Document ID: SEC-2013-1769-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2013-10-22T04:00Z

[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62775-62777]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24548]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70590; File No. SR-CBOE-2013-092]

Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to CBSX Appendix A

October 1, 2013.
    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 September 23, 2013, Chicago Board Options Exchange, 
Incorporated (``Exchange'' or ``CBOE'') filed with the Securities and 
Exchange Commission (``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 proposes to amend Appendix A in the CBOE Stock 
Exchange, LLC's (``CBSX'') Rules. The text of the proposed rule change 
is 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.

[[Page 62776]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    By way of background, CBSX (CBOE's facility for trading non-option 
securities) rules are generally contained within Chapters 50 through 54 
of the CBOE rulebook. Trading of non-option securities on CBSX is also 
subject to the rules in Chapters 1 through 29 to the same extent such 
rules apply to the trading of the products to which those rules apply, 
in some cases supplemented by the rules in Chapters 50 through 54, 
except for rules that have been replaced by rules in Chapters 50 
through 54 and except where the context otherwise requires. Appendix A 
to Chapters 50 through 54 lists the rules in Chapters 1 through 29 that 
are applicable to trading on CBSX. Where appropriate, Appendix A also 
indicates that a rule in Chapter 1 through 29 has been supplemented by 
a rule in Chapter 50 through 54.\3\
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    \3\ See Introduction to CBSX Rules, Chapters 50 through 54.
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    In that regard, Appendix A of the CBSX rules currently references 
CBOE Rule 3.9, as supplemented by CBSX Rule 50.4. CBOE Rule 3.9(g) 
currently states, in relevant part, that any person applying pursuant 
to paragraph (a) of the rule to ``have an authorized trading function 
is required to have completed the Exchange's Trading Permit Holder 
Orientation Program and to have passed an Exchange Trading Permit 
Holder Qualification Exam.'' Because Appendix A of the CBSX rules 
contains a cross-reference to CBOE Rule 3.9 (as supplemented by CBSX 
Rule 50.4) \4\, Rule 3.9 is applicable to CBSX Trading Permit Holder 
(``TPH'') applicants as well. The CBOE Registration Services Department 
historically, however, has not required this orientation or examination 
for CBSX TPH applicants that will not be engaging in options trading as 
both the orientation program and the examination referenced in 
paragraph (g) of Rule 3.9 are focused upon options trading on CBOE (not 
non-option securities).
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    \4\ CBSX Rule 50.4 relates to Trading Access to the CBSX System, 
and, thus, does not supplement the requirements specifically related 
to CBOE Rule 3.9(g).
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    As such, the Exchange is proposing to add text to the CBSX Appendix 
A to make clear that CBOE Rule 3.9(g) is not applicable to CBSX TPH 
applicants that will not engage in options trading on the Exchange. 
Specifically, the Exchange is proposing to add text to CBSX Appendix A 
to explicitly state the applicable subparagraphs of 3.9(g) that are 
applicable to CBSX TPH applicants. The Exchange believes this proposal 
is appropriate as the orientation program and examination referenced in 
CBOE 3.9(g) is focused on options trading. Thus, the Exchange believes 
it is appropriate to continue to administer the orientation and 
examination to CBOE TPH applicants but not to CBSX TPH applicants.
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 requirements for CBSX applicants along 
with codify existing Exchange practices. The Exchange believes the 
proposed change is consistent with the Act in that it continues to 
require the options focused TPH Qualification Examination and 
associated orientation program for CBOE applicants applying to engage 
in options trading but not for CBSX applicants applying to the Exchange 
to engage in trading of non-option securities. In addition, the 
proposed filing is not unfairly discriminating because it will be 
applied to all similarly situated TPH applicants who are solely trading 
on CBSX.

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. In particular, the Exchange 
does not believe that the proposed rule filing will place any burden on 
intramarket competition because it will be applied equally to similarly 
situated applicants that are applying to only engage in non-options 
trading on CBSX. The Exchange does not believe the proposed rule filing 
will place any burden on intermarket competition because it is merely 
codifying a current Exchange practice.

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 does not: (i) Significantly 
affect 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, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
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    The Exchange has requested that the Commission waive the 30-day 
operative delay because the rule change would codify an existing 
Exchange practice and reduce confusion for associated persons of TPHs 
and regulators. The Commission designates the proposal operative upon 
filing because it will align CBSX's rules with its existing practice of 
not requiring CBSX TPH applicants to complete either the TPH 
orientation program or the TPH exam.\9\
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    \9\ For purposes only of waiving the 30-day operative delay, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
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    At any time within 60 days of the filing of this 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

[[Page 62777]]

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 rule-comments@sec.gov. Please include 
File Number SR-CBOE-2013-092 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-2013-092. 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 CBOE. 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-2013-092 and should be 
submitted on or before November 12, 2013.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24548 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P