[Federal Register Volume 82, Number 160 (Monday, August 21, 2017)]
[Notices]
[Pages 39621-39622]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17549]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-81402; File No. SR-CFE-2017-002]
Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice
of Filing of a Proposed Rule Change Regarding Recordkeeping
Requirements
August 15, 2017.
Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on August 7, 2017 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 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 August 7, 2017.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(7).
\2\ 7 U.S.C. 7a-2(c).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Description of the Proposed Rule
Change
The Exchange proposes to amend CFE Rules 502 and 535 related to
recordkeeping requirements. The scope of this filing is limited solely
to the application of the proposed rule amendments to security futures
that may be traded on CFE. Although no security futures are currently
listed for trading on CFE, CFE may list security futures for trading in
the future. The text of the proposed rule change is attached as Exhibit
4 to the filing but is not attached to the publication of this notice.
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 502 sets forth CFE's requirements relating to record
retention periods and the inspection and delivery of books and records.
CFE Rule 535 provides that any CFE Trading Privilege Holder subject to
CFTC Regulation 1.31 \3\ that violates CFTC Regulation 1.31 shall be
deemed to have violated Rule 535. Rule 535 also includes the text of
CFTC Regulation 1.31 within Rule 535.
---------------------------------------------------------------------------
\3\ 17 CFR 1.31.
---------------------------------------------------------------------------
The CFTC recently issued a final rulemaking regarding recordkeeping
requirements which amends CFTC Regulation 1.31.\4\ The amendments to
CFTC Regulation 1.31 become effective on August 28, 2017. CFE is
proposing to amend Rules 502 and 535 to conform them to amended CFTC
Regulation 1.31. Rule 502 continues to provide for a five year record
retention period consistent with CFTC Regulation 1.31. In conformity
with amended CFTC Regulation 1.31, CFE is proposing to amend Rule 502
to provide that required books and records exclusively created and
maintained on paper shall be readily accessible during the first two
years of that five year period and that electronic books and records
shall be readily accessible for the entire five year period. CFE is
proposing to amend Rule 535 to replace the previous text of CFTC
Regulation 1.31 with the new text of CFTC Regulation 1.31. CFE is
proposing to amend Rule 535 to modernize and make technology neutral
the form and manner in which regulatory records must be kept, as well
as rationalize the current rule text for ease of understanding,
consistent with the changes made to CFTC Regulation 1.31. Specifically,
the proposed changes to Rule 535 eliminate the requirement for a
records entity to: (1) Keep electronic regulatory records in their
native file format; (2) retain any electronic record in a non-
rewritable, non-erasable format; and (3) engage a third-party technical
consultant.
---------------------------------------------------------------------------
\4\ 82 FR 24479 (May 30, 2017).
---------------------------------------------------------------------------
[[Page 39622]]
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 Sections 6(b)(5) \6\ and 6(b)(7) \7\ in particular in
that it is designed:
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
\7\ 15 U.S.C. 78f(b)(7).
---------------------------------------------------------------------------
To prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, and
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.
The proposed rule change would align CFE's rules related to
recordkeeping with the CFTC's amended recordkeeping requirements. The
Exchange believes that the proposed rule change furthers the ability of
the Exchange to regulate its market by providing for updated and
enhanced recordkeeping requirements (which include, among other things,
a requirement to keep electronic records readily accessible for a [sic]
five years).
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, in that the proposed rule change is consistent
with the CFTC's amended recordkeeping requirements. The Exchange
believes that the proposed rule change is equitable and not unfairly
discriminatory in that the rule amendments included in the proposed
rule change would apply equally to all CFE Trading Privilege Holders.
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 August 28, 2017.
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 rule change be refiled in accordance with the provisions of
Section 19(b)(1) of the Act.\8\
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------
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-2017-002 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-CFE-2017-002. 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 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-2017-002, and should be
submitted on or before September 11, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
---------------------------------------------------------------------------
\9\ 17 CFR 200.30-3(a)(73).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-17549 Filed 8-18-17; 8:45 am]
BILLING CODE 8011-01-P