[Federal Register Volume 78, Number 121 (Monday, June 24, 2013)]
[Notices]
[Pages 37854-37856]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-14964]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69789; File No. SR-BOX-2013-31]
Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Extend the Penny Pilot Program and Amend Rule 7050
June 18, 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 June 11, 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 change 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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[[Page 37855]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 7260 to extend, through
December 31, 2013, the pilot program that permits certain classes to be
quoted in penny increments (``Penny Pilot Program'') and to remove
obsolete rule text from Rule 7050. The text of the proposed rule change
is available from the principal office of the Exchange, on the
Exchange's Internet Web site at http://boxexchange.com, 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 Exchange 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 Exchange 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to extend the effective time period of the
Penny Pilot Program that is currently scheduled to expire on June 30,
2013, for an additional six months, through December 31, 2013.\3\ The
Penny Pilot Program permits certain classes to be quoted in penny
increments. The minimum price variation for all classes included in the
Penny Pilot Program, except for the QQQs, SPY and IWM, will continue to
be $0.01 for all quotations in options series that are quoted at less
than $3 per contract and $0.05 for all quotations in options series
that are quoted at $3 per contract or greater. The QQQs, SPY and IWM,
will continue to be quoted in $0.01 increments for all options series.
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\3\ The Penny Pilot Program has been in effect on the Exchange
since its inception in May 2012. See Securities Exchange Act Release
Nos. 66871 (April 27, 2012) 77 FR 26323 (May 3, 2012) (File No. 10-
206, In the Matter of the Application of BOX Options Exchange LLC
for Registration as a National Securities Exchange Findings,
Opinion, and Order of the Commission), 67328 (June 29, 2012) 77 FR
40123 (July 6, 2012) (SR-BOX-2012-007), and 68425 (December 13,
2012) 77 FR 75234 (December 19, 2013) (SR-BOX-2012-021). The
extension of the effective date is the only change to the Penny
Pilot Program being proposed at this time.
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The Exchange may replace any Pilot Program classes that have been
delisted on the second trading day following July 1, 2013. The
replacement classes will be selected based on trading activity for the
six month period beginning December 1, 2012, and ending May 31, 2013.
The Exchange will employ the same parameters to prospective replacement
classes as approved and applicable under the Pilot Program, including
excluding high-priced underlying securities. The Exchange will
distribute a Regulatory Circular notifying Participants which
replacement classes shall be included in the Penny Pilot Program.
Additionally, the Exchange proposes to remove obsolete rule text
from BOX Rule 7050 (b) regarding the issuance of Regulatory Circulars
by the Exchange which specify the options trading in the pilot and in
what increments. These Regulatory Circulars are no longer filed with
the Commission and removing this text will conform the Penny Pilot
Program with the rules of the other exchanges.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\4\ in general, and Section
6(b)(5) of the Act,\5\ in particular, in that it is designed to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism for a free and open market and a national market
system and, in general, to protect investors and the public interest.
In particular, the proposed extension will allow the Penny Pilot
Program to remain in effect without interruption.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Because the proposed rule change does not impose any new or
additional burden on BOX Options Participants, and only extends the
current Penny Pilot Program, 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.
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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \6\ and Rule 19b-4(f)(6) thereunder.\7\
Because the 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 prior to
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, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6)(iii) thereunder.\9\
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\6\ 15 U.S.C. 78s(b)(3)(A)(iii).
\7\ 17 CFR 240.19b-4(f)(6).
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6)(iii).
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of the filing.\10\
However, pursuant to Rule 19b-4(f)(6)(iii),\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 asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest because doing so will
allow the Pilot Program to continue without interruption in a manner
that is consistent with the Commission's prior approval of the
extension and expansion of the Pilot Program and will allow the
Exchange and the Commission additional time to analyze the impact of
the Pilot Program.\12\ Accordingly, the
[[Page 37856]]
Commission designates the proposed rule change as operative upon filing
with the Commission.\13\
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\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change along with a
brief description and the text of 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. The
Exchange has satisfied this pre-filing requirement.
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ See Securities Exchange Act Release No. 61061 (November 24,
2009), 74 FR 62857 (December 1, 2009) (SR-NYSEArca-2009-44). See
also supra note 3.
\13\ For purposes only of waiving the operative delay for this
proposal, the Commission has 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 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-BOX-2013-31 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-2013-31. 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 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-BOX-2013-31 and should be
submitted on or before July 15, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-14964 Filed 6-21-13; 8:45 am]
BILLING CODE 8011-01-P