
[Federal Register Volume 80, Number 242 (Thursday, December 17, 2015)]
[Notices]
[Pages 78799-78800]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-31678]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76632; File No. SR-CBOE-2015-104]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Order Granting Accelerated Approval of a Proposed Rule 
Change To Trade Expiring MSCI EAFE Index Options Until 3:00 p.m.

December 11, 2015.

I. Introduction

    On November 13, 2015, the Chicago Board Options Exchange, 
Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities 
and Exchange Commission (the ``Commission''), pursuant to Section 
19(b)(1) of the Securities Exchange Act of 1934 (the ``Act'') \1\ and 
Rule 19b-4 thereunder,\2\ a proposed rule change to change the trading 
hours for expiring MSCI EAFE Index (``EAFE'') options. This proposal 
was published for comment in the Federal Register on November 25, 
2015.\3\ The Commission received no comments regarding the proposal. 
This order approves the proposed rule change on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 76482 (November 19, 
2015), 80 FR 73839 (``Notice'').
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II. Description of the Proposed Rule Change

    The Exchange proposes to change the trading hours for expiring EAFE 
options from 10:00 a.m. (Chicago time) on their expiration date to 3:00 
p.m. (Chicago time) on their expiration date. When the Exchange first 
listed EAFE options, the MSCI EAFE Index was not calculated and 
disseminated during the entire time period during which EAFE options 
were traded on the Exchange. Accordingly, the Exchange set the initial 
trading hours for expiring EAFE options to align with expiring EAFE 
futures contracts traded on the Intercontinental Exchange, Inc. 
(``ICE''), which stopped trading at 10:00 a.m. (Chicago time) on the 
third Friday of the futures contracts month.\4\
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    \4\ See Notice, supra note 3, at 73840. The Exchange established 
listing criteria that permits the trading of EAFE 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 EAFE futures contracts are trading and prices for 
those contract may be used as a proxy for the current index value.'' 
See CBOE Rule 24.2.01(a)(8).
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    The MSCI EAFE Index, however, will now be calculated and 
disseminated through the close of trading on U.S.

[[Page 78800]]

markets at 3:00 p.m. (Chicago time). As such, the Exchange understands 
that ICE is changing the trading hours for expiring EAFE futures 
contracts listed on ICE from 10:00 a.m. (Chicago time) to 3:15 p.m. 
(Chicago time).\5\ Because the MSCI EAFE Index will now be calculated 
and disseminated through the close of trading on U.S. markets (until 
3:00 p.m. (Chicago time)) and because ICE is also changing the trading 
hours for expiring EAFE futures (to close at 3:15 p.m. (Chicago time)), 
the Exchange proposes to change the closing time for trading in 
expiring EAFE options from 10:00 a.m. (Chicago time) to 3:00 p.m. 
(Chicago time) on their expiration date.
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    \5\ See Notice, supra note 3, at 73840.
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    The Exchange proposes to close trading at 3:00 p.m. (Chicago 
time)--rather than at 3:15 p.m. (Chicago time), the time ICE ceases 
trading for expiring EAFE futures contracts--because, according to the 
Exchange, on the last day of trading, the closing prices of the 
component stocks, which are used to derive the exercise settlement 
value of the EAFE options, are known at 3:00 p.m. (Chicago time) (or 
shortly thereafter).\6\ The Exchange further notes that this proposed 
rule change is consistent with the closing times for other expiring 
P.M.-settled contracts that underlie indexes that close when the U.S. 
equity markets close at 3:00 p.m. (Chicago time).\7\
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    \6\ Id.
    \7\ Id.
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    The Exchange proposes to change the trading hours for expiring EAFE 
options beginning with the December 2015 expiration, which occurs on 
December 18, 2015. The Exchange is proposing to have this change apply 
to all EAFE options listed on or before the effective date of this 
filing and all EAFE options listed afterward.

III. Discussion and Findings

    After careful review, 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.\8\ 
In particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\9\ 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.
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    \8\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that it is consistent with the Act for the 
Exchange to change the trading hours for expiring EAFE options from a 
close of 10:00 a.m. (Chicago time) to 3:00 p.m. (Chicago time), because 
the MSCI EAFE Index will now be calculated and disseminated through the 
close of trading at 3:00 p.m. (Chicago time) and thus the current index 
value should be widely available to market participants throughout the 
entire trading day. Further, the proposed rule change will allow the 
trading hours of EAFE options to continue to closely align with the 
trading hours of expiring EAFE futures contracts, which the Commission 
believes will afford investors and market participants the ability to 
continue to hedge across markets. The Commission also notes that the 
trading hours are consistent with the closing times of other P.M.-
settled contracts listed on the Exchange that underlie indexes that 
close when the U.S. equity markets close at 3:00 p.m. (Chicago 
time).\10\
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    \10\ See CBOE Rules 24.6.01, 24.6.03, 24.6.04 and 24.9(e).
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    In addition, the Commission finds good cause, pursuant to Section 
19(b)(2) of the Act,\11\ for approving the proposed rule change prior 
to the 45th day after publication of notice in the Federal Register. 
The proposed rule change to modify the trading hours of EAFE options 
was published for a 15-day comment period to ensure that the public had 
an opportunity to review the proposal and no comments were received. 
The proposed rule change will increase the trading hours during which 
EAFE options may be traded, which the Commission believes should 
broaden the trading and hedging opportunities for investors. Further, 
the Commission notes that the Exchange represents that the change to 
the trading hours for EAFE futures will be implemented with the 
December 2015 expiration. Accordingly, the Commission believes that 
accelerated approval will maintain consistency in the trading hours of 
EAFE options and EAFE futures contracts, which should enable cross-
market competition and facilitate hedging opportunities. For these 
reasons, the Commission finds that good cause exists for approving the 
proposed rule change on an accelerated basis.
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    \11\ 15 U.S.C. 78s(b)(2).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\12\ that the proposed rule change (File No. SR-CBOE-2015-104) be, 
and hereby is, approved on an accelerated basis.
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    \12\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-31678 Filed 12-16-15; 8:45 am]
 BILLING CODE 8011-01-P


