Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 12140 (Imposition of Fines for Minor Rule Violations), 20706-20708 [2013-07940]
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Federal Register / Vol. 78, No. 66 / Friday, April 5, 2013 / Notices
(‘‘OMB’’) has determined that the FASB
is included in sequestration anticipated
by the the Budget Control Act of 2011
(‘‘BCA’’).2 So long as sequestration is
applicable, we anticipate that the FAF
will work with the Commission and
Commission staff as appropriate
regarding its implementation of
sequestration. In that event, the
Commission also requests the FAF to
provide the Commission with
information regarding the FAF’s plans
for implementation of sequestration,
including how it will impact 2013
spending for each of the FAF’s program
areas and cost categories.
After its review, the Commission
determined that the 2013 annual
accounting support fee for the FASB is
consistent with Section 109 of the Act.
Accordingly,
It is ordered, pursuant to Section 109
of the Act, that the FASB may act in
accordance with this determination of
the Commission.
By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013–07984 Filed 4–4–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69259; File No. SR–BOX–
2013–17]
Self-Regulatory Organizations; BOX
Options Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Rule
12140 (Imposition of Fines for Minor
Rule Violations)
mstockstill on DSK4VPTVN1PROD with NOTICES
March 29, 2013.
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 March
22, 2013, BOX Options Exchange LLC
(the ‘‘Exchange’’ or ‘‘BOX’’) 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 by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
from interested persons.
2 See ‘‘OMB Report Pursuant to the Sequestration
Transparency Act of 2012’’ (P.L. 112–155), page 222
of 224 at: https://www.whitehouse.gov/sites/default/
files/omb/assets/legislative_reports/stareport.pdf.
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 amend
Rule 12140 (Imposition of Fines for
Minor Rule Violations) to correct certain
cross references, clarify the calculation
and review periods applicable to certain
violations, and amend the sanction
amounts for trade-through violations.
The text of the proposed rule change is
available from the principal office of the
Exchange, at the Commission’s Public
Reference Room and also on the
Exchange’s Internet Web site at https://
boxexchange.com.
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 these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization 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
The Exchange proposes to amend
Rule 12140 (Imposition of Fines for
Minor Rule Violations) to correct certain
cross references, clarify the calculation
and review periods applicable to certain
violations, and amend the sanction
amounts for trade-through violations.
Exchange Rule 12140 provides that in
lieu of commencing a disciplinary
proceeding, the Exchange may, subject
to the certain requirements set forth in
the Rule, impose a fine, not to exceed
$5,000, on any Options Participant, or
person associated with or employed by
an Options Participant, with respect to
any Rule violation listed in Rule
12140(d). Any fine imposed pursuant to
this Rule that (i) does not exceed $2,500
and (ii) is not contested, shall be
reported on a periodic basis, except as
may otherwise be required by Rule 19d–
1 under the Act or by any other
regulatory authority. Further, the Rule
provides that any person against whom
a fine is imposed under the Rule shall
be served with a written statement
setting forth (i) the Rule(s) allegedly
violated; (ii) the act or omission
constituting each such violation; (iii) the
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fine imposed for each violation; and (iv)
the date by which such determination
becomes final and such fine must be
paid or contested as provided below,
which date shall be not less than thirty
(30) calendar days after the date of
service of such written statement.
First, the Exchange proposes to
amend Rule 12140(b) to change the date
that a determination becomes final and
the fine must be paid or contested from
thirty to twenty-five (25) calendar days
after the date of service of the written
notice of an alleged violation. This
change is meant to bring the final
determination time period in line with
the time period to file an answer under
Rule 12050. With this change a
Participant will have twenty-five (25)
days to file an answer, after which the
determination will become final and the
fine must be paid or contested.
Next, the Exchange proposes to
amend Rule 12140(d)(1) to clarify that
violations of the Positions Limit Rule
will be progressive for the number of
cumulative violations within any rolling
24-month period.
The Exchange also proposes to amend
Rule 12140(d)(2) to clarify the time
period that may be subject to penalty for
late focus reports will be 1–30 calendar
days, 31 to 60 days, 61–90 days and
over 90 days.
The Exchange proposes to amend
Rule 12140(d)(5), (6), (11), and (12) to
add and correct citations to Rule
8040(a)(7), 8050(e), 8030(e), and
8050(c)(2)–(4) regarding Market Maker
obligations. Additionally proposed
amendments to Rule 12140(d)(6) clarify
the review period for calculating
violations of a Market Maker’s quoting
obligations, and specify additional
sanctions that may apply to Market
Maker violations of their quoting
obligations for consecutive business
days within the review period.
The Exchange proposes to add to Rule
12140(d)(8) specific references to Rules
2020, 2040, and 2050 regarding a firm’s
obligation to timely file amendments to
Form U–4, Form U–5, and Form BD.
Additionally, the Exchange proposes to
specify that a fourth violation, or any
violation thereafter, may result in formal
disciplinary action against a firm.
The Exchange proposes to add to Rule
12140(d)(9) specific references to the
rule provisions related to Contrary
Exercise Advice (Rule 9000(c)–(e),
9000(g), and 9000(h)).
The Exchange proposes to amend
Rule 12140(d)(10) to add and correct
citations to Rule 15020 regarding
Locked and Crossed Market Violations.
Finally, the Exchange proposes to
amend Rule 12140(d)(13) regarding
Trade-Through Violations. The
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Federal Register / Vol. 78, No. 66 / Friday, April 5, 2013 / Notices
Exchange proposes to add and correct
citations to Rule 15010 regarding tradethroughs, and to clarify that for
purposes of calculating the number of
violations during a period subject to
sanctions, a violation shall occur when
an Options Participant engages in a
pattern or practice of trading through
better prices available on other
exchanges. In addition, the Exchange
proposes to extend the period of time
used in calculating the number of tradethrough violations from a twelve-month
rolling period to a twenty-four month
rolling period, and increase the sanction
amounts that an Options Participant
will be subject to under this rule. An
initial trade-through violation will now
have a sanction of $500, the second
violation will have a sanction of $1,000,
the third violation will have a sanction
of $2,500, and any subsequent
violations will be have a sanction of
$5,000 or Formal Disciplinary Action.
These changes are based on the rules of
the Chicago Board Option Exchange,
Inc. (‘‘CBOE’’).3.
mstockstill on DSK4VPTVN1PROD with NOTICES
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),4 in general, and Section 6(b)(5)
of the Act,5 in particular, in that it is
designed to promote just and equitable
principles of trade, 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 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 Exchange believes the
proposed change is consistent with
Section 6(b) of the Act, which further
requires that the Exchange enforce
compliance with, and provide
appropriate discipline for violations of,
Commission and Exchange rules.
Finally, the Exchange believes that the
proposal is consistent with the public
interest, the protection of investors, or
otherwise in furtherance of the purposes
of the Act, because Rule 12140
strengthens the Exchange’s ability to
carry out its oversight and enforcement
responsibilities as an SRO in cases
where full disciplinary proceedings may
be unsuitable in view of the minor
nature of the particular violation.
3 See
CBOE Rule 17.50(g)(12).
U.S.C. 78f(b).
5 15 U.S.C. 78f(b)(5).
4 15
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B. Self-Regulatory Organization’s
Statement on Burden on Competition
Because the proposed rule change
does not impose any new or additional
burden on BOX Options Participants,
and only corrects and clarifies certain
information in Rule 12140 with regard
to the Exchange Minor Rule Violation
Plan, the Exchange 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
The Exchange has neither solicited
nor received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
This proposed rule change is filed for
immediate effectiveness pursuant to
paragraph (A) of section 19(b)(3) of the
Exchange Act 6 and Rule 19b-4(f)(6)
thereunder.7 The Exchange asserts that
this 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 after the date of the filing,
or such shorter time as the Commission
may designate if consistent with the
protection of investors and the public
interest.
Because the proposed rule change
does not impose any new or additional
burden on BOX Options Participants,
and only corrects and clarifies certain
information in Rule 12140 with regard
to the Exchange Minor Rule Violation
Plan, the Exchange believes this rule
filing qualifies as a ‘‘non-controversial’’
rule change under Rule 19b–4(f)(6) of
the Act and requests that the
Commission make the proposed change
effective and operative upon filing. 8
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend the rule change if
it appears to the Commission that the
action is necessary or appropriate in the
public interest, for the protection of
6 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
8 As required under Rule 19b–4(f)(6)(iii), the
Exchange provided the Commission with written
notice of its intent to file the proposed rule change
along with a brief description and the text of 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.
7 17
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20707
investors, or would otherwise further
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 rulecomments@sec.gov. Please include File
Number SR–BOX–2013–17 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–BOX–2013–17. 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 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–BOX–
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Federal Register / Vol. 78, No. 66 / Friday, April 5, 2013 / Notices
2013–17 and should be submitted on or
before April 26, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–07940 Filed 4–4–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69262; File No. SR–FINRA–
2013–019]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to FINRA Rule
0180 (Application of Rules to SecurityBased Swaps)
April 1, 2013.
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 18,
2013, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III below, which Items have been
prepared by FINRA. FINRA has
designated the proposed rule change as
constituting a ‘‘non-controversial’’ rule
change under paragraph (f)(6) of Rule
19b–4 under the Act,3 which renders
the proposal effective upon receipt of
this filing by the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
mstockstill on DSK4VPTVN1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing to extend the
expiration date of FINRA Rule 0180
(Application of Rules to Security-Based
Swaps) to February 11, 2014. FINRA
Rule 0180 temporarily limits, with
certain exceptions, the application of
FINRA rules with respect to securitybased swaps.
The text of the proposed rule change
is available on FINRA’s Web site at
https://www.finra.org, at the principal
office of FINRA and at the
Commission’s Public Reference Room.
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
1 15
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II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA 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. FINRA 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 1, 2011, the SEC issued an
Order granting temporary exemptive
relief (the ‘‘Temporary Exemptions’’)
from compliance with certain
provisions of the Exchange Act in
connection with the revision, pursuant
to Title VII of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act (the ‘‘Dodd-Frank Act’’),4 of the
Exchange Act definition of ‘‘security’’ to
encompass security-based swaps.5 In
tandem with the Commission’s action,
on July 8, 2011, FINRA filed for
immediate effectiveness FINRA Rule
0180,6 which, with certain exceptions,
is intended to temporarily limit the
application of FINRA rules 7 with
4 Public
Law 111–203, 124 Stat. 1376 (2010).
Securities Exchange Act Release No. 64795
(July 1, 2011), 76 FR 39927 (July 7, 2011) (Order
Granting Temporary Exemptions Under the
Securities Exchange Act of 1934 in Connection
With the Pending Revision of the Definition of
‘‘Security’’ To Encompass Security-Based Swaps,
and Request for Comment) (the ‘‘Exemptive
Release’’). The term ‘‘security-based swap’’ is
defined in Section 761 of the Dodd-Frank Act. See
also Securities Exchange Act Release No. 67453
(July 18, 2012), 77 FR 48208 (August 13, 2012)
(Further Definition of ‘‘Swap,’’ ‘‘Security-Based
Swap,’’ and ‘‘Security-Based Swap Agreement’’;
Mixed Swaps; Security-Based Swap Agreement
Recordkeeping).
6 See Securities Exchange Act Release No. 64884
(July 14, 2011), 76 FR 42755 (July 19, 2011) (Notice
of Filing and Immediate Effectiveness of Proposed
Rule Change; File No. SR–FINRA–2011–033)
(‘‘FINRA Rule 0180 Notice of Filing’’). See also
Securities Exchange Act Release No. 66156 (January
13, 2012), 77 FR 3027 (January 20, 2012) (Notice of
Filing and Immediate Effectiveness of Proposed
Rule Change; File No. SR–FINRA–2012–004)
(extending the expiration date of FINRA Rule 0180
to January 17, 2013); Securities Exchange Act
Release No. 68471 (December 19, 2012), 77 FR
76113 (December 26, 2012) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change;
File No. SR–FINRA–2012–056) (extending the
expiration date of FINRA Rule 0180 to July 17,
2013).
7 The current FINRA rulebook consists of: (1)
FINRA Rules; (2) NASD Rules; and (3) rules
5 See
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respect to security-based swaps, thereby
helping to avoid undue market
disruptions resulting from the change to
the definition of ‘‘security’’ under the
Act.8
The Commission, noting the need to
avoid a potential unnecessary
disruption to the security-based swap
market in the absence of an extension of
the Temporary Exemptions, and the
need for additional time to consider the
potential impact of the revision of the
Exchange Act definition of ‘‘security’’ in
light of recent Commission rulemaking
efforts under Title VII of the Dodd-Frank
Act, has issued an Order extending the
expiration date of the Temporary
Exemptions until February 11, 2014.9
The Commission noted that extending
the Temporary Exemptions would
facilitate a coordinated consideration of
these issues with the relief provided
pursuant to FINRA Rule 0180. FINRA,
in establishing FINRA Rule 0180, noted
its intent to align the rule’s expiration
date with the expiration of the
Temporary Exemptions.10 FINRA
believes it is appropriate and in the
public interest, in light of the
incorporated from NYSE (‘‘Incorporated NYSE
Rules’’). While the NASD Rules generally apply to
all FINRA members, the Incorporated NYSE Rules
apply only to those members of FINRA that are also
members of the NYSE. The FINRA Rules apply to
all FINRA members, unless such rules have a more
limited application by their terms. For more
information about the rulebook consolidation
process, see Information Notice, March 12, 2008
(Rulebook Consolidation Process).
8 In its Exemptive Release, the Commission noted
that the relief is targeted and does not include, for
instance, relief from the Act’s antifraud and antimanipulation provisions. FINRA has noted that
FINRA Rule 0180 is similarly targeted. For instance,
paragraph (a) of FINRA Rule 0180 provides that
FINRA rules shall not apply to members’ activities
and positions with respect to security-based swaps,
except for FINRA Rules 2010 (Standards of
Commercial Honor and Principles of Trade), 2020
(Use of Manipulative, Deceptive or Other
Fraudulent Devices), 3310 (Anti-Money Laundering
Compliance Program) and 4240 (Margin
Requirements for Credit Default Swaps). See also
paragraphs (b) and (c) of FINRA Rule 0180
(addressing the applicability of additional rules)
and FINRA Rule 0180 Notice of Filing.
9 See Securities Exchange Act Release No. 68864
(February 7, 2013), 78 FR 10218 (February 13, 2013)
(Order Extending Temporary Exemptions Under the
Securities Exchange Act of 1934 in Connection
With the Revision of the Definition of ‘‘Security’’
to Encompass Security-Based Swaps, and Request
for Comment) (‘‘Temporary Exemptions Extension
Release’’). See also Securities Exchange Act Release
No. 68753 (January 29, 2013), 78 FR 7654 (February
4, 2013) (Extension of Exemptions for SecurityBased Swaps) (extending the expiration dates in
interim final rules that provide exemptions under
the Securities Act of 1933 (the ‘‘Securities Act’’),
the Exchange Act, and the Trust Indenture Act of
1939 for those security-based swaps that prior to
July 16, 2011 were security-based swap agreements
and are defined as ‘‘securities’’ under the Securities
Act and the Exchange Act as of July 16, 2011 due
solely to the provisions of Title VII of the DoddFrank Act).
10 See FINRA Rule 0180 Notice of Filing.
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]]>Agencies
[Federal Register Volume 78, Number 66 (Friday, April 5, 2013)]
[Notices]
[Pages 20706-20708]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-07940]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69259; File No. SR-BOX-2013-17]
Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Rule 12140 (Imposition of Fines for Minor Rule Violations)
March 29, 2013.
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 March 22, 2013, BOX Options Exchange LLC (the ``Exchange'' or
``BOX'') 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 by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule 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 Rule 12140 (Imposition of Fines for
Minor Rule Violations) to correct certain cross references, clarify the
calculation and review periods applicable to certain violations, and
amend the sanction amounts for trade-through violations. The text of
the proposed rule change is available from the principal office of the
Exchange, at the Commission's Public Reference Room and also on the
Exchange's Internet Web site at https://boxexchange.com.
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 these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
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
The Exchange proposes to amend Rule 12140 (Imposition of Fines for
Minor Rule Violations) to correct certain cross references, clarify the
calculation and review periods applicable to certain violations, and
amend the sanction amounts for trade-through violations.
Exchange Rule 12140 provides that in lieu of commencing a
disciplinary proceeding, the Exchange may, subject to the certain
requirements set forth in the Rule, impose a fine, not to exceed
$5,000, on any Options Participant, or person associated with or
employed by an Options Participant, with respect to any Rule violation
listed in Rule 12140(d). Any fine imposed pursuant to this Rule that
(i) does not exceed $2,500 and (ii) is not contested, shall be reported
on a periodic basis, except as may otherwise be required by Rule 19d-1
under the Act or by any other regulatory authority. Further, the Rule
provides that any person against whom a fine is imposed under the Rule
shall be served with a written statement setting forth (i) the Rule(s)
allegedly violated; (ii) the act or omission constituting each such
violation; (iii) the fine imposed for each violation; and (iv) the date
by which such determination becomes final and such fine must be paid or
contested as provided below, which date shall be not less than thirty
(30) calendar days after the date of service of such written statement.
First, the Exchange proposes to amend Rule 12140(b) to change the
date that a determination becomes final and the fine must be paid or
contested from thirty to twenty-five (25) calendar days after the date
of service of the written notice of an alleged violation. This change
is meant to bring the final determination time period in line with the
time period to file an answer under Rule 12050. With this change a
Participant will have twenty-five (25) days to file an answer, after
which the determination will become final and the fine must be paid or
contested.
Next, the Exchange proposes to amend Rule 12140(d)(1) to clarify
that violations of the Positions Limit Rule will be progressive for the
number of cumulative violations within any rolling 24-month period.
The Exchange also proposes to amend Rule 12140(d)(2) to clarify the
time period that may be subject to penalty for late focus reports will
be 1-30 calendar days, 31 to 60 days, 61-90 days and over 90 days.
The Exchange proposes to amend Rule 12140(d)(5), (6), (11), and
(12) to add and correct citations to Rule 8040(a)(7), 8050(e), 8030(e),
and 8050(c)(2)-(4) regarding Market Maker obligations. Additionally
proposed amendments to Rule 12140(d)(6) clarify the review period for
calculating violations of a Market Maker's quoting obligations, and
specify additional sanctions that may apply to Market Maker violations
of their quoting obligations for consecutive business days within the
review period.
The Exchange proposes to add to Rule 12140(d)(8) specific
references to Rules 2020, 2040, and 2050 regarding a firm's obligation
to timely file amendments to Form U-4, Form U-5, and Form BD.
Additionally, the Exchange proposes to specify that a fourth violation,
or any violation thereafter, may result in formal disciplinary action
against a firm.
The Exchange proposes to add to Rule 12140(d)(9) specific
references to the rule provisions related to Contrary Exercise Advice
(Rule 9000(c)-(e), 9000(g), and 9000(h)).
The Exchange proposes to amend Rule 12140(d)(10) to add and correct
citations to Rule 15020 regarding Locked and Crossed Market Violations.
Finally, the Exchange proposes to amend Rule 12140(d)(13) regarding
Trade-Through Violations. The
[[Page 20707]]
Exchange proposes to add and correct citations to Rule 15010 regarding
trade-throughs, and to clarify that for purposes of calculating the
number of violations during a period subject to sanctions, a violation
shall occur when an Options Participant engages in a pattern or
practice of trading through better prices available on other exchanges.
In addition, the Exchange proposes to extend the period of time used in
calculating the number of trade-through violations from a twelve-month
rolling period to a twenty-four month rolling period, and increase the
sanction amounts that an Options Participant will be subject to under
this rule. An initial trade-through violation will now have a sanction
of $500, the second violation will have a sanction of $1,000, the third
violation will have a sanction of $2,500, and any subsequent violations
will be have a sanction of $5,000 or Formal Disciplinary Action. These
changes are based on the rules of the Chicago Board Option Exchange,
Inc. (``CBOE'').\3\.
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\3\ See CBOE Rule 17.50(g)(12).
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2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Securities Exchange Act of 1934
(the ``Act''),\4\ in general, and Section 6(b)(5) of the Act,\5\ in
particular, in that it is designed to promote just and equitable
principles of trade, 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 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 Exchange
believes the proposed change is consistent with Section 6(b) of the
Act, which further requires that the Exchange enforce compliance with,
and provide appropriate discipline for violations of, Commission and
Exchange rules. Finally, the Exchange believes that the proposal is
consistent with the public interest, the protection of investors, or
otherwise in furtherance of the purposes of the Act, because Rule 12140
strengthens the Exchange's ability to carry out its oversight and
enforcement responsibilities as an SRO in cases where full disciplinary
proceedings may be unsuitable in view of the minor nature of the
particular violation.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Because the proposed rule change does not impose any new or
additional burden on BOX Options Participants, and only corrects and
clarifies certain information in Rule 12140 with regard to the Exchange
Minor Rule Violation Plan, the Exchange 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
The Exchange has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
This proposed rule change is filed for immediate effectiveness
pursuant to paragraph (A) of section 19(b)(3) of the Exchange Act \6\
and Rule 19b-4(f)(6) thereunder.\7\ The Exchange asserts that this
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 after the date
of the filing, or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest.
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f)(6).
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Because the proposed rule change does not impose any new or
additional burden on BOX Options Participants, and only corrects and
clarifies certain information in Rule 12140 with regard to the Exchange
Minor Rule Violation Plan, the Exchange believes this rule filing
qualifies as a ``non-controversial'' rule change under Rule 19b-4(f)(6)
of the Act and requests that the Commission make the proposed change
effective and operative upon filing. \8\
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\8\ As required under Rule 19b-4(f)(6)(iii), the Exchange
provided the Commission with written notice of its intent to file
the proposed rule change along with a brief description and the text
of 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.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend the rule
change if it appears to the Commission that the action is necessary or
appropriate in the public interest, for the protection of investors, or
would otherwise further 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-BOX-2013-17 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-BOX-2013-17. 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 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-BOX-
[[Page 20708]]
2013-17 and should be submitted on or before April 26, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-07940 Filed 4-4-13; 8:45 am]
BILLING CODE 8011-01-P
