Document ID: SEC-2013-0216-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: CBOE Futures Exchange, LLC
Posted Date: 2013-02-05T05:00Z

[Federal Register Volume 78, Number 24 (Tuesday, February 5, 2013)]
[Notices]
[Pages 8207-8208]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-02422]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68765; File No. SR-CFE-2013-002]

Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change 
Regarding Market-Wide Trading Halts

January 30, 2013.
    Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on January 17, 2013 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 January 17, 2013.
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    \1\ 15 U.S.C. 78s(b)(7).
    \2\ 7 U.S.C. 7a-2(c).
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I. Self-Regulatory Organization's Description of the Proposed Rule 
Change

    CFE proposes to amend CFE Rules 417A(e) and 1602(i) to coordinate 
the adoption and effectiveness of market-wide trading halt provisions 
applicable to Individual Stock Based and Exchange-Traded Fund Based 
Volatility Index (``Volatility Index'') security futures traded on CFE 
with the implementation of corresponding market-wide trading halt 
provisions by the national securities exchanges.\3\ The text of the 
proposed rule change is available on the Exchange's Web site at http://www.cfe.cboe.com, on the Commission's Web site at http://www.sec.gov, 
at the principal office of the Exchange, and at the Commission's Public 
Reference Room.
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    \3\ The scope of this filing is limited solely to the 
application of the rule changes to security futures traded on CFE 
and the only security futures currently traded on CFE are traded 
under Chapter 16 of CFE's Rulebook which is applicable to Volatility 
Index security futures.
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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
    The purpose of this proposal is to amend CFE Rules 417A(e) and 
1602(i) to coordinate the adoption and effectiveness of market-wide 
trading halt provisions applicable to Volatility Index security futures 
traded on CFE with the implementation of corresponding market-wide 
trading halt provisions by the national securities exchanges.
    In October 2012, CFE adopted CFE Rule 417A and amended CFE Rule 
1602(i) to incorporate, effective on February 4, 2013, market-wide 
trading halt provisions that would be consistent with the market-wide 
trading halt provisions which were anticipated to be adopted by the 
national securities exchanges on February 4, 2013.\4\ CFE understands 
that the national securities exchanges are now delaying the 
implementation of their market-wide trading halt provisions.
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    \4\ See Securities Exchange Act Release No. 68100 (October 24, 
2012), 77 FR 65747 (October 30, 2012) (Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change to Adopt and Amend 
Certain Rules that are Applicable to Security Futures) (SR-CFE-2012-
001).
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    Because CFE Rules 417A and 1602(i) were coordinated with the 
previously planned February 4, 2013 adoption and effective date of the 
market-wide trading halt regime on national securities exchanges, CFE 
is now amending those rules by deleting references to the February 4, 
2013 date and replacing them with references to the date on which the 
corresponding market-wide trading halt regime becomes effective on 
national securities exchanges. CFE will issue a circular advising its 
Trading Privilege Holders of the effective date of the new market-wide 
trading halt provisions prior to their effectiveness.
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 Section

[[Page 8208]]

6(b)(5) \6\ in particular in that it is designed to foster cooperation 
and coordination with persons engaged in 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.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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    Specifically, the proposed change would promote uniformity across 
securities and futures markets concerning when and how to halt trading 
in relation to equity-based products as a result of extraordinary 
market volatility which in turn facilitates the protection of investors 
and the public interest. Having trading halts apply across markets that 
operate under different regulatory regimes will benefit the public 
interest because similar products will be subject to consistent market-
wide trading halt rules.

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.\7\ The Exchange believes that the proposal 
will strengthen competition because coordination of market-wide trading 
halts among securities and futures markets for equity-based products 
avoids the competitive disadvantage that would exist if some exchanges 
trading equity-based products halted in a coordinated fashion due to 
extraordinary market volatility and others did not.
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    \7\ 15 U.S.C. 78a et seq.
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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 February 4, 2013. 
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\
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    \8\ 15 U.S.C. 78s(b)(1).
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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 rule-comments@sec.gov. Please include 
File Number SR-CFE-2013-002 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-CFE-2013-002. 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 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-CFE-2013-002, and should be submitted on or before 
February 26, 2013.

    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)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-02422 Filed 2-4-13; 8:45 am]
BILLING CODE 8011-01-P