[Federal Register Volume 81, Number 127 (Friday, July 1, 2016)]
[Notices]
[Pages 43308-43315]
[FR Doc No: 2016-15716]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78177; File No. SR-CBOE-2016-049]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of a Proposed Rule Change To List
Options That Overlie the FTSE Developed Europe Index and the FTSE
Emerging Index, To Raise the Comprehensive Surveillance Agreement
Percentage Applicable to Certain Index Options, and To Amend the
Maintenance Listing Criteria Applicable to Certain Index Options

June 28, 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 June 15, 2016, Chicago Board Options Exchange, Incorporated
(``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (``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 Exchanges seeks to list and trade options that overlie the FTSE
Developed Europe Index and the FTSE Emerging Index (``FTSE Developed
options'' and ``FTSE Emerging options''), raise the comprehensive
surveillance agreement percentage applicable to options that overlie
the MSCI EAFE Index and the MSCI Emerging Markets Index (``EAFE
options'' and ``EM options''), and amend the maintenance listing
criteria applicable to EAFE options, EM options, FTSE 100 Index options
(``FTSE 100 options''), and FTSE China 50 Index options (``FTSE China
50 options''). The text of the proposed rule change is provided in
Exhibit 5.
    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 purpose of this proposed rule change is to permit the Exchange
to list and trade FTSE Developed options and FTSE Emerging options,
amend Rule 24.2.01(a)(7) to raise the comprehensive surveillance
agreement (``CSA'') percentage applicable to EAFE options and EM
options,\3\ and amend Rules 24.2.01(b)(1), 24.2.02(b)(1), and
24.2.03(b)(1) to modify the maintenance listing criteria applicable to
EAFE options, EM options, FTSE 100 options,\4\ and FTSE China 50
options.\5\ FTSE Developed and FTSE Emerging options would be P.M.,
cash-settled contracts with European-style exercise.
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    \3\ The Securities and Exchange Commission (the ``Commission)
approved CBOE's proposal to list and trade EAFE and EM options on
April 8, 2015. See Securities Exchange Act Release No. 74681 (April
8, 2015), 80 FR 20032 (April 14, 2015) (approving SR-CBOE-2015-023).
    \4\ The Securities and Exchange Commission (the ``Commission)
approved CBOE's proposal to list and trade FTSE 100 options on
December 11, 2015. See Securities Exchange Act Release No. 76626
(December 11, 2015), 80 FR 78794 (December 17, 2015) (approving SR-
CBOE-2015-100).
    \5\ The Securities and Exchange Commission (the ``Commission)
approved CBOE's proposal to list and trade FTSE China 50 options on
December 17, 2015. See Securities Exchange Act Release No. 76676
(December 17, 2015), 80 FR 79963 (December 23, 2015) (approving SR-
CBOE-2015-099).
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FTSE Developed Europe Index Design, Methodology and Dissemination
    The FTSE Developed Europe Index is a weighted index representing
the performance of large- and mid-cap companies in Developed European
markets. The index is comprised of over 500 securities from the
following 15 countries: Austria, Belgium & Luxembourg, Denmark,
Finland, France, Germany, Ireland, Italy, Netherlands,

Norway, Portugal, Spain, Sweden, Switzerland, and the United
Kingdom.\6\
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    \6\ See FTSE Developed Europe Index fact sheet (dated May 31,
2016) located at: http://www.ftse.com/Analytics/FactSheets/Home/DownloadSingleIssue?issueName=AWDEURS. Belgium and Luxembourg are
listed as one country in the ``Country Breakdown.''
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    The FTSE Developed Europe Index was launched on May 31, 2000 and is
calculated by FTSE International Limited (``FTSE''), which is a
provider of investment support tools. The FTSE Developed Europe Index
is calculated and published on a real-time basis in British pounds and
U.S dollars during U.K. and U.S. trading hours: From 2:00 a.m.-10:30
a.m. (Chicago time) the real-time index is calculated using real time
prices of the securities. At 10:30 a.m. (Chicago time) the real-time
index closes using the closing prices from the London Stock Exchange.
Thus, between 10:30 a.m. and 3:15 p.m. (Chicago time) the FTSE
Developed Europe Index level is a static value that market participants
can access via data vendors.
    The methodology used to calculate the FTSE Developed Europe Index
is similar to the methodology used to calculate the value of other
benchmark market-capitalization weighted indexes. Specifically, the
FTSE Developed Europe Index is governed by the Ground Rules for the
FTSE Global Equity Index Series.\7\ The level of the FTSE Developed
Europe Index reflects the free float-adjusted market value of the
component stocks relative to a particular base date and is computed by
dividing the total market value of the companies in the FTSE Developed
Europe Index by the index divisor.
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    \7\ Summary and comprehensive information about the FTSE
Developed Europe Index methodology may be reviewed at: http://www.ftse.com/products/downloads/FTSE_Global_Equity_Index_Series.pdf?840.
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    The FTSE Developed Europe Index is monitored and maintained by
FTSE. Adjustments to the FTSE Developed Europe Index could be made on a
daily basis with respect to corporate events and dividends. FTSE
reviews the FTSE Developed Europe Index semi-annually (March and
September).\8\
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    \8\ See id.
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    Real-time data is distributed at least every 15 seconds while the
index is being calculated using FTSE's real-time calculation engine to
Bloomberg L.P. (``Bloomberg''), Thomson Reuters (``Reuters'') and other
major vendors. End-of-day data is distributed daily to clients through
FTSE as well as through major quotation vendors, including Bloomberg
and Reuters.
    The Exchange notes that FTSE Developed Europe Index futures
contracts are listed for trading on the Chicago Mercantile Exchange
(``CME'').\9\
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    \9\ See E-mini FTSE Developed Europe Index Futures contract
specifications located at: http://www.cmegroup.com/trading/equity-index/international-index/e-mini-ftse-developed-europe-index_contract_specifications.html.
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FTSE Emerging Index Design, Methodology and Dissemination
    The FTSE Emerging Index is a weighted index representing the
performance of large- and mid-cap companies in advanced and secondary
emerging markets. The index is comprised of approximately 950
securities from the following 22 countries: Brazil, Chile, China,
Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia,
Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Russia, South
Africa, Taiwan, Thailand, Turkey, and United Arab Emirates.\10\
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    \10\ See FTSE Emerging Index fact sheet (dated May 31, 2016)
located at: http://www.ftse.com/Analytics/FactSheets/Home/DownloadSingleIssue?issueName=AWALLE.
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    The FTSE Emerging Index was launched on June 30, 2000 and is also
calculated by FTSE.
    The FTSE Emerging Index is calculated and published on a real-time
basis in U.S. dollars during U.K. and U.S. trading hours: From 6:30
p.m. (Chicago time) (prior day) to 3:10 p.m. (Chicago time) (next day).
At 3:10 p.m. (Chicago time) the real-time index closes using the
closing prices from Brazil, Chile, Peru and Mexico. Thus, between 3:10
p.m. and 3:15 p.m. (Chicago time) the FTSE Emerging Index level is a
static value that market participants can access via data vendors.
    The methodology used to calculate the FTSE Emerging Index is
similar to the methodology used to calculate the value of other
benchmark market-capitalization weighted indexes. Specifically, the
FTSE Emerging Index is also governed by the Ground Rules for the FTSE
Global Equity Index Series.\11\ The level of the FTSE Emerging Index
reflects the free float-adjusted market value of the component stocks
relative to a particular base date and is computed by dividing the
total market value of the companies in the FTSE Emerging Index by the
index divisor.
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    \11\ Summary and comprehensive information about the FTSE
Emerging Index methodology may be reviewed at: http://www.ftse.com/products/downloads/FTSE_Global_Equity_Index_Series.pdf?840.
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    The FTSE Emerging Index is monitored and maintained by FTSE.
Adjustments to the FTSE Emerging Index could be made on a daily basis
with respect to corporate events and dividends. FTSE reviews the FTSE
Emerging Index semi-annually (March and September).\12\
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    \12\ See id.
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    Real-time data is distributed at least every 15 seconds while the
index is being calculated using FTSE's real-time calculation engine to
Bloomberg, Reuters and other major vendors. End-of-day data is
distributed daily to clients through FTSE as well as through major
quotation vendors, including Bloomberg and Reuters.
    The Exchange notes that FTSE Emerging Index futures contracts are
listed for trading on CME.\13\
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    \13\ See E-mini FTSE Emerging Index Futures contract
specifications located at: http://www.cmegroup.com/trading/equity-index/international-index/e-mini-ftse-emerging-index_contract_specifications.html.
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Initial and Maintenance Listing Criteria
    The FTSE Developed Europe Index and the FTSE Emerging Index each
meet the definition of a broad-based index as set forth in Rule
24.1(i)(1).\14\ In addition, the Exchange proposes to apply the initial
and maintenance listing criteria currently only applicable to EAFE and
EM options to FTSE Developed and FTSE Emerging options. Specifically,
the Exchange proposes to amend Interpretation and Policy .01(a) to Rule
24.2, Designation of the Index, to provide that the Exchange may trade
FTSE Developed and FTSE Emerging options if each of the following
conditions is satisfied: (1) The index is broad-based, as defined in
Rule 24.1(i)(1); (2) Options on the index are designated as P.M.-
settled index options; (3) The index is capitalization-weighted, price-
weighted, modified capitalization-weighted or equal dollar-weighted;
(4) The index consists of 500 or more component securities; (5) All of
the component securities of the index will have a market capitalization
of greater than $100 million; (6) No single component security accounts
for more than fifteen percent (15%) of the weight of the index, and the
five highest weighted component securities in the index do not, in the
aggregate, account for more than fifty percent (50%) of the weight of
the index; (7) Non-U.S. component securities (stocks or American
Depositary Receipts (``ADRs'')) that are not subject to CSAs do not, in
the aggregate, represent more than fifty percent (50%) of the weight of
the FTSE Developed Europe Index or the FTSE Emerging Index;\15\ (8)
During

the time options on the index are traded on the Exchange, the current
index value is widely disseminated at least once every fifteen (15)
seconds by one or more major market data vendors. However, the Exchange
may continue to trade FTSE Developed and FTSE Emerging options after
trading in all component securities has closed for the day and the
index level is no longer widely disseminated at least once every
fifteen (15) seconds by one or more major market data vendors, provided
that FTSE Developed Europe Index futures or FTSE Emerging Index futures
contracts are trading and prices for those contracts may be used as a
proxy for the current index value; (9) The Exchange reasonably believes
it has adequate system capacity to support the trading of options on
the index, based on a calculation of the Exchange's current Independent
System Capacity Advisor (ISCA) allocation and the number of new
messages per second expected to be generated by options on such index;
and (10) The Exchange has written surveillance procedures in place with
respect to surveillance of trading of options on the index.
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    \14\ Rule 24.1(i)(1) defines a broad-based index to mean an
index designed to be representative of a stock market as a whole or
of a range of companies in unrelated industries.
    \15\ Other than proposed listing criteria 7 of Rule 24.2.01(a)
and maintenance listing criteria 1 of Rule 24.2.01(b), the Exchange
is proposing to adopt the same listing criteria for FTSE Developed
and FTSE Emerging options that are currently applicable to EAFE and
EM options. See infra text on ``MSCI EAFE and EM Indexes'' for the
discussion on raising the CSA percentage for EAFE and EM options and
text on ``Maintenance Listing Criteria'' amending maintenance
listing criteria for EAFE, EM, FTSE 100 and FTSE China 50 options.
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    Additionally, pursuant to Interpretation and Policy .01(b) to Rule
24.2, the Exchange is proposing the following maintenance listing
standards for FTSE Developed and FTSE Emerging options: (1) The
conditions set forth in subparagraphs .01(a) (1), (2), (3), (4), (8),
(9) and (10) must continue to be satisfied. The conditions set forth in
subparagraphs .01(a)(5), (6), and (7) must be satisfied only as of the
first day of January and July in each year; and (2) The total number of
component securities in the index may not increase or decrease by more
than thirty-five percent (35%) from the number of component securities
in the index at the time of its initial listing. In the event a class
of index options listed on the Exchange fails to satisfy the
maintenance listing standards set forth herein, the Exchange shall not
open for trading any additional series of options of that class unless
the continued listing of that class of index options has been approved
by the Commission under Section 19(b)(2) of the Securities Exchange Act
of 1934 (the ``Act'').
    The Exchange believes that P.M. settlement is appropriate for FTSE
Developed and FTSE Emerging options due to the nature of these indexes
that encompass multiple markets around the world. As to the FTSE
Developed Europe Index, the components open with the start of trading
in certain parts of Europe at approximately 2:00 a.m. (Chicago time)
and close with the end of trading in Europe at approximately 10:30 a.m.
(Chicago time) as closing prices from Ireland are accounted for in the
closing calculation. The closing FTSE Developed Europe Index is
distributed by FTSE between approximately 10:30 a.m. and 1:00 p.m.
(Chicago time) each trading day.
    As a result, there will not be a current FTSE Developed Europe
Index level calculated and disseminated during a portion of the time
during which FTSE Developed options would be traded (from approximately
10:30 a.m. (Chicago time) to 3:15 p.m. (Chicago time)). However, the
FTSE Developed Europe Index futures contract trades on CME during this
time period.\16\ The Exchange believes that the FTSE Developed Europe
Index futures prices may be a proxy for the current FTSE Developed
Europe Index level. Therefore, the Exchange believes that FTSE
Developed options should be permitted to trade after trading in all
component securities has closed for the day and the index level is no
longer widely disseminated at least once every fifteen (15) seconds by
one or more major market data vendors, provided that FTSE Developed
Europe Index futures contracts are trading and prices for those
contracts may be used as a proxy for the current index value.
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    \16\ The trading hours for E-mini FTSE Developed Europe Index
futures are from 5:00 p.m. (Chicago time) (prior day) to 4:00 p.m.
(Chicago time) (next day), Sunday through Friday. See E-mini FTSE
Developed Europe Index Futures contract specifications located at:
http://www.cmegroup.com/trading/equity-index/international-index/e-mini-ftse-developed-europe-index_contract_specifications.html.
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    As to the FTSE Emerging Index, the components open with the start
of trading in certain parts of Asia at approximately 6:30 p.m. (Chicago
time) (prior day) and close with the end of trading in Mexico and Peru
at approximately 3:10 p.m. (Chicago time) (next day) as closing prices
from Brazil, Chile, Peru and Mexico, including late prices, are
accounted for in the closing calculation. The closing FTSE Emerging
Index level is distributed at approximately 3:10 p.m. (Chicago time)
each trading day.
    As a result, there will not be a current FTSE Emerging Index level
calculated and disseminated during a portion of the time during which
FTSE Emerging options would be traded (from approximately 3:10 p.m.
(Chicago time) to 3:15 p.m. (Chicago time)). However, the FTSE Emerging
Index futures contract trades on CME during this time period.\17\ The
Exchange believes that the FTSE Emerging Index futures prices may be a
proxy for the current FTSE Emerging Index level. Therefore, the
Exchange believes that FTSE Emerging options should be permitted to
trade after trading in all component securities has closed for the day
and the index level is no longer widely disseminated at least once
every fifteen (15) seconds by one or more major market data vendors,
provided that FTSE Emerging Index futures contracts are trading and
prices for those contracts may be used as a proxy for the current index
value.
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    \17\ The trading hours for E-mini FTSE Emerging Index futures
are from 5:00 p.m. (Chicago time) (prior day) to 4:00 p.m. (Chicago
time) (next day), Sunday through Friday. See E-mini FTSE Emerging
Index Futures contract specifications located at: http://www.cmegroup.com/trading/equity-index/international-index/e-mini-ftse-emerging-index_contract_specifications.html.
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    Because the FTSE Developed Europe Index and FTSE Emerging Index
each has a large number of component securities and is representative
of many countries, similar to other broad-based indexes, the Exchange
believes that the initial listing requirements are appropriate to trade
options on this index. In addition, similar to other broad-based
indexes, the Exchange proposes various maintenance requirements, which
require continual and periodic compliance.
Options Trading
    Generally, the proposed trading rules for FTSE Developed and FTSE
Emerging options would be the same except for their respective trading
hours, which the Exchange will describe separately below. Exhibit 3
presents contract specifications for FTSE Developed and FTSE Emerging
options.
    The contract multiplier for FTSE Developed and FTSE Emerging
options would be $100. FTSE Developed and FTSE Emerging options would
be quoted in index points, and one point would equal $100. The minimum
tick size for series trading below $3 would be 0.05 ($5.00) and at or
above $3 will be 0.10 ($10.00).
    Initially, the Exchange would list in-, at- and out-of-the-money
strike prices. Additional series may be opened for trading as the
underlying index level moves up or down.\18\ The minimum

strike price interval for FTSE Developed and FTSE Emerging options
series would be 2.5 points if the strike price is less than 200. When
the strike price is 200 or above, strike price intervals would be no
less than 5 points.\19\ New series would be permitted to be added up to
the fifth business day prior to expiration.\20\
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    \18\ See Rules 24.9(a), 24.9.01 and 24.9.04. These rules set
forth the criteria for listing additional series of the same class
as the current value of the underlying index moves. Generally,
additional series must be ``reasonably related'' to the current
index value, which means that strike prices must be within 30% of
the current index value. Series exceeding the 30% range may be
listed based on demonstrated customer interest.
    \19\ See proposed amendments to Rule 24.9.01(a) adding FTSE
Developed and FTSE Emerging options as classes eligible for 2.5
point minimum strikes if the strike price is below 200.
    \20\ See Rule 24.9.01(c).
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    The Exchange would be permitted to list up to twelve near-term
expiration months.\21\ The Exchange would also be permitted to list up
to ten expirations in Long-Term Index Option Series (``LEAPS'') \22\ on
the FTSE Developed Europe Index and the FTSE Emerging Index and those
indexes would be eligible for all other expirations permitted for other
broad-based indexes, e.g., End of Week/End of Month/Wednesday
Expirations, Short Term Option Series and Quarterly Option Series.\23\
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    \21\ See proposed amendments to Rule 24.9(a)(2). The Exchange is
proposing to allow the listing of up to twelve expiration months at
any one time for FTSE Developed and FTSE Emerging options.
    \22\ See, e.g., Rule 24.9(b) (LEAPS). The Exchange may list
LEAPS that expire from 12 to 180 months from the date of issuance;
however, as noted in Exhibit 3, the Exchange is limiting FTSE
Developed and FTSE Emerging LEAPS to expirations between 12 and 60
months. The Exchange may determine to list LEAPS that expire between
60 and 180 months at a later date without a rule filing.
    \23\ See, e.g., Rules 24.9(e) (End of Week/End of Month/
Wednesday Expirations), 24.9(a)(2)(A) (Short Term Option Series) and
24.9(a)(2)(B) (Quarterly Option Series).
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    The trading hours for FTSE Developed options would be from 8:30
a.m. (Chicago time) to 3:15 p.m. (Chicago time), except that trading in
expiring FTSE Developed options would end upon the close of the London
Stock Exchange (usually 10:30 a.m. Chicago time) \24\ on their
expiration date (usually a Friday). The Exchange is proposing that FTSE
Developed options trade only during a portion of the day on their
expiration date to align the trading hours of expiring FTSE Developed
options with expiring FTSE Developed Europe Index futures. FTSE
Developed Europe Index futures trade on CME and stop trading at 10:30
a.m. (Chicago time) on the third Friday of the futures contract
month.\25\
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    \24\ For example, Daylight Saving Time began in Chicago on March
13, 2016, and in London on March 27, 2016. If an expiration were to
occur after Daylight Savings was observed in Chicago but prior to
observance in London, trading in expiring FTSE Developed options
would end at 11:30 a.m. (Chicago time). FTSE Emerging options are
not affected by Daylight Savings as trading in expiring FTSE
Emerging options ends at 3:15 p.m. (Chicago Time).
    \25\ See CME Rule 39002.G, available at: http://www.cmegroup.com/rulebook/CME/IV/350/390.pdf.
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    The trading hours for FTSE Emerging options would be from 8:30 a.m.
to 3:15 p.m. (Chicago time). The trading in expiring FTSE Emerging
options would also end at 3:15 p.m. (Chicago time) on their expiration
date (usually a Friday).
Exercise and Settlement
    The proposed FTSE Developed and FTSE Emerging options would expire
on the third Friday of the expiring month. Trading in expiring FTSE
Developed options would cease upon the close of the London Stock
Exchange (usually 10:30 a.m. Chicago time) on their expiration date
(usually a Friday) and trading in expiring FTSE Emerging options would
cease at 3:15 p.m. (Chicago time) on their expiration date (usually a
Friday). When the last trading day/expiration date is moved because of
an Exchange holiday or closure, the last trading day/expiration date
for expiring options would be the immediately preceding business day.
    Exercise would result in delivery of cash on the business day
following expiration. FTSE Developed and FTSE Emerging options would be
P.M.-settled. The exercise settlement value would be the official
closing values of the FTSE Developed Europe Index and the FTSE Emerging
Index as reported by FTSE on the last trading day of the expiring
contract.\26\
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    \26\ See proposed amendment to Rule 24.1.01 to identify FTSE
International Limited as the Reporting Authority for the FTSE
Developed Europe Index and the FTSE Emerging Index. As the
designated Reporting Authority for each of these indexes, the
disclaimers set forth in Rule 24.14 (Disclaimers) would apply to
FTSE International Limited.
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    The exercise settlement amount would be equal to the difference
between the exercise-settlement value and the exercise price of the
option, multiplied by the contract multiplier ($100).
    If the exercise settlement value is not available or the normal
settlement procedure cannot be utilized due to a trading disruption or
other unusual circumstance, the settlement value would be determined in
accordance with the rules and bylaws of The Options Clearing
Corporation (``OCC'').\27\
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    \27\ See Rule 24.7.
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Position and Exercise Limits
    The Exchange proposes to apply the default position limits for
broad-based index options to FTSE Developed and FTSE Emerging options.
Specifically, the chart set forth in Rule 24.4(a), Position Limits for
Broad-Based Index Options, provides that the positions limits
applicable to ``other broad-based indexes'' is 25,000 contracts
(standard limit/on the same side of the market) and 15,000 contracts
(near-term limit). Pursuant to Rule 24.5, Exercise Limits, the exercise
limits for FTSE Developed and FTSE Emerging options would be equivalent
to the near-term position limits for FTSE Developed and FTSE Emerging
options. These same position and exercise limits would apply to FLEX
trading. All position limit hedge exemptions would apply.
Margin
    The Exchange proposes that FTSE Developed and FTSE Emerging options
be margined as ``broad-based index'' options, and under CBOE rules,
especially Rule 12.3(c)(5)(A), the margin requirement for a short put
or call shall be 100% of the current market value of the contract plus
15% of the product of the current index group value and the applicable
index multiplier, reduced by any out-of-the-money amount. There would
be a minimum margin requirement of 100% of the current market value of
the contract plus: 10% of the aggregate put exercise price amount in
the case of puts, and 10% of the product of the current index group
value and the applicable index multiplier in the case of calls.
Additional margin may be required pursuant to Rules 12.3(h) and 12.10
(Margin Required is Minimum).
    The Exchange believes that FTSE Developed and FTSE Emerging options
are eligible products for portfolio margining under CBOE Rule 12.4.
Accordingly, the Exchange proposes that FTSE Developed and FTSE
Emerging options be allowed in portfolio margin accounts. CBOE proposes
that the FTSE Developed Europe Index be treated as a high-
capitalization, broad-based index to be housed in the European Market
Product Group. The market moves utilized for the European Markets
Product Group is -8%/+6%, with a 100% offset of gains and losses
between products in the same Class Group and an 85% offset with the
other classes contained in the Product Group.\28\
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    \28\ A table detailing the currently existing portfolio
margining Product Groups and their component class groups can be
found at http://www.optionsclearing.com/components/docs/risk-management/cpm/cpm_parameters.pdf.
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    CBOE proposes that the FTSE Emerging Index be treated as a non-
high-capitalization, broad-based index to be housed in the Emerging
Markets Indexes Product Group. The market

moves utilized for the Emerging Markets Indexes Product Groups are +/-
10%, with a 100% offset of gains and losses between products in the
same Class Group and an 85% offset with the other classes contained in
the Product Group.
Exchange Rules Applicable
    Except as modified herein, the rules in Chapters I through XIX,
XXIV, XXIVA, and XXIVB would equally apply to FTSE Developed and FTSE
Emerging options. FTSE Developed and FTSE Emerging options would be
subject to the same rules that currently govern other CBOE index
options, including sales practice rules,\29\ margin requirements \30\
and trading rules.\31\
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    \29\ See Chapter IX (Doing Business with the Public).
    \30\ See Chapter XII (Margins).
    \31\ See, e.g., Chapters IV (Business Conduct), VI (Doing
Business on the Trading Floor), VIII (Market-Makers, Trading Crowds
and Modified Trading Systems) and XXIV (Index Options).
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    The Exchange hereby designates FTSE Developed and FTSE Emerging
options as eligible for trading as Flexible Exchange Options as
provided for in Chapters XXIVA (Flexible Exchange Options) and XXIVB
(FLEX Hybrid Trading System).\32\
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    \32\ See proposed amendments to Rules 24A.7, Position Limits and
Reporting Requirements, and 24B.7, Position Limits and Reporting
Requirements, providing that the position limits for FLEX Index
options on the FTSE Developed Europe Index and on the FTSE Emerging
Index would be equal to the position limits for Non-FLEX options on
those indexes. Per existing Rules 24A.8, Exercise Limits, and 24B.8,
Exercise Limits, the exercise limits for FLEX FTSE Developed and
FTSE Emerging option would be equivalent to the position limits for
FLEX FTSE Developed and FTSE Emerging options.
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Surveillance and Capacity
    The Exchange represents that it has an adequate surveillance
program in place for FTSE Developed and FTSE Emerging options and
intends to use the same surveillance procedures currently utilized for
each of the Exchange's other index options to monitor trading in FTSE
Developed and FTSE Emerging options.
    The Exchange is a member of the Intermarket Surveillance Group
(``ISG''), which ``covers major self-regulatory bodies across the
world.'' ``The purpose of the ISG is to provide a framework for the
sharing of information and the coordination of regulatory efforts among
exchanges trading securities and related products to address potential
intermarket manipulations and trading abuses. The ISG plays a crucial
role in information sharing among markets that trade securities,
options on securities, security futures products, and futures and
options on broad-based security indexes.'' A list identifying the
current ISG members is available at: https://www.isgportal.org/home.html.
    The Exchange is also an affiliate member of the International
Organization of Securities Commissions (``IOSCO''), which has members
from over 100 different countries.\33\ A list identifying the current
ordinary IOSCO members is available at: http://www.iosco.org/about/?subsection=membership&memid=1. Finally, the Exchange has entered into
CSAs with various stock exchanges.\34\
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    \33\ There are three categories of IOSCO members: Ordinary,
associate and affiliate. In general, the ordinary members (125) are
the national securities commissions in their respective
jurisdictions. Associate members (18) are usually agencies or
branches of government, other than the principal national securities
regulator in their respective jurisdictions that have some
regulatory competence over securities markets, or intergovernmental
international organizations and other international standard-setting
bodies, such as the IMF and the World Bank, with a mission related
to either the development or the regulation of securities markets.
Affiliate members (64) are self-regulatory organizations, stock
exchanges, financial market infrastructures, investor protection
funds and compensation funds, and other bodies with an appropriate
interest in securities regulation. See IOSCO Fact Sheet located at:
http://www.iosco.org/about/pdf/IOSCO-Fact-Sheet.pdf.
    \34\ CSAs can be in the form of Memoranda of Understanding
(``MOUs'') or information sharing agreements.
---------------------------------------------------------------------------

    The FTSE Developed Europe Index is a broad-based index of which the
component securities have a market capitalization of 7,073,781 (EUR
Millions) and an average market capitalization per constituent of
13,397 (EUR Millions). Additionally, the component stocks have an
average daily volume of over 2.8 billion with an average daily volume
per constituent of over 5 million. Also, the largest constituent in the
FTSE Developed Europe Index currently only accounts for 2.89% of the
weight of the FTSE Developed Europe Index.
    The FTSE Emerging Index is also a broad-based index of which the
component securities have a market capitalization of 3,033,757 (USD
Millions) and an average market capitalization per constituent of 3,118
(USD Millions). Additionally, the component stocks have an average
daily volume of over 25 billion with an average daily volume per
constituent of over 29 million. Also, the largest constituent in the
FTSE Emerging Index currently only accounts for 3.93% of the weight of
the FTSE Emerging Index.
    Given the capitalization of the FTSE Developed Europe and FTSE
Emerging Indexes and the deep and liquid markets for the securities
underlying these Indexes, the concerns for market manipulation and/or
disruption in the underlying markets are greatly reduced.
    CBOE has analyzed its capacity and represents that it believes the
Exchange and the Options Price Reporting Authority (``OPRA'') have the
necessary systems capacity to handle the additional traffic associated
with the listing of new series that would result from the introduction
of FTSE Developed and FTSE Emerging options. Because the proposal is
limited to two new classes, the Exchange believes that the additional
traffic that would be generated from the introduction of FTSE Developed
and FTSE Emerging options would be manageable.
MSCI EAFE and EM Indexes
    On April 8, 2015, the Commission approved CBOE's proposal to list
and trade options on the MSCI EAFE Index (``EAFE Index'') and the MSCI
Emerging Markets Index (``EM Index'').\35\ On March 8, 2016, the
Commission approved CBOE's proposal to amend Rule 24.2.01(a)(7) to
raise the CSA percentage for the EAFE and EM Indexes by five percent
(5%).\36\ Pursuant to SR-CBOE-2016-016, Rule 24.2.01(a)(7) currently
states that Non-U.S. component securities (stocks or ADRs) that are not
subject to CSAs do not, in the aggregate, represent more than: (i)
Twenty-five percent (25%) of the weight of the EAFE Index, and (ii)
twenty-seven and a half percent (27.5%) of the weight of the EM Index.
Because both the EAFE and EM Indexes are broad-based indexes, the
component securities of the indexes have high market capitalizations,
the indexes are comprised of over 500 constituents, and no single
component comprises more than 5% of the weight of either index, all of
which makes the indexes not easily subject to market manipulation, the
Exchange proposes to amend Rule 24.2.01(a)(7) to raise the CSA
percentage for the EAFE and EM Indexes to fifty percent (50%).\37\
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    \35\ See Securities Exchange Act Release No. 74681 (April 8,
2015), 80 FR 20032 (April 14, 2015) (approving SR-CBOE-2015-023).
    \36\ See Securities Exchange Act Release No. 77319 (March 8,
2016), 81 FR 13429 (March 14, 2016) (approving SR-CBOE-2016-016).
    \37\ The Exchange is proposing to make this CSA percentage
applicable to FTSE Developed and FTSE Emerging options because both
the FTSE Developed Europe and FTSE Emerging Indexes are broad-based
indexes, the component securities of the indexes have high market
capitalizations, the indexes are comprised of over 500 constituents,
and no single component comprises more than 5% of the weight of
either index, which makes the indexes not easily susceptible to
manipulation.
---------------------------------------------------------------------------

    The EAFE Index consists of the following 21 developed market
countries: Australia, Austria, Belgium, Denmark, Finland, France,
Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New
Zealand, Norway,

Portugal, Singapore, Spain, Sweden, Switzerland, and the United
Kingdom. The EAFE Index consists of large- and mid-cap components, has
925 constituents and ``covers approximately 85% of the free float-
adjusted market capitalization in each country.'' \38\ Furthermore, the
EAFE Index is a broad-based index of which the component securities
have a market capitalization of 12,021,032.52 (USD Millions) and an
average market capitalization per constituent of 12,995.71 (USD
Millions). Additionally, the component stocks have an average daily
volume of over 5 billion with an average daily volume per constituent
of over 5 million. Also, the largest constituent in the EAFE Index
currently accounts for less than 2% of the weight of the EAFE Index.
---------------------------------------------------------------------------

    \38\ See EAFE Index fact sheet (dated May 31, 2016) located at:
http://www.msci.com/resources/factsheets/index_fact_sheet/msci-eafe-index-usd-price.pdf.
---------------------------------------------------------------------------

    The EM Index consists of the following 23 emerging market country
indexes [sic]: Brazil, Chile, China, Colombia, Czech Republic, Egypt,
Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru,
Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand,
Turkey and United Arab Emirates. The EM Index consists of large- and
mid-cap components, has 837 constituents and ``covers approximately 85%
of the free float-adjusted market capitalization in each country.''
\39\ Furthermore, the EM Index is a broad-based index of which the
component securities have a market capitalization of 3,506,908.00 (USD
Millions) and an average market capitalization per constituent of
4,189.85 (USD Millions). Additionally, the component stocks have an
average daily volume of over 25 billion with an average daily volume
per constituent of over 30 million. Also, the largest constituent in
the EM Index currently accounts for less than 3.5% of the weight of the
EM Index.
---------------------------------------------------------------------------

    \39\ See EM Index fact sheet (dated May 31, 2016) located at:
http://www.msci.com/resources/factsheets/index_fact_sheet/msci-emerging-markets-index-usd-price.pdf.
---------------------------------------------------------------------------

    Given the high number of constituents and capitalization of the
EAFE and EM Indexes and the deep and liquid markets for the securities
underlying these indexes, the concerns for market manipulation and/or
disruption in the underlying markets are greatly reduced. Additionally,
the Exchange represents that raising the CSA percentage will not have
an adverse impact on the Exchange's surveillance program. The Exchange
represents that it will still have an adequate surveillance program in
place for EAFE and EM options and will continue to use the same
surveillance procedures currently utilized for each of the Exchange's
other index options to monitor trading in EAFE and EM options.
    The Exchange notes that equity exchanges are not required to have
any CSAs in place to list ETFs that seek to track the EAFE, EM, FTSE
Developed, and FTSE Emerging Indexes.\40\ Additionally, CBOE is not
required to have any CSAs in place to list and trade options on an ETF
that seeks to track these indexes as long as the ETF is listed in
accordance with an equity exchange's generic listing criteria under
which CSAs are not required.\41\ Finally, futures exchanges are
similarly not required to have any CSAs in place to list futures on the
EAFE, EM, FTSE Developed and FTSE Emerging Indexes.\42\
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    \40\ See e.g., NYSE MKT Rule 1000 Commentary .03(a)(B); NYSE
Arca Equities Rule 5.2(j)(3) Commentary .01(a)(B); NASDAQ Rule
5705(a)(3)(A)(ii); and BATS Rule 14.11(b)(3)(A)(ii).
    \41\ See Rule 5.3.06(C)(i).
    \42\ See, e.g., CME Rulebook Chapters 390--E-mini FTSE Developed
Europe Index Futures and 391--E-mini FTSE Emerging Index Futures;
and ICE Futures Chapters 40--MSCI EAFE Mini Index Futures and 41--
MSCI Emerging Markets Mini Index Futures.
---------------------------------------------------------------------------

Maintenance Listing Criteria
    The Exchange is seeking to amend Rules 24.2.01(b)(1),
24.2.02(b)(1), and 24.2.03(b)(1) to modify the maintenance listing
criteria applicable to EAFE options, EM options, FTSE 100 options, and
FTSE China 50 options. Currently, Rules 24.2.01(b)(1), 24.2.02(b)(1),
and 24.2.03(b)(1) state, as applicable, that the listing criteria set
forth in subparagraphs .01(a)(5) and (6), .02(a)(5) and (6), and
.03(a)(5) and (6) to Rule 24.2 (``listing criteria 5 and 6'') \43\ need
only be met as of the first day of January and July in each year. The
Exchange is seeking to amend Rules 24.2.01(b)(1), 24.2.02(b)(1), and
24.2.03(b)(1) \44\ to specify that listing criteria set forth in
subparagraphs .01(a)(7), .02(a)(7), and .03(a)(7) to Rule 24.2
(``listing criteria 7'') \45\ need also only be met as of the first of
January and July in each year. The Exchange is not seeking to amend the
frequency with which listing criteria 5 and 6 are reviewed; rather, the
Exchange is seeking to specify the frequency with which the listing
criteria 7 is reviewed. The substantive analysis involved in reviewing
listing criteria 5, 6, and 7 is similar. Each review involves an
analysis of the market capitalization of individual components and
resulting changes to the weights those individual components contribute
to indexes; thus, it's appropriate to review those criteria at the same
time.
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    \43\ Listing criteria 5 provides that all of the component
securities of the index will have a market capitalization of greater
than $100 million. Listing criteria 6 provides that no single
component security accounts for more than fifteen percent (15%) of
the weight of the index, and the five highest weighted component
securities in the index do not, in the aggregate, account for more
than fifty percent (50%) of the weight of the index.
    \44\ Current Rule 24.2.03(b) and (b)(1) mistakenly references
paragraph .02(a), instead of .03(a); thus, the Exchange is also
amending Rule 24.2.03(b) to correct the technical error.
    \45\ Listing criteria 7 generally provides that non-U.S.
component securities (stocks or American Depositary Receipts
(``ADRs'')) that are not subject to CSAs do not, in the aggregate,
represent more than a certain percent of the weight of the
applicable index. As previously noted, this proposal seeks to amend
the listing criteria 7 applicable to EAFE and EM options and apply
that same percentage to FTSE Developed and FTSE Emerging options.
This proposal does not seek to amend the listing criteria 7
applicable to FTSE 100 and FTSE China 50 options; however, as noted
above, this proposal does seek to amend the maintenance listing
criteria for EAFE, EM, FTSE 100, and FTSE China 50 options.
---------------------------------------------------------------------------

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
Act.\46\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \47\ requirements that the rules
of an exchange be designed to promote just and equitable principles of
trade, to prevent fraudulent and manipulative acts, to remove
impediments to and to perfect the mechanism for a free and open market
and a national market system, and, in general, to protect investors and
the public interest.
---------------------------------------------------------------------------

    \46\ 15 U.S.C. 78f(b).
    \47\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change will further
the Exchange's goal of introducing new and innovative products to the
marketplace. Currently, the Exchange believes that there is unmet
market demand for exchange-listed security options listed on these two
popular cash indexes. FTSE Developed Europe and FTSE Emerging Index
futures are listed for trading on CME. As a result, CBOE believes that
FTSE Developed and FTSE Emerging options are designed to provide
different and additional opportunities for investors to hedge or
speculate on the market risk associated with the FTSE Developed and
FTSE Emerging Indexes by listing an option directly on these indexes.
    The Exchange believes that both the FTSE Developed Europe Index and
FTSE Emerging Index are not easily susceptible to manipulation. Both
indexes are broad-based indexes and

have high market capitalizations. The FTSE Developed Europe Index is
comprised of 528 component stocks, the component stocks have a market
capitalization 7,073,781 (EUR Millions) and average daily volume of
over 2.8 billion, and no single component comprises more than 5% of the
index, making it not easily subject to market manipulation. Similarly,
the FTSE Emerging Index is comprised of 973 components stocks, the
component stocks have a market capitalization of 3,033,757 (USD
Millions) and average daily volume of over 25 billion, and no single
component comprises more than 5% of the index, making it not easily
subject to market manipulation. Due to both indexes having a large
number of component securities, high market capitalization, and being
representative of many countries, similar to other broad-based indexes,
the Exchange believes that the initial listing requirements are
appropriate to trade options on these indexes. In addition, similar to
other broad-based indexes, the Exchange proposes to adopt various
maintenance criteria, which would require continual compliance and
periodic compliance.
    With regards to the CSA percentage applicable to FTSE Developed and
FTSE Emerging options in particular, the purpose of a CSA is to allow
the Exchange to investigate manipulation if it were to occur on an
exchange at which one of the component securities trades. However, as
described above, the FTSE Developed Europe and FTSE Emerging Indexes
are unlikely to be susceptible to manipulation; thus, requiring fifty
(50%) of the component securities to be subject to CSAs for the FTSE
Developed Europe and the FTSE Emerging Indexes is unlikely to affect
the Exchange's ability to investigate manipulation. Additionally, the
Commission is in the best position to investigate potential
manipulation occurring on foreign exchanges because the Commission has
bilateral and multilateral information sharing agreements with foreign
regulators in countries all over the world; \48\ thus, whether the
Exchange receives information pursuant to a CSA or not, the Exchange
can refer potential manipulation cases to the Commission. The Exchange
notes that it is the practice today to refer cases to the Commission
when the Exchange does not have jurisdiction over the potentially
offending market participants, and the Exchange is unlikely to have
jurisdiction over a market participant potentially manipulating markets
on a foreign exchange. In addition, it is more than likely that market
participants trading on foreign exchanges are subject to anti-
manipulation laws in those jurisdictions,\49\ which further limits the
likelihood that these indexes will be manipulated.
---------------------------------------------------------------------------

    \48\ For example, the Commission's own Web site specifically
identifies the multilateral memorandum of understanding created by
the International organization of Securities Commissions, whereby
the signatories, including the Commission, agreed: To provide
certain critical information, to permit use of that information in
civil or administrative proceedings, to onward share information
with self-regulatory organizations and criminal authorities, and to
keep such information confidential. In particular, the MMOU provides
for the following: Sharing information and documents held in the
regulators' files; obtaining information and documents regarding
transactions in bank and brokerage accounts, and the beneficial
owners of such accounts; and taking or compelling a person's
statement or, where permissible, a person's testimony. The MMOU has
significantly enhanced the SEC's enforcement program by increasing
and expediting the SEC's ability to obtain information from a
growing number of jurisdictions worldwide. See SEC's Cooperative
Arrangements with Foreign Regulators Factsheet, available at:
https://www.sec.gov/about/offices/oia/oia_coopfactsheet.htm. A list
of the current signatories to the IOSCO multilateral memorandum of
understanding is available at: https://www. iosco.org/about/?subSection=mmou&subSection 1=signatories. A list of the
Commission's Cooperative Arrangements with Foreign Regulators is
available at: https://www.sec.gov/about/offices/oia/oia_cooparrangements.shtml.
    \49\ See, e.g., Article 5 of European Union Directive 2003/6/EC
(stating that member states shall prohibit any person from engaging
in market manipulation), available at: http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A32003L0006; Article 15 of European
Union Regulation 596/2014, which replaces Directive 2003/6/EC
(stating that a person shall not engage in or attempt to engage in
market manipulation); available at: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32014R0596; Article 16 of European Union
Regulation 596/2014 (stating that market operators and investment
firms that operate a trading venue shall establish and maintain
effective arrangements, systems and procedures aimed at preventing
and detecting insider dealing, market manipulation and attempted
insider dealing and market manipulation); Rule 545 of the Stock
Exchange of Hong Kong, available at: https://www.hkex.com.hk/eng/rulesreg/traderules/sehk/Documents/chap-5_eng.pdf; Rule 8.10 of the
Johannesburg Stock Exchange, available at: https://www.jse.co.za/content/JSERulesPoliciesand RegulationItems/
JSE%20Equities%20Rules.pdf.
---------------------------------------------------------------------------

    FTSE Developed and FTSE Emerging options would be subject to the
same rules that currently govern other CBOE index options, including
sales practice rules,\50\ margin requirements \51\ and trading
rules.\52\ The Exchange would apply the same default position limits
for broad-based index options to FTSE Developed and FTSE Emerging
options. Specifically, the applicable position limits would be 25,000
contracts (standard limit/on the same side of the market) and 15,000
contracts (near-term limit). The exercise limits for FTSE Developed and
FTSE Emerging options would be equivalent to the position limits for
EAFE and EM options. These same position and exercise limits would
apply to FLEX trading. All position limit hedge exemptions would apply.
The Exchange would apply existing index option margin requirements to
the purchase and sale of FTSE Developed and FTSE Emerging options.
---------------------------------------------------------------------------

    \50\ See Chapter IX (Doing Business with the Public).
    \51\ See Chapter XII (Margins).
    \52\ See, e.g., Chapters IV (Business Conduct), VI (Doing
Business on the Trading Floor), VIII (Market-Makers, Trading Crowds
and Modified Trading Systems) and XXIV (Index Options).
---------------------------------------------------------------------------

    The Exchange represents that is has an adequate surveillance
program in place for FTSE Developed and FTSE Emerging options. The
Exchange also represents that it has the necessary systems capacity to
support the new option series.
    With regards to the CSA percentage applicable to EAFE and EM
options, both the MSCI EAFE and MSCI EM Indexes are not easily
susceptible to manipulation. Both indexes are broad-based indexes and
have high market capitalizations. The EAFE Index is comprised of 925
component stocks, the component stocks have a market capitalization of
12,021,032.52 (USD Millions) and average daily volume of over 5
billion, and no single component comprises more than 5% of the index,
making it not easily subject to market manipulation. Similarly, the EM
Index is comprised of 837 components stocks, the component stocks have
a market capitalization of 3,506,908.00 (USD Millions) and average
daily volume of over 25 billion, and no single component comprises more
than 5% of the index, making it not easily subject to market
manipulation. As previously noted, the purpose of a CSA is to allow the
Exchange to investigate manipulation if it were to occur on an exchange
at which one of the component securities trades. However, as described
above, the EAFE and EM Indexes are unlikely to be susceptible to
manipulation; thus, raising the CSA percentage for the EAFE and EM
Indexes to fifty (50%) is unlikely to affect the Exchange's ability to
investigate manipulation. Additionally, as noted above, the Commission
is in a prime position to investigate potential manipulation occurring
on foreign exchanges, and the Exchange can always refer investigations
to the Commission. Also, as previously noted, equity exchanges are not
required to have any CSAs in place to list ETFs that seek to track the
EAFE, EM, FTSE Developed, and FTSE Emerging Indexes, and CBOE is not
required to have any CSAs in place to list and trade options on an ETF
that seeks to track these

indexes as long as the ETF is listed in accordance with an equity
exchange's generic listing criteria under which CSAs are not required.
Thus, the proposed CSA percentage promotes just and equitable
principles of trade and a free and open market by more equally applying
CSA percentages to similar products.
    Finally, with regards to amending the maintenance listing criteria
applicable to EAFE, EM, FTSE 100, and FTSE China 50 options, the
substantive analysis of reviewing the listing criteria set forth in
subparagraphs .01(a)(5) and (6), .02(a)(5) and (6), and .03(a)(5) and
(6) to Rule 24.2 is similar to the analysis involved in reviewing the
listing criteria set forth in subparagraphs .01(a)(7), .02(a)(7), and
.03(a)(7) to Rule 24.2. Thus, it's appropriate, and generally
supportive of the protection of investors and the public interest, to
review those criteria at the same time as it strikes the appropriate
balance between ensuring the Exchange has the ability to access
information to conduct investigative activities with the Exchange
efficiently and effectively deploying Exchange resources.

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

    CBOE does not believe that the proposed rule change will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act. Specifically, CBOE believes that the
introduction of new cash index options will enhance competition among
market participants and will provide a new type of options to compete
with domestic products such as FTSE Developed Europe and FTSE Emerging
Index futures and European-traded derivatives on the FTSE Developed
Europe and FTSE Emerging Indexes to the benefit of investors and the
marketplace. With regards to the CSA percentage applicable to EAFE, EM,
FTSE Developed, and FTSE Emerging options, the Exchange considers this
a competitive filing. As noted above, equity exchanges are not required
to have any CSAs in place to list ETFs that seek to track the EAFE, EM,
FTSE Developed, and FTSE Emerging Indexes.\53\ Additionally, CBOE is
not required to have any CSAs in place to list and trade options on an
ETF that seeks to track these indexes as long as the ETF is listed in
accordance with an equity exchange's generic listing criteria under
which CSAs are not required.\54\ Futures exchanges are similarly not
required to have any CSAs in place to list futures on the EAFE, EM,
FTSE Developed and FTSE Emerging Indexes.\55\ Finally, modifying the
maintenance listing criteria applicable to EAFE, EM, FTSE 100, and FTSE
China 50 options as proposed will not impose any burden on
competition--intermarket or otherwise--because maintenance listing
criteria are applicable to products, not market participants, and,
thus, are unrelated to competition among market participants.
---------------------------------------------------------------------------

    \53\ See, e.g., NYSE MKT Rule 1000 Commentary .03(a)(B); NYSE
Arca Equities Rule 5.2(j)(3) Commentary .01(a)(B); NASDAQ Rule
5705(a)(3)(A)(ii); and BATS Rule 14.11(b)(3)(A)(ii).
    \54\ See Rule 5.3.06(C)(i).
    \55\ See, e.g., CME Rulebook Chapters 390--E-mini FTSE Developed
Europe Index Futures and 391--E-mini FTSE Emerging Index Futures;
and ICE Futures Chapters 40--MSCI EAFE Mini Index Futures and 41--
MSCI Emerging Markets Mini Index Futures.
---------------------------------------------------------------------------

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to 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
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-CBOE-2016-049 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-2016-049.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-2016-049 and should be
submitted on or before July 22, 2016.
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    \56\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\56\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-15716 Filed 6-30-16; 8:45 am]
 BILLING CODE 8011-01-P