Self-Regulatory Organizations; BOX Options Exchange LLC; Order Approving Minor Rule Violation Plan for BOX Options Exchange LLC, 76319-76320 [2012-31121]
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Federal Register / Vol. 77, No. 248 / Thursday, December 27, 2012 / Notices
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
Number SR–ICEEU–2012–16 on the
subject line.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–31126 Filed 12–26–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68489; File No. 4–655]
Self-Regulatory Organizations; BOX
Options Exchange LLC; Order
Approving Minor Rule Violation Plan
for BOX Options Exchange LLC
tkelley on DSK3SPTVN1PROD with
Paper Comments
December 20, 2012.
• 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–ICEEU–2012–16. 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
filings will also be available for
inspection and copying at the principal
office of ICE Clear Europe and on ICE
Clear Europe’s Web site (https://
www.theice.com/publicdocs/
regulatory_filings/
ICEU_SEC_121912_2012–16.pdf).
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–ICEEU–2012–16 and
should be submitted on or before
January 17, 2013.
On October 15, 2012, BOX Options
Exchange LLC (the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) a
proposed minor rule violation plan
(‘‘MRVP’’) pursuant to Section 19(d)(1)
of the Securities Exchange Act of 1934
(the ‘‘Act’’) 1 and Rule 19d–1(c)(2)
thereunder.2 The proposed MRVP was
published for public comment on
November 13, 2012.3 The Commission
received no comments on the proposal.
This order approves the Exchange’s
proposed MRVP.
The Exchange’s MRVP specifies those
uncontested minor rule violations with
sanctions not exceeding $2,500 which
would not be subject to the provisions
of Rule 19d–1(c)(1) of the Act 4 requiring
that a self-regulatory organization
(‘‘SRO’’) promptly file notice with the
Commission of any final disciplinary
action taken with respect to any person
or organization.5 In accordance with
Rule 19d–1(c)(2) under the Act, the
Exchange proposed to designate certain
specified rule violations as minor rule
violations, and requested that it be
relieved of the prompt reporting
requirements regarding such violations,
VerDate Mar<15>2010
16:53 Dec 26, 2012
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11 17
CFR 200.30–3(a)(12).
U.S.C. 78s(d)(1).
2 17 CFR 240.19d–1(c)(2).
3 See Securities Exchange Act Release No. 68170
(November 6, 2012), 77 FR 67722 (‘‘Notice’’).
4 17 CFR 240.19d–1(c)(1).
5 The Commission adopted amendments to
paragraph (c) of Rule 19d–1 to allow SROs to
submit for Commission approval plans for the
abbreviated reporting of minor disciplinary
infractions. See Securities Exchange Act Release
No. 21013 (June 1, 1984), 49 FR 23828 (June 8,
1984). Any disciplinary action taken by an SRO
against any person for violation of a rule of the SRO
which has been designated as a minor rule violation
pursuant to such a plan filed with and declared
effective by the Commission shall not be considered
‘‘final’’ for purposes of Section 19(d)(1) of the Act
if the sanction imposed consists of a fine not
exceeding $2,500 and the sanctioned person has not
sought an adjudication, including a hearing, or
otherwise exhausted his administrative remedies.
1 15
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Frm 00032
Fmt 4703
Sfmt 4703
76319
provided it gives notice of such
violations to the Commission on a
quarterly basis. The Exchange proposed
to include in its MRVP the procedures
and violations currently included in
Exchange Rule 12140 (‘‘Imposition of
Fines for Minor Rule Violations’’).6
According to the Exchange’s proposed
MRVP, under Exchange Rule 12140, the
Exchange may impose a fine (not to
exceed $2,500) on a member or an
associated person with respect to any
rule violation listed in Exchange Rule
12140(d).7 The Exchange shall serve the
person against whom a fine is imposed
with a written statement setting forth
the rule or rules violated, the act or
omission constituting each such
violation, the fine imposed for each
such violation, and the date by which
such fine shall be paid, such
determination becomes final or such
determination must be contested. If the
person against whom the fine is
imposed pays the fine, such payment
shall be deemed to be a waiver of such
person’s right to a disciplinary
proceeding and any review of the matter
under the Exchange Rules. Any person
against whom a fine is imposed may
contest the Exchange’s determination by
filing with the Exchange a written
answer, at which point the matter shall
become a disciplinary proceeding.
Upon approval of the plan, the
Exchange will provide the Commission
a quarterly report of actions taken on
minor rule violations under the plan.
The quarterly report will include,
among other things: The Exchange’s
internal file number for the case, the
name of the individual and/or
organization, the nature of the violation,
the specific rule provision violated, the
sanction imposed, the number of times
the rule violation has occurred, and the
date of disposition.8
The Commission finds that the
proposed MRVP is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange. In
particular, the Commission believes that
the proposal is consistent with Section
6 On April 27, 2012, the Exchange’s application
for registration as a national securities exchange,
including the rules governing the Exchange, was
approved. See Securities Exchange Act Release No.
66871 (April 27, 2012), 77 FR 26323 (May 3, 2012)
(File No. 10–206).
7 See Notice, supra note 3. The Commission noted
that the list of violations set forth in the Notice
corrected certain rule reference errors that are
presently in Exchange Rule 12140. The Exchange
has informed Commission staff that it will submit
a rule filing to correct such errors. Id.
8 The Exchange attached a sample form of the
quarterly report with its submission to the
Commission.
E:\FR\FM\27DEN1.SGM
27DEN1
76320
Federal Register / Vol. 77, No. 248 / Thursday, December 27, 2012 / Notices
tkelley on DSK3SPTVN1PROD with
6(b)(5) of the Act,9 which requires that
the rules of an exchange be designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest. The
Commission also believes that the
proposal is consistent with Sections
6(b)(1) and 6(b)(6) of the Act,10 which
require that the exchange enforce
compliance with, and provide
appropriate discipline for violations of,
Commission and Exchange rules. In
addition, because the MRVP offers
procedural rights to a person sanctioned
under Exchange Rule 12140, the
Commission believes that Exchange
Rule 12140 provides a fair procedure for
the disciplining of members and
persons associated with members,
consistent with Sections 6(b)(7) and
6(d)(1) of the Act.11
Finally, the Commission finds that the
proposal is consistent with the public
interest, the protection of investors, or
otherwise in furtherance of the purposes
of the Act, as required by Rule 19d–
1(c)(2) under the Act,12 because the
MRVP strengthens the Exchange’s
ability to carry out its oversight and
enforcement responsibilities as an SRO
in cases where full disciplinary
proceedings are unsuitable in view of
the minor nature of the particular
violation.
In approving this proposal, the
Commission in no way minimizes the
importance of compliance with
Exchange rules and all other rules
subject to the imposition of sanctions
under Exchange Rule 12140. The
Commission believes that the violation
of an SRO’s rules, as well as
Commission rules, is a serious matter.
However, Exchange Rule 12140
provides a reasonable means of
addressing violations that do not rise to
the level of requiring formal
disciplinary proceedings, while
providing greater flexibility in handling
certain violations. The Commission
expects that the Exchange will continue
to conduct surveillance with due
diligence and make determinations
based on its findings, on a case-by-case
basis, regarding whether a sanction
under the MRVP is appropriate, or
whether a violation requires formal
disciplinary action.
It is therefore ordered, pursuant to
Rule 19d–1(c)(2) under the Act,13 that
9 15
U.S.C. 78f(b)(5).
U.S.C. 78f(b)(1) and 78f(b)(6).
11 15 U.S.C. 78f(b)(7) and 78f(d)(1).
12 17 CFR 240.19d–1(c)(2).
13 Id.
the proposed MRVP for BOX Options
Exchange LLC, File No. 4–655, be, and
hereby is, approved and declared
effective.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–31121 Filed 12–26–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68487; File No. SR–CBOE–
2012–124]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Proposed Rule
To Amend Various CBOE Rules
Governing Letters of Guarantee and
Authorization
December 20, 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 December
14, 2012, the Chicago Board Options
Exchange, Incorporated (‘‘Exchange’’ or
‘‘CBOE’’) 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 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
CBOE proposes to amend various
CBOE rules governing letters of
guarantee and authorization. The text of
the rule proposal is available on the
Exchange’s Web site (https://
www.cboe.org/legal), at the Exchange’s
Office of the Secretary and at the
Commission.
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
10 15
VerDate Mar<15>2010
16:53 Dec 26, 2012
Jkt 229001
14 17
CFR 200.30–3(a)(44).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
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Fmt 4703
Sfmt 4703
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
Trading Permit Holders (‘‘TPHs’’) that
have trading functions on CBOE, are
required to submit a letter of guarantee
or authorization 3 for that TPH’s trading
activities on CBOE from a Clearing
TPH.4 The purpose of this proposal is to
amend various CBOE rules governing
letters of guarantee and authorization to:
• Give CBOE the ability to prevent
access to its marketplace if a TPH does
not have an effective letter of guarantee
or authorization on file with the
Exchange;
• Provide that any written revocation
of a letter of guarantee or authorization
will be given effect as quickly as CBOE
can process it;
• Give CBOE the ability to take any
action necessary to give effect to actions
by the Clearing Corporation,5 such as
restricting the activities of a Clearing
TPH or suspending a Clearing TPH;
• Automatically terminate the trading
permit(s) and TPH status of a TPH if the
TPH does not have a required letter of
guarantee or authorization in place for
ninety consecutive days;
• Delete obsolete and outdated rule
text; and
• Make technical, non-substantive
rule text changes.
The changes proposed in this filing
are intended to clarify and codify
existing and well-established principles
regarding activities permitted by
Clearing TPHs. While elementary, the
Exchanges believes that it is important
to specifically provide in its rules that
a TPH must have a valid letter of
guarantee or authorization in order to
engage in trading activities and, if one
is not in place, the Exchange is
permitted to prevent connectivity and
access to the Exchange by that TPH.
Similarly, the definition of a Clearing
3 A letter of guarantee is typically provided to
CBOE by a Clearing TPH guaranteeing any trades
made by one of its TPH customers, e.g., a MarketMaker. A letter of authorization is typically
provided to CBOE by a Clearing TPH accepting
financial responsibility for all transactions on CBOE
made by a guaranteed Floor Broker.
4 CBOE Rule 1.1(f) defines ‘‘Clearing Trading
Permit Holder’’ as a Trading Permit Holder that has
been admitted to membership in the Clearing
Corporation pursuant to the provisions of the Rules
of the Clearing Corporation.
5 The Options Clearing Corporation (‘‘OCC’’) is
currently the only Clearing Corporation of CBOE.
E:\FR\FM\27DEN1.SGM
27DEN1
]]>Agencies
[Federal Register Volume 77, Number 248 (Thursday, December 27, 2012)]
[Notices]
[Pages 76319-76320]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-31121]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68489; File No. 4-655]
Self-Regulatory Organizations; BOX Options Exchange LLC; Order
Approving Minor Rule Violation Plan for BOX Options Exchange LLC
December 20, 2012.
On October 15, 2012, BOX Options Exchange LLC (the ``Exchange'')
filed with the Securities and Exchange Commission (the ``Commission'')
a proposed minor rule violation plan (``MRVP'') pursuant to Section
19(d)(1) of the Securities Exchange Act of 1934 (the ``Act'') \1\ and
Rule 19d-1(c)(2) thereunder.\2\ The proposed MRVP was published for
public comment on November 13, 2012.\3\ The Commission received no
comments on the proposal. This order approves the Exchange's proposed
MRVP.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(d)(1).
\2\ 17 CFR 240.19d-1(c)(2).
\3\ See Securities Exchange Act Release No. 68170 (November 6,
2012), 77 FR 67722 (``Notice'').
---------------------------------------------------------------------------
The Exchange's MRVP specifies those uncontested minor rule
violations with sanctions not exceeding $2,500 which would not be
subject to the provisions of Rule 19d-1(c)(1) of the Act \4\ requiring
that a self-regulatory organization (``SRO'') promptly file notice with
the Commission of any final disciplinary action taken with respect to
any person or organization.\5\ In accordance with Rule 19d-1(c)(2)
under the Act, the Exchange proposed to designate certain specified
rule violations as minor rule violations, and requested that it be
relieved of the prompt reporting requirements regarding such
violations, provided it gives notice of such violations to the
Commission on a quarterly basis. The Exchange proposed to include in
its MRVP the procedures and violations currently included in Exchange
Rule 12140 (``Imposition of Fines for Minor Rule Violations'').\6\
---------------------------------------------------------------------------
\4\ 17 CFR 240.19d-1(c)(1).
\5\ The Commission adopted amendments to paragraph (c) of Rule
19d-1 to allow SROs to submit for Commission approval plans for the
abbreviated reporting of minor disciplinary infractions. See
Securities Exchange Act Release No. 21013 (June 1, 1984), 49 FR
23828 (June 8, 1984). Any disciplinary action taken by an SRO
against any person for violation of a rule of the SRO which has been
designated as a minor rule violation pursuant to such a plan filed
with and declared effective by the Commission shall not be
considered ``final'' for purposes of Section 19(d)(1) of the Act if
the sanction imposed consists of a fine not exceeding $2,500 and the
sanctioned person has not sought an adjudication, including a
hearing, or otherwise exhausted his administrative remedies.
\6\ On April 27, 2012, the Exchange's application for
registration as a national securities exchange, including the rules
governing the Exchange, was approved. See Securities Exchange Act
Release No. 66871 (April 27, 2012), 77 FR 26323 (May 3, 2012) (File
No. 10-206).
---------------------------------------------------------------------------
According to the Exchange's proposed MRVP, under Exchange Rule
12140, the Exchange may impose a fine (not to exceed $2,500) on a
member or an associated person with respect to any rule violation
listed in Exchange Rule 12140(d).\7\ The Exchange shall serve the
person against whom a fine is imposed with a written statement setting
forth the rule or rules violated, the act or omission constituting each
such violation, the fine imposed for each such violation, and the date
by which such fine shall be paid, such determination becomes final or
such determination must be contested. If the person against whom the
fine is imposed pays the fine, such payment shall be deemed to be a
waiver of such person's right to a disciplinary proceeding and any
review of the matter under the Exchange Rules. Any person against whom
a fine is imposed may contest the Exchange's determination by filing
with the Exchange a written answer, at which point the matter shall
become a disciplinary proceeding.
---------------------------------------------------------------------------
\7\ See Notice, supra note 3. The Commission noted that the list
of violations set forth in the Notice corrected certain rule
reference errors that are presently in Exchange Rule 12140. The
Exchange has informed Commission staff that it will submit a rule
filing to correct such errors. Id.
---------------------------------------------------------------------------
Upon approval of the plan, the Exchange will provide the Commission
a quarterly report of actions taken on minor rule violations under the
plan. The quarterly report will include, among other things: The
Exchange's internal file number for the case, the name of the
individual and/or organization, the nature of the violation, the
specific rule provision violated, the sanction imposed, the number of
times the rule violation has occurred, and the date of disposition.\8\
---------------------------------------------------------------------------
\8\ The Exchange attached a sample form of the quarterly report
with its submission to the Commission.
---------------------------------------------------------------------------
The Commission finds that the proposed MRVP is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange. In particular, the
Commission believes that the proposal is consistent with Section
[[Page 76320]]
6(b)(5) of the Act,\9\ which requires that the rules of an exchange be
designed to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, to protect investors and the
public interest. The Commission also believes that the proposal is
consistent with Sections 6(b)(1) and 6(b)(6) of the Act,\10\ which
require that the exchange enforce compliance with, and provide
appropriate discipline for violations of, Commission and Exchange
rules. In addition, because the MRVP offers procedural rights to a
person sanctioned under Exchange Rule 12140, the Commission believes
that Exchange Rule 12140 provides a fair procedure for the disciplining
of members and persons associated with members, consistent with
Sections 6(b)(7) and 6(d)(1) of the Act.\11\
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b)(5).
\10\ 15 U.S.C. 78f(b)(1) and 78f(b)(6).
\11\ 15 U.S.C. 78f(b)(7) and 78f(d)(1).
---------------------------------------------------------------------------
Finally, the Commission finds that the proposal is consistent with
the public interest, the protection of investors, or otherwise in
furtherance of the purposes of the Act, as required by Rule 19d-1(c)(2)
under the Act,\12\ because the MRVP strengthens the Exchange's ability
to carry out its oversight and enforcement responsibilities as an SRO
in cases where full disciplinary proceedings are unsuitable in view of
the minor nature of the particular violation.
---------------------------------------------------------------------------
\12\ 17 CFR 240.19d-1(c)(2).
---------------------------------------------------------------------------
In approving this proposal, the Commission in no way minimizes the
importance of compliance with Exchange rules and all other rules
subject to the imposition of sanctions under Exchange Rule 12140. The
Commission believes that the violation of an SRO's rules, as well as
Commission rules, is a serious matter. However, Exchange Rule 12140
provides a reasonable means of addressing violations that do not rise
to the level of requiring formal disciplinary proceedings, while
providing greater flexibility in handling certain violations. The
Commission expects that the Exchange will continue to conduct
surveillance with due diligence and make determinations based on its
findings, on a case-by-case basis, regarding whether a sanction under
the MRVP is appropriate, or whether a violation requires formal
disciplinary action.
It is therefore ordered, pursuant to Rule 19d-1(c)(2) under the
Act,\13\ that the proposed MRVP for BOX Options Exchange LLC, File No.
4-655, be, and hereby is, approved and declared effective.
---------------------------------------------------------------------------
\13\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(44).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-31121 Filed 12-26-12; 8:45 am]
BILLING CODE 8011-01-P
