Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving Proposed Rule Change To Adopt a Trade, Flash and Cancel Order Type for CBSX, 6927-6928 [E9-2774]

Download as PDF Federal Register / Vol. 74, No. 27 / Wednesday, February 11, 2009 / Notices Each of the proposed access fees will remain in effect until such time either that the Exchange submits a further rule filing pursuant to Section 19(b)(3)(A)(ii) of the Act 8 to modify the applicable access fee or the applicable status (i.e., the Temporary Membership status or the ITP status) is terminated. Accordingly, the Exchange may, and likely will, further adjust the proposed access fees in the future if the Exchange determines that it would be appropriate to do so taking into consideration lease rates for transferable CBOE memberships prevailing at that time. The procedural provisions of the CBOE Fee Schedule related to the assessment of each proposed access fee are not proposed to be changed and will remain the same as the current procedural provisions relating to the assessment of that access fee. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,9 in general, and furthers the objectives of Section 6(b)(4) of the Act,10 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among persons using its facilities. 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. mstockstill on PROD1PC66 with NOTICES 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 rule change establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the Act 11 and subparagraph (f)(2) of Rule 19b–4 12 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is 8 15 U.S.C. 78s(b)(3)(A)(ii). U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(4). 11 15 U.S.C. 78s(b)(3)(A). 12 17 CFR 240.19b–4(f)(2). 9 15 VerDate Nov<24>2008 17:58 Feb 10, 2009 Jkt 217001 necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. 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 (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2009–005 on the subject line. 6927 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–2773 Filed 2–10–09; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59359; File No. SR–CBOE– 2008–123] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving Proposed Rule Change To Adopt a Trade, Flash and Cancel Order Type for CBSX February 4, 2009. On December 3, 2008, Chicago Board Options Exchange, Incorporated (‘‘CBOE’’) filed with the Securities and • Send paper comments in triplicate Exchange Commission (‘‘Commission’’), to Elizabeth M. Murphy, Secretary, pursuant to Section 19(b)(1) of the Securities and Exchange Commission, Securities Exchange Act of 1934 100 F Street, NE., Washington, DC (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a 20549–1090. proposed rule change to adopt a Trade, Flash and Cancel order type for the All submissions should refer to File CBOE Stock Exchange (‘‘CBSX’’). The Number SR–CBOE–2009–005. This file proposed rule change was published for number should be included on the subject line if e-mail is used. To help the comment in the Federal Register on January 2, 2009.3 The Commission Commission process and review your received no comments regarding the comments more efficiently, please use only one method. The Commission will proposal. The Commission has carefully post all comments on the Commission’s reviewed the proposed rule change and Internet Web site (https://www.sec.gov/ finds that the proposed rule change is rules/sro.shtml). Copies of the consistent with the requirements of the submission, all subsequent Act and the rules and regulations amendments, all written statements thereunder applicable to a national with respect to the proposed rule securities exchange 4 and, in particular, change that are filed with the Section 6(b)(5) of the Act,5 which Commission, and all written requires that an exchange have rules communications relating to the designed to promote just and equitable proposed rule change between the Commission and any person, other than principles of trade, remove impediments to and perfect the those that may be withheld from the mechanism of a free and open market public in accordance with the and a national market system, and to provisions of 5 U.S.C. 552, will be protect investors and the public interest. available for inspection and copying in The Commission also believes that the the Commission’s Public Reference proposed rule change furthers the Room, 100 F Street, NE., Washington, objectives of Section 11A of the Act,6 as DC 20549, on official business days it helps to assure the economically between the hours of 10 a.m. and 3 p.m. efficient execution of securities Copies of such filing also will be transactions, fair competition among available for inspection and copying at the principal office of the Exchange. All 13 17 CFR 200.30–3(a)(12). comments received will be posted 1 15 U.S.C. 78s(b)(1). without change; the Commission does 2 17 CFR 240.19b–4. not edit personal identifying 3 See Securities Exchange Act Release No. 59147 information from submissions. You (December 22, 2008), 74 FR 150. 4 In approving this proposed rule change, the should submit only information that you wish to make available publicly. All Commission has considered the proposed rule’s impact on efficiency, competition, and capital submissions should refer to File No. formation. See 15 U.S.C. 78c(f). SR–CBOE–2009–005 and should be 5 15 U.S.C. 78f(b)(5). submitted on or before March 4, 2009. 6 15 U.S.C. 78k–1. Paper Comments PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 E:\FR\FM\11FEN1.SGM 11FEN1 6928 Federal Register / Vol. 74, No. 27 / Wednesday, February 11, 2009 / Notices brokers and dealers and among exchange markets, and the practicability of brokers executing investors’ orders in the best market. If CBSX is at quoting at the national best bid or offer (‘‘NBBO’’) when a Trade, Flash and Cancel order is submitted to CBSX, CBSX will execute the incoming order automatically against the published quotation. However, if CBSX is not quoting at the NBBO, the Trade, Flash and Cancel designation initiates a process whereby the order would be electronically exposed to CBSX traders for a period of up to three seconds, rather than routed away to other markets, in accordance with Exchange Rule 52.6(a). CBSX traders will not know the identity or the account type of the party that submitted the Trade, Flash and Cancel order.7 CBSX traders can respond with orders that match or better the NBBO to trade with the Trade, Flash and Cancel order. If no CBSX trader matches or improves on the NBBO by the end of the exposure period, the CBSX system will cancel the Trade, Flash and Cancel order. In no event will an execution result that is inferior to the NBBO.8 Use of the Trade, Flash and Cancel order is strictly voluntary. The Commission believes that the Trade, Flash and Cancel order type is a potentially useful means for order senders to control where their orders are routed and to seek price improvement. Therefore, the Commission believes that the proposal is consistent with the Act. It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (SR–CBOE–2008– 123) be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–2774 Filed 2–10–09; 8:45 am] mstockstill on PROD1PC66 with NOTICES BILLING CODE 8011–01–P 7 See e-mail from Angelo Evangelou, Assistant General Counsel, CBOE, to Michael Gaw, Assistant Director, and Andrew Madar, Special Counsel, Division of Trading and Markets, Commission, dated February 3, 2009. 8 The Exchange stated that, ‘‘If a flash responder attempts to trade against the order by matching the flash price (the NBBO price at the time the order was received by the CBSX System), the order will be executed unless the system determines at the point of execution that the flash price is worse than a revised NBBO in which case the order will be cancelled.’’ See e-mail from Angelo Evangelou, Assistant General Counsel, CBOE, to Michael Gaw, Assistant Director, and Andrew Madar, Special Counsel, Division of Trading and Markets, Commission, dated December 19, 2008. 9 17 CFR 200.30–3(a)(12). VerDate Nov<24>2008 17:58 Feb 10, 2009 Jkt 217001 SECURITIES AND EXCHANGE COMMISSION II. Description of the Proposed Rule Change [Release No. 34–59358; File No. SR–FINRA– 2008–051] FINRA proposed to amend its Customer Code and Industry Code to require arbitrators to provide an explained decision upon the joint request of the parties. The explained decision would be a fact-based award stating the general reason(s) for the arbitrators’ decision; it would not be required to include legal authorities and/or damage calculations. Under the proposed rule change, parties would be required to submit any joint request for an explained decision at least 20 days before the first scheduled hearing date.6 The chairperson would: (1) Be required to write the explained decision; and (2) receive an additional honorarium of $400 for writing the decision. The panel would allocate the cost of the additional honorarium to the parties as part of the final award. The arbitrators would not be required to provide an explained decision in cases resolved without a hearing under simplified arbitration Rules 12800 and 13800 or in default cases conducted under Rules 12801 and 13801. FINRA did not propose to amend Rules 12904(f) and 13904(f), which provide that an award may contain an underlying rationale. This means that arbitrators would continue to be permitted to decide, on their own, to write an explained decision. Thus, as is currently the case, if the panel decides on its own to write an explained decision, FINRA would not pay an additional honorarium to any panel member. Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving Proposed Rule Change Relating to Amendments to the Codes of Arbitration Procedure To Require Arbitrators To Provide an Explained Decision Upon the Joint Request of the Parties February 4, 2009. I. Introduction The Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) (f/k/a National Association of Securities Dealers, Inc. (‘‘NASD’’)) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) on October 14, 2008 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend Rules 12214, 12514 and 12904 of the Code of Arbitration Procedure for Customer Disputes (‘‘Customer Code’’) and Rules 13214, 13514 and 13904 of the Code of Arbitration Procedure for Industry Disputes (‘‘Industry Code,’’ and together with the Customer Code, the ‘‘Codes’’) 3 to require arbitrators to provide an explained decision upon the joint request of the parties. The proposed rule change was published for comment in the Federal Register on October 31, 2008.4 The Commission received five comments in response to the proposed rule change.5 This order approves the proposed rule change. Background 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 The former NASD Rule 12000 Series (Customer Code) and 13000 Series (Industry Code) have been adopted as the FINRA 12000 Series (Customer Code) and 13000 Series (Industry Code) in the new consolidated rulebook pursuant to SR–FINRA– 2008–021, which was approved by the Commission. See Securities Exchange Act Release No. 58643 (September 25, 2008), 73 FR 57174 (October 1, 2008) (SR–FINRA–2008–021) (approval order). The FINRA Rule 12000 Series (Customer Code) and 13000 Series (Industry Code), as set forth in SR– FINRA–2008–021, became effective on December 15, 2008. See FINRA Regulatory Notice 08–57 (SEC Approves New Consolidated FINRA Rules) (October 2008). 4 See Securities Exchange Act Release No. 58862 (October 27, 2008), 73 FR 64995 (October 31, 2008), (SR–FINRA–2008–051) (notice). 5 See letter from Kevin Thomas Hoffman, dated November 10, 2008 (‘‘Hoffman letter’’); letter from Barbara Black, Director, Corporate Law Center, University of Cincinnati College of Law, Jill I. Gross, Director, Pace Investor Rights Clinic, Pace University School of Law, and Deborah Sommers, Student Intern, submitted November 20, 2008 (‘‘Black and Gross letter’’); letter from Barry D. Estell, dated November 20, 2008 (‘‘Estell letter’’); PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 The absence of explanations in awards is a common complaint of nonprevailing parties in the FINRA forum, especially customers and associated persons. In order to address these complaints and increase investor confidence in the fairness of the arbitration process, in March 2005, FINRA filed a proposed rule change with the SEC that would have required arbitrators to provide explained decisions upon the request of customers, or of associated persons in industry controversies. The SEC published the original proposed rule letter from Scott R. Shewan, Vice-President, Public Investors Arbitration Bar Association, dated November 21, 2008 (‘‘PIABA letter’’); and letter from Theodore M. Davis, submitted November 21, 2008 (‘‘Davis letter’’). 6 The term ‘‘hearing’’ means the hearing of an arbitration under Rules 12600 and 13600 (see Rules 12100(m) and 13100(m)). E:\FR\FM\11FEN1.SGM 11FEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 74, Number 27 (Wednesday, February 11, 2009)]
[Notices]
[Pages 6927-6928]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-2774]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59359; File No. SR-CBOE-2008-123]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Order Approving Proposed Rule Change To Adopt a Trade, 
Flash and Cancel Order Type for CBSX

February 4, 2009.
    On December 3, 2008, Chicago Board Options Exchange, Incorporated 
(``CBOE'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to adopt a Trade, Flash and Cancel order type for 
the CBOE Stock Exchange (``CBSX''). The proposed rule change was 
published for comment in the Federal Register on January 2, 2009.\3\ 
The Commission received no comments regarding the proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 59147 (December 22, 
2008), 74 FR 150.
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    The Commission has carefully reviewed the proposed rule change and 
finds that the proposed rule change is consistent with the requirements 
of the Act and the rules and regulations thereunder applicable to a 
national securities exchange \4\ and, in particular, Section 6(b)(5) of 
the Act,\5\ which requires that an exchange have rules designed to 
promote just and equitable principles of trade, remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system, and to protect investors and the public interest. The 
Commission also believes that the proposed rule change furthers the 
objectives of Section 11A of the Act,\6\ as it helps to assure the 
economically efficient execution of securities transactions, fair 
competition among

[[Page 6928]]

brokers and dealers and among exchange markets, and the practicability 
of brokers executing investors' orders in the best market.
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    \4\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 15 U.S.C. 78k-1.
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    If CBSX is at quoting at the national best bid or offer (``NBBO'') 
when a Trade, Flash and Cancel order is submitted to CBSX, CBSX will 
execute the incoming order automatically against the published 
quotation. However, if CBSX is not quoting at the NBBO, the Trade, 
Flash and Cancel designation initiates a process whereby the order 
would be electronically exposed to CBSX traders for a period of up to 
three seconds, rather than routed away to other markets, in accordance 
with Exchange Rule 52.6(a). CBSX traders will not know the identity or 
the account type of the party that submitted the Trade, Flash and 
Cancel order.\7\ CBSX traders can respond with orders that match or 
better the NBBO to trade with the Trade, Flash and Cancel order. If no 
CBSX trader matches or improves on the NBBO by the end of the exposure 
period, the CBSX system will cancel the Trade, Flash and Cancel order. 
In no event will an execution result that is inferior to the NBBO.\8\ 
Use of the Trade, Flash and Cancel order is strictly voluntary. The 
Commission believes that the Trade, Flash and Cancel order type is a 
potentially useful means for order senders to control where their 
orders are routed and to seek price improvement. Therefore, the 
Commission believes that the proposal is consistent with the Act.
---------------------------------------------------------------------------

    \7\ See e-mail from Angelo Evangelou, Assistant General Counsel, 
CBOE, to Michael Gaw, Assistant Director, and Andrew Madar, Special 
Counsel, Division of Trading and Markets, Commission, dated February 
3, 2009.
    \8\ The Exchange stated that, ``If a flash responder attempts to 
trade against the order by matching the flash price (the NBBO price 
at the time the order was received by the CBSX System), the order 
will be executed unless the system determines at the point of 
execution that the flash price is worse than a revised NBBO in which 
case the order will be cancelled.'' See e-mail from Angelo 
Evangelou, Assistant General Counsel, CBOE, to Michael Gaw, 
Assistant Director, and Andrew Madar, Special Counsel, Division of 
Trading and Markets, Commission, dated December 19, 2008.
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-CBOE-2008-123) be, and it hereby is, 
approved.

    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)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-2774 Filed 2-10-09; 8:45 am]
BILLING CODE 8011-01-P

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