[Federal Register Volume 77, Number 191 (Tuesday, October 2, 2012)]
[Notices]
[Pages 60163-60165]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-24170]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67929; File No. SR-C2-2012-034]
Self-Regulatory Organizations; C2 Options Exchange, Incorporated;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Related to AIM and SAM
September 26, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on September 21, 2012, the C2 Options Exchange, Incorporated
(``Exchange'' or ``C2'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I and II below, which Items have been prepared by the
Exchange. The Exchange has designated the proposal as a ``non-
controversial'' proposed rule change pursuant to Section 19(b)(3)(A) of
the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to make amendments to its rules
pertaining to certain auction mechanisms. The text of the proposed rule
change is available on the Exchange's Web site (http://www.c2exchange.com/Legal/RuleFilings.aspx), at the Exchange's Office of
the Secretary and at the Commission.
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
[[Page 60164]]
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 those statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
Under Rule 6.51, Automated Improvement Mechanism (``AIM''), a
Trading Permit Holder that represents agency orders may electronically
execute an order it represents as agency (an ``Agency Order'') against
principal interest and/or against solicited orders provided it submits
the Agency Order for execution into the AIM auction process. Under Rule
6.52, Solicitation Auction Mechanism (``SAM''), a Trading Permit Holder
that represents agency orders may electronically execute an Agency
Order against solicited orders provided it submits the Agency Order for
electronic execution into the SAM auction process, under which both the
Agency Order and the solicited order will be designated in the C2
System as all-or-none. The Exchange is proposing to make certain
changes detailed below to these auction trading rules.
First, currently the AIM and SAM auctions each in relevant part
provide that auction responses may be modified or canceled during the
auction response period. The only way to modify a response would be for
a Trading Permit Holder to cancel a prior response then submit a new
response. As a result, the Exchange believes that the references to
modifying responses in the rule text are unnecessary. Therefore, the
Exchange is proposing to delete references to modifying responses in
Rules 6.51(b)(1) and 6.52(b)(1), respectively.
Second, normally an auction would conclude after 1 second in the
case of an AIM or SAM auction. In addition, respective AIM and SAM
auction provisions set out various circumstances during which an
auction would conclude early. Currently, the provisions are silent on
what would happen in the event the option series is subject to a
trading halt while an auction is ongoing. In such an event, the
relevant auction would conclude early and the Agency Order would
execute (or not execute) in accordance with the allocation provisions
set out in the relevant rules. Therefore, the Exchange is proposing to
amend Rules 6.51(b)(2) and 6.52(b)(2), respectively, to indicate that
an auction would conclude early in the event of a trading halt in the
series on the Exchange and the Agency Order would execute (or not
execute) in accordance with the allocation provisions set out in the
relevant rules.\5\
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\5\ The Exchange notes that NASDAQ OMX PHLX LLC (``Phlx'') has a
similar provision within its electronic auction rules related to the
early conclusion of an auction due to a trading halt. See Phlx Rule
1080(n).
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(b) Statutory Basis \6\
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\6\ The Commission notes that the Exchange has repeated this
paragraph under Section I.A.2 (Statutory Basis).
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The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Act \7\ in general and furthers the objectives of
Section 6(b)(5) of the Act \8\ in particular in that it should promote
just and equitable principles of trade, serve to remove impediments to
and perfect the mechanism of a free and open market and a national
market system, and protect investors and the public interest. In
particular, the Exchange believes that the refinements being proposed
in this rule change filing should serve to further those objectives by
more clearly and fully describing certain aspects of the operation of
the AIM and SAM auction processes.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Act \9\ in general and furthers the objectives of
Section 6(b)(5) of the Act \10\ in particular in that it should promote
just and equitable principles of trade, serve to remove impediments to
and perfect the mechanism of a free and open market and a national
market system, and protect investors and the public interest. In
particular, the Exchange believes that the refinements being proposed
in this rule change filing should serve to further those objectives by
more clearly and fully describing certain aspects of the operation of
the AIM and SAM auction processes.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposal.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6)
\12\ thereunder.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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 protected]. Please include
File Number SR-C2-2012-034 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-C2-2012-034. 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
[[Page 60165]]
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-C2-2012-034 and should be submitted on or before October
23, 2012.
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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-24170 Filed 10-1-12; 8:45 am]
BILLING CODE 8011-01-P