Document ID: SEC-2013-0839-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2013-05-02T04:00Z

[Federal Register Volume 78, Number 85 (Thursday, May 2, 2013)]
[Notices]
[Pages 25779-25780]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-10353]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69468; File No. SR-CBOE-2013-046]

Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Delete Rule 6.74(b) That Sets Forth Expired 
SizeQuote Mechanism Pilot Program

April 26, 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 April 25, 2013, the Chicago Board Options Exchange, 
Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities 
and Exchange Commission (the ``Commission'') the proposed rule change 
as described in Items I and II below, which Items have been prepared by 
the Exchange. The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to delete Rule 6.74(f) that sets forth the SizeQuote 
Mechanism pilot program because this pilot program expired on February 
15, 2008. 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 self-regulatory organization 
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 those 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 parts of such statements.

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

1. Purpose
    The purpose of this filing is to delete Rule 6.74(f) that sets 
forth the open outcry SizeQuote Mechanism program, which was approved 
on a pilot basis in February 2005 and was expanded to include solicited 
orders in January 2006. The SizeQuote Mechanism pilot program was 
extended twice and expired on February 15, 2008.\5\
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    \5\ See Securities Exchange Act Release Nos. 51205 (February 15, 
2005), 70 FR 8647 (February 22, 2005) (approving SR-CBOE-2004-72 on 
a pilot basis through February 15, 2006); 53135 (January 17, 2006), 
71 FR 3908 (January 24, 2006) (approving SR-CBOE-2005-83, which 
modified the pilot program); 53252 (February 8, 2006), 71 FR 8012 
(February 15, 2006) (immediately effective proposal, SR-CBOE-2006-
05, extending the pilot program from February 15, 2006 to February 
15, 2007); and 55174 (January 25, 2007), 72 FR January 31, 2007 
(immediately effective proposal, SR-CBOE-2007-07, extending the 
pilot program from February 15, 2007 to February 15, 2008).
    The expired pilot program provided a process by which a Floor 
Broker (using his/her exercise of due diligence to execute orders at 
the best price(s)) could execute and facilitate large-sized orders 
in open outcry. The Exchange issued a Regulatory Circular announcing 
the expiration of the SizeQuote Mechanism Pilot, which was no longer 
operative after February 15, 2008. See CBOE Regulatory Circular 
RG08-028 (Expiration of SizeQuote Mechanism Pilot).
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    In connection with the March 18, 2013 launch of mini-options, the 
Exchange amended, among other rules, Rule 6.74(f) to establish a 
minimum eligible order size for mini-options in an amount proportional 
to the minimum eligible order size that is required for standard 
options (i.e., not less than 250 standard option contracts delivering 
100 shares and not less than 2,500 for mini-option contracts delivering 
10 shares).\6\ In that filing, the Exchange deleted obsolete rule text 
from Rule 6.74(f)(i) that referenced that the SizeQuote Mechanism pilot 
program had expired on February 15, 2008. The Exchange believes that 
the entirety of 6.74(f) should be deleted since the SizeQuote Mechanism 
pilot program has expired, the rule text language is obsolete and to 
eliminate confusion as to availability of the SizeQuote Mechanism pilot 
program that may arise if the language remains in Rule 6.74(f).
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    \6\ See Securities Exchange Act Release No. 69235 (March 25, 
2013), 78 FR 19552 (April 1, 2013) (notice of filing and immediate 
effectiveness of SR-CBOE-2013-036).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder, including the 
requirements of Section 6(b) of the Act.\7\ In particular, the Exchange 
believes the proposed rule change is consistent with the Section 
6(b)(5) \8\ requirements that the rules of an exchange be designed to 
promote just and equitable principles of trade, to prevent fraudulent 
and manipulative acts, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, to remove 
impediments to and to perfect the mechanism for a free and open market 
and a national market system, and, in general, to protect investors and 
the public interest.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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    Specifically, the Exchange believes that investors and market 
participants would benefit from Rule 6.74(d) being deleted because it 
sets forth the SizeQuote Mechanism pilot program that expired on 
February 15, 2008 and therefore contains obsolete and outdated rule 
text. If the current rule text language remains, confusion could arise 
as to whether the SizeQuote Mechanism pilot program is currently 
available. Because CBOE did not to renew and/or revise or seek to make 
the SizeQuote Mechanism pilot program permanent, CBOE believes that it 
is appropriate to delete the obsolete rule text that references the 
SizeQuote Mechanism pilot program which expired on February 15, 2008.

B. Self-Regulatory Organization's Statement on Burden on Competition

    This proposed rule change does not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act. In this regard and as indicated above, the Exchange notes that 
the rule change is being proposed to delete obsolete rule text language 
that sets forth the expired SizeQuote Mechanism pilot program in Rule 
6.74(d). Since all market participants cannot currently utilize the 
expired SizeQuote Mechanism pilot

[[Page 25780]]

program, the rule change will not have any burden on competition.

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

    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 if consistent with the protection of 
investors and the public interest, provided that the self-regulatory 
organization has given the Commission written notice of its intent to 
file the proposed rule change at least five business days prior to the 
date of filing of the proposed rule change or such shorter time as 
designated by the Commission,\9\ the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\ At any time within 60 days of the filing of 
such 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.
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    \9\ The Exchange has fulfilled this requirement.
    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
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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-CBOE-2013-046 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-2013-046. 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-2013-046 and should be 
submitted on or before May 23, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-10353 Filed 5-1-13; 8:45 am]
BILLING CODE 8011-01-P