Document ID: SEC-2015-0105-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: C2 Options Exchange, Inc.
Posted Date: 2015-01-16T05:00Z

[Federal Register Volume 80, Number 11 (Friday, January 16, 2015)]
[Notices]
[Pages 2455-2457]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-00624]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74038; File No. SR-C2-2014-028]

Self-Regulatory Organizations; C2 Options Exchange, Incorporated; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to Amending Rule 8.2(d)

January 13, 2015.
    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 December 31, 2014, C2 Options Exchange, Incorporated (the 
``Exchange'' or ``C2'') 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 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 is proposing to remove the registration cost of SPXPM 
from Exchange Rule 8.2(d) as this class of options is no longer listed 
or traded on the Exchange. The text of the proposed rule change is 
provided below.
    (additions are italicized; deletions are [bracketed])
* * * * *
    C2 Options Exchange, Incorporated
    Rules
* * * * *
Rule 8.2. Continuing Market-Maker Registration
    (a)-(c) No change.
    (d) Market-Maker Option Class Registration. Absent an exemption by 
the Exchange, an option class registration of a Market-maker confers 
the right to quote in that product. A Market-Maker may change its 
registered classes upon advance notification to the Exchange in a form 
and manner prescribed by the Exchange.

[[Page 2456]]

    Each Trading permit held by a Market-Maker has a registration 
credit of 1.0. A Market-Maker may select for each Trading Permit the 
Market-Maker holds any combination of option classes, whose aggregate 
registration cost does not exceed 1.0. Option class ``registration 
costs'' are set forth below:

------------------------------------------------------------------------
                                                            Registration
                       Option class                             cost
------------------------------------------------------------------------
[SPXPM]...................................................         [1.0]
All [other] options.......................................          .001
(e) No change.............................................
------------------------------------------------------------------------

* * * * *
    The text of the proposed rule change is also 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.

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

1. Purpose
    The Exchange is proposing to amend its Rule 8.2(d) regarding 
registration costs. In the current Exchange Rules, Rule 8.2 describes 
the registration process and corresponding registration costs for 
Trading Permit Holders (``TPHs'') on C2. Exchange Rule 8.2(d) lists the 
registration cost for options classes traded on C2. SPXPM has a 
registration cost of 1.0, which requires its own Trading Permit. 
However, SPXPM is no longer a class of options that is traded on C2 and 
the Exchange is proposing to update Exchange Rule 8.2(d) to reflect 
that change and to add clarity to the Exchange Rules.
    By way of background, the Exchange was granted permission by the 
Commission in 2011 to list and trade Standard & Poor's 500 Index (``S&P 
500'') options with third-Friday-of-the-month (``Expiration Friday'') 
expiration dates for which the exercise settlement value will be [sic] 
based on the index value derived from the closing prices of component 
securities (``P.M. settled'') on C2 on a pilot basis.\3\ As a result of 
the Commission's approval to list and trade SPXPM options on C2, the 
Exchange filed a subsequent rule filing to amend 8.2(d) to include the 
registration cost for SPXPM.\4\
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    \3\ See Securities Exchange Act Release No. 34-65256 (September 
2, 2011), 76 FR 175 [sic] (September 9, 2011) (SR-C2-2011-008) 
(order approving listing and trading SPXPM on C2 on a pilot basis); 
see also Securities Exchange Act Release No. 34-68888 (February 8, 
2013), 78 FR 31 [sic] (February 14, 2013) (SR-CBOE-2012-120) (order 
approving listing and trading SPXPM on CBOE on a pilot basis). C2 
ceased trading SPXPM on February 19, 2013.
    \4\ See Securities Exchange Act Release No. 34-65452 (September 
30, 2011), 76 FR 194 [sic] (October 6, 2011) (SR-C2-2011-023) 
(immediately effective filing establishing Market-Maker registration 
costs for SPXPM options).
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    Pursuant to Exchange Rule 8.2, an option class registration of a 
Market-Maker confers the right to quote in that product. Each Trading 
Permit held by a Market-Maker has a registration credit of 1.0. A 
Market-Maker may select for trading any combination of available option 
classes whose aggregate is 1.0 for each Trading Permit held. Since the 
Exchange has ceased the listing and trading of SPXPM, the Exchange is 
proposing to amend Rule 8.2(d) to delete the language that lists SPXPM 
and its registration cost of 1.0. There is no need for the registration 
cost of SPXPM to be listed under Rule 8.2(d) as this class of options 
is no longer traded on the Exchange. The Exchange is proposing the 
proposed change to harmonize the Exchange Rules with the current 
practices of the Exchange.
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 options classes that are traded on C2 
and their corresponding registration costs for TPHs. The Exchange 
believes the proposed change is consistent with the Act in that it is 
merely updating an Exchange Rule to align with the current practices of 
the Exchange to avoid confusion with respect to registration costs for 
Market-Makers on C2. In addition, the proposed filing is not unfairly 
discriminating because SPXPM is no longer traded on C2 and as a result, 
the removal of SPXPM from the registration costs provided in 8.2(d) 
will be applied to all Market-Makers on C2. Finally, the proposed 
filing protects investors and the public interest by relieving 
confusion that might otherwise arise by having an obsolete reference in 
the CBOE [sic] Rule Book.

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

    C2 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 
intermarket competition because SPXPM is no longer an option class that 
is traded on C2 and thus, the change will be applied equally to all 
Market-Makers registered to trade on C2. Additionally, the Exchange 
does not believe that the proposed rule filing will place any burden on 
intermarket competition because it is merely updating the Exchange 
rules to harmonize them with the current practices of the Exchange.

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 change does not: (i) 
Significantly affect

[[Page 2457]]

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, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) \9\ thereunder.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of the 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 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-C2-2014-028 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-C2-2014-028. 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 will also 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 Number SR-C2-2014-028 and should be 
submitted on or before February 6, 2015.

    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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Brent J. Fields,
Secretary.
[FR Doc. 2015-00624 Filed 1-15-15; 8:45 am]
BILLING CODE 8011-01-P