[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62775-62777]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-24548]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70590; File No. SR-CBOE-2013-092]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change Relating to CBSX Appendix A
October 1, 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 September 23, 2013, Chicago Board Options Exchange,
Incorporated (``Exchange'' or ``CBOE'') 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Appendix A in the CBOE Stock
Exchange, LLC's (``CBSX'') Rules. 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 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.
[[Page 62776]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
By way of background, CBSX (CBOE's facility for trading non-option
securities) rules are generally contained within Chapters 50 through 54
of the CBOE rulebook. Trading of non-option securities on CBSX is also
subject to the rules in Chapters 1 through 29 to the same extent such
rules apply to the trading of the products to which those rules apply,
in some cases supplemented by the rules in Chapters 50 through 54,
except for rules that have been replaced by rules in Chapters 50
through 54 and except where the context otherwise requires. Appendix A
to Chapters 50 through 54 lists the rules in Chapters 1 through 29 that
are applicable to trading on CBSX. Where appropriate, Appendix A also
indicates that a rule in Chapter 1 through 29 has been supplemented by
a rule in Chapter 50 through 54.\3\
---------------------------------------------------------------------------
\3\ See Introduction to CBSX Rules, Chapters 50 through 54.
---------------------------------------------------------------------------
In that regard, Appendix A of the CBSX rules currently references
CBOE Rule 3.9, as supplemented by CBSX Rule 50.4. CBOE Rule 3.9(g)
currently states, in relevant part, that any person applying pursuant
to paragraph (a) of the rule to ``have an authorized trading function
is required to have completed the Exchange's Trading Permit Holder
Orientation Program and to have passed an Exchange Trading Permit
Holder Qualification Exam.'' Because Appendix A of the CBSX rules
contains a cross-reference to CBOE Rule 3.9 (as supplemented by CBSX
Rule 50.4) \4\, Rule 3.9 is applicable to CBSX Trading Permit Holder
(``TPH'') applicants as well. The CBOE Registration Services Department
historically, however, has not required this orientation or examination
for CBSX TPH applicants that will not be engaging in options trading as
both the orientation program and the examination referenced in
paragraph (g) of Rule 3.9 are focused upon options trading on CBOE (not
non-option securities).
---------------------------------------------------------------------------
\4\ CBSX Rule 50.4 relates to Trading Access to the CBSX System,
and, thus, does not supplement the requirements specifically related
to CBOE Rule 3.9(g).
---------------------------------------------------------------------------
As such, the Exchange is proposing to add text to the CBSX Appendix
A to make clear that CBOE Rule 3.9(g) is not applicable to CBSX TPH
applicants that will not engage in options trading on the Exchange.
Specifically, the Exchange is proposing to add text to CBSX Appendix A
to explicitly state the applicable subparagraphs of 3.9(g) that are
applicable to CBSX TPH applicants. The Exchange believes this proposal
is appropriate as the orientation program and examination referenced in
CBOE 3.9(g) is focused on options trading. Thus, the Exchange believes
it is appropriate to continue to administer the orientation and
examination to CBOE TPH applicants but not to CBSX TPH applicants.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\5\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \6\ requirements that the rules of an exchange be
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 regulating, clearing,
settling, processing information with respect to, and 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. Additionally,
the Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \7\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
\7\ Id.
---------------------------------------------------------------------------
In particular, the Exchange believes that the proposed rule filing
will more specifically state the requirements for CBSX applicants along
with codify existing Exchange practices. The Exchange believes the
proposed change is consistent with the Act in that it continues to
require the options focused TPH Qualification Examination and
associated orientation program for CBOE applicants applying to engage
in options trading but not for CBSX applicants applying to the Exchange
to engage in trading of non-option securities. In addition, the
proposed filing is not unfairly discriminating because it will be
applied to all similarly situated TPH applicants who are solely trading
on CBSX.
B. Self-Regulatory Organization's Statement on Burden on Competition
CBOE 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. In particular, the Exchange
does not believe that the proposed rule filing will place any burden on
intramarket competition because it will be applied equally to similarly
situated applicants that are applying to only engage in non-options
trading on CBSX. The Exchange does not believe the proposed rule filing
will place any burden on intermarket competition because it is merely
codifying a current Exchange practice.
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
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, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A).
---------------------------------------------------------------------------
The Exchange has requested that the Commission waive the 30-day
operative delay because the rule change would codify an existing
Exchange practice and reduce confusion for associated persons of TPHs
and regulators. The Commission designates the proposal operative upon
filing because it will align CBSX's rules with its existing practice of
not requiring CBSX TPH applicants to complete either the TPH
orientation program or the TPH exam.\9\
---------------------------------------------------------------------------
\9\ For purposes only of waiving the 30-day operative delay, the
Commission has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of this 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
[[Page 62777]]
Commission takes such action, the Commission will 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. 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-2013-092 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-2013-092. 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-2013-092 and should be
submitted on or before November 12, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24548 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P