Document ID: SEC-2012-1845-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Options Exchange LLC
Posted Date: 2012-11-13T05:00Z

[Federal Register Volume 77, Number 219 (Tuesday, November 13, 2012)]
[Notices]
[Pages 67722-67723]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-27527]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68170; File No. 4-655]

Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing of Proposed Minor Rule Violation Plan

November 6, 2012.
    Pursuant to Section 19(d)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19d-1(c)(2) thereunder,\2\ notice is hereby 
given that on October 15, 2012, BOX Options Exchange LLC (the 
``Exchange''), filed with the Securities and Exchange Commission (the 
``Commission'') a proposed minor rule violation plan (``MRVP'') with 
sanctions not exceeding $2,500 which would not be subject to the 
provisions of Rule 19d-1(c)(1) of the Act \3\ requiring that a self-
regulatory organization (``SRO'') promptly file notice with the 
Commission of any final disciplinary action taken with respect to any 
person or organization.\4\ In accordance with Rule 19d-1(c)(2) under 
the Act, the Exchange proposed to designate certain specified rule

[[Page 67723]]

violations as minor rule violations, and requested that it be relieved 
of the prompt reporting requirements regarding such violations, 
provided it gives notice of such violations to the Commission on a 
quarterly basis.
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    \1\ 15 U.S.C. 78s(d)(1).
    \2\ 17 CFR 240.19d-1(c)(2).
    \3\ 17 CFR 240.19d-1(c)(1).
    \4\ The Commission adopted amendments to paragraph (c) of Rule 
19d-1 to allow SROs to submit for Commission approval plans for the 
abbreviated reporting of minor disciplinary infractions. See 
Securities Exchange Act Release No. 21013 (June 1, 1984), 49 FR 
23828 (June 8, 1984). Any disciplinary action taken by an SRO 
against any person for violation of a rule of the SRO which has been 
designated as a minor rule violation pursuant to such a plan filed 
with and declared effective by the Commission shall not be 
considered ``final'' for purposes of Section 19(d)(1) of the Act if 
the sanction imposed consists of a fine not exceeding $2,500 and the 
sanctioned person has not sought an adjudication, including a 
hearing, or otherwise exhausted his administrative remedies.
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    The Exchange proposes to include in its MRVP the procedures and 
violations currently included in Exchange Rule 12140 (``Imposition of 
Fines for Minor Rule Violations'').\5\
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    \5\ On April 27, 2012, the Exchange's application for 
registration as a national securities exchange, including the rules 
governing the Exchange, was approved. See Securities Exchange Act 
Release No. 66871 (April 27, 2012), 77 FR 26323 (May 3, 2012) (File 
No. 10-206).
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    According to the Exchange's proposed MRVP, under Rule 12140, the 
Exchange may impose a fine (not to exceed $2,500) on a member or an 
associated person with respect to any rule violation listed in Rule 
12140(d). The Exchange shall serve the person against whom a fine is 
imposed with a written statement setting forth the rule or rules 
violated, the act or omission constituting each such violation, the 
fine imposed for each such violation, and the date by which such fine 
shall be paid, such determination becomes final or such determination 
must be contested. If the person against whom the fine is imposed pays 
the fine, such payment shall be deemed to be a waiver of such person's 
right to a disciplinary proceeding and any review of the matter under 
the Exchange Rules. Any person against whom a fine is imposed may 
contest the Exchange's determination by filing with the Exchange a 
written answer, at which point the matter shall become a disciplinary 
proceeding.
    The Exchange proposes that, as set forth in Exchange Rule 12140(d), 
violations of the following rules would be appropriate for disposition 
under the MRVP: Rule 3120 (Position Limits); Rule 10030 (Focus 
Reports); Rule 10040 (Requests for Trade Data); Rules 7110(a), 7150(d)-
(f), and 8050(a)-(d) (Order Entry); Rule 8040(a)(7) (Quotation 
Parameters); Rule 8050(e) (Continuous Quotes); Rule 3180 (Mandatory 
Systems Testing); Rules 2020, 2040, and 2050 related to failure to 
timely file amendments to Form U4, Form U5, and Form BD; Rule 9000(c)-
(e), (g) and (h) (Contrary Exercise Advice); Rule 15020 (Locked and 
Crossed Markets); Rule 8030(e) (Market Maker Assigned Activity); Rule 
8050(c)(2)-(4) (Request for Quote); and Rule 15010(a) (Trade-
Through).\6\
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    \6\ The Commission notes that the list of violations set forth 
in this notice corrects certain rule reference errors that are 
presently in Exchange Rule 12140. The Exchange has informed 
Commission staff that it will submit a rule filing to correct such 
errors.
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    Upon approval of the plan, the Exchange will provide the Commission 
a quarterly report of actions taken on minor rule violations under the 
plan. The quarterly report will include, among other things: the 
Exchange's internal file number for the case, the name of the 
individual and/or organization, the nature of the violation, the 
specific rule provision violated, the sanction imposed, the number of 
times the rule violation has occurred, and the date of disposition.\7\
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    \7\ The Exchange attached a sample form of the quarterly report 
with its submission to the Commission.
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I. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the Exchange's proposed MRVP, including whether 
the proposed MRVP 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 No. 4-655 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 No. 4-655. 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 MRVP that are filed with the 
Commission, and all written communications relating to the proposed 
MRVP 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 the proposed MRVP 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 No. 4-655 and should be submitted on 
or before December 4, 2012.

II. Date of Effectiveness of the Proposed Minor Rule Violation Plan and 
Timing for Commission Action

    Pursuant to Section 19(d)(1) of the Act and Rule 19d-1(c)(2) 
thereunder,\8\ after December 4, 2012, the Commission may, by order, 
declare the Exchange's proposed MRVP effective if the plan is 
consistent with the public interest, the protection of investors, or 
otherwise in furtherance of the purposes of the Act. The Commission in 
its order may restrict the categories of violations to be designated as 
minor rule violations and may impose any other terms or conditions to 
the proposed MRVP, File No. 4-655, and to the period of its 
effectiveness, which the Commission deems necessary or appropriate in 
the public interest, for the protection of investors or otherwise in 
furtherance of the purposes of the Act.
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    \8\ 15 U.S.C. 78s(d)(1); 17 CFR 240.19d-1(c)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(44).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-27527 Filed 11-9-12; 8:45 am]
BILLING CODE 8011-01-P