Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Order Approving Proposed Rule Change Relating to Its Automated Improvement Mechanism, 20471-20472 [2012-8036]
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Federal Register / Vol. 77, No. 65 / Wednesday, April 4, 2012 / Notices
considered carefully and responded
adequately to comments and concerns
raised about previous versions of the
proposed rule. As evidence of FINRA’s
commitment to drafting a narrowly
tailored rule while maintaining
comprehensive investor protection
standards, the Commission points to the
discussion above which highlights the
many revisions FINRA made to the
proposal to address comments and
concerns raised through four separate
opportunities for comment.
VI. Accelerated Approval
The Commission finds goods cause,
pursuant to Section 19(b)(2) of the
Exchange Act,195 for approving the
proposed rule change, as modified by
Amendments Nos. 1, 2, and 3 thereto,
prior to the 30th day after publication of
notice of the filing of Amendment No.
3 in the Federal Register. The proposed
rule change was informed by FINRA’s
consideration of, and the incorporation
of many suggestions made in comments
on a 2009 proposal to members to
harmonize and modernize the
communications with the public
rules,196 the Original Proposal, the
Notice and Proceedings Order, and
Amendment No. 2. Amendment No. 3
reflects FINRA’s efforts to further
address commenter concerns and
minimize burdens resulting from the
proposed rule’s requirements.
Accordingly, the Commission finds
that good cause exists to approve the
proposal, as modified by Amendment
Nos. 1, 2 and 3 on an accelerated basis.
VII. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether Amendment No. 3 to
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
Number SR–FINRA–2011–035 on the
subject line.
All submissions should refer to File
Number SR–FINRA–2011–035. 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 such filing
also will be available for inspection and
copying at the principal office of
FINRA. 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–FINRA–2011–035 and
should be submitted on or before April
25, 2012.
VIII. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,197 that the
proposed rule change (SR–FINRA–
2011–035), as modified by Amendments
Nos. 1, 2 and 3, be, and hereby is,
approved on an accelerated basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.198
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–8043 Filed 4–3–12; 8:45 am]
BILLING CODE 8011–01–P
emcdonald on DSK29S0YB1PROD with NOTICES
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
195 15
197 15
U.S.C. 78s(b)(2).
Regulatory Notice 09–55.
196 See
VerDate Mar<15>2010
15:28 Apr 03, 2012
198 17
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U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
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20471
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66677; File No. SR–C2–
2012–006]
Self-Regulatory Organizations; C2
Options Exchange, Incorporated;
Order Approving Proposed Rule
Change Relating to Its Automated
Improvement Mechanism
March 29, 2012.
On January 31, 2012, the C2 Options
Exchange, Incorporated (‘‘Exchange’’)
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 amend C2 Rule 6.51, which
relates to the Exchange’s Automated
Improvement Mechanism (‘‘AIM’’). The
proposal would permit a participant
(‘‘Participant’’), when submitting an
agency order to AIM to initiate an
auction against a single price
submission, to elect to have last priority
in the AIM auction’s order allocation.3
The proposed rule change was
published for comment in the Federal
Register on February 17, 2012.4 The
Commission received no comments on
the proposal.
After careful review, the Commission
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 5 and, in particular,
the requirements of Section 6(b)(5) of
the Act,6 in that it is designed to provide
additional flexibility for Participants to
obtain executions on behalf of their
customers through AIM because the
initiating Participants may elect to have
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 In an AIM auction, described here generally, a
Participant submits into the mechanism an order
that it represents as agent (‘‘Agency Order’’) along
with a contra-side order at a specified price (which
must comply with parameters set forth in Rule 6.51)
and for the same size that either represents
principal interest of the Participant or is a solicited
order. Certain Participants, as set forth in Rule 6.51,
then can compete with the contra-side order by
submitting bids (offers) to execute against the
Agency Order. After better-priced orders are filled
and public customers competing at the best price
receive their allocations, the Participant is granted
priority ahead of other participants to execute
against 40% (in some circumstances 50%) of the
original size of the Agency Order. Under the
proposed rule change, the initiating Participant will
be able to elect to have last priority.
4 See Securities Exchange Act Release No. 66384
(February 13, 2012), 77 FR 9717.
5 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).
6 15 U.S.C. 78f(b)(5).
2 17
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Federal Register / Vol. 77, No. 65 / Wednesday, April 4, 2012 / Notices
last priority. The Commission believes
that, as a result of this flexibility, there
may be increased usage of AIM auctions
and the mechanism may attract new
participants, thereby helping to further
competition and to enhance the
possibility of price improvement on
behalf of customers.7
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,8 that the
proposed rule change (SR–C2–2012–
006) be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–8036 Filed 4–3–12; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66676; File No. SR–OCC–
2012–03]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing of Proposed Rule Change to
More Closely Align OCC’s By-Laws
and Rules with Regulatory
Requirements Related to ‘‘Statutory
Disqualifications’’
March 29, 2012.
emcdonald on DSK29S0YB1PROD with NOTICES
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 March 15,
2012, The Options Clearing Corporation
(‘‘OCC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which Items
have been prepared primarily by OCC.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
7 The Commission notes that Chapter V, Section
18(f)(v) of the Rules of the Boston Exchange Group,
LLC, ‘‘The Price Improvement Period’’ (‘‘PIP’’),
includes a similar provision that permits an options
participant initiating a PIP auction to designate a
lower amount than the 40% to which it is otherwise
entitled upon the conclusion of the PIP auction.
The Commission also recently approved a similar
provision under Rule 6.74A of the Chicago Board
of Options Exchange, Incorporated, with respect to
its AIM auction. See Securities Exchange Act
Release No. 66375 (February 10, 2012), 77 FR 9274
(February 16, 2012) (SR–CBOE–2011–117).
8 15 U.S.C. 78s(b)(2).
9 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
15:28 Apr 03, 2012
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The proposed rule change would
more closely align OCC’s By-Laws and
Rules with applicable regulatory
requirements related to ‘‘statutory
disqualifications’’ under the Act in
order to reduce the overall
administrative burden on OCC
associated with addressing the statutory
disqualification of OCC clearing
members (‘‘Clearing Members’’) and
applicants for clearing membership
(‘‘Applicants’’) while giving guidance to
Clearing Members and Applicants as to
OCC’s policies with respect to statutory
disqualifications.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
VerDate Mar<15>2010
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
In its filing with the Commission,
OCC included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. OCC has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of these statements.3
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
The purpose of this proposed rule
change is to more closely align OCC’s
By-Laws and Rules with applicable
regulatory requirements related to
‘‘statutory disqualifications’’ under the
Act in order to reduce the overall
administrative burden on OCC
associated with addressing the statutory
disqualification of Clearing Members
and Applicants while giving guidance to
Clearing Members and Applicants as to
OCC’s policies with respect to statutory
disqualifications. OCC is also proposing
to amend its ‘‘Fitness Standards for
Directors, Clearing Members and
Others’’ (‘‘Fitness Standards’’) to bring
such standards into conformity with the
proposed amendments to OCC’s ByLaws. The Fitness Standards were
submitted to the Commission in SR–
OCC–2011–12 and approved by the
Commission on October 27, 2011.4
3 The Commission has modified the text of the
summaries prepared by OCC.
4 Securities Exchange Act Release No. 34–65648
(October 27, 2011), 76 FR 68236 (November 3,
2011).
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Background
Persons who have engaged in certain
types of misconduct are subject to
‘‘statutory disqualification,’’ as defined
by Section 3(a)(39) of the Act, and must
undergo a review by the Commission
under Rule 19h–1 of the Act in order to
enter or continue in membership in a
self-regulatory organization (‘‘SRO’’).
Section 17A(b)(4)(A) of the Act provides
that a registered clearing agency may,
and in cases in which the Commission
so orders must, deny participation to
any person subject to a statutory
disqualification. This provision further
requires a registered clearing agency to
provide the Commission with 30 days’
notice before admitting a statutorily
disqualified person to clearing
membership. Rule 19h–1 of the Act
implements these statutory provisions
by requiring notice to the Commission
if a registered clearing agency proposes
either to admit to membership or to
continue as a member a person subject
to a statutory disqualification. Notably,
unlike in the case of a national
securities exchange or registered
securities association, the rule does not
require a registered clearing agency to
file such a notice with respect to
statutory disqualifications of associated
persons of a Member or Applicant. A
registered clearing agency is required to
file such a notice only when the
Member or Applicant itself is subject to
the disqualification.
Article V of OCC’s By-Laws
establishes the qualifications required of
Clearing Members and sets forth the
procedures for admitting persons to
clearing membership, including those
that are or become subject to a statutory
disqualification. Currently,
Interpretation and Policy .03 of Article
V, Section 1 of OCC’s By-Laws provides
that the Membership/Risk Committee
(‘‘Committee’’) will not recommend the
approval of an application for
membership if the Applicant or an
associated person is subject to a
statutory disqualification unless the
Committee makes a finding that ‘‘special
circumstances’’ exist warranting a
waiver of the statutory disqualification.
The requirements of this By-Law are
more stringent than those applied to
registered clearing agencies by the Act
or Commission rules because they
require the Committee to (i) make
specific findings of ‘‘special
circumstances’’ before recommending
membership approval and (ii) address
statutory disqualifications of associated
persons. The By-Laws therefore impose
additional administrative burdens on
OCC that are not required under any
E:\FR\FM\04APN1.SGM
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Agencies
[Federal Register Volume 77, Number 65 (Wednesday, April 4, 2012)]
[Notices]
[Pages 20471-20472]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-8036]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66677; File No. SR-C2-2012-006]
Self-Regulatory Organizations; C2 Options Exchange,
Incorporated; Order Approving Proposed Rule Change Relating to Its
Automated Improvement Mechanism
March 29, 2012.
On January 31, 2012, the C2 Options Exchange, Incorporated
(``Exchange'') 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 amend C2 Rule 6.51, which relates to the
Exchange's Automated Improvement Mechanism (``AIM''). The proposal
would permit a participant (``Participant''), when submitting an agency
order to AIM to initiate an auction against a single price submission,
to elect to have last priority in the AIM auction's order
allocation.\3\
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In an AIM auction, described here generally, a Participant
submits into the mechanism an order that it represents as agent
(``Agency Order'') along with a contra-side order at a specified
price (which must comply with parameters set forth in Rule 6.51) and
for the same size that either represents principal interest of the
Participant or is a solicited order. Certain Participants, as set
forth in Rule 6.51, then can compete with the contra-side order by
submitting bids (offers) to execute against the Agency Order. After
better-priced orders are filled and public customers competing at
the best price receive their allocations, the Participant is granted
priority ahead of other participants to execute against 40% (in some
circumstances 50%) of the original size of the Agency Order. Under
the proposed rule change, the initiating Participant will be able to
elect to have last priority.
---------------------------------------------------------------------------
The proposed rule change was published for comment in the Federal
Register on February 17, 2012.\4\ The Commission received no comments
on the proposal.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 66384 (February 13,
2012), 77 FR 9717.
---------------------------------------------------------------------------
After careful review, the Commission 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 \5\
and, in particular, the requirements of Section 6(b)(5) of the Act,\6\
in that it is designed to provide additional flexibility for
Participants to obtain executions on behalf of their customers through
AIM because the initiating Participants may elect to have
[[Page 20472]]
last priority. The Commission believes that, as a result of this
flexibility, there may be increased usage of AIM auctions and the
mechanism may attract new participants, thereby helping to further
competition and to enhance the possibility of price improvement on
behalf of customers.\7\
---------------------------------------------------------------------------
\5\ 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).
\6\ 15 U.S.C. 78f(b)(5).
\7\ The Commission notes that Chapter V, Section 18(f)(v) of the
Rules of the Boston Exchange Group, LLC, ``The Price Improvement
Period'' (``PIP''), includes a similar provision that permits an
options participant initiating a PIP auction to designate a lower
amount than the 40% to which it is otherwise entitled upon the
conclusion of the PIP auction. The Commission also recently approved
a similar provision under Rule 6.74A of the Chicago Board of Options
Exchange, Incorporated, with respect to its AIM auction. See
Securities Exchange Act Release No. 66375 (February 10, 2012), 77 FR
9274 (February 16, 2012) (SR-CBOE-2011-117).
---------------------------------------------------------------------------
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\8\ that the proposed rule change (SR-C2-2012-006) be, and it
hereby is, approved.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
---------------------------------------------------------------------------
\9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-8036 Filed 4-3-12; 8:45 am]
BILLING CODE 8011-01-P