[Federal Register Volume 78, Number 116 (Monday, June 17, 2013)]
[Notices]
[Pages 36284-36286]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-14250]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69731; File No. SR-CFE-2013-004]
Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to the Requirements Applicable to Foreign Trading Privilege
Holders
June 11, 2013.
Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on May 31, 2013, CBOE Futures
Exchange, LLC (``CFE'' or ``Exchange'') filed with the Securities and
Exchange Commission (``SEC'' or ``Commission'') the proposed rule
change described in Items I, II, and III below, which Items have been
prepared by CFE. The Commission is publishing this notice to solicit
comments on the proposed rule
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change from interested persons. CFE also has filed this proposed rule
change with the Commodity Futures Trading Commission (``CFTC''). CFE
filed a written certification with the CFTC under Section 5c(c) of the
Commodity Exchange Act (``CEA'') \2\ on May 30, 2013.
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\1\ 15 U.S.C. 78s(b)(7).
\2\ 7 U.S.C. 7a-2(c).
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I. Self-Regulatory Organization's Description of the Proposed Rule
Change
CFE proposes to amend CFE Rule 305B (Foreign Trading Privilege
Holders) by adding new subparagraphs (b)(ii) and (b)(iii) to that rule
that would require that foreign Trading Privilege Holders (``TPHs''):
(1) Maintain in English and U.S. dollars any books and records that are
required to be kept by TPHs under CFE Rules; and (2) prior to acting as
agent for a customer from a foreign jurisdiction in relation to a CFE
Contract, obtain written consent from that customer that permits the
TPH to provide information regarding the customer and the customer's
activities in CFE Contracts to CFE in response to a regulatory request
for information pursuant to CFE Rules.
The scope of this filing is limited solely to the application of
the rule changes to security futures traded on CFE. The only security
futures currently traded on CFE are traded under Chapter 16 of CFE's
Rulebook which is applicable to Individual Stock Based and Exchange-
Traded Fund Based Volatility Index (``Volatility Index'') security
futures.
The text of the proposed rule change is attached as Exhibit 4.\3\
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\3\ The Commission notes that Exhibit 4 is attached to the
filing, not to this Notice.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, CFE 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. CFE 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
CFE Rule 305B (Foreign Trading Privilege Holders) provides that
each TPH shall be organized under the laws of, and be solely
responsible for ensuring that the location of any CBOE Workstation \4\
is in, the United States or a foreign jurisdiction expressly approved
by the Exchange. CFE Rule 305B also sets forth certain requirements
that are applicable to any TPH organized under the laws of, or with a
CBOE Workstation in, a foreign jurisdiction.
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\4\ CFE Rule 116 provides that the term ``CBOE Workstation''
means any computer connected directly to the CBOE System, including
by means of an Exchange application programming interface, for the
purpose of trading Contracts. CFE Rule 115 provides that the term
``CBOE System'' means (i) the electronic systems administered by or
on behalf of the Exchange which perform the functions set out in the
Rules of the Exchange, including controlling, monitoring, and
recording trading on the Exchange and (ii) any connectivity to the
foregoing electronic systems that is administered by or on behalf of
the Exchange, such as a communications hub in a foreign
jurisdiction.
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CFE proposes to amend CFE Rule 305B by adding two additional
requirements that would apply to these foreign TPHs. First, a foreign
TPH would be required under new subparagraph (b)(ii) to CFE Rule 305B
to maintain in English and U.S. dollars any books and records required
to be kept by the TPH under the Rules of the Exchange. Second, a
foreign TPH, prior to acting as agent for a Customer from a foreign
jurisdiction in relation to a CFE Contract, would be required under new
subparagraph (b)(iii) to CFE Rule 305B to obtain written consent from
that Customer that permits the TPH to provide information regarding the
Customer and the Customer's activities in CFE Contracts to the Exchange
in response to a regulatory request for information pursuant to the
Rules of the Exchange.
The Exchange believes that the proposed changes will assist CFE in
enforcing compliance with its Rules. Specifically, the Exchange
believes that the proposed changes will be beneficial in connection
with CFE regulatory examinations and investigations involving foreign
TPHs and in connection with obtaining information for regulatory
purposes regarding the trading activities in CFE Contracts of foreign
customers that trade through those TPHs.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\5\ in general, and furthers the
objectives of Section 6(b)(5) \6\ in particular in that it is designed
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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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change will strengthen
its ability to examine and investigate foreign TPHs more readily
because books and records that are required to be kept under CFE Rules
will be more easily understandable by CFE regulatory staff because they
would be maintained in English and denominated in U.S. dollars. In
addition, the Exchange believes that the proposed change will
strengthen the Exchange's ability to carry out its self-regulatory
obligations regarding the trading activities in CFE Contracts by
foreign customers that trade those foreign TPHs.
B. Self-Regulatory Organization's Statement on Burden on Competition
CFE 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. The Exchange believes that the proposed rule
change is equitable and not unfairly discriminatory because amended CFE
Rule 305B would apply to all foreign TPHs and reasonably and fairly
requires uniformity (i.e., English/U.S. dollar denomination) concerning
books and records obligations.
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
The proposed rule change will become operative on June 17, 2013.
At any time within 60 days of the date of effectiveness of the
proposed rule change, the Commission, after consultation with the CFTC,
may summarily abrogate the proposed rule change and require that the
proposed
[[Page 36286]]
rule change be refiled in accordance with the provisions of Section
19(b)(1) of the Act.\7\
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\7\ 15 U.S.C. 78s(b)(1).
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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-CFE-2013-004 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-CFE-2013-004. 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 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-CFE-2013-004,
and should be submitted on or before July 8, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-14250 Filed 6-14-13; 8:45 am]
BILLING CODE 8011-01-P