
customer orders or non-customer orders based solely on whether or not
the order was placed for the account of a customer or for the account
of a registered securities broker-dealer.\9\ According to CBOE, the
Exchange granted public customers certain advantages, including
priority to trade and reduced or no transaction fees, in order to
attract public customer order flow and to account for such customers'
lack of sophistication along with their lack of access to market data
services, analytics technology, and other trading devices more common
to broker-dealers.\10\ As non-broker-dealer traders gained access to
electronic trading platforms, analytics technology, and market data
services previously available only to broker-dealers, the distinction
between public customers and non-customers became, in CBOE's opinion,
less effective in promoting the intended purposes of the Exchange's
customer priority rules because certain customers increasingly were
more similarly situated to broker-dealers.\11\ Accordingly, in 2009,
the Exchange adopted a definition of Professional under Rule 1.1(ggg)
to further distinguish different types of orders placed on the
Exchange.\12\ In November 2014, the Exchange clarified its Professional
order rule by adopting Interpretation and Policy .01 to Rule
1.1(ggg).\13\
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    \9\ See id. at 7174.
    \10\ See id.
    \11\ See id.
    \12\ According to CBOE, its Professional customer rule
originally was based upon a similar rule from the International
Securities Exchange, LLC (``ISE''). See Securities Exchange Release
59287 (January 23, 2009), 74 FR 5694 (January 30, 2009) (SR-ISE-
2006-26) (``ISE Approval Order''); see also Notice, supra note 4, at
7174, n.8.
    \13\ See CBOE Regulatory Circular RG09-148 (Professional
Orders). Specifically, the Exchange codified its interpretation
that, for Professional order counting purposes, ``parent'' orders
that are placed on a single ticket and entered for the beneficial
account(s) of a person or entity that is not a broker or dealer in
securities and that are broken into multiple parts by a broker or
dealer, or by an algorithm housed at a broker or dealer, or by an
algorithm licensed from a broker or dealer that is housed with the
customer in order to achieve a specific execution strategy,
including, but not limited to basket trades, program trades,
portfolio trades, basis trades, and benchmark hedges, should count
as one single order for Professional order counting purposes.
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    According to the Exchange, the advent of new multi-leg spread
products and the proliferation of the use of complex orders and
algorithmic execution strategies by both institutional and retail
market participants raise questions as to what should be counted as an
``order'' for Professional order counting purposes.\14\ In light of
this, the Exchange now proposes to adopt an amended interpretation to
specifically address the counting of multi-leg spread products,
algorithm generated orders, and complex orders for purposes of
determining Professional customer status.\15\
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    \14\ See Notice, supra note 4, at 7175.
    \15\ See id.
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Proposal

    The Exchange's proposal deletes current Interpretation and Policy
.01 to Rule 1.1(ggg) and replaces it with a new Interpretation and
Policy that sets forth a new methodology for counting complex orders,
parent/child orders, and cancel/replace orders for Professional order
counting purposes.\16\ Pursuant to Rule 1.1(ggg), all orders will count
as one single order for Professional customer counting purposes, unless
one of the exceptions enumerated in the new Interpretation and Policy
stipulates otherwise.\17\
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    \16\ See id. at 7176.
    \17\ See id. Under current Exchange Rule 1.1(ggg), Trading
Permit Holders are required to indicate whether their public
customer orders are Professional orders. This existing requirement
remains unchanged under this proposed rule change. See id. at 7178.
According to the Exchange, a Trading Permit Holder must conduct a
review of all orders received from non-broker-dealers on at least a
quarterly basis in order to make the appropriate designation. See
id.

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    Paragraph (a) of proposed new Interpretation and Policy .01 will
govern the computation rules for complex orders. Under subparagraph
(a)(1), a complex order of eight legs or less will count as one
order.\18\ In contrast, under subparagraph (a)(2), a complex order of
nine legs or more will count as multiple orders with each option leg
counting as its own separate order.\19\ The Exchange stated that this
dividing line is appropriate because complex orders with eight or fewer
legs are more often associated with retail strategies such as
strangles, straddles, butterflies, collars, and condor strategies.\20\
In contrast, the Exchange believes that Professionals may be more
likely than retail customers to use complex orders of nine legs or
more, as CBOE believes that such orders are demonstrative of
sophisticated trading activity.\21\
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    \18\ See Notice, supra note 4, at 7176; see also Amendment No.
1, supra note 6.
    \19\ See Notice, supra note 4, at 7176; see also Amendment No.
1, supra note 6.
    \20\ See Notice, supra note 4, at 7176.
    \21\ See id.
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    Paragraph (b) of proposed new Interpretation and Policy .01 will
govern the calculations for parent/child orders.\22\ Under subparagraph
(b)(1), if a parent order submitted for the beneficial account(s) of a
person or entity other than a broker or dealer is subsequently broken
up into multiple child orders on the same side (buy/sell) and series by
a broker or dealer, or by an algorithm housed at the broker or dealer,
or by an algorithm licensed from the broker or dealer but housed with
the customer, then the order will count as one order even if the child
orders are routed across several exchanges.\23\ According to the
Exchange, this subparagraph is designed to allow the orders of public
customers to be ``worked'' by a broker (or a broker's algorithm) in
order to achieve best execution without counting the activity as
multiple child orders for Professional order counting purposes.\24\
Conversely, under subparagraph (b)(2), if a parent order, including a
strategy order,\25\ is broken into multiple child orders on both sides
(buy/sell) of a series and/or multiple series, then each child order
will count as a separate new order.\26\ The Exchange believes that
strategy orders are most often utilized by Professionals and therefore
are appropriately counted as multiple orders for Professional order
counting purposes.\27\ The Exchange further noted that paragraph (b) is
not designed to capture larger-size orders that are broken into
multiple orders to achieve an execution consistent with the principles
of best execution.\28\ Instead, the Exchange stated that paragraph (b)
is aimed at capturing orders generated by an algorithm operated by a
Professional that continuously updates its orders in tandem with market
changes.\29\ According to the Exchange, these orders are most
appropriately counted as multiple orders for Professional order
counting purposes.\30\
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    \22\ See id.
    \23\ See id.
    \24\ See id.
    \25\ In its filing, CBOE noted that the term ``strategy order''
is intended to mean an execution strategy, trading instruction, or
algorithm whereby multiple ``child'' orders on both sides of a
series and/or multiple series are generated prior to being sent to
an options exchange(s). See id. at 7176, n.17.
    \26\ See id. at 7176. The Exchange noted that non-professional
customers that simultaneously or nearly simultaneously enter
multiple limit orders to buy and sell the same security may violate
CBOE Rule 6.8C, the prohibition against acting as a Market Maker.
See id. at 7176, n.18; see also Exchange Rule 6.8C.
    \27\ See Notice, supra note 4, at 7176 (containing examples of
types of strategy orders including vega and volatility orders).
    \28\ See id. at 7177.
    \29\ See id.
    \30\ See id.
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    Paragraph (c) of new Interpretation and Policy .01 will govern the
counting methodology for cancel/replace orders.\31\ Subparagraph (c)(1)
states, as a general rule that any order that cancels and replaces an
existing order will count as a separate order (or multiple orders in
the case of complex orders of nine legs or more).\32\ Subparagraph
(c)(2) contains an exception from this general rule. Under subparagraph
(c)(2), an order to cancel and replace a child order would not count as
a new order if the parent order that was placed for the beneficial
account(s) of a non-broker or dealer had been subsequently broken into
multiple child orders on the same side and series as the parent order
by a broker or dealer, algorithm at a broker or dealer, or algorithm
licensed from a broker or dealer but housed at the customer.\33\ By
contrast, subparagraph (c)(3) provides that an order that cancels and
replaces a child order resulting from a parent order, including a
strategy order, that generated child orders on both sides (buy/sell) of
a series and/or in multiple series would count as a new order per side
and series.\34\ Finally, subparagraph (c)(4) states that,
notwithstanding subparagraph (c)(2), an order that cancels and replaces
any child order resulting from a parent order being pegged to the
Exchange's best bid or offer (``BBO'') or the national best bid or
offer (``NBBO'') or that cancels and replaces any child order pursuant
to an algorithm that uses the BBO or NBBO in the calculation of child
orders and attempts to move with or follow the BBO or NBBO of a
particular options series would count as a new order each time the
order cancels and replaces in order to attempt to move with or follow
the BBO or NBBO.\35\
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    \31\ See id.
    \32\ See id.; see also Amendment No. 1, supra note 6.
    \33\ See Notice, supra note 4, at 7177.
    \34\ See id.
    \35\ See id.
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Implementation

    The Exchange has proposed an effective date of April 1, 2016 for
this proposed rule change.\36\ The proposal would not be applied
retroactively.\37\
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    \36\ See id.
    \37\ See id. at 7178.
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 III. Comment Summary and CBOE's Response

    The Commission received one comment letter regarding the proposed
rule change, which opposed the proposal.\38\ Among other things, the
commenter expressed concern that the proposal would ``unfairly require
the professional categorization of certain other customers that do not
otherwise seem to be market professionals and are not systematically
attempting to compete with market makers . . . .'' \39\ Specifically,
the commenter believed that the proposal would classify as
Professionals, persons or entities that increasingly use complex orders
and other multi-legged orders or who have ``hired a more market savvy
and technologically sophisticated firm to handle their interactions
with the market.'' \40\ In response, CBOE stated that customers trading
with a frequency sufficient to meet the Professional customer
definition, as modified by the current proposal, evidence a level of
sophistication similar to that of broker-dealers and Market-Makers and
therefore do compete with those market participants.\41\ The Exchange
asserted that many of those customers include hedge funds, proprietary
trading firms, large bank trading desks, and wealth

management firms who employ sophisticated algorithms to execute more
than the Professional customer threshold, which is equivalent to one
order per minute.\42\ Therefore, CBOE believes that it is not unfair or
anti-competitive to designate as Professionals those participants who,
when executing the requisite number of orders, share similar levels of
sophistication with broker-dealers or Market-Makers while maintaining
customer priority for true traditional retail investors.\43\
---------------------------------------------------------------------------

    \38\ See SpiderRock Letter, supra note 5, at 3-4. The commenter
made several recommendations to the Commission, and expressed
concern over the concept of customer priority, Market Maker payment
for order flow, order routing, and Market Maker preferencing. The
Commission notes that these issues are beyond the scope of CBOE's
present proposal, which applies to a modified calculation of order
activity for Professional order counting purposes.
    \39\ See id. at 8. The Commenter argued that a ``new
generation'' of customer is increasingly using more sophisticated
trading techniques. See id. at 4.
    \40\ See id. at 4.
    \41\ See CBOE Response Letter, supra note 7, at 4.
    \42\ See id.
    \43\ See id. The Exchange further noted that, subject to
applicable regulatory requirements, it has discretion to decide the
best way to encourage competitive markets and how best to attract
retail order flow to the exchange, and its proposed rule change
seeks to accomplish those business objectives. See id.
---------------------------------------------------------------------------

    The commenter also expressed a concern that the proposed rule
change ``would effectively ban'' the use of certain multi-part orders
in priority customer accounts.\44\ In response, CBOE stated that it is
not banning any order type that is permitted under its rules, including
the order types referenced by the commenter.\45\ More specifically, the
Exchange noted that ``[p]ublic customers and Professionals alike are
free to employ these strategies on the Exchange as they see fit, the
only difference being that, unlike a public customer, a Professional
may not receive execution priority over broker-dealer orders and
Market-Maker quotes at the same price and may incur transaction fees.''
\46\ Therefore, CBOE asserted that the choice whether to use any
particular strategy is within the business judgment of the particular
customer and not the result of an Exchange-imposed restriction.\47\
---------------------------------------------------------------------------

    \44\ See SpiderRock Letter, supra note 5, at 7.
    \45\ See CBOE Response Letter, supra note 7, at 2-3.
    \46\ See id. at 3.
    \47\ See id.
---------------------------------------------------------------------------

    The commenter next noted that customers are becoming ``increasingly
sophisticated and technology enabled.'' \48\ The commenter stated that
there are varying types of investors with different levels of
sophistication using multi-part orders to trade on their own behalf or
hire firms to carry out such trading strategies on their behalf.\49\
Therefore, the commenter asserted that the assumption that only
``true'' Professionals have access to more sophisticated trading
techniques is misguided.\50\ The commenter believed that ``there is no
agreed definition of retail customer, rather, there is a complex
collection of accounts that can be categorized along a number of not-
mutually-exclusive dimensions.'' \51\ In response, CBOE noted that it
does not seek to dissuade the use of technology by any investor, nor
use technology as the benchmark for deciding whether an investor who
uses it crosses the threshold of public customer to Professional.\52\
Rather, the Exchange noted that its proposal will look to the number of
orders produced through that technology and if the number of orders is
fewer than 390 average orders per day on average over the applicable
period then that investor will not be a Professional despite the use of
the technology-enabled strategies.\53\ The Exchange further emphasized
that it is the number of orders that determines whether a trader is a
Professional and not the technology to which a trader has access.\54\
---------------------------------------------------------------------------

    \48\ See SpiderRock Letter, supra note 5, at 9.
    \49\ See id. at 7-8.
    \50\ See id.
    \51\ See id. at 8.
    \52\ See CBOE Response Letter, supra note 7, at 3.
    \53\ See id.
    \54\ See id. at 3-4.
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IV. Discussion and Commission Findings

    After careful review of the proposed rule change, as well as the
comment letter and the CBOE response, the Commission finds that the
proposed rule change is consistent with the requirements of the Act and
the rules and regulations thereunder applicable to a national
securities exchange.\55\ In particular, the Commission finds that the
proposed rule change is consistent with Section 6(b)(5) of the Act,\56\
which requires, among other things, that the rules of a national
securities exchange be designed to prevent fraudulent and manipulative
acts and practices, 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; and not be designed to permit unfair
discrimination between customers, issuers, brokers, or dealers. In
addition, the Commission finds that the proposed rule change is
consistent with Section 6(b)(8) of the Act, which requires the rules of
the exchange not to impose any burden on competition not necessary or
appropriate in furtherance of the Act.\57\
---------------------------------------------------------------------------

    \55\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \56\ 15 U.S.C. 78f(b)(5).
    \57\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    The Commission previously has articulated its position regarding
the application of Section 6 of the Act in evaluating distinctions
among market participants proposed by exchanges and the discretion
available to an exchange to set an appropriate level of advantages and
responsibilities of persons trading on its market.\58\ In particular,
the Commission previously indicated that it does not believe that
priority for public customer orders is a statutorily-required attribute
of an exchange and therefore the grant of such priority is within an
exchange's prerogative and business judgement, as long as such
provision is otherwise consistent with the requirements of the Act.\59\
---------------------------------------------------------------------------

    \58\ See ISE Approval Order, supra note 12, at 5699, n. 59.
    \59\ See id. at 5700.
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    The Commission notes that the Exchange is not amending the
threshold of 390 orders in listed options per day but is revising the
method for counting Professional orders in the context of multi-part
orders and cancel/replace activity. The Exchange noted that it has
received questions regarding the classification of these types of
orders when calculating Professional customer activity.\60\ The
Commission believes that the proposal is designed to set forth a
reasonable and objective approach to determine Professional customer
status.
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    \60\ See Notice supra note 4, at 7175.
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    Specifically, the proposal addresses how to account for complex
orders, parent/child orders, and cancel/replace orders. The Commission
believes that distinguishing between complex orders with 9 or more
options legs and those orders with 8 or fewer options legs is a
reasonable and objective approach. The Commission notes that, in
Amendment No. 1, the Exchange increased the number of complex order
legs considered for multiple order counting purposes from five or more
legs to nine or more legs in response to the concerns of the commenter,
who noted that some retail customers are increasingly using trading
techniques with multi-part orders.
    In addition, the Commission believes that CBOE's proposal
appropriately distinguishes between parent/child orders that are
generated by a broker's efforts to obtain an execution on a larger size
order while minimizing market impact and multi-part orders that used by
more sophisticated market participants. Similarly, the Commission
believes that the proposed guidance that cancel/replace orders will
count as separate orders with limited exceptions is a reasonable and
objective approach to distinguish the orders of retail customers that
are ``worked'' by a broker from orders generated by algorithms used by
more sophisticated market

participants. Similar to what it has noted in past Professional
customer filings, the Commission believes that the line that CBOE now
seeks to draw between ``priority'' customers and Professional customers
reflects CBOE's belief that the orders of a person who submits, on
average, more than one order every minute of the trading day need not
(or should not) be granted the same benefit or incentive that is
granted to customers who do not trade on such a scale.\61\
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    \61\ See ISE Approval Order, supra note 12, at 5701.
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    The Commission believes that the grant of priority to certain
participants over others in a manner that is consistent with the Act is
most reasonably viewed as within the discretion of the Exchange.\62\
Thus, the Commission believes that CBOE's proposal, which establishes
an objective methodology for counting average daily order submissions
for Professional order counting purposes, is consistent with the Act.
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    \62\ See id. at 5700.
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V. Solicitation of Comments on Amendment No. 1 to the Proposed Rule
Change

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether Amendment No. 1
to 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<EMAIL_ADDRESS>Please include
File No. SR-CBOE-2016-005 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 No. SR-CBOE-2016-005. 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 will also 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 No. SR-CBOE-2016-005 and should be
submitted on or before April 21, 2016.

VI. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 1, prior to the thirtieth day
after the date of publication of notice of the amended proposal in the
Federal Register. The revisions made to the proposal in Amendment No. 1
\63\ changed how complex orders will be counted with respect to
Professional order counting. Amendment No. 1 modified the proposal to
provide that a complex order compromised of nine legs or more will
count as multiple orders with each option leg counting as its own
separate order instead of five legs or more as previously proposed by
the Exchange.\64\ The Commission believes that this modification
responds to one of the primary concerns raised by the commenter on the
proposal that increasingly sophisticated customers would be adversely
affected by the proposal, causing them to become Professionals and lose
their priority customer status. Amendment No. 1 effectively allows
retail customers to use more advanced trading strategies (i.e., complex
orders with up to eight legs) without having that activity counted as
multiple orders for purposes of Professional order counting. Thus, the
Commission believes that the changes in Amendment No. 1 respond to one
of the concerns raised by the commenter by adopting a more permissive
threshold for complex orders, and ultimately could decrease the number
of persons or entities that will meet the definition of Professional
under the new Interpretation and Guidance. Accordingly, the Commission
finds good cause, pursuant to Section 19(b)(2) of the Act,\65\ to
approve the proposed rule change, as modified by Amendment No. 1, on an
accelerated basis.
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    \63\ See Amendment No. 1, supra note 6.
    \64\ See id.
    \65\ 15 U.S.C. 78s(b)(2)
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VII. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\66\ that the proposed rule change (SR-CBOE-2016-005), as modified
by Amendment No. 1, be, and hereby is, approved on an accelerated
basis.
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    \66\ See id.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\67\
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    \67\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-07204 Filed 3-30-16; 8:45 am]
BILLING CODE 8011-01-P