Document ID: SEC-2012-2129-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2012-12-26T05:00Z

[Federal Register Volume 77, Number 247 (Wednesday, December 26, 2012)]
[Notices]
[Pages 76135-76139]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-30887]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68457; File No. SR-CBOE-2012-120]

Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing of a Proposed Rule Change, as Modified 
by Amendment No. 2, To Allow the Listing and Trading of a P.M.-Settled 
S&P 500 Index Option Product

December 18, 2012.
    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 5, 2012, 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. On December 17, 2012, the Exchange filed Amendments No. 1 and 
2 to the proposed rule change.\3\ The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The Exchange withdrew Amendment No. 1 on December 17, 2012. 
In Amendment No. 2, the Exchange represented that it does not 
believe that CBOE Trading Permit Holders will experience significant 
operations issues when trading P.M.-settled S&P 500 Index products 
on CBOE.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to permit the listing and trading of P.M.-
settled S&P 500 Index options on a pilot basis. 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.

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 rule filing is to permit the listing and 
trading, on a pilot basis, of 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 based 
on the index value derived from the closing prices of component 
securities (``P.M.-settled'') for an initial period of twelve months 
(the ``Pilot Program''). The S&P 500 is a capitalization-weighted index 
of 500 stocks from a broad range of industries. The component stocks 
are weighted according to the total market value of their outstanding 
shares. The impact of a component's price change is proportional to the 
issue's total market share value, which is the share price times the 
number of shares outstanding. These are summed for all 500 stocks and 
divided by a predetermined base value. The base value for the S&P 500 
is adjusted to reflect changes in capitalization resulting from, among 
other things, mergers, acquisitions, stock rights, and substitutions.
    The proposed contract (``SPXPM'') would use a $100 multiplier, and 
the minimum trading increment would be $0.05 for options trading below 
$3.00 and $0.10 for all other series. Strike price intervals would be 
set no less than 5 points apart. Consistent with existing rules for 
index options, the Exchange would allow up to twelve near-term 
expiration months,\4\ as well as LEAPS.\5\ Expiration processing would 
occur on Saturday following the Expiration Friday. The product would 
have European-style exercise, and because it is based on the S&P 500, 
there would be no position limits.\6\ The Exchange has the flexibility 
to open for trading additional series in response to customer demand. 
SPXPM would be

[[Page 76136]]

traded on the Exchange's Hybrid Trading System (``Hybrid'').
---------------------------------------------------------------------------

    \4\ The Exchange wishes to give the same expiration month 
options for SPXPM as are given for SPX, since both options classes 
are derived from the S&P 500.
    \5\ Pursuant to CBOE Rule 24.9(b)(1)(A), index LEAPS may expire 
from 12-180 months from the date of issuance.
    \6\ There would be reporting requirements pursuant to Rule 4.13, 
Reports Related to Position Limits, and Interpretation and Policy 
.03 to Rule 24.4, Position Limits for Broad-Based Index Options, 
which sets forth the reporting requirements for certain broad-based 
indexes that do not have position limits.
---------------------------------------------------------------------------

    SPXPM is currently being traded, on the same terms as proposed for 
the Pilot Program, on a pilot basis on C2 Options Exchange, 
Incorporated (``C2'') (the ``C2 Pilot Program'').\7\ C2 (which is 
wholly owned by the same corporation, CBOE Holdings, Inc., as CBOE) 
intends to cease trading SPXPM upon the introduction of SPXPM trading 
on CBOE. C2 and CBOE do not intend to engage in trading of SPXPM at the 
same time. CBOE intends to begin trading SPXPM on or around January 22, 
2013.
---------------------------------------------------------------------------

    \7\ See Supplemental Rule (a) to C2 Chapter 24, and also 
Securities Exchange Act Release No. 65256 (September 2, 2011), 76 FR 
55969 (September 9, 2011) (SR-C2-2011-008) and also Securities 
Exchange Act. Release No. 67939 (September 27, 2012), 77 FR 60504 
(October 3, 2012) (SR-C2-2012-033).
---------------------------------------------------------------------------

    The Exchange does not expect that CBOE Trading Permit Holders will 
experience significant operations issues regarding the proposed rule 
change. The listing of SPXPM is merely the listing of a new class to be 
traded on Hybrid, and from the standpoint of Trading Permit Holders, 
the procedures and processes involved are similar to those involved 
with the listing and trading of any other new class on Hybrid. 
Currently, there are no C2 Trading Permit Holders that are not also 
CBOE Trading Permit Holders, so any C2 Trading Permit Holder that is 
currently trading SPXPM on C2 will have access to trade SPXPM on CBOE. 
As with any other new class, any CBOE Market-Maker who wishes to act as 
a Market-Maker for SPXPM will have to follow the Exchange's Market-
Maker appointment procedures and get an SPXPM appointment.
    CBOE proposes to abide by the same reporting requirements for its 
Pilot Program as C2 has abided by for the C2 Pilot Program. As such, 
the Exchange proposes to submit a pilot program report to the 
Securities and Exchange Commission (the ``Commission'') at least two 
months prior to the expiration date of the Pilot Program (the ``annual 
report''). The annual report would contain an analysis of volume, open 
interest, and trading patterns. The analysis would examine trading in 
the proposed option product as well as trading in the securities that 
comprise the S&P 500 index. In addition, for series that exceed certain 
minimum open interest parameters, the annual report would provide 
analysis of index price volatility and share trading activity. In 
addition to the annual report, the Exchange would provide the 
Commission with periodic interim reports while the pilot is in effect 
that would contain some, but not all, of the information contained in 
the annual report. The annual report would be provided to the 
Commission on a confidential basis.
    The annual report would contain the following volume and open 
interest data:
    (1) Monthly volume aggregated for all trades;
    (2) monthly volume aggregated by expiration date;
    (3) monthly volume for each individual series;
    (4) month-end open interest aggregated for all series;
    (5) month-end open interest for all series aggregated by expiration 
date; and
    (6) month-end open interest for each individual series.

In addition to the annual report, the Exchange would provide the 
Commission with interim reports of the information listed in Items (1) 
through (6) above periodically as required by the Commission while the 
pilot is in effect. These interim reports would also be provided on a 
confidential basis. The annual report would also contain the 
information noted in Items (1) through (6) above for Expiration Friday, 
A.M.-settled S&P 500 index options traded on CBOE.
    In addition, the annual report would contain the following analysis 
of trading patterns in Expiration Friday, P.M.-settled S&P 500 Index 
option series in the pilot:
    (1) A time series analysis of open interest; and
    (2) an analysis of the distribution of trade sizes.

Also, for series that exceed certain minimum parameters, the annual 
report would contain the following analysis related to index price 
changes and underlying share trading volume at the close on Expiration 
Fridays:
    (1) A comparison of index price changes at the close of trading on 
a given Expiration Friday with comparable price changes from a control 
sample. The data would include a calculation of percentage price 
changes for various time intervals and compare that information to the 
respective control sample. Raw percentage price change data as well as 
percentage price change data normalized for prevailing market 
volatility, as measured by the CBOE Volatility Index (VIX), would be 
provided; and
    (2) a calculation of share volume for a sample set of the component 
securities representing an upper limit on share trading that could be 
attributable to expiring in-the-money series. The data would include a 
comparison of the calculated share volume for securities in the sample 
set to the average daily trading volumes of those securities over a 
sample period.

The minimum open interest parameters, control sample, time intervals, 
method for randomly selecting the component securities, and sample 
periods would be determined by the Exchange and the Commission.
    The conditions for listing SPXPM on CBOE will be similar to those 
for SPX, which is already listed and trading on CBOE (with the one 
notable exception being that SPXPM will be P.M.-settled). As with SPX, 
bids and offers on complex orders in SPXPM options, except for box/roll 
spreads, shall be expressed in decimal increments no smaller than $0.05 
or in any increment, as determined by the Exchange on a class-by-class 
basis and announced to the Trading Permit Holders (``TPHs'') via 
Regulatory Circular.\8\
---------------------------------------------------------------------------

    \8\ See CBOE Rule 6.42(4), in both the current and proposed 
forms.
---------------------------------------------------------------------------

    As with SPX, in determining compliance with Rule 4.11 (Position 
Limits), there shall be no position limits for broad-based index option 
contracts (including reduced-value option contracts) in the SPXPM 
class.\9\ As with SPX, each TPH (other than CBOE Market-Makers) or TPH 
organization that maintains a broad-based index option position on the 
same side of the market in excess of 100,000 contracts for SPXPM, for 
its own account or for the account of a customer, shall report 
information as to whether the positions are hedged and provide 
documentation as to how such contracts are hedged, in the manner and 
form required by the Division of Market Regulation.\10\ As with SPX, 
whenever the Exchange determines, based on a report by the Department 
of Market Regulation or otherwise, that additional margin is warranted 
in light of the risks associated with an under-hedged SPXPM option 
position, the Exchange may consider imposing additional margin upon the 
account maintaining such under-hedged position pursuant to its 
authority under Exchange Rule 12.10.\11\ As with SPX, there shall be no 
exercise limits for broad-based index options (including reduced-value 
option contracts) on SPXPM.\12\
---------------------------------------------------------------------------

    \9\ See CBOE Rule 24.4, in both the current and proposed forms.
    \10\ See CBOE Rule 24.4, Interpretation and Policy .03, in both 
the current and proposed forms.
    \11\ See CBOE Rule 24.4, Interpretation and Policy .04, in both 
the current and proposed forms.
    \12\ See CBOE Rule 24.5, in both the current and proposed forms.
---------------------------------------------------------------------------

    As with SPX, the trading hours for SPXPM will be from 8:30 a.m. 
(Chicago time; all times in this proposed rule

[[Page 76137]]

change are Chicago time) to 3:15 p.m., with the exception being that 
trading in expiring SPXPM options will close at 3:00 p.m. on their last 
trading day (except for FLEX Options (as defined below) on SPXPM). 
SPXPM options will be priced in the market based on corresponding 
futures values. The primary listing markets for the component 
securities that comprise the S&P 500 close trading in those securities 
at 3:00 p.m. The primary listing exchanges for the component securities 
disseminate closing prices of the component securities, which are used 
to calculate the exercise settlement value of the S&P 500. CBOE 
believes that, under normal trading circumstances, the primary listing 
markets have sufficient bandwidth to prevent any data queuing that 
would cause any trades that are executed prior to the closing time from 
being reported after 3 p.m. Despite the fact that the exercise 
settlement value will be fixed at or soon after 3 p.m., if the Exchange 
did not close trading in expiring SPXPM options (except SPXPM FLEX 
Options) at 3:00 p.m. on their last trading day, trading in expiring 
PM-settled S&P 500 options would continue for an additional fifteen 
minutes until 3:15 p.m. and would not be priced on corresponding 
futures values, but rather the known cash value. At the same time, the 
prices of non-expiring PM-settled S&P 500 options series would continue 
to move and be priced in response to changes in corresponding futures 
prices.
    A potential pricing divergence could occur between 3:00 and 3:15 
p.m. on the final trading day in expiring PM-settled S&P 500 options 
(e.g., switch from pricing off of futures to cash). Further, the switch 
from pricing off of futures to cash can be a difficult and risky 
switchover for liquidity providers. As a result, without closing 
expiring contracts at 3:00 p.m., it is foreseeable that Market-Makers 
would react by widening spreads in order to compensate for the 
additional risk. Therefore, the Exchange believes that, in order to 
mitigate potential investor confusion and the potential for increased 
costs to investors, it is appropriate to cease trading in expiring PM-
settled S&P 500 options contracts at 3:00 p.m. The Exchange does not 
believe that the proposed change will impact volatility on the 
underlying cash market at the close on Expiration Friday. Further, the 
proposal to close trading on the last trading day for transactions in 
expiring SPXPM options at 3:00 p.m. is identical to a proposal already 
in effect on C2.\13\
---------------------------------------------------------------------------

    \13\ See Securities Exchange Act Release No. 65630 (October 26, 
2011), 76 FR 67510 (November 1, 2011) (SR-C2-2012-030).
---------------------------------------------------------------------------

    Regarding SPXPM Flexible Exchange (``FLEX'') Options generally as 
well as SPXPM FLEX Options traded on the Exchange's FLEX Hybrid Trading 
System, there shall be no position limits (as with SPX FLEX Options). 
As with SPX FLEX Options, each Trading Permit Holder or TPH 
organization (other than CBOE Market-Makers) that maintains a FLEX 
broad-based index option position on the same side of the market in 
excess of 100,000 contracts for SPXPM, for its own account or for the 
account of a customer, shall report information as to whether the 
positions are hedged and provide documentation as to how such contracts 
are hedged, in the manner and form prescribed by the Exchange. In 
addition, whenever the Exchange determines that a higher margin is 
warranted in light of the risks associated with an under-hedged FLEX 
SPXPM option position, the Exchange may consider imposing additional 
margin upon the account maintaining such under-hedged position, 
pursuant to its authority under Exchange Rule 12.10 (as with SPX).\14\ 
There shall be no exercise limits for broad-based FLEX Index Options 
(including reduced-value option contracts) on SPXPM (as with SPX).\15\ 
These FLEX Options-related stipulations apply to SPXPM FLEX Options 
effected pursuant to the rules in Chapter XXIVA or on the FLEX Hybrid 
Trading System pursuant to the rules in Chapter XXIVB of the Exchange 
rules.
---------------------------------------------------------------------------

    \14\ See CBOE Rules 24A.7 and 24B.7, in both the current and 
proposed forms.
    \15\ See CBOE Rules 24A.8 and 24B.8, in both the current and 
proposed forms.
---------------------------------------------------------------------------

    To explain the basic adoption of SPXPM, the Exchange proposes to 
add Interpretation and Policy .14 to Rule 24.9. This proposed new 
Interpretation and Policy would state that in addition to A.M.-settled 
Standard & Poor's 500 Stock Index options approved for trading on the 
Exchange pursuant to Rule 24.9, the Exchange may also list options on 
the S&P 500 Index whose exercise settlement value is derived from 
closing prices on the last trading day prior to expiration (SPXPM). 
SPXPM options will be listed for trading for an initial pilot period 
ending twelve months from the date of Commission approval of this rule 
change proposal.
    The Exchange also proposes to amend Rule 8.3 to specifically 
reference SPXPM options as having a Market-Maker tier appointment cost 
of 1.0. The Exchange notes that the new tier appointment cost for SPXPM 
options will be the initial tier appointment cost because this options 
class is not currently trading. Thus, to trade SPXPM, a Market-Maker 
will be required to obtain a dedicated Market-Maker permit. Among other 
reasons, the Exchange believes that the tier appointment cost for SPXPM 
is reasonable in light of the fact that it is a new product and the 
cost is comparable to the 1.0 tier appointment cost for SPX,\16\ as 
well as the 1.0 appointment cost for SPXPM on C2.\17\ The Exchange 
proposes to move all P.M.-settled S&P 500 Index options series that are 
part of the SPXPM options class and that have an expiration on any day 
other than the third Friday of every month (e.g., Quarterly Index 
Options (``QIX''), End-of-Week (``EOW'') series, etc.) to the SPXPM 
class. The Exchange proposes to continue to allow such series to be 
traded under the appointment cost of the overarching class.
---------------------------------------------------------------------------

    \16\ See CBOE Rule 8.3(c)(iii).
    \17\ See C2 Rule 8.2(d).
---------------------------------------------------------------------------

    There exists precedent for P.M. settlement of broad-based index 
options. As previously stated, SPXPM is already traded on C2.\18\ 
Further, OEX (an index option contract based on the Standard & Poor's 
100 index) has been P.M.-settled since 1983.\19\ Also, FLEX Options 
have P.M. settlements on any expiration day.\20\ Similarly, CBOE 
recently established a pilot program that permits P.M.-settled options 
on broad-based indexes expiring on any Friday of the month, other than 
the third Friday of the month, as well as the last trading day of the 
month.\21\ CBOE also trades Quarterly Option Series \22\ that overlie 
exchange traded funds or indexes, and Quarterly Index Expirations \23\ 
that are cash-settled options on certain broad-based indexes, both of 
which expire at the close of business on the last business day of a 
calendar quarter and are P.M.-settled. CBOE has experience with these 
special dated options and neither CBOE nor C2 have observed any market 
disruptions resulting from the P.M.-settlement feature of these 
options.
---------------------------------------------------------------------------

    \18\ See Supplemental Rule (a) to C2 Chapter 24, and also 
Securities Exchange Act Release No. 65256 (September 2, 2011), 76 FR 
55969 (September 9, 2011) (SR-C2-2011-008).
    \19\ The Exchange notes that there are no futures or options on 
futures traded on the S&P 100 at this time.
    \20\ See Rule 24A.4(a)(2)(iv) and Rule 24B.4(a)(2)(iv) and 
Interpretation and Policy .01 to Rules 24A.4 and 24B.4.
    \21\ See Rule 24.9(e) and Securities Exchange Act Release No. 
62911 (September 14, 2010), 75 FR 57539 (September 21, 2010) (SR-
CBOE-2009-075).
    \22\ See Rules 5.5(e) and 24.9(a)(2)(B).
    \23\ See Rule 24.9(c).

---------------------------------------------------------------------------

[[Page 76138]]

    There are multiple primary listing and unlisted trading privilege 
(``UTP'') markets for the stocks underlying the index, and trading is 
widely dispersed among several stock exchanges and alternative trading 
systems. Many of these markets use closing cross procedures and employ 
closing order types to facilitate orderly closings.\24\ Moreover, today 
stock order flow is predominantly electronic and the ability to smooth 
out openings and closings is greatly enhanced and market-on-close 
procedures work just as well as opening procedures. Bearing in mind 
these considerations as well as current SPXPM trading volume levels on 
C2, the Exchange does not believe that any market disruptions will be 
encountered with the introduction of P.M.-settled S&P 500 index options 
(especially given the fact that C2 has not experienced any such market 
disruptions due to its introduction of SPXPM). The Exchange will, of 
course, monitor for any such disruptions or the development of any 
factors that could cause such disruptions.
---------------------------------------------------------------------------

    \24\ For example, see Nasdaq Rule 4754 (Nasdaq Closing Cross).
---------------------------------------------------------------------------

    The Exchange also notes that P.M.-settled options predominate in 
the OTC market, and CBOE is not aware of any adverse effects in the 
stock market attributable to the P.M.-settlement feature. CBOE is 
merely proposing to offer a P.M.-settled product (similar to that which 
is already traded on C2) in an exchange environment which offers the 
benefit of added transparency, price discovery, and stability.
    In response to any potential concerns that disruptive trading 
conduct could occur as a result of the concurrent listing and trading 
of two index option products based on the same index but for which 
different settlement methodologies exist (i.e., one is A.M.-settled and 
one is P.M.-settled), the Exchange notes that for roughly five years 
(1987 to 1992) CBOE listed and traded an A.M.-settled S&P 500 index 
option called NSX at the same time it listed and traded a P.M.-settled 
S&P 500 index option called SPX and CBOE did not observe any market 
disruptions as a result of offering both products.
    As proposed, the proposal would become effective on a pilot program 
basis for a period of twelve months. If the Exchange were to propose an 
extension of the program or should the Exchange propose to make the 
program permanent, then the Exchange would submit a filing proposing 
such amendments to the program. The Exchange notes that any positions 
established under the pilot would not be impacted by the expiration of 
the pilot. For example, a position in a P.M.-settled series that 
expires beyond the conclusion of the pilot period could be established 
during the 12-month pilot. If the pilot program were not extended, then 
the position could continue to exist. However, the Exchange notes that 
any further trading in the series would be restricted to transactions 
where at least one side of the trade is a closing transaction.
    The adoption of trading of P.M.-settled options on the S&P 500 
Index on the same exchange as A.M.-settled options on the S&P 500 Index 
would provide greater spread opportunities. For example, a market 
participant could trade in open outcry SPX (A.M.-settled) versus SPXPM 
as a spread.\25\ This manner of trading in different products allows a 
market participant to take advantage of the different expiration times. 
This provides expanded trading opportunities. In the options market 
currently, market participants regularly trade similar or related 
products in conjunction with each other, which contributes to overall 
market liquidity.
---------------------------------------------------------------------------

    \25\ See CBOE Rule 24.19.
---------------------------------------------------------------------------

    The Exchange represents that it has sufficient capacity to handle 
additional traffic associated with this new listing, and that it has in 
place adequate surveillance procedures to monitor trading in these 
options thereby helping to ensure the maintenance of a fair and orderly 
market.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\26\ Specifically, the Exchange believes the proposed rule change 
is consistent with the Section 6(b)(5) \27\ requirements that the rules 
of an exchange be designed to promote just and equitable principles of 
trade, to prevent fraudulent and manipulative acts, 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. The Exchange believes that the introduction of 
P.M. settlement for the subject index option in the manner proposed 
does not raise any meaningful regulatory concerns. Further, the 
Exchange believes that the proposal will not adversely impact fair and 
orderly markets on expiration Fridays for the underlying stocks 
comprising the S&P 500 index. The Exchange believes that C2 has 
experienced no meaningful regulatory concerns, nor an adverse impact on 
fair and orderly markets, in connection with the C2 Pilot Program. 
Additionally, the proposed rule change would provide TPHs and investors 
with an opportunity to trade S&P 500 options with a P.M. settlement 
feature on CBOE subject to transparent exchange-based rules. Investors 
would also benefit from the opportunity to trade in association with 
this product on Expiration Fridays thereby removing impediments to a 
free and open market consistent with the Act.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78f(b).
---------------------------------------------------------------------------

    The proposal to end trading at 3 p.m. on the last trading day for 
transactions in expiring SPXPM options will prevent continued trading 
on a product after the exercise settlement value has been fixed. This 
eliminates potential confusion and thereby protects investors and the 
public interest.

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.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. By order approve or disapprove such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule 
change should be 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:

[[Page 76139]]

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. SR-CBOE-2012-120 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. SR-CBOE-2012-120. 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 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 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 No. SR-CBOE-2012-120 and should be submitted on or 
before January 14, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
---------------------------------------------------------------------------

    \28\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-30887 Filed 12-21-12; 8:45 am]
BILLING CODE 8011-01-P