[Federal Register Volume 80, Number 133 (Monday, July 13, 2015)]
[Notices]
[Pages 40090-40092]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-16974]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-75373; File No. SR-CBOE-2015-063]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change Relating to Rule 6.49A
July 7, 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 June 24, 2015, Chicago Board Options Exchange, Incorporated
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I, II, and III below, which Items have been prepared by the
Exchange. The Exchange filed the proposal as a ``non-controversial''
proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
\3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange p [sic] proposes to amend its Rule 6.49A relating to
the transfer of positions. The text of the proposed rule change is
provided below.
(additions are italicized; deletions are [bracketed])
* * * * *
Chicago Board Options Exchange, Incorporated Rules
* * * * *
Rule 6.49A. Transfer of Positions
(a)-(b) No change.
(c) Transfer Procedure.
(1)-(8) No change.
(9) Any Request for Quotes that is to be submitted later than
12:30[0] p.m. (or two and one half hours prior to an early scheduled
close) must have the approval of the President of the Exchange to have
a Request Response Time of less than two hours. In no event may a
Request for Quotes be submitted to the floor later than 2:30 p.m. (or
thirty minutes prior to an early scheduled close).
(10)-(13) No change.
(d) No change.
. . . Interpretations and Policies:
.01-.03 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
Rule 6.49A describes the circumstances under which Trading Permit
Holders may transfer positions and the on- and off-floor procedures for
a transfer of positions. Pursuant to subparagraph (c), an on-floor
transfer of positions must be represented to the trading crowd pursuant
to a request for quotes and can be completed after a two-hour response
time (or different time if approved by the Exchange President pursuant
to subparagraph (c)(8)). Subparagraph (c)(6) indicates that transfer
packages offered on the floor are subject to FLEX trading procedures in
Rule 24A.5(a) through (c) or Rule 24B.5(a)(2)(i) through (iii).
Pursuant to Rule 24A.5(a) or Rule 24B.5(a)(2), the submission of a
request for quotes must use the forms, formats, procedures and time
frames established by the Exchange. On receipt of a request for quotes
in proper form, the Exchange official will initiate the request for
quotes by communicating the terms and specifications on and off the
floor.
Rule 6.49A(c)(9) currently provides that a submission of a request
for quotes for a transfer package later than 1:00 p.m. require the
approval of the President of the Exchange (as that would result in a
response time of less than two hours). Additionally, Rule
[[Page 40091]]
6.49A(c)(9) provides that no requests for quotes for transfer packages
may be submitted to the floor later than 2:30 p.m. Because the request
for quotes procedures described above provide that a request for quotes
must be in proper form before the Exchange initiates it, the Exchange
needs time to review the materials submitted to determine that the
request is in proper form. However, if a request for quotes is
submitted near the 1:00 p.m. cut-off time, the Exchange may not have
sufficient time to conduct this review and complete its procedures to
initiate the request for quotes by 1:00 p.m. to allow the full two-hour
response time in accordance with Rule 6.49A. If the review cannot be
completed by 1:00 p.m., then the Exchange President would need to
approve initiation of the request for quotes that trading day, which
could further delay the process. To ensure the Exchange has sufficient
time to determine that a request for quotes submission is in proper
form and to initiate the request for quotes, the Exchange proposes to
amend Rule 6.49A(c)(9) to require that requests for quotes be submitted
by 12:30 p.m.\5\ (or two and one half hours prior to an early scheduled
close). This proposed rule change provides the Exchange with sufficient
time to complete its review and initiate requests for quotes to allow
the full two-hour response time for the trading crowd to submit quotes
in accordance with Rule 6.49A (without the potential delay of obtaining
approval of the Exchange President)
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\5\ The proposed rule change also adds corresponding cut-off
times for submissions of requests for quotes to the Exchange for
review, as well as the latest a request for quotes may be submitted
to the floor, when the Exchange is scheduled to close early (such as
trading days immediately preceding certain holidays).
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\6\ Specifically, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \7\ 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) \8\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
\8\ Id.
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In particular, the Exchange believes that the proposed rule change
will promote just and equitable principles of trade by ensuring that
the Exchange has sufficient time to review submissions of requests for
quotes to determine whether they are in proper form and complete its
procedures to initiate a request for quotes. Additionally, the proposed
rule change will protect investors because it will ensure this review
is completed in time to provide the trading crowd with the full two-
hour period during which it can submit quotes in accordance with Rule
6.49A (without the potential delay of obtaining approval of the
Exchange President).
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. The proposed rule change
slightly modifies the cut-off time for submission of requests for
quotes for on-floor position transfers to provide the Exchange with
sufficient time to review the request for quotes and determine whether
it is in proper form prior to the initiation of the request for
response time. All submissions of requests for quotes will be subject
to the same revised cut-off time. While the proposed rule change
requires requests for quotes to be submitted to the Exchange earlier,
any potential burden imposed by this earlier cut-off time is offset by
the benefits of ensuring that requests for quotes are submitted in
proper form and that the trading crowd receives the full two hour
response time to submit quotes for the transfer package. To the extent
the Exchange receives a submission after the revised cut-off time, the
rule still permits the Exchange to accept it and begin the shortened
request for quotes with approval of the President.
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:
A. Significantly affect the protection of investors or the public
interest;
B. impose any significant burden on competition; and
C. 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 \9\ and
Rule 19b-4(f)(6) \10\ thereunder. 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.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
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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-CBOE-2015-063 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-CBOE-2015-063. 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
[[Page 40092]]
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 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-CBOE-2015-063, and should be
submitted on or before August 3, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-16974 Filed 7-10-15; 8:45 am]
BILLING CODE 8011-01-P