[Federal Register Volume 78, Number 90 (Thursday, May 9, 2013)]
[Notices]
[Pages 27263-27265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-11003]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69512; File No. SR-BOX-2013-23]
Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing of Proposed Rule Change To Provide for the Manner in Which
Mini Options Will Trade as a Complex Order Pursuant to BOX Rule 7240
May 3, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 2, 2013, BOX Options Exchange LLC (the ``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I and II below, which Items have been
prepared by the Exchange. The Commission is publishing this notice to
solicit comments on the proposed rule 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 the
Substance of the Proposed Rule Change
The Exchange proposes to amend BOX Rule 7240 (Complex Orders). The
text of the proposed rule change is available from the principal office
of the Exchange, at the Commission's Public Reference Room and also on
the Exchange's Internet Web site at http://boxexchange.com.
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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
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 the proposed rule change is to provide for the
manner in which Mini Options will trade as a Complex Order pursuant to
BOX Rule
[[Page 27264]]
7240. The Exchange previously filed to list and trade Mini Options.\3\
Whereas standard options contracts represent a deliverable of 100
shares of an underlying security, Mini Options contracts represent a
deliverable of 10 shares. Except for the difference in the number of
deliverable shares, Mini Options have the same terms and contract
characteristics as regular-sized equity and ETF options, including
exercise style. Accordingly, the Exchange noted in its Mini Options
filing that Exchange rules that apply to the trading of standard
options contracts would apply to Mini Option contracts as well.\4\
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\3\ See Securities Exchange Act Release No. 68771 (January 30,
2013), 78 FR 8208 (February 5, 2013) (Notice of Filing and Immediate
Effectiveness of SR-BOX-2013-07). The Exchange began trading Mini
Options on March 18, 2013.
\4\ Id.
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Prior to the launch of its new Complex Order Book,\5\ the Exchange
proposes to amend Rule 7240 (Complex Orders) to provide that while
Participants may execute complex orders involving Mini Options, if any
leg of a complex order is a Mini Option contract, all options legs of
such orders must also be Mini Option contracts.
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\5\ See Securities Exchange Act Release No. 69419 (April 19,
2013), 78 FR 24449 (April 25, 2013) (Approving SR-BOX-2013-01). The
Exchange expects to launch its new Complex Order Book on May 3,
2013.
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2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Securities Exchange Act of 1934
(the ``Act''),\6\ in general, and Section 6(b)(5) of the Act,\7\ in
particular, in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, 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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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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Specifically, the Exchange believes that investors and other market
participants would benefit from the current rule proposal because it
provides that market participants may take advantage of legitimate
investment strategies and execute complex orders involving Mini
Options. Additionally, the Exchange believes the proposed rule change
will avoid investor confusion by providing how Mini Options will trade
as compared to standard options with respect to Complex Orders.
The Exchange's proposal to permit Mini Options to trade as Complex
Orders provided the strategy does not combine Mini Options and standard
options serves to maintain the permissible ratios that are applicable
to Complex Orders by separating the trading of standard Complex Orders
and Mini Options Complex Orders.
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 not necessary or appropriate in
furtherance of the purposes of the Act. All Participants may transact
Complex Orders on BOX. The rule change does not permit unfair
discrimination and does not impose a burden on Participants with
respect to trading Mini Options.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has neither solicited nor received comments on the
proposed rule change.
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 from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) \8\ of the Act and
Rule 19b-4(f)(6) \9\ thereunder.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of the filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) of the Act \10\
normally does not become operative prior to 30 days after the date of
the filing. However, pursuant to Rule 19b-4(f)(6)(iii) of the Act,\11\
the Commission may designate a shorter time if such action is
consistent with the protection of investors and the public interest.
The Exchange has requested the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. In January 2013, the Exchange filed a proposed rule change to
amend its rules to list and trade certain mini-options contracts on the
Exchange, and represented in that filing that the Exchange's rules that
apply to the trading of standard options contracts would apply to mini-
options contracts.\12\ The Exchange has represented that it intends to
launch its new complex order book, on which mini-options contracts may
trade as components of complex orders, on May 3, 2013. The Exchange
believes that waiver of the 30-day operative delay is consistent with
the protection of investors and the public interest because such waiver
would minimize confusion among market participants about how complex
orders involving mini-options contracts will trade.\13\
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\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ See Securities Exchange Act Release No. 68771 (January 30,
2013), 78 FR 8208 (February 5, 2013) (SR-BOX-2013-07).
\13\ See SR-BOX-2013-23, Item 7.
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
Such waiver would allow the Exchange to implement the proposed rule
change prior to the launch of its new complex order book on May 3,
2013, thereby mitigating potential investor confusion as to how complex
orders involving mini-options contracts will trade. For this reason,
the Commission hereby waives the 30-day operative delay and designates
the proposed rule change to be operative upon filing with the
Commission.\14\
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\14\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
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.
[[Page 27265]]
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-BOX-2013-23 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-BOX-2013-23. 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 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 offices 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-BOX-2013-23, and should be submitted on or before May
30, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-11003 Filed 5-8-13; 8:45 am]
BILLING CODE 8011-01-P