Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Delay the Implementation Date of Changes to Market-Makers' Continuous Quoting Obligations, 69667-69668 [2012-28134]

Agencies

• SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 77, Number 224 (Tuesday, November 20, 2012)]
[Notices]
[Pages 69667-69668]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-28134]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68218; File No. SR-CBOE-2012-106]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Delay the Implementation Date of Changes to 
Market-Makers' Continuous Quoting Obligations

November 13, 2012.
    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 1, 2012, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to delay the implementation date of changes 
to Market-Makers' continuous quoting obligations.
    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, and at the Commission's 
Public Reference Room.

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 these 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 aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On July 5, 2012, the Exchange submitted a rule change filing, which 
became effective on that date, to amend Rule 1.1(ccc), ``Continuous 
Electronic Quotes,'' to reduce to 90% the percentage of time for which 
a Market-Maker is required to provide continuous electronic quotes in 
an appointed option class on a given trading day. That filing also 
included a proposed rule change to amend Rules 8.13, 8.15A, 8.85, and 
8.93 to increase to the lesser of 99% or 100% minus one call-put pair 
the percentage of series in each class in which Preferred Market-
Makers, Lead Market-Makers, Designated Primary Market-Makers, and 
Electronic Designated Primary Market-Makers, respectively 
(collectively, ``Market-Makers''), must provide continuous electronic 
quotes.\3\ The proposed rule changes in that filing were set to become 
operative on August 4, 2012.
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    \3\ Securities Exchange Act Release No. 34-67410 (July 11, 
2012), 77 FR 42040 (July 17, 2012) (SR-CBOE-2012-064).
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    The Exchange submitted another rule change filing on August 3, 
2012, which became effective and operative upon filing, to delay 
implementation of these quoting obligation changes to provide Market-
Makers with additional time to make necessary system changes to comply 
with the new quoting obligations. The filing indicated that the 
Exchange would announce the implementation date of the proposed rule 
change in a Regulatory Circular to be published no later than November 
1, 2012, which implementation date would be no later than December 31, 
2012.\4\
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    \4\ Securities Exchange Act Release No. 34-67644 (August 13, 
2012), 77 FR 49846 (August 17, 2012) (SR-CBOE-2012-077).
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    The purpose of this rule change filing is to again delay 
implementation of these quoting obligation changes to provide Market-
Makers with additional time to make further necessary system changes to 
comply with the new quoting obligations. The Exchange will announce the 
implementation date of the proposed rule change in a Regulatory 
Circular to be published no later than 120 days following the effective 
date. The implementation date will be no later than 180 days following 
the effective date.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\5\ Specifically, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \6\ requirements that the rules of 
an exchange be designed to promote just and equitable principles of 
trade, to prevent fraudulent and manipulative acts, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, 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.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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    In particular, the Exchange believes that delaying the 
implementation date of these changes to Market-Makers' continuous 
quoting obligations to allow Market-Makers to further adjust their 
systems to be consistent with the new quoting obligations will provide 
efficiencies that will benefit investors and the public interest and 
encourage more efficient order entry practices by Market-Makers. The 
Exchange believes that additional time to allow Market-Maker's [sic] to 
adjust their systems will promote compliance by Market-Makers with the 
new quoting obligations. Providing Market-Makers with additional time 
to make necessary system adjustments that will allow them to comply 
with the new quoting obligations fosters cooperation between the 
Market-Makers and the Exchange, which monitors Market-Makers' 
compliance with quoting obligations. Additionally, the proposed rule 
change will allow the Exchange to announce an implementation schedule 
in a fair and orderly manner.

[[Page 69668]]

B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE does not believe that the proposed rule change will impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\ 
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 prior to 
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, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act. \9\ and Rule 19b-
4(f)(6)(iii) thereunder.\10\
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6)(iii). The Exchange has requested 
that the Commission waive the requirement that the Exchange provide 
the Commission written notice of its intent to file the proposed 
rule change, along with a brief description and text of the proposed 
rule change, at least five business days prior to the date on which 
the Exchange filed the proposed rule change pursuant to Rule 19b-
4(f)(6)(iii). The Commission hereby grants this request.
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    A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has 
indicated that it will not be able to announce an implementation date 
for the changes to the Market-Maker quoting obligations by November 1, 
2012, as provided in proposed rule change filing SR-CBOE-2012-077,\13\ 
because allowing Market-Makers additional time to adjust their systems 
will promote compliance by Market-Makers with the new quoting 
obligations. The Commission notes that the proposed rule change does 
not present any new, unique, or substantive issues, but rather is 
merely delaying the implementation date of an already effective rule 
change, and that waiver of the 30-day operative delay will allow the 
Exchange to announce an implementation schedule in an efficient manner. 
The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
and, therefore, designates the proposed rule change as operative upon 
filing.\14\
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ See supra note 4.
    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the 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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or 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 Number SR-CBOE-2012-106 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-2012-106. 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 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-CBOE-2012-106 and should be 
submitted on or before December 11, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-28134 Filed 11-19-12; 8:45 am]
BILLING CODE 8011-01-P