[Federal Register Volume 78, Number 85 (Thursday, May 2, 2013)]
[Notices]
[Pages 25779-25780]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-10353]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69468; File No. SR-CBOE-2013-046]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Delete Rule 6.74(b) That Sets Forth Expired
SizeQuote Mechanism Pilot Program
April 26, 2013.
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 April 25, 2013, the Chicago Board Options Exchange,
Incorporated (the ``Exchange'' or ``CBOE'') 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 filed the proposal as a ``non-
controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) 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)(iii).
\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
CBOE proposes to delete Rule 6.74(f) that sets forth the SizeQuote
Mechanism pilot program because this pilot program expired on February
15, 2008. 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 self-regulatory organization
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 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
The purpose of this filing is to delete Rule 6.74(f) that sets
forth the open outcry SizeQuote Mechanism program, which was approved
on a pilot basis in February 2005 and was expanded to include solicited
orders in January 2006. The SizeQuote Mechanism pilot program was
extended twice and expired on February 15, 2008.\5\
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\5\ See Securities Exchange Act Release Nos. 51205 (February 15,
2005), 70 FR 8647 (February 22, 2005) (approving SR-CBOE-2004-72 on
a pilot basis through February 15, 2006); 53135 (January 17, 2006),
71 FR 3908 (January 24, 2006) (approving SR-CBOE-2005-83, which
modified the pilot program); 53252 (February 8, 2006), 71 FR 8012
(February 15, 2006) (immediately effective proposal, SR-CBOE-2006-
05, extending the pilot program from February 15, 2006 to February
15, 2007); and 55174 (January 25, 2007), 72 FR January 31, 2007
(immediately effective proposal, SR-CBOE-2007-07, extending the
pilot program from February 15, 2007 to February 15, 2008).
The expired pilot program provided a process by which a Floor
Broker (using his/her exercise of due diligence to execute orders at
the best price(s)) could execute and facilitate large-sized orders
in open outcry. The Exchange issued a Regulatory Circular announcing
the expiration of the SizeQuote Mechanism Pilot, which was no longer
operative after February 15, 2008. See CBOE Regulatory Circular
RG08-028 (Expiration of SizeQuote Mechanism Pilot).
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In connection with the March 18, 2013 launch of mini-options, the
Exchange amended, among other rules, Rule 6.74(f) to establish a
minimum eligible order size for mini-options in an amount proportional
to the minimum eligible order size that is required for standard
options (i.e., not less than 250 standard option contracts delivering
100 shares and not less than 2,500 for mini-option contracts delivering
10 shares).\6\ In that filing, the Exchange deleted obsolete rule text
from Rule 6.74(f)(i) that referenced that the SizeQuote Mechanism pilot
program had expired on February 15, 2008. The Exchange believes that
the entirety of 6.74(f) should be deleted since the SizeQuote Mechanism
pilot program has expired, the rule text language is obsolete and to
eliminate confusion as to availability of the SizeQuote Mechanism pilot
program that may arise if the language remains in Rule 6.74(f).
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\6\ See Securities Exchange Act Release No. 69235 (March 25,
2013), 78 FR 19552 (April 1, 2013) (notice of filing and immediate
effectiveness of SR-CBOE-2013-036).
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder, including the
requirements of Section 6(b) of the Act.\7\ In particular, the Exchange
believes the proposed rule change is consistent with the Section
6(b)(5) \8\ requirements that the rules of an exchange be designed to
promote just and equitable principles of trade, to prevent fraudulent
and manipulative acts, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, 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.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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Specifically, the Exchange believes that investors and market
participants would benefit from Rule 6.74(d) being deleted because it
sets forth the SizeQuote Mechanism pilot program that expired on
February 15, 2008 and therefore contains obsolete and outdated rule
text. If the current rule text language remains, confusion could arise
as to whether the SizeQuote Mechanism pilot program is currently
available. Because CBOE did not to renew and/or revise or seek to make
the SizeQuote Mechanism pilot program permanent, CBOE believes that it
is appropriate to delete the obsolete rule text that references the
SizeQuote Mechanism pilot program which expired on February 15, 2008.
B. Self-Regulatory Organization's Statement on Burden on Competition
This proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. In this regard and as indicated above, the Exchange notes that
the rule change is being proposed to delete obsolete rule text language
that sets forth the expired SizeQuote Mechanism pilot program in Rule
6.74(d). Since all market participants cannot currently utilize the
expired SizeQuote Mechanism pilot
[[Page 25780]]
program, the rule change will not have any burden on competition.
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
Because the foregoing proposed rule does not (i) Significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate if consistent with the protection of
investors and the public interest, provided that the self-regulatory
organization has given the Commission written notice of its intent to
file the proposed rule change at least five business days prior to the
date of filing of the proposed rule change or such shorter time as
designated by the Commission,\9\ the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\ At any time within 60 days of the filing of
such 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.
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\9\ The Exchange has fulfilled this requirement.
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
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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-CBOE-2013-046 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-CBOE-2013-046. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the CBOE. 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-2013-046 and should be
submitted on or before May 23, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-10353 Filed 5-1-13; 8:45 am]
BILLING CODE 8011-01-P