Document ID: SEC-2013-1071-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: CBOE Futures Exchange, LLC
Posted Date: 2013-06-17T04:00Z

[Federal Register Volume 78, Number 116 (Monday, June 17, 2013)]
[Notices]
[Pages 36284-36286]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-14250]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69731; File No. SR-CFE-2013-004]

Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to the Requirements Applicable to Foreign Trading Privilege 
Holders

June 11, 2013.
    Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on May 31, 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

[[Page 36285]]

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 May 30, 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 Rule 305B (Foreign Trading Privilege 
Holders) by adding new subparagraphs (b)(ii) and (b)(iii) to that rule 
that would require that foreign Trading Privilege Holders (``TPHs''): 
(1) Maintain in English and U.S. dollars any books and records that are 
required to be kept by TPHs under CFE Rules; and (2) prior to acting as 
agent for a customer from a foreign jurisdiction in relation to a CFE 
Contract, obtain written consent from that customer that permits the 
TPH to provide information regarding the customer and the customer's 
activities in CFE Contracts to CFE in response to a regulatory request 
for information pursuant to CFE Rules.
    The scope of this filing is limited solely to the application of 
the rule changes to security futures traded on CFE. The only security 
futures currently traded on CFE are traded under Chapter 16 of CFE's 
Rulebook which is applicable to Individual Stock Based and Exchange-
Traded Fund Based Volatility Index (``Volatility Index'') security 
futures.
    The text of the proposed rule change is attached as Exhibit 4.\3\
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    \3\ The Commission notes that Exhibit 4 is attached to the 
filing, not to this Notice.
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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
    CFE Rule 305B (Foreign Trading Privilege Holders) provides that 
each TPH shall be organized under the laws of, and be solely 
responsible for ensuring that the location of any CBOE Workstation \4\ 
is in, the United States or a foreign jurisdiction expressly approved 
by the Exchange. CFE Rule 305B also sets forth certain requirements 
that are applicable to any TPH organized under the laws of, or with a 
CBOE Workstation in, a foreign jurisdiction.
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    \4\ CFE Rule 116 provides that the term ``CBOE Workstation'' 
means any computer connected directly to the CBOE System, including 
by means of an Exchange application programming interface, for the 
purpose of trading Contracts. CFE Rule 115 provides that the term 
``CBOE System'' means (i) the electronic systems administered by or 
on behalf of the Exchange which perform the functions set out in the 
Rules of the Exchange, including controlling, monitoring, and 
recording trading on the Exchange and (ii) any connectivity to the 
foregoing electronic systems that is administered by or on behalf of 
the Exchange, such as a communications hub in a foreign 
jurisdiction.
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    CFE proposes to amend CFE Rule 305B by adding two additional 
requirements that would apply to these foreign TPHs. First, a foreign 
TPH would be required under new subparagraph (b)(ii) to CFE Rule 305B 
to maintain in English and U.S. dollars any books and records required 
to be kept by the TPH under the Rules of the Exchange. Second, a 
foreign TPH, prior to acting as agent for a Customer from a foreign 
jurisdiction in relation to a CFE Contract, would be required under new 
subparagraph (b)(iii) to CFE Rule 305B to obtain written consent from 
that Customer that permits the TPH to provide information regarding the 
Customer and the Customer's activities in CFE Contracts to the Exchange 
in response to a regulatory request for information pursuant to the 
Rules of the Exchange.
    The Exchange believes that the proposed changes will assist CFE in 
enforcing compliance with its Rules. Specifically, the Exchange 
believes that the proposed changes will be beneficial in connection 
with CFE regulatory examinations and investigations involving foreign 
TPHs and in connection with obtaining information for regulatory 
purposes regarding the trading activities in CFE Contracts of foreign 
customers that trade through those TPHs.
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 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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    The Exchange believes that the proposed rule change will strengthen 
its ability to examine and investigate foreign TPHs more readily 
because books and records that are required to be kept under CFE Rules 
will be more easily understandable by CFE regulatory staff because they 
would be maintained in English and denominated in U.S. dollars. In 
addition, the Exchange believes that the proposed change will 
strengthen the Exchange's ability to carry out its self-regulatory 
obligations regarding the trading activities in CFE Contracts by 
foreign customers that trade those foreign TPHs.

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. The Exchange believes that the proposed rule 
change is equitable and not unfairly discriminatory because amended CFE 
Rule 305B would apply to all foreign TPHs and reasonably and fairly 
requires uniformity (i.e., English/U.S. dollar denomination) concerning 
books and records obligations.

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 June 17, 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

[[Page 36286]]

rule change be refiled in accordance with the provisions of Section 
19(b)(1) of the Act.\7\
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    \7\ 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-2013-004 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-2013-004. 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 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-2013-004, 
and should be submitted on or before July 8, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-14250 Filed 6-14-13; 8:45 am]
BILLING CODE 8011-01-P