Document ID: SEC-2013-1019-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2013-06-05T04:00Z

[Federal Register Volume 78, Number 108 (Wednesday, June 5, 2013)]
[Notices]
[Pages 33868-33869]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-13277]

[[Page 33868]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69675; File No. SR-CBOE-2013-041)

Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing of Amendment Nos. 1 and 2 and 
Designation of Longer Period for Commission Action on Proposed Rule 
Change, as Modified by Amendment Nos. 1 and 2, To Amend Rule 6.53(u)

May 30, 2013.
    On March 28, 2013, Chicago Board Options Exchange, Incorporated 
(``Exchange'' or ``CBOE'') filed with the Securities and Exchange 
Commission (``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to amend CBOE Rule 6.53(u), which 
governs Qualified Contingent Cross (``QCC'') Orders. The proposed rule 
change would allow QCC Orders with more than one option leg to be 
entered in the increments specified for complex orders under CBOE Rule 
6.42. The proposed rule change was published for comment in the Federal 
Register on April 16, 2013.\3\ The Commission has received no comment 
letters on the proposal. On April 18, 2013, CBOE filed Amendment No. 1 
to the proposed rule change.\4\ On May 29, 2013, CBOE filed Amendment 
No. 2 to the proposed rule change.\5\ The Commission is publishing this 
notice to solicit comments on the proposed rule change, as modified by 
Amendment Nos. 1 and 2, from interested persons, and to designate a 
longer period for Commission action on the proposed rule change, as 
modified by Amendment Nos. 1 and 2.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 69360 (April 10, 
2013), 78 FR 22591 (``Notice'').
    \4\ In Amendment No. 1, CBOE added an additional paragraph at 
the end of the purpose section stating that: (1) A QCC Order with 
multiple legs is a form of a complex order and should be able to be 
entered in $0.01 increments, as non-QCC complex orders can currently 
be entered in $0.01 increments; and (2) such orders still cannot 
trade unless they are at or between the NBBO and the opportunity to 
trade QCC Orders with multiple legs in $0.01 increments provides an 
opportunity for price improvement at this smaller increment level. 
The paragraph added in Amendment No. 1 was deleted and replaced by 
language added in Amendment No. 2. See note 5 infra. The text of 
Amendment No. 1 is available on CBOE's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at CBOE's 
Office of the Secretary, and at the Commission's Public Reference 
Room.
    \5\ In Amendment No. 2, CBOE replaced the paragraph added by 
Amendment No. 1 with two paragraphs at the end of the purpose 
section stating that: (1) Were it not for language in CBOE Rule 
6.53(u) that limits the entry of QCC Orders to the standard 
increments applicable to simple orders in the options class of each 
leg, QCC Orders with multiple legs would be allowed to be traded in 
$0.01 increments under CBOE Rule 6.42; (2) the nature of the pricing 
of a complex order, whether a QCC Order or otherwise, is such that 
the pricing is based on the relative price of one option versus 
another and thus the standard increment of trading of a complex 
order's individual options legs is less relevant to the pricing of 
the complex order; (3) the proposed amendment to permit QCC Orders 
with more than one option leg to be entered in the increments 
specified for complex orders under CBOE Rule 6.42 (i.e., $0.01 
increments) would put the trading of QCC Orders with multiple legs 
on the same footing as the trading of other types of complex orders; 
(4) pursuant to CBOE Rule 6.53(u)(ii), each options leg of a complex 
QCC Order cannot trade unless each leg provides price improvement 
over a public customer order resting in the electronic book and is 
at or between the NBBO, and to date, CBOE has never had to reject a 
submitted complex QCC Order because it would have violated either of 
these principles; and (5) permitting the trading of QCC Orders with 
multiple legs in $0.01 increments would provide an opportunity for 
price improvement at this smaller increment level. The text of 
Amendment No. 2 is available on CBOE's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at CBOE's 
Office of the Secretary, and at the Commission's Public Reference 
Room.
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I. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as modified by Amendment Nos. 1 and 2, 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 rule-comments@sec.gov. Please include 
File Number SR-CBOE-2013-041 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-2013-041. 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 offices 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-2013-041, 
and should be submitted on or before June 26, 2013.

II. Designation of a Longer Period for Commission Action

    Section 19(b)(2) of the Act \6\ provides that within 45 days of the 
publication of notice of the filing of a proposed rule change, or 
within such longer period up to 90 days as the Commission may designate 
if it finds such longer period to be appropriate and publishes its 
reasons for so finding or as to which the self-regulatory organization 
consents, the Commission shall either approve the proposed rule change, 
disapprove the proposed rule change, or institute proceedings to 
determine whether these proposed rule changes should be disapproved. 
The 45th day for this filing is May 31, 2013.
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    \6\ 15 U.S.C. 78s(b)(2).
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    The Commission is extending the 45-day time period for Commission 
action on the proposed rule change, as modified by Amendment Nos. 1 and 
2. The Commission finds that it is appropriate to designate a longer 
period within which to take action on the proposed rule change so that 
it has sufficient time to consider and take action on the Exchange's 
proposed rule change, as modified by Amendment Nos. 1 and 2.
    Accordingly, pursuant to Section 19(b)(2)(A)(ii)(I) of the Act \7\ 
and for the reasons stated above, the Commission designates July 15, 
2013, as the date by which the Commission should either approve or 
disapprove, or institute proceedings to determine whether to 
disapprove, the proposed rule change,

[[Page 33869]]

as modified by Amendment Nos. 1 and 2, File Number SR-CBOE-2013-041.
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    \7\ 15 U.S.C. 78s(b)(2)(A)(ii)(I).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12) and (31).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-13277 Filed 6-4-13; 8:45 am]
BILLING CODE 8011-01-P