Document ID: SEC-2017-1413-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: CBOE Futures Exchange, LLC
Posted Date: 2017-08-21T04:00Z

[Federal Register Volume 82, Number 160 (Monday, August 21, 2017)]
[Notices]
[Pages 39621-39622]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17549]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81402; File No. SR-CFE-2017-002]

Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice 
of Filing of a Proposed Rule Change Regarding Recordkeeping 
Requirements

August 15, 2017.
    Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on August 7, 2017 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 August 7, 2017.
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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

    The Exchange proposes to amend CFE Rules 502 and 535 related to 
recordkeeping requirements. The scope of this filing is limited solely 
to the application of the proposed rule amendments to security futures 
that may be traded on CFE. Although no security futures are currently 
listed for trading on CFE, CFE may list security futures for trading in 
the future. The text of the proposed rule change is attached as Exhibit 
4 to the filing but is not attached to the publication of this notice.

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
    CFE Rule 502 sets forth CFE's requirements relating to record 
retention periods and the inspection and delivery of books and records. 
CFE Rule 535 provides that any CFE Trading Privilege Holder subject to 
CFTC Regulation 1.31 \3\ that violates CFTC Regulation 1.31 shall be 
deemed to have violated Rule 535. Rule 535 also includes the text of 
CFTC Regulation 1.31 within Rule 535.
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    \3\ 17 CFR 1.31.
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    The CFTC recently issued a final rulemaking regarding recordkeeping 
requirements which amends CFTC Regulation 1.31.\4\ The amendments to 
CFTC Regulation 1.31 become effective on August 28, 2017. CFE is 
proposing to amend Rules 502 and 535 to conform them to amended CFTC 
Regulation 1.31. Rule 502 continues to provide for a five year record 
retention period consistent with CFTC Regulation 1.31. In conformity 
with amended CFTC Regulation 1.31, CFE is proposing to amend Rule 502 
to provide that required books and records exclusively created and 
maintained on paper shall be readily accessible during the first two 
years of that five year period and that electronic books and records 
shall be readily accessible for the entire five year period. CFE is 
proposing to amend Rule 535 to replace the previous text of CFTC 
Regulation 1.31 with the new text of CFTC Regulation 1.31. CFE is 
proposing to amend Rule 535 to modernize and make technology neutral 
the form and manner in which regulatory records must be kept, as well 
as rationalize the current rule text for ease of understanding, 
consistent with the changes made to CFTC Regulation 1.31. Specifically, 
the proposed changes to Rule 535 eliminate the requirement for a 
records entity to: (1) Keep electronic regulatory records in their 
native file format; (2) retain any electronic record in a non-
rewritable, non-erasable format; and (3) engage a third-party technical 
consultant.
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    \4\ 82 FR 24479 (May 30, 2017).

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[[Page 39622]]

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 Sections 6(b)(5) \6\ and 6(b)(7) \7\ in particular in 
that it is designed:
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ 15 U.S.C. 78f(b)(7).
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     To prevent fraudulent and manipulative acts and practices,
     to promote just and equitable principles of trade, and
     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.
    The proposed rule change would align CFE's rules related to 
recordkeeping with the CFTC's amended recordkeeping requirements. The 
Exchange believes that the proposed rule change furthers the ability of 
the Exchange to regulate its market by providing for updated and 
enhanced recordkeeping requirements (which include, among other things, 
a requirement to keep electronic records readily accessible for a [sic] 
five years).

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, in that the proposed rule change is consistent 
with the CFTC's amended recordkeeping requirements. The Exchange 
believes that the proposed rule change is equitable and not unfairly 
discriminatory in that the rule amendments included in the proposed 
rule change would apply equally to all CFE Trading Privilege Holders.

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 August 28, 2017. 
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-2017-002 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-CFE-2017-002. 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, 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 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-2017-002, and should be 
submitted on or before September 11, 2017.

    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)(73).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-17549 Filed 8-18-17; 8:45 am]
 BILLING CODE 8011-01-P