Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of Proposed Rule Change Amending and Restating the CBSX Operating Agreement and Adopting Rule 2.50, 75577-75582 [2011-31001]
Download as PDF
<![CDATA[
Federal Register / Vol. 76, No. 232 / Friday, December 2, 2011 / Notices
quotes in these series increase quote
traffic and burdens systems without a
corresponding benefit. By not requiring
Market-Makers to provide continuous
electronic quotes in these series, the
Exchange’s proposal would further its
goal of measured quote mitigation.
Further, while they will not be tasked
with providing continuous electronic
quotes in these series, Market-Makers
must still quote these series when
requested by a floor broker, Trading
Permit Holder or PAR Official.
Accordingly, the proposal supports the
quality of CBOE’s trading markets by
helping to ensure that Market-Makers
will continue to be obligated to quote in
adjusted option series if and when the
need arises.
These changes are consistent with the
rules of competing options exchanges,
and they serve to remove impediments
to and to perfect the mechanism for a
free and open market and a national
market system.
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 not necessary or
appropriate in furtherance of the
purposes of the Act. In this regard, and
as indicated above, the Exchange notes
that the rule change is being proposed
as a competitive response to recent rule
changes of NYSE Amex, NYSE Arca and
PHLX.18 CBOE believes this proposed
rule change is necessary to permit fair
competition among the options
exchanges with respect to MarketMakers’ continuous electronic quoting
obligations.
jlentini on DSK4TPTVN1PROD 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 proposed rule change
does not (i) significantly affect 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 if
consistent with the protection of
investors and the public interest,
provided that the self-regulatory
organization has given the Commission
18 See
supra note 5.
VerDate Mar<15>2010
17:03 Dec 01, 2011
Jkt 226001
written notice of its intent to file the
proposed rule change at least five
business days prior to the date of filing
of the proposed rule change or such
shorter time as designated by the
Commission, the proposed rule change
has become effective pursuant to
Section 19(b)(3)(A) of the Act 19 and
Rule 19b–4(f)(6) 20 thereunder.
At any time within 60 days of the
filing of such 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.
IV. Solicitation of Comments
75577
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
a.m. and 3 p.m. Copies of the 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–CBOE–
2011–105 and should be submitted on
or before December 23, 2011.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Kevin M. O’Neill,
Deputy Secretary.
Electronic Comments
[FR Doc. 2011–30996 Filed 12–1–11; 8:45 am]
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–CBOE–2011–105 on the
subject line.
BILLING CODE 8011–01–P
Paper Comments
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing of
Proposed Rule Change Amending and
Restating the CBSX Operating
Agreement and Adopting Rule 2.50
• 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–CBOE–2011–105. 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 (https://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
19 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
20 17
PO 00000
Frm 00060
Fmt 4703
Sfmt 4703
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65843; File No. SR–CBOE–
2011–107]
November 28, 2011.
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 November
28, 2011, the 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. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend and
restate the Second Amended and
21 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\02DEN1.SGM
02DEN1
75578
Federal Register / Vol. 76, No. 232 / Friday, December 2, 2011 / Notices
Restated Operating Agreement
(‘‘Operating Agreement’’) of CBOE Stock
Exchange, LLC (‘‘CBSX’’) and adopt new
Rule 2.50 in connection with CBSX’s
proposed acquisition (the
‘‘Transaction’’) of the National Stock
Exchange, Inc. (‘‘NSX’’). The text of the
proposed rule change is available on the
Exchange’s Web site (https://
www.cboe.com/AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
the Commission’s Public Reference
Room, and on the Commission’s Web
site at https://www.sec.gov.
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
self-regulatory organization 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 those 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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
a. Transaction
jlentini on DSK4TPTVN1PROD with NOTICES
Currently, NSX is wholly and directly
owned by NSX Holdings, Inc. (‘‘NSX
Holdings’’). Under a Purchase
Agreement (the ‘‘Purchase Agreement’’)
dated September 28, 2011 by and
between NSX, NSX Holdings and CBSX,
CBSX will acquire all of the outstanding
capital stock of NSX on the date of or
after all conditions precedent to
closing 3 have been satisfied or waived,
including approval by the Commission
of this proposed rule change.
Following the Transaction, NSX will
be a wholly owned subsidiary of CBSX.
NSX will remain a Delaware for-profit
stock corporation, with the authority to
issue 1,000 shares of common stock, 100
shares of which would be held by
CBSX. At all times, all of the
outstanding stock of NSX would be
owned by CBSX. NSX would remain
3 Conditions precedent to closing the Transaction
are formal requirements set forth in the Purchase
Agreement and include delivery of certain
documents (such as officers’ certificates, legal
opinions, and agreements), compliance by each
party with specified representations, warranties and
covenants, and receipt of necessary approvals by
each party.
VerDate Mar<15>2010
17:03 Dec 01, 2011
Jkt 226001
registered as a national securities
exchange under Section 6 of the Act,4
and accordingly, NSX would remain a
self-regulatory organization (‘‘SRO’’).5
In 2007, the Commission approved
the establishment of CBSX as a facility,
as defined in Section 3(a)(2) of the Act,6
of CBOE.7 As the SRO for CBSX, CBOE
has regulatory responsibility for the
activities of CBSX. CBSX administers a
fully automated trading platform for
securities other than options (the
‘‘Facility’’). As a limited liability
company, the governance structure and
operating authority of CBSX are set forth
in the Operating Agreement and the
CBSX Certificate of Formation. In
connection with the establishment of
the Facility, CBOE adopted Rule 3.32
pertaining to ownership concentration
and affiliation limitations.8
As a limited liability company,
ownership of CBSX is represented by
limited liability membership interests.
The holders of such interests are
referred to as ‘‘Owners.’’ CBOE is one of
the Owners of CBSX and owns all
outstanding ‘‘Series A’’ Voting Shares 9
of CBSX, representing just under 50% of
all outstanding shares of CBSX.10 The
4 15
U.S.C. 78f.
would continue to adhere to the
undertakings in the Order Instituting
Administrative and Cease-and-Desist Proceedings
Pursuant to Sections 19(h) and 21C of the Securities
Exchange Act of 1934, Making Findings, and
Imposing Sanctions, including those related to a
Regulatory Oversight Committee and the separation
of the regulatory functions from the commercial
interests of NSX. See Securities Exchange Act
Release No. 51714 (May 19, 2005).
6 15 U.S.C. 78c(a)(2).
7 See Securities Exchange Act Release No. 55389
(March 2, 2007), 72 FR 10575 (March 8, 2007) (SR–
CBOE–2006–110) (the ‘‘CBSX Approval Order’’);
see also Securities Exchange Act Release No. 55172
(January 25, 2007), 72 FR 4745 (February 1, 2007)
(SR–CBOE–2006–110) (the ‘‘CBSX Notice of
Filing’’).
8 See CBSX Order Approval and CBSX Notice of
Filing. CBOE Rule 3.32(a) provides, in part:
For as long as CBSX LLC operates as a facility of
the Exchange, no Trading Permit Holder, either
alone or together with its Affiliates, at any time,
may own, directly or indirectly, of record or
beneficially, an aggregate amount of Shares that
would result in a greater than twenty percent (20%)
Percentage Interest in CBSX LLC (the
‘‘Concentration Limitation’’).
In addition, the Certificate of Incorporation of
CBOE Holdings, Inc., the owner of CBOE (‘‘CBOE
Holdings’’), provides that no person (either alone or
together with its related persons) may beneficially
own more than 20% of the total outstanding shares
of CBOE Holdings stock. See Article Sixth (b) of the
Amended and Restated Certificate of Incorporation
of CBOE Holdings, Inc.; see also Securities
Exchange Act Release No. 62158 (May 24, 2010), 75
FR 30082 (May 28, 2010) (SR–CBOE–2008–88).
9 ‘‘Voting Shares’’ means those Shares entitled to
vote on matters submitted to the Owners, which
Voting Shares are held by the Voting Owners. See
Section 2.1(a)(28) of the Operating Agreement.
10 As noted in Section 3.2 of the Operating
Agreement, it is the intention of the Owners that no
other members of CBSX (other than Affiliates of
5 NSX
PO 00000
Frm 00061
Fmt 4703
Sfmt 4703
outstanding ‘‘Series B’’ Voting Shares of
CBSX are held by nine broker-dealers.
As provided in Section 8.9 of the
Operating Agreement, the outstanding
Series A Voting Shares, in the aggregate
(and without being deemed to be a
voting trust), are entitled to a number of
votes equal to 50% of the total number
of Voting Shares outstanding on each
matter submitted to a vote of the
Owners. Each outstanding Series B
Voting Share is entitled to one vote on
each matter submitted to a vote of the
Owners.11
The CBSX Approval Order and the
CBSX Notice of Filing describe various
characteristics of CBSX, including: the
relationship between CBSX and CBOE;
changes in control of CBSX; the
regulatory jurisdiction of the
Commission and CBOE over the
controlling parties and the Owners; and
the ownership and voting restrictions on
Owners.12 These provisions, as
contained in the Operating Agreement
and applicable CBOE rules, will remain
unchanged after the Transaction except
as otherwise described below.
b. Proposed Rule Change
In connection with the Transaction,
CBOE proposes to amend and restate the
Operating Agreement to be effective as
of the closing of the Transaction. CBOE
also proposes to adopt new Rule 2.50
regarding its policy with respect to NSX.
i. CBSX’s Ownership of NSX
The proposed rule change includes
several amendments related to CBSX’s
ownership of NSX. These amendments
address the fact that CBSX will become
a holding company of NSX after the
Transaction to the extent related to
CBOE) be owners of Series A Voting Shares, and
that no additional Series A Voting Shares be
authorized, created or issued for such purpose;
provided however, that this provision is not
intended to limit or restrict any rights of CBOE to
transfer any of its Series A Voting Shares with the
prior approval of the Commission as provided for
in Article VI, including Section 6.14, of the
Operating Agreement, or any other provision
thereof, or any rights to be acquired by a transferee
of those Shares as provided therein.
11 The Operating Agreement also creates a Series
C Non-Voting Restricted Shares; however, these
Shares are not entitled to vote on any matter
submitted to a vote of the Owners, and there are
currently no Series C shares outstanding. See
Section 8.9 of the Operating Agreement.
12 Section 6.12(a) of the Operating Agreement
provides that no person (other than CBOE), either
alone or together with its Affiliates, may directly or
indirectly own an aggregate amount of Shares that
would result in a greater than 20% Percentage
Interest in CBSX (the ‘‘Concentration Limitation’’).
In addition, Section 8.10 provides that if an Owner
of Series B Voting Shares that is also a CBOE
member owns more than 20% of the outstanding
Voting Shares (‘‘Excess Shares’’), alone or together
with any Affiliate, such Owner will have no voting
rights with respect to the Excess Shares.
E:\FR\FM\02DEN1.SGM
02DEN1
Federal Register / Vol. 76, No. 232 / Friday, December 2, 2011 / Notices
jlentini on DSK4TPTVN1PROD with NOTICES
CBSX’s control of NSX and clarify
CBSX’s rights and responsibilities
related to its role as a holding company
of a registered national securities
exchange (amendments related to such
responsibilities are further discussed in
Section (ii) below). For example, the
proposed rule change amends Section
1.6 to provide that the Company’s sole
purposes (and any other lawful
purposes related to those purposes) will
be: (1) To act as a trading market for
securities other than options as a facility
of a registered national securities
exchange and (2) to act as a holding
company of NSX. The proposed rule
change also amends several provisions
to clarify that certain references to CBSX
include its subsidiaries, including
NSX.13
In addition, the proposal amends
Section 6.12 to provide that the
Concentration Limitation described in
that section does not apply to CBOE or
CBOE Holdings, and to expand
applicability of the Concentration
Limitation to persons and their Related
Persons 14 rather than to persons and
their Affiliates.15 The proposal also
13 See, e.g., proposed Sections 1.6 and 9.15(a)(9)
and (10) of the Operating Agreement.
14 Proposed Rule 2.1(a)(23) of the Operating
Agreement defines ‘‘Related Person’’ as (A) with
respect to any person, all ‘‘affiliates’’ as such term
is defined in Rule 12b–2 of the Exchange Act); (B)
any person associated with a member (as the phrase
‘‘person associated with a member’’ is defined
under Section 3(a)(21) of the Exchange Act); (C) any
two or more persons that have any agreement,
arrangement or understanding (whether or not in
writing) to act together for the purpose of acquiring,
voting, holding or disposing of shares of CBSX; (D)
in the case of a person that is a company,
corporation or similar entity, any executive officer
(as defined under Rule 3b–7 of the Exchange Act)
or director of such person and, in the case of a
person that is a partnership or a limited liability
company, any general partner, managing member of
manager of such person, as applicable; (E) in the
case of a person that is a natural person, any
relative or spouse of such natural person, or any
relative of such spouse who has the same home as
such natural person or who is a director or officer
of CBSX or any of CBSX’s parents or subsidiaries;
(F) in the case of a person that is an executive
officer (as defined under Rule 3b–7 of the Exchange
Act) or a director of a company, corporation or
similar entity, such company, corporation or entity,
as applicable; and (G) in the case of a person that
is a general partner, managing member or manager
of a partnership or limited liability company, such
partnership or limited liability company, as
applicable. Under this definition, Related Persons
include Affiliates and thus extends the
Concentration Limitation imposed by proposed
Rule 6.12 to a broader group of persons.
15 Rule 2.1(a)(1) of the Operating Agreement
defines ‘‘Affiliate’’ as, with respect to any person,
any other person that directly, or indirectly through
one or more intermediaries, controls, is controlled
by, or is under common control with, such person.
As used in this definition, ‘‘control’’ means the
possession, directly or indirectly, of the power to
direct or cause the direction of management and
policies of a person, whether through the
ownership of voting securities, by contract or
otherwise with respect to such person.
VerDate Mar<15>2010
17:03 Dec 01, 2011
Jkt 226001
amends Section 6.12(c) and (e) to
impose on NSX equity trading permit
holders the Concentration Limitation
prohibitions described in those
paragraphs, which are currently only
imposed on CBOE Trading Permit
Holders. The proposal makes similar
amendments to Section 8.10 to expand
applicability of the voting restriction
described in that section to persons and
their Related Persons and to provide
that if any person, not just a CBOE
Trading Permit Holder, exceeds the
Concentration Limitation set forth in
Section 6.12 of the Operating
Agreement, then the Owner and its
Related Persons will have no voting
rights with respect to the shares in
excess of such limitation unless it
satisfies certain requirements set forth
in proposed Section 8.10(b) through (d),
which are similar to the requirements
set forth in Section 6.12(b), (c) and (e).
The proposed rule change also extends
the applicability of the voting restriction
in Section 8.10 to voting agreements,
plans and arrangements.
The proposal also amends Section
9.15(a)(9) to clarify that with respect to
a sale of material assets or ownership
interests that requires approval pursuant
to Section 9.15, ‘‘material assets or
ownership interests’’ include
subsidiaries of CBSX. In addition, the
proposed rule change adds Section
15.19 to the Operating Agreement,
which obligates CBSX, when voting as
NSX’s sole shareholder in an election of
the NSX board of directors, to vote in
favor of ETP Holder Directors (a certain
class of directors defined in the NSX
Bylaws) that were nominated in
accordance with the procedures set
forth in NSX’s certificate of
incorporation and bylaws.
ii. Self-Regulatory Function of NSX
The proposed rule change adds
various provisions designed to protect
the independence of the self-regulatory
function of NSX and to clarify NSX’s
jurisdiction with respect to CBSX, but
only to the extent related to CBSX’s
control of NSX. For example, the
proposed rule change adds Section
5.7(b), which, among other things:
• For so long as CBSX controls NSX,
only to the extent related to the
activities of NSX, requires CBSX
Owners, board of directors, officers and
employees to give due regard to the
preservation of the independence of the
self-regulatory function of NSX and to
its obligations under the Act;
• Prohibits these persons from taking
any actions that would interfere with
the effectuation of any decisions by the
NSX board of directors relating to NSX’s
regulatory functions, including
PO 00000
Frm 00062
Fmt 4703
Sfmt 4703
75579
disciplinary matters, or with NSX’s
ability to carry out its responsibilities
under the Act; and
• Requires CBSX to comply with
federal securities laws and the rules and
regulations thereunder, and requires
CBSX and its officers, directors,
employees and agents to cooperate with
the Commission and NSX pursuant to
and to the extent of their regulatory
authority.
In addition, the proposed rule change
amends Section 6.15 to clarify
possession of CBSX’s and its Owners’
books and records by the Facility and
NSX in connection with their oversight
pursuant to the Act. The proposed rule
change amends Section 6.15(a): 16
• To clarify that the Owners
acknowledge that the books, records,
premises, officers, directors, agents, and
employees of the Owners will be
deemed to be the books, records,
premises, officers, directors, agents, and
employees of CBOE for the purpose of
and subject to oversight pursuant to the
Act, but only to the extent they are
related to the Facility; and
• To add the provision that the
Owners acknowledge that the books,
records, premises, officers, directors,
agents, and employees of the Owners
will be deemed to be the books, records,
premises, officers, directors, agents, and
employees of NSX for the purpose of
and subject to oversight pursuant to the
Act, but only to the extent they are
related to the activities of NSX.
Similarly, the proposed rule change
amends Section 6.15(b): 17
• To clarify that the books, records,
premises, officers, directors, agents, and
employees of CBSX will be deemed to
be the books, records, premises, officers,
directors, agents, and employees of
CBSX for the purpose of and subject to
oversight pursuant to the Act, but only
to the extent related to the Facility; and
• To add the provision that the books,
records, premises, officers, directors,
agents, and employees of CBSX will be
deemed to be the books, records,
premises, officers, directors, agents, and
employees of NSX for the purpose of
and subject to oversight pursuant to the
16 Section 6.15(a) of the Operating Agreement
currently provides: ‘‘The Owners acknowledge that
to the extent they are related to [CBSX’s] activities,
the books, records, premises, officers, directors,
agents, and employees of the Owners shall be
deemed to be the books, records, premises, officers,
directors, agents, and employees of CBOE for the
purpose of and subject to oversight pursuant to the
Exchange Act.’’
17 Section 6.15(b) of the Operating Agreement
currently provides: ‘‘The books, records, premises,
officers, directors, agents, and employees of [CBSX]
shall be deemed to be the books, records, premises,
officers, directors, agents, and employees of CBOE
for the purpose of and subject to oversight pursuant
to the Exchange Act.’’
E:\FR\FM\02DEN1.SGM
02DEN1
75580
Federal Register / Vol. 76, No. 232 / Friday, December 2, 2011 / Notices
jlentini on DSK4TPTVN1PROD with NOTICES
Act, but only to the extent related to the
activities of NSX.18
The proposal also amends Section
6.15(c) to provide that CBSX and the
Owners and their respective officers,
directors, agents, and employees,19
irrevocably submit to the jurisdiction of
the U.S. federal courts, the Commission,
CBOE and NSX for the purposes of any
suit, action, or proceeding pursuant to
U.S. federal securities laws or the rules
or regulations thereunder, commenced
or initiated by the Commission arising
out of, or relating to, the Facility or the
Company’s control of NSX, as
applicable.
In addition, the proposed rule change
amends Sections 9.15(c) and 9.16 to
provide that CBSX directors agree to
comply with the federal securities laws
and the rules and regulations
thereunder, and to cooperate with the
Commission, CBOE, and NSX pursuant
to their regulatory authority, as
applicable, and the provisions of the
Operating Agreement. The proposal also
amends Section 9.15(c) to provide that
CBSX directors will take into
consideration whether any actions taken
or proposed to be taken as a director for
or on behalf of CBSX, or any failure or
refusal to act, would constitute
interference with CBOE’s or NSX’s
regulatory functions and
responsibilities, as applicable, in
violation of the Operating Agreement or
the Act.20
Additionally, the proposal amends
Section 14.1(a) to provide that, for so
long as CBSX controls NSX, before any
amendment, alteration, or repeal of any
provision of the Operating Agreement,
to the extent related to CBSX’s control
of NSX, will be effective, such
amendment, alteration, or repeal must
be submitted to the NSX board of
directors, and if CBOE and the NSX
board of directors determine that such
amendment, alteration, or repeal must
be filed with or filed with and approved
by the Commission, then such
amendment, alteration, or repeal will
18 CBSX’s complete records and books of account
must be subject at all times to inspection and
examination by CBOE (to the extent related to the
Facility), NSX (to the extent related to CBSX’s
control of NSX), and the Commission at no
additional charge to CBOE, NSX and the
Commission, as applicable. See proposed Section
13.2 of the Operating Agreement.
19 Proposed Rule 6.15(c) (consent to jurisdiction)
and (d) (consent in writing to applicability) also
extend the requirements of these provisions to all
agents and employees of the Company and its
Owners, rather than only agents and employees
whose principal place of business and residence is
outside of the United States.
20 Interference with respect to the Facility will be
determined by the CBSX board designees of CBOE.
See proposed Section 9.15(c) of the Operating
Agreement.
VerDate Mar<15>2010
17:03 Dec 01, 2011
Jkt 226001
not become effective until filed with or
filed with and approved by the
Commission, as the case may be. The
proposal also adds a 10-day notice
provision for any amendment,
alteration, or repeal of the Operating
Agreement made pursuant to Section
14.1(a) to provide CBOE and NSX with
sufficient opportunity to review any
potential regulatory impacts of such
amendment, alteration, or repeal before
it becomes effective.
The proposal also amends Section
15.2 to provide that nothing in the
Operating Agreement will be interpreted
to limit or impede the rights of the
Commission, CBOE, or NSX to access
and examine any Confidential
Information (as defined in the Operating
Agreement) pursuant to the U.S. federal
securities laws and the rules thereunder,
or to limit or impede the ability of an
Owner or an officer, director, agent, or
employee of an Owner to disclose any
Confidential Information to the
Commission, CBOE, or NSX. Proposed
Section 15.2 also provides that the
obligation of Owners not to disclose
Confidential Information described in
that section does not apply to CBOE’s or
NSX’s communications with the
Commission with respect to the conduct
of the Facility’s business or NSX’s
business, respectively. In addition, the
proposal amends the representation
being made by Owners in Section
15.17(a) with respect to the validity and
enforceability of the Operating
Agreement by excepting the
requirement, as applicable to the
Facility or NSX (with respect to CBSX’s
control of NSX), that the portions of the
Operating Agreement that constitute
rules of a facility of an exchange or rules
of a self-regulatory organization, as
applicable, be filed for public comment
and approval by the Commission from
that representation.
The proposed rule change adds CBOE
Rule 2.50 to further preserve the selfregulatory function of NSX. Rule 2.50
proposes a policy that CBOE, as a partial
owner of CBSX, will not take any action
related to NSX’s activities that would
interfere with NSX’s efforts to carry out
its self-regulatory obligations under the
Act and the rules and regulations
thereunder. Additionally, proposed
Rule 2.50 provides that the Exchange
will exercise its powers as a partial
owner of CBSX to support the
fulfillment by NSX of its self-regulatory
obligations, including the appropriate
allocation by NSX of such financial,
technological, technical and personnel
resources as may be necessary or
appropriate for NSX to meet its
obligations under the Exchange Act.
While the Exchange is not a guarantor
PO 00000
Frm 00063
Fmt 4703
Sfmt 4703
of NSX’s compliance with the Exchange
Act and will not be in a position to
monitor the day-to-day operations of
NSX, the purpose of proposed Rule
2.50(a) is to provide that the Exchange
will, through CBSX and consistent with
its relationship with CBSX, work with
NSX to establish and maintain
appropriate resources in connection
with NSX’s self-regulatory obligations,
as well as to establish a framework by
which NSX will affirmatively report
deficiencies in fulfilling its selfregulatory obligations to the CBSX
board of directors while taking action to
remedy such deficiencies.
iii. Facility of CBOE
The proposed rule change amends
various provisions to clarify that the
part of CBSX that constitutes the
Facility is a facility of CBOE under the
Act, while the part of CBSX that relates
to its control of NSX will not be a
facility of CBOE. For example, the
proposal amends Section 1.7 to clarify
that the Facility (and not CBSX to the
extent it will act as a holding company
for NSX) is a facility of CBOE under the
Act, and therefore the Facility will be
subject to self-regulation by CBOE and
oversight by the Commission. The
proposal also amends Section 1.8 to
clarify that only the Facility is a facility
of CBOE.21
iv. Additional Changes
Finally, the proposed rule change
makes several non-substantive technical
and conforming changes throughout the
Operating Agreement, including:
Updating the name and date of the
Operating Agreement; updating the
current Owners and their current
percentage interests and CBSX shares
owned; 22 replacing references to CBOE
members with CBOE trading permit
holders; 23 updating the table of contents
and section references; and adding new
defined terms and renumbering the
defined terms as necessary.24 In
connection with the updates to reflect
the current Owners, the proposed rule
change amends the definition of ‘‘Super
Majority of the Owners’’ to mean,
subject to the regulatory requirements
described in Section 1.8 of the
Operating Agreement, the affirmative
vote of both (i) all of the Owners of the
Series A Voting Shares at the time, and
21 See also proposed Sections 6.2(e), 6.15(c) and
(d), 9.2(d), 9.15(a)(14) and 14.1(a) for additional
such clarifications.
22 See proposed Section 3.2(d) of and signature
page and Exhibit A to the Operating Agreement.
23 See proposed Sections 6.12(c) and (e) and 8.10
of the Operating Agreement.
24 See proposed Section 2.1 of the Operating
Agreement.
E:\FR\FM\02DEN1.SGM
02DEN1
Federal Register / Vol. 76, No. 232 / Friday, December 2, 2011 / Notices
(ii) Owners of the Series B Voting
Shares who then retain ownership of
Series B Voting Shares and represent at
least a twenty (20%) percentage interest
in CBSX, which more accurately
corresponds to CBSX’s current
ownership structure.25
jlentini on DSK4TPTVN1PROD with NOTICES
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with Section 6
of the Act 26 and the rules and
regulations thereunder and, in
particular, the requirements of Section
6(b) of the Act.27 Specifically, the
Exchange believes the amendments
described in Item II(A)(1)(b)(iii),
including amendments to Sections 1.7
and 1.8, that clarify the Facility is a
facility of CBOE under the Act further
the objective of Section 6(b)(1) of the
Act because they ensure that CBOE will
continue to have the necessary authority
to perform its regulatory responsibilities
with respect to the Facility under
Section 6 of the Act. Additionally, this
clarification of what constitutes the
Facility ensures that CBSX, to the extent
it controls NSX, is not part of the
Facility and thus is not subject to
CBOE’s regulatory authority over the
Facility, which the Exchange believes
will preserve the independence of
NSX’s self-regulatory functions and
allow NSX to fulfill its self-regulatory
duties.
The Exchange also believes that this
proposed rule change furthers the
objectives of Section 6(b)(5) of the Act,28
because the amendments summarized in
this filing will ensure that CBSX and
NSX continue to have governance and
regulatory structures 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. In particular, the
amendments to Sections 6.12 and 8.10
described in Item II(A)(1)(b)(i) above
extend certain ownership and voting
restrictions to NSX equity trading
permit holders in addition to CBOE
trading permit holders to ensure that
CBSX continues to promote equitable
principles of trade by not allowing
certain interested parties to have
25 See proposed Rule 2.1(a)(26). This change is
consistent with the original structure of CBSX
under which a super majority could be obtained
with an affirmative vote of CBOE and two initial
owners, who all initially had ten (10%) percentage
interests in CBSX.
26 15 U.S.C. 78f.
27 15 U.S.C. 78f(b).
28 15 U.S.C. 78f(b)(5).
VerDate Mar<15>2010
17:03 Dec 01, 2011
Jkt 226001
excessive influence over CBSX’s
activities.
The addition of Section 5.7(b)
(described in Item II(A)(1)(b)(ii) above)
is intended to preserve the
independence of NSX’s self-regulatory
function and ensure that NSX is able to
obtain any information it needs from the
specified parties to detect and deter any
fraudulent and manipulative acts in its
marketplace and carry out its regulatory
responsibilities under the Act.
Similarly, the amendments to Section
6.15(a) and (b) (described in Item
II(A)(1)(b)(ii) above) that clarify that
CBSX’s books and records with respect
to the Facility and NSX’s activities will
be subject to the necessary oversight of
the Act are consistent with Section
6(b)(5) of the Act, because they provide
for the Commission, CBOE and NSX to
have access to necessary information
that will allow CBOE and NSX to
efficiently and effectively enforce
compliance with the Act and their
respective rules, as well as allow the
Commission to provide proper
oversight, which will ultimately
promote just and equitable principles of
trade and protect investors. The
amendment to Section 14.1(a)
(described in Item II(A)(1)(b)(ii) above)
is intended to make sure that NSX
receives notice of any amendment to the
Operating Agreement so that it can
make any filings with the Commission
necessary for NSX to fulfill its
regulatory duties under the Act.
The Exchange represents that it
remains committed to its role as a
national securities exchange and does
not believe that the proposed changes to
the Operating Agreement will
undermine the Exchange’s
responsibilities for regulating the
Facility. The proposed rule change
provides transparency and clarity with
respect to the governance of CBSX and
the status of CBSX as both a facility of
CBOE and a holding company of NSX.
Additionally, the proposed rule changes
are intended to protect and maintain the
integrity of the self-regulatory functions
of CBOE with respect to the Facility and
of NSX, and to allow both CBOE and
NSX to carry out their regulatory
responsibilities under the Act.
Moreover, the Exchange is not
proposing any significant changes to
CBSX’s existing operational or trading
structure in connection with the
Transaction. Instead, the Exchange
represents that the proposed rule change
primarily consists of amendments to the
Operating Agreement that will allow for
CBSX’s ownership of NSX, which are
generally consistent with parallel
provisions of governance documents of
other companies that directly control
PO 00000
Frm 00064
Fmt 4703
Sfmt 4703
75581
SROs, which were previously approved
by the Commission,29 and with the
principles articulated by the
Commission,30 while allowing CBOE to
maintain its regulatory jurisdiction and
authority over the Facility and NSX to
remain an independent self-regulatory
organization.
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 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
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
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
the 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:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
29 See Articles Sixth, Fifteenth, and Sixteenth of
the Amended and Restated Certificate of
Incorporation of CBOE Holdings, Inc.; see also
Securities Exchange Act Release No. 62158 (May
24, 2010), 75 FR 30082 (May 28, 2010) (SR–CBOE–
2008–88) (order approving the Amended and
Restated Certificate of Incorporation of CBOE
Holdings in connection with the demutualization of
CBOE).
30 See Securities Exchange Act Release No. 50699
(November 18, 2004), 69 FR 71126 (December 8,
2004) (File No. S7–39–04).
E:\FR\FM\02DEN1.SGM
02DEN1
75582
Federal Register / Vol. 76, No. 232 / Friday, December 2, 2011 / Notices
Number SR–CBOE–2011–107 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
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–CBOE–2011–107. 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 (https://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
a.m. and 3 p.m. Copies of the filing will
also be available for inspection and
copying at the Exchange’s principal
office. 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 publicly available. All
submissions should refer to File
Number SR–CBOE–2011–107 and
should be submitted on or before
December 23, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.31
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2011–31001 Filed 12–1–11; 8:45 am]
jlentini on DSK4TPTVN1PROD with NOTICES
BILLING CODE 8011–01–P
31 17
CFR 200.30–3(a)(12).
VerDate Mar<15>2010
17:03 Dec 01, 2011
Jkt 226001
[Release No. 34–65834; File No. SR–C2–
2011–033]
Self-Regulatory Organizations; C2
Options Exchange, Incorporated;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to Market-Makers’
Continuous Quoting Obligations and
Adjusted Option Series
November 28, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
18, 2011, the 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, II, and III below, which Items
have been prepared by the Exchange.
The Exchange filed the proposal as a
‘‘non-controversial’’ proposed rule
change pursuant to Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b–4(f)(6) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rules 8.5 and 8.13 to indicate that
Market-Makers will not be obligated to
maintain continuous quotes in adjusted
option series and to define the term
adjusted option series.5 The text of the
proposed rule change is available on the
Exchange’s Web site (https://
www.c2exchange.com/legal), at the
Exchange’s Office of the Secretary, and
at the Commission’s Public Reference
Room.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
5 In addition, to ensure that Market-Makers will
continue to be obligated to quote in adjusted option
series if and when the need arises, the proposed
rule change adds Rule 8.5(d) to provide that a
Market-Maker may be called upon by an Exchange
official designated by the Board of Directors to
submit a single quote or maintain continuous
quotes in one or more series of a class to which the
Market-Maker is appointed whenever, in the
judgment of such official, it is necessary to do so
in the interest of maintaining a fair and orderly
market.
2 17
PO 00000
Frm 00065
Fmt 4703
Sfmt 4703
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 those
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 parts 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 the proposed rule
change is to amend Rules 8.5,
‘‘Obligations of Market-Makers,’’ and
8.13, ‘‘Preferred Market-Maker
Program,’’ to indicate that MarketMakers will not be obligated to maintain
continuous quotes in adjusted option
series and to define the term adjusted
option series. The proposal is based on
recent rule changes of NYSE Amex LLC
(‘‘NYSE Amex’’), NYSE Arca, Inc.
(‘‘NYSE Arca’’) and NASDAQ OMX
PHLX, Inc. (‘‘PHLX’’).6
Rule 8.5(a)(1) currently provides that
during trading hours, a Market-Maker
must maintain a continuous two-sided
market in 60% of the series of each
registered class that have a time to
expiration of less than nine months. For
purposes of that obligation,
‘‘continuous’’ means 99% of the time.7
Rule 8.13(d) currently provides that a
Preferred Market-Maker 8 (Market6 See Securities Exchange Act Release Nos. 65572
(October 14, 2011), 76 FR 65310 (October 20, 2011)
(SR–NYSEAmex–2011–61) (order granting approval
of proposed rule change concerning market maker
continuous quoting obligations and adjusted option
series); 65573 (October 14, 2011), 76 FR 65305
(October 20, 2011) (SR–NYSEArca–2011–59) (order
granting approval of proposed rule change
concerning market maker continuous quoting
obligations and adjusted option series); and 61095
(December 2, 2009), 74 FR 64786 (December 8, 2009
(SR–PHLX–2009–99).
7 The rule also provides that if a technical failure
or limitation of the Exchange’s system prevents a
Market-Maker from maintaining, or from
communicating to the Exchange, timely and
accurate quotes in a series, the duration of such
failure will not be considered in determining
whether that Market-Maker has satisfied the 99%
quoting standard with respect to that series. The
Exchange may consider other exceptions to this
obligation based on demonstrated legal or
regulatory requirements or other mitigating
circumstances.
8 Rule 8.13(a) provides that the Exchange may
allow, on a class-by-class basis, for the receipt of
marketable orders, through the Exchange’s system
E:\FR\FM\02DEN1.SGM
02DEN1
]]>Agencies
[Federal Register Volume 76, Number 232 (Friday, December 2, 2011)]
[Notices]
[Pages 75577-75582]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-31001]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65843; File No. SR-CBOE-2011-107]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of Proposed Rule Change Amending and
Restating the CBSX Operating Agreement and Adopting Rule 2.50
November 28, 2011.
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 November 28, 2011, the 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. 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend and restate the Second Amended and
[[Page 75578]]
Restated Operating Agreement (``Operating Agreement'') of CBOE Stock
Exchange, LLC (``CBSX'') and adopt new Rule 2.50 in connection with
CBSX's proposed acquisition (the ``Transaction'') of the National Stock
Exchange, Inc. (``NSX''). The text of the proposed rule change is
available on the Exchange's Web site (https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, the Commission's Public Reference Room, and on the
Commission's Web site at https://www.sec.gov.
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 self-regulatory organization
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 those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
a. Transaction
Currently, NSX is wholly and directly owned by NSX Holdings, Inc.
(``NSX Holdings''). Under a Purchase Agreement (the ``Purchase
Agreement'') dated September 28, 2011 by and between NSX, NSX Holdings
and CBSX, CBSX will acquire all of the outstanding capital stock of NSX
on the date of or after all conditions precedent to closing \3\ have
been satisfied or waived, including approval by the Commission of this
proposed rule change.
---------------------------------------------------------------------------
\3\ Conditions precedent to closing the Transaction are formal
requirements set forth in the Purchase Agreement and include
delivery of certain documents (such as officers' certificates, legal
opinions, and agreements), compliance by each party with specified
representations, warranties and covenants, and receipt of necessary
approvals by each party.
---------------------------------------------------------------------------
Following the Transaction, NSX will be a wholly owned subsidiary of
CBSX. NSX will remain a Delaware for-profit stock corporation, with the
authority to issue 1,000 shares of common stock, 100 shares of which
would be held by CBSX. At all times, all of the outstanding stock of
NSX would be owned by CBSX. NSX would remain registered as a national
securities exchange under Section 6 of the Act,\4\ and accordingly, NSX
would remain a self-regulatory organization (``SRO'').\5\
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f.
\5\ NSX would continue to adhere to the undertakings in the
Order Instituting Administrative and Cease-and-Desist Proceedings
Pursuant to Sections 19(h) and 21C of the Securities Exchange Act of
1934, Making Findings, and Imposing Sanctions, including those
related to a Regulatory Oversight Committee and the separation of
the regulatory functions from the commercial interests of NSX. See
Securities Exchange Act Release No. 51714 (May 19, 2005).
---------------------------------------------------------------------------
In 2007, the Commission approved the establishment of CBSX as a
facility, as defined in Section 3(a)(2) of the Act,\6\ of CBOE.\7\ As
the SRO for CBSX, CBOE has regulatory responsibility for the activities
of CBSX. CBSX administers a fully automated trading platform for
securities other than options (the ``Facility''). As a limited
liability company, the governance structure and operating authority of
CBSX are set forth in the Operating Agreement and the CBSX Certificate
of Formation. In connection with the establishment of the Facility,
CBOE adopted Rule 3.32 pertaining to ownership concentration and
affiliation limitations.\8\
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78c(a)(2).
\7\ See Securities Exchange Act Release No. 55389 (March 2,
2007), 72 FR 10575 (March 8, 2007) (SR-CBOE-2006-110) (the ``CBSX
Approval Order''); see also Securities Exchange Act Release No.
55172 (January 25, 2007), 72 FR 4745 (February 1, 2007) (SR-CBOE-
2006-110) (the ``CBSX Notice of Filing'').
\8\ See CBSX Order Approval and CBSX Notice of Filing. CBOE Rule
3.32(a) provides, in part:
For as long as CBSX LLC operates as a facility of the Exchange,
no Trading Permit Holder, either alone or together with its
Affiliates, at any time, may own, directly or indirectly, of record
or beneficially, an aggregate amount of Shares that would result in
a greater than twenty percent (20%) Percentage Interest in CBSX LLC
(the ``Concentration Limitation'').
In addition, the Certificate of Incorporation of CBOE Holdings,
Inc., the owner of CBOE (``CBOE Holdings''), provides that no person
(either alone or together with its related persons) may beneficially
own more than 20% of the total outstanding shares of CBOE Holdings
stock. See Article Sixth (b) of the Amended and Restated Certificate
of Incorporation of CBOE Holdings, Inc.; see also Securities
Exchange Act Release No. 62158 (May 24, 2010), 75 FR 30082 (May 28,
2010) (SR-CBOE-2008-88).
---------------------------------------------------------------------------
As a limited liability company, ownership of CBSX is represented by
limited liability membership interests. The holders of such interests
are referred to as ``Owners.'' CBOE is one of the Owners of CBSX and
owns all outstanding ``Series A'' Voting Shares \9\ of CBSX,
representing just under 50% of all outstanding shares of CBSX.\10\ The
outstanding ``Series B'' Voting Shares of CBSX are held by nine broker-
dealers.
---------------------------------------------------------------------------
\9\ ``Voting Shares'' means those Shares entitled to vote on
matters submitted to the Owners, which Voting Shares are held by the
Voting Owners. See Section 2.1(a)(28) of the Operating Agreement.
\10\ As noted in Section 3.2 of the Operating Agreement, it is
the intention of the Owners that no other members of CBSX (other
than Affiliates of CBOE) be owners of Series A Voting Shares, and
that no additional Series A Voting Shares be authorized, created or
issued for such purpose; provided however, that this provision is
not intended to limit or restrict any rights of CBOE to transfer any
of its Series A Voting Shares with the prior approval of the
Commission as provided for in Article VI, including Section 6.14, of
the Operating Agreement, or any other provision thereof, or any
rights to be acquired by a transferee of those Shares as provided
therein.
---------------------------------------------------------------------------
As provided in Section 8.9 of the Operating Agreement, the
outstanding Series A Voting Shares, in the aggregate (and without being
deemed to be a voting trust), are entitled to a number of votes equal
to 50% of the total number of Voting Shares outstanding on each matter
submitted to a vote of the Owners. Each outstanding Series B Voting
Share is entitled to one vote on each matter submitted to a vote of the
Owners.\11\
---------------------------------------------------------------------------
\11\ The Operating Agreement also creates a Series C Non-Voting
Restricted Shares; however, these Shares are not entitled to vote on
any matter submitted to a vote of the Owners, and there are
currently no Series C shares outstanding. See Section 8.9 of the
Operating Agreement.
---------------------------------------------------------------------------
The CBSX Approval Order and the CBSX Notice of Filing describe
various characteristics of CBSX, including: the relationship between
CBSX and CBOE; changes in control of CBSX; the regulatory jurisdiction
of the Commission and CBOE over the controlling parties and the Owners;
and the ownership and voting restrictions on Owners.\12\ These
provisions, as contained in the Operating Agreement and applicable CBOE
rules, will remain unchanged after the Transaction except as otherwise
described below.
---------------------------------------------------------------------------
\12\ Section 6.12(a) of the Operating Agreement provides that no
person (other than CBOE), either alone or together with its
Affiliates, may directly or indirectly own an aggregate amount of
Shares that would result in a greater than 20% Percentage Interest
in CBSX (the ``Concentration Limitation''). In addition, Section
8.10 provides that if an Owner of Series B Voting Shares that is
also a CBOE member owns more than 20% of the outstanding Voting
Shares (``Excess Shares''), alone or together with any Affiliate,
such Owner will have no voting rights with respect to the Excess
Shares.
---------------------------------------------------------------------------
b. Proposed Rule Change
In connection with the Transaction, CBOE proposes to amend and
restate the Operating Agreement to be effective as of the closing of
the Transaction. CBOE also proposes to adopt new Rule 2.50 regarding
its policy with respect to NSX.
i. CBSX's Ownership of NSX
The proposed rule change includes several amendments related to
CBSX's ownership of NSX. These amendments address the fact that CBSX
will become a holding company of NSX after the Transaction to the
extent related to
[[Page 75579]]
CBSX's control of NSX and clarify CBSX's rights and responsibilities
related to its role as a holding company of a registered national
securities exchange (amendments related to such responsibilities are
further discussed in Section (ii) below). For example, the proposed
rule change amends Section 1.6 to provide that the Company's sole
purposes (and any other lawful purposes related to those purposes) will
be: (1) To act as a trading market for securities other than options as
a facility of a registered national securities exchange and (2) to act
as a holding company of NSX. The proposed rule change also amends
several provisions to clarify that certain references to CBSX include
its subsidiaries, including NSX.\13\
---------------------------------------------------------------------------
\13\ See, e.g., proposed Sections 1.6 and 9.15(a)(9) and (10) of
the Operating Agreement.
---------------------------------------------------------------------------
In addition, the proposal amends Section 6.12 to provide that the
Concentration Limitation described in that section does not apply to
CBOE or CBOE Holdings, and to expand applicability of the Concentration
Limitation to persons and their Related Persons \14\ rather than to
persons and their Affiliates.\15\ The proposal also amends Section
6.12(c) and (e) to impose on NSX equity trading permit holders the
Concentration Limitation prohibitions described in those paragraphs,
which are currently only imposed on CBOE Trading Permit Holders. The
proposal makes similar amendments to Section 8.10 to expand
applicability of the voting restriction described in that section to
persons and their Related Persons and to provide that if any person,
not just a CBOE Trading Permit Holder, exceeds the Concentration
Limitation set forth in Section 6.12 of the Operating Agreement, then
the Owner and its Related Persons will have no voting rights with
respect to the shares in excess of such limitation unless it satisfies
certain requirements set forth in proposed Section 8.10(b) through (d),
which are similar to the requirements set forth in Section 6.12(b), (c)
and (e). The proposed rule change also extends the applicability of the
voting restriction in Section 8.10 to voting agreements, plans and
arrangements.
---------------------------------------------------------------------------
\14\ Proposed Rule 2.1(a)(23) of the Operating Agreement defines
``Related Person'' as (A) with respect to any person, all
``affiliates'' as such term is defined in Rule 12b-2 of the Exchange
Act); (B) any person associated with a member (as the phrase
``person associated with a member'' is defined under Section
3(a)(21) of the Exchange Act); (C) any two or more persons that have
any agreement, arrangement or understanding (whether or not in
writing) to act together for the purpose of acquiring, voting,
holding or disposing of shares of CBSX; (D) in the case of a person
that is a company, corporation or similar entity, any executive
officer (as defined under Rule 3b-7 of the Exchange Act) or director
of such person and, in the case of a person that is a partnership or
a limited liability company, any general partner, managing member of
manager of such person, as applicable; (E) in the case of a person
that is a natural person, any relative or spouse of such natural
person, or any relative of such spouse who has the same home as such
natural person or who is a director or officer of CBSX or any of
CBSX's parents or subsidiaries; (F) in the case of a person that is
an executive officer (as defined under Rule 3b-7 of the Exchange
Act) or a director of a company, corporation or similar entity, such
company, corporation or entity, as applicable; and (G) in the case
of a person that is a general partner, managing member or manager of
a partnership or limited liability company, such partnership or
limited liability company, as applicable. Under this definition,
Related Persons include Affiliates and thus extends the
Concentration Limitation imposed by proposed Rule 6.12 to a broader
group of persons.
\15\ Rule 2.1(a)(1) of the Operating Agreement defines
``Affiliate'' as, with respect to any person, any other person that
directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such
person. As used in this definition, ``control'' means the
possession, directly or indirectly, of the power to direct or cause
the direction of management and policies of a person, whether
through the ownership of voting securities, by contract or otherwise
with respect to such person.
---------------------------------------------------------------------------
The proposal also amends Section 9.15(a)(9) to clarify that with
respect to a sale of material assets or ownership interests that
requires approval pursuant to Section 9.15, ``material assets or
ownership interests'' include subsidiaries of CBSX. In addition, the
proposed rule change adds Section 15.19 to the Operating Agreement,
which obligates CBSX, when voting as NSX's sole shareholder in an
election of the NSX board of directors, to vote in favor of ETP Holder
Directors (a certain class of directors defined in the NSX Bylaws) that
were nominated in accordance with the procedures set forth in NSX's
certificate of incorporation and bylaws.
ii. Self-Regulatory Function of NSX
The proposed rule change adds various provisions designed to
protect the independence of the self-regulatory function of NSX and to
clarify NSX's jurisdiction with respect to CBSX, but only to the extent
related to CBSX's control of NSX. For example, the proposed rule change
adds Section 5.7(b), which, among other things:
For so long as CBSX controls NSX, only to the extent
related to the activities of NSX, requires CBSX Owners, board of
directors, officers and employees to give due regard to the
preservation of the independence of the self-regulatory function of NSX
and to its obligations under the Act;
Prohibits these persons from taking any actions that would
interfere with the effectuation of any decisions by the NSX board of
directors relating to NSX's regulatory functions, including
disciplinary matters, or with NSX's ability to carry out its
responsibilities under the Act; and
Requires CBSX to comply with federal securities laws and
the rules and regulations thereunder, and requires CBSX and its
officers, directors, employees and agents to cooperate with the
Commission and NSX pursuant to and to the extent of their regulatory
authority.
In addition, the proposed rule change amends Section 6.15 to
clarify possession of CBSX's and its Owners' books and records by the
Facility and NSX in connection with their oversight pursuant to the
Act. The proposed rule change amends Section 6.15(a): \16\
---------------------------------------------------------------------------
\16\ Section 6.15(a) of the Operating Agreement currently
provides: ``The Owners acknowledge that to the extent they are
related to [CBSX's] activities, the books, records, premises,
officers, directors, agents, and employees of the Owners shall be
deemed to be the books, records, premises, officers, directors,
agents, and employees of CBOE for the purpose of and subject to
oversight pursuant to the Exchange Act.''
---------------------------------------------------------------------------
To clarify that the Owners acknowledge that the books,
records, premises, officers, directors, agents, and employees of the
Owners will be deemed to be the books, records, premises, officers,
directors, agents, and employees of CBOE for the purpose of and subject
to oversight pursuant to the Act, but only to the extent they are
related to the Facility; and
To add the provision that the Owners acknowledge that the
books, records, premises, officers, directors, agents, and employees of
the Owners will be deemed to be the books, records, premises, officers,
directors, agents, and employees of NSX for the purpose of and subject
to oversight pursuant to the Act, but only to the extent they are
related to the activities of NSX.
Similarly, the proposed rule change amends Section 6.15(b): \17\
---------------------------------------------------------------------------
\17\ Section 6.15(b) of the Operating Agreement currently
provides: ``The books, records, premises, officers, directors,
agents, and employees of [CBSX] shall be deemed to be the books,
records, premises, officers, directors, agents, and employees of
CBOE for the purpose of and subject to oversight pursuant to the
Exchange Act.''
---------------------------------------------------------------------------
To clarify that the books, records, premises, officers,
directors, agents, and employees of CBSX will be deemed to be the
books, records, premises, officers, directors, agents, and employees of
CBSX for the purpose of and subject to oversight pursuant to the Act,
but only to the extent related to the Facility; and
To add the provision that the books, records, premises,
officers, directors, agents, and employees of CBSX will be deemed to be
the books, records, premises, officers, directors, agents, and
employees of NSX for the purpose of and subject to oversight pursuant
to the
[[Page 75580]]
Act, but only to the extent related to the activities of NSX.\18\
---------------------------------------------------------------------------
\18\ CBSX's complete records and books of account must be
subject at all times to inspection and examination by CBOE (to the
extent related to the Facility), NSX (to the extent related to
CBSX's control of NSX), and the Commission at no additional charge
to CBOE, NSX and the Commission, as applicable. See proposed Section
13.2 of the Operating Agreement.
---------------------------------------------------------------------------
The proposal also amends Section 6.15(c) to provide that CBSX and
the Owners and their respective officers, directors, agents, and
employees,\19\ irrevocably submit to the jurisdiction of the U.S.
federal courts, the Commission, CBOE and NSX for the purposes of any
suit, action, or proceeding pursuant to U.S. federal securities laws or
the rules or regulations thereunder, commenced or initiated by the
Commission arising out of, or relating to, the Facility or the
Company's control of NSX, as applicable.
---------------------------------------------------------------------------
\19\ Proposed Rule 6.15(c) (consent to jurisdiction) and (d)
(consent in writing to applicability) also extend the requirements
of these provisions to all agents and employees of the Company and
its Owners, rather than only agents and employees whose principal
place of business and residence is outside of the United States.
---------------------------------------------------------------------------
In addition, the proposed rule change amends Sections 9.15(c) and
9.16 to provide that CBSX directors agree to comply with the federal
securities laws and the rules and regulations thereunder, and to
cooperate with the Commission, CBOE, and NSX pursuant to their
regulatory authority, as applicable, and the provisions of the
Operating Agreement. The proposal also amends Section 9.15(c) to
provide that CBSX directors will take into consideration whether any
actions taken or proposed to be taken as a director for or on behalf of
CBSX, or any failure or refusal to act, would constitute interference
with CBOE's or NSX's regulatory functions and responsibilities, as
applicable, in violation of the Operating Agreement or the Act.\20\
---------------------------------------------------------------------------
\20\ Interference with respect to the Facility will be
determined by the CBSX board designees of CBOE. See proposed Section
9.15(c) of the Operating Agreement.
---------------------------------------------------------------------------
Additionally, the proposal amends Section 14.1(a) to provide that,
for so long as CBSX controls NSX, before any amendment, alteration, or
repeal of any provision of the Operating Agreement, to the extent
related to CBSX's control of NSX, will be effective, such amendment,
alteration, or repeal must be submitted to the NSX board of directors,
and if CBOE and the NSX board of directors determine that such
amendment, alteration, or repeal must be filed with or filed with and
approved by the Commission, then such amendment, alteration, or repeal
will not become effective until filed with or filed with and approved
by the Commission, as the case may be. The proposal also adds a 10-day
notice provision for any amendment, alteration, or repeal of the
Operating Agreement made pursuant to Section 14.1(a) to provide CBOE
and NSX with sufficient opportunity to review any potential regulatory
impacts of such amendment, alteration, or repeal before it becomes
effective.
The proposal also amends Section 15.2 to provide that nothing in
the Operating Agreement will be interpreted to limit or impede the
rights of the Commission, CBOE, or NSX to access and examine any
Confidential Information (as defined in the Operating Agreement)
pursuant to the U.S. federal securities laws and the rules thereunder,
or to limit or impede the ability of an Owner or an officer, director,
agent, or employee of an Owner to disclose any Confidential Information
to the Commission, CBOE, or NSX. Proposed Section 15.2 also provides
that the obligation of Owners not to disclose Confidential Information
described in that section does not apply to CBOE's or NSX's
communications with the Commission with respect to the conduct of the
Facility's business or NSX's business, respectively. In addition, the
proposal amends the representation being made by Owners in Section
15.17(a) with respect to the validity and enforceability of the
Operating Agreement by excepting the requirement, as applicable to the
Facility or NSX (with respect to CBSX's control of NSX), that the
portions of the Operating Agreement that constitute rules of a facility
of an exchange or rules of a self-regulatory organization, as
applicable, be filed for public comment and approval by the Commission
from that representation.
The proposed rule change adds CBOE Rule 2.50 to further preserve
the self-regulatory function of NSX. Rule 2.50 proposes a policy that
CBOE, as a partial owner of CBSX, will not take any action related to
NSX's activities that would interfere with NSX's efforts to carry out
its self-regulatory obligations under the Act and the rules and
regulations thereunder. Additionally, proposed Rule 2.50 provides that
the Exchange will exercise its powers as a partial owner of CBSX to
support the fulfillment by NSX of its self-regulatory obligations,
including the appropriate allocation by NSX of such financial,
technological, technical and personnel resources as may be necessary or
appropriate for NSX to meet its obligations under the Exchange Act.
While the Exchange is not a guarantor of NSX's compliance with the
Exchange Act and will not be in a position to monitor the day-to-day
operations of NSX, the purpose of proposed Rule 2.50(a) is to provide
that the Exchange will, through CBSX and consistent with its
relationship with CBSX, work with NSX to establish and maintain
appropriate resources in connection with NSX's self-regulatory
obligations, as well as to establish a framework by which NSX will
affirmatively report deficiencies in fulfilling its self-regulatory
obligations to the CBSX board of directors while taking action to
remedy such deficiencies.
iii. Facility of CBOE
The proposed rule change amends various provisions to clarify that
the part of CBSX that constitutes the Facility is a facility of CBOE
under the Act, while the part of CBSX that relates to its control of
NSX will not be a facility of CBOE. For example, the proposal amends
Section 1.7 to clarify that the Facility (and not CBSX to the extent it
will act as a holding company for NSX) is a facility of CBOE under the
Act, and therefore the Facility will be subject to self-regulation by
CBOE and oversight by the Commission. The proposal also amends Section
1.8 to clarify that only the Facility is a facility of CBOE.\21\
---------------------------------------------------------------------------
\21\ See also proposed Sections 6.2(e), 6.15(c) and (d), 9.2(d),
9.15(a)(14) and 14.1(a) for additional such clarifications.
---------------------------------------------------------------------------
iv. Additional Changes
Finally, the proposed rule change makes several non-substantive
technical and conforming changes throughout the Operating Agreement,
including: Updating the name and date of the Operating Agreement;
updating the current Owners and their current percentage interests and
CBSX shares owned; \22\ replacing references to CBOE members with CBOE
trading permit holders; \23\ updating the table of contents and section
references; and adding new defined terms and renumbering the defined
terms as necessary.\24\ In connection with the updates to reflect the
current Owners, the proposed rule change amends the definition of
``Super Majority of the Owners'' to mean, subject to the regulatory
requirements described in Section 1.8 of the Operating Agreement, the
affirmative vote of both (i) all of the Owners of the Series A Voting
Shares at the time, and
[[Page 75581]]
(ii) Owners of the Series B Voting Shares who then retain ownership of
Series B Voting Shares and represent at least a twenty (20%) percentage
interest in CBSX, which more accurately corresponds to CBSX's current
ownership structure.\25\
---------------------------------------------------------------------------
\22\ See proposed Section 3.2(d) of and signature page and
Exhibit A to the Operating Agreement.
\23\ See proposed Sections 6.12(c) and (e) and 8.10 of the
Operating Agreement.
\24\ See proposed Section 2.1 of the Operating Agreement.
\25\ See proposed Rule 2.1(a)(26). This change is consistent
with the original structure of CBSX under which a super majority
could be obtained with an affirmative vote of CBOE and two initial
owners, who all initially had ten (10%) percentage interests in
CBSX.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6 of the Act \26\ and the rules and regulations thereunder and,
in particular, the requirements of Section 6(b) of the Act.\27\
Specifically, the Exchange believes the amendments described in Item
II(A)(1)(b)(iii), including amendments to Sections 1.7 and 1.8, that
clarify the Facility is a facility of CBOE under the Act further the
objective of Section 6(b)(1) of the Act because they ensure that CBOE
will continue to have the necessary authority to perform its regulatory
responsibilities with respect to the Facility under Section 6 of the
Act. Additionally, this clarification of what constitutes the Facility
ensures that CBSX, to the extent it controls NSX, is not part of the
Facility and thus is not subject to CBOE's regulatory authority over
the Facility, which the Exchange believes will preserve the
independence of NSX's self-regulatory functions and allow NSX to
fulfill its self-regulatory duties.
---------------------------------------------------------------------------
\26\ 15 U.S.C. 78f.
\27\ 15 U.S.C. 78f(b).
---------------------------------------------------------------------------
The Exchange also believes that this proposed rule change furthers
the objectives of Section 6(b)(5) of the Act,\28\ because the
amendments summarized in this filing will ensure that CBSX and NSX
continue to have governance and regulatory structures 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. In
particular, the amendments to Sections 6.12 and 8.10 described in Item
II(A)(1)(b)(i) above extend certain ownership and voting restrictions
to NSX equity trading permit holders in addition to CBOE trading permit
holders to ensure that CBSX continues to promote equitable principles
of trade by not allowing certain interested parties to have excessive
influence over CBSX's activities.
---------------------------------------------------------------------------
\28\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The addition of Section 5.7(b) (described in Item II(A)(1)(b)(ii)
above) is intended to preserve the independence of NSX's self-
regulatory function and ensure that NSX is able to obtain any
information it needs from the specified parties to detect and deter any
fraudulent and manipulative acts in its marketplace and carry out its
regulatory responsibilities under the Act. Similarly, the amendments to
Section 6.15(a) and (b) (described in Item II(A)(1)(b)(ii) above) that
clarify that CBSX's books and records with respect to the Facility and
NSX's activities will be subject to the necessary oversight of the Act
are consistent with Section 6(b)(5) of the Act, because they provide
for the Commission, CBOE and NSX to have access to necessary
information that will allow CBOE and NSX to efficiently and effectively
enforce compliance with the Act and their respective rules, as well as
allow the Commission to provide proper oversight, which will ultimately
promote just and equitable principles of trade and protect investors.
The amendment to Section 14.1(a) (described in Item II(A)(1)(b)(ii)
above) is intended to make sure that NSX receives notice of any
amendment to the Operating Agreement so that it can make any filings
with the Commission necessary for NSX to fulfill its regulatory duties
under the Act.
The Exchange represents that it remains committed to its role as a
national securities exchange and does not believe that the proposed
changes to the Operating Agreement will undermine the Exchange's
responsibilities for regulating the Facility. The proposed rule change
provides transparency and clarity with respect to the governance of
CBSX and the status of CBSX as both a facility of CBOE and a holding
company of NSX. Additionally, the proposed rule changes are intended to
protect and maintain the integrity of the self-regulatory functions of
CBOE with respect to the Facility and of NSX, and to allow both CBOE
and NSX to carry out their regulatory responsibilities under the Act.
Moreover, the Exchange is not proposing any significant changes to
CBSX's existing operational or trading structure in connection with the
Transaction. Instead, the Exchange represents that the proposed rule
change primarily consists of amendments to the Operating Agreement that
will allow for CBSX's ownership of NSX, which are generally consistent
with parallel provisions of governance documents of other companies
that directly control SROs, which were previously approved by the
Commission,\29\ and with the principles articulated by the
Commission,\30\ while allowing CBOE to maintain its regulatory
jurisdiction and authority over the Facility and NSX to remain an
independent self-regulatory organization.
---------------------------------------------------------------------------
\29\ See Articles Sixth, Fifteenth, and Sixteenth of the Amended
and Restated Certificate of Incorporation of CBOE Holdings, Inc.;
see also Securities Exchange Act Release No. 62158 (May 24, 2010),
75 FR 30082 (May 28, 2010) (SR-CBOE-2008-88) (order approving the
Amended and Restated Certificate of Incorporation of CBOE Holdings
in connection with the demutualization of CBOE).
\30\ See Securities Exchange Act Release No. 50699 (November 18,
2004), 69 FR 71126 (December 8, 2004) (File No. S7-39-04).
---------------------------------------------------------------------------
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 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
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
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 the 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:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File
[[Page 75582]]
Number SR-CBOE-2011-107 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-CBOE-2011-107. 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 (https://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
a.m. and 3 p.m. Copies of the filing will also be available for
inspection and copying at the Exchange's principal office. 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 publicly available. All
submissions should refer to File Number SR-CBOE-2011-107 and should be
submitted on or before December 23, 2011.
---------------------------------------------------------------------------
\31\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-31001 Filed 12-1-11; 8:45 am]
BILLING CODE 8011-01-P
