[Federal Register Volume 80, Number 11 (Friday, January 16, 2015)]
[Notices]
[Pages 2455-2457]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-00624]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74038; File No. SR-C2-2014-028]
Self-Regulatory Organizations; C2 Options Exchange, Incorporated;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to Amending Rule 8.2(d)
January 13, 2015.
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 December 31, 2014, C2 Options Exchange, Incorporated (the
``Exchange'' or ``C2'') 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 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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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to remove the registration cost of SPXPM
from Exchange Rule 8.2(d) as this class of options is no longer listed
or traded on the Exchange. The text of the proposed rule change is
provided below.
(additions are italicized; deletions are [bracketed])
* * * * *
C2 Options Exchange, Incorporated
Rules
* * * * *
Rule 8.2. Continuing Market-Maker Registration
(a)-(c) No change.
(d) Market-Maker Option Class Registration. Absent an exemption by
the Exchange, an option class registration of a Market-maker confers
the right to quote in that product. A Market-Maker may change its
registered classes upon advance notification to the Exchange in a form
and manner prescribed by the Exchange.
[[Page 2456]]
Each Trading permit held by a Market-Maker has a registration
credit of 1.0. A Market-Maker may select for each Trading Permit the
Market-Maker holds any combination of option classes, whose aggregate
registration cost does not exceed 1.0. Option class ``registration
costs'' are set forth below:
------------------------------------------------------------------------
Registration
Option class cost
------------------------------------------------------------------------
[SPXPM]................................................... [1.0]
All [other] options....................................... .001
(e) No change.............................................
------------------------------------------------------------------------
* * * * *
The text of the proposed rule change is also 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.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing to amend its Rule 8.2(d) regarding
registration costs. In the current Exchange Rules, Rule 8.2 describes
the registration process and corresponding registration costs for
Trading Permit Holders (``TPHs'') on C2. Exchange Rule 8.2(d) lists the
registration cost for options classes traded on C2. SPXPM has a
registration cost of 1.0, which requires its own Trading Permit.
However, SPXPM is no longer a class of options that is traded on C2 and
the Exchange is proposing to update Exchange Rule 8.2(d) to reflect
that change and to add clarity to the Exchange Rules.
By way of background, the Exchange was granted permission by the
Commission in 2011 to list and trade Standard & Poor's 500 Index (``S&P
500'') options with third-Friday-of-the-month (``Expiration Friday'')
expiration dates for which the exercise settlement value will be [sic]
based on the index value derived from the closing prices of component
securities (``P.M. settled'') on C2 on a pilot basis.\3\ As a result of
the Commission's approval to list and trade SPXPM options on C2, the
Exchange filed a subsequent rule filing to amend 8.2(d) to include the
registration cost for SPXPM.\4\
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\3\ See Securities Exchange Act Release No. 34-65256 (September
2, 2011), 76 FR 175 [sic] (September 9, 2011) (SR-C2-2011-008)
(order approving listing and trading SPXPM on C2 on a pilot basis);
see also Securities Exchange Act Release No. 34-68888 (February 8,
2013), 78 FR 31 [sic] (February 14, 2013) (SR-CBOE-2012-120) (order
approving listing and trading SPXPM on CBOE on a pilot basis). C2
ceased trading SPXPM on February 19, 2013.
\4\ See Securities Exchange Act Release No. 34-65452 (September
30, 2011), 76 FR 194 [sic] (October 6, 2011) (SR-C2-2011-023)
(immediately effective filing establishing Market-Maker registration
costs for SPXPM options).
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Pursuant to Exchange Rule 8.2, an option class registration of a
Market-Maker confers the right to quote in that product. Each Trading
Permit held by a Market-Maker has a registration credit of 1.0. A
Market-Maker may select for trading any combination of available option
classes whose aggregate is 1.0 for each Trading Permit held. Since the
Exchange has ceased the listing and trading of SPXPM, the Exchange is
proposing to amend Rule 8.2(d) to delete the language that lists SPXPM
and its registration cost of 1.0. There is no need for the registration
cost of SPXPM to be listed under Rule 8.2(d) as this class of options
is no longer traded on the Exchange. The Exchange is proposing the
proposed change to harmonize the Exchange Rules with the current
practices of the Exchange.
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.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
\7\ Id.
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In particular, the Exchange believes that the proposed rule filing
will more specifically state the options classes that are traded on C2
and their corresponding registration costs for TPHs. The Exchange
believes the proposed change is consistent with the Act in that it is
merely updating an Exchange Rule to align with the current practices of
the Exchange to avoid confusion with respect to registration costs for
Market-Makers on C2. In addition, the proposed filing is not unfairly
discriminating because SPXPM is no longer traded on C2 and as a result,
the removal of SPXPM from the registration costs provided in 8.2(d)
will be applied to all Market-Makers on C2. Finally, the proposed
filing protects investors and the public interest by relieving
confusion that might otherwise arise by having an obsolete reference in
the CBOE [sic] Rule Book.
B. Self-Regulatory Organization's Statement on Burden on Competition
C2 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
intermarket competition because SPXPM is no longer an option class that
is traded on C2 and thus, the change will be applied equally to all
Market-Makers registered to trade on C2. Additionally, the Exchange
does not believe that the proposed rule filing will place any burden on
intermarket competition because it is merely updating the Exchange
rules to harmonize them with the current practices of the Exchange.
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 change does not: (i)
Significantly affect
[[Page 2457]]
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) of the Act \8\ 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).
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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. If the 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-C2-2014-028 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-C2-2014-028. 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 will also 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-C2-2014-028 and should be
submitted on or before February 6, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-00624 Filed 1-15-15; 8:45 am]
BILLING CODE 8011-01-P