Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing of Proposed Rule Change To Provide for the Manner in Which Mini Options Will Trade as a Complex Order Pursuant to BOX Rule 7240, 27263-27265 [2013-11003]
Download as PDF
<![CDATA[
Federal Register / Vol. 78, No. 90 / Thursday, May 9, 2013 / Notices
mstockstill on DSK4VPTVN1PROD with NOTICES
finds that the proposed rule changes are
consistent with the requirements of the
Act and the rules and regulations
thereunder that are applicable to a
national securities exchange.12 In
particular, the Commission finds that
the proposed rule changes are consistent
with Section 6(b)(5) of the Act,13 which
requires, among other things, that the
rules of a national securities exchange
be designed to prevent fraudulent and
manipulative acts and practices, 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 of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest; and not be designed to
permit unfair discrimination between
customers, issuers, brokers or dealers.
The Commission finds that the
proposed ‘‘substantially all’’ standard is
a limited and sufficiently-defined
modification to the Programs’ current
RMO attestation requirements that does
not constitute a significant departure
from the Programs as initially approved
by the Commission.14 The proposals
make clear that to comply with the
standard, RMOs may submit only
isolated and de minimis amounts of
agency orders that cannot be segregated
from Retail Orders due to systems
limitations.15 Furthermore, as the
Exchanges note, RMOs will need to
adequately document their compliance
with the ‘‘substantially all’’ standard in
their books and records. Specifically, an
RMO would need to retain adequate
documentation that substantially all
orders sent to the Exchanges as Retail
Orders met that definition, and that
those orders not meeting that definition
are agency orders that cannot be
segregated from Retail Orders due to
system limitations, and are de minimis
in terms of the overall number of Retail
12 In approving the proposals, the Commission
has considered the proposed rules’ impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
13 15 U.S.C. 78f(b)(5).
14 The Commission notes that it approved the
Programs on a pilot basis subject to ongoing
Commission review.
15 While the Commission recognizes the potential
benefit of the commenter’s suggestion concerning a
bright-line definition of de minimis, see supra note
11, the Commission believes that, in light of the
facts surrounding the instant proposals, the
proposals, and the guidance that the Exchanges will
provide to their members on this point, are
sufficiently clear. The Commission also notes that
the example the commenter cites is found in
Regulation M, which governs different
circumstances than those at issue here.
VerDate Mar<15>2010
17:18 May 08, 2013
Jkt 229001
27263
Orders sent to the Exchanges. The
Commission also notes that FINRA will
monitor an RMO’s compliance with this
requirement.
Additionally, the Commission finds
that the Exchanges have provided
adequate justification for the proposals.
The Exchanges represented that, as
several significant retail brokers
explained to them, the current ‘‘any
order’’ standard is effectively
prohibitive, given the brokers’ order
flow aggregation and management
systems. The Exchanges further
represented that these retail brokers
indicated their systems would allow
them to comply with the ‘‘substantially
all’’ standard, as proposed. By allowing
these retail brokers to participate in the
Programs, the proposals could bring the
potential benefits of the Programs,
including price improvement and
increased transparency,16 to the retail
order flow that these brokers
represent.17
SECURITIES AND EXCHANGE
COMMISSION
V. Conclusion
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to amend
BOX Rule 7240 (Complex Orders). 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.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,18 that the
proposed rules changes (SR–NYSE–
2013–08; SR–NYSEMKT–2013–07) be,
and hereby are, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–11004 Filed 5–8–13; 8:45 am]
BILLING CODE 8011–01–P
16 For a more detailed discussion of the Program’s
potential benefits, see RLP Approval Order, supra
note 7.
17 The commenter also expressed concern that
this proposal may increase the burden upon the
Exchanges in monitoring compliance with the
Programs. The Commission finds that any potential
concerns raised by this assertion, which are
disputed by the Exchanges, are outweighed by the
potential benefits of the proposals; namely, that the
proposals may allow more retail orders the
opportunity to participate in the Programs and
receive the attendant benefits of the Programs. With
respect to the commenter’s concern that members
may be subject to unfair discrimination in the
approval and disqualification process for
participation in the Programs, the Commission
notes that it previously found that the Programs’
provisions concerning the certification, approval,
and potential disqualification of RMOs and Retail
Liquidity Providers are not inconsistent with the
Act. See RLP Approval Order, supra note 7.
18 15 U.S.C. 78s(b)(2).
19 17 CFR 200.30–3(a)(12); 17 CFR 200.30–
3(a)(83).
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
[Release No. 34–69512; File No. SR–BOX–
2013–23]
Self-Regulatory Organizations; BOX
Options Exchange LLC; Notice of
Filing of Proposed Rule Change To
Provide for the Manner in Which Mini
Options Will Trade as a Complex Order
Pursuant to BOX Rule 7240
May 3, 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 May 2,
2013, BOX Options Exchange LLC (the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘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 from
interested persons.
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 purpose of the proposed rule
change is to provide for the manner in
which Mini Options will trade as a
Complex Order pursuant to BOX Rule
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
E:\FR\FM\09MYN1.SGM
09MYN1
27264
Federal Register / Vol. 78, No. 90 / Thursday, May 9, 2013 / Notices
7240. The Exchange previously filed to
list and trade Mini Options.3 Whereas
standard options contracts represent a
deliverable of 100 shares of an
underlying security, Mini Options
contracts represent a deliverable of 10
shares. Except for the difference in the
number of deliverable shares, Mini
Options have the same terms and
contract characteristics as regular-sized
equity and ETF options, including
exercise style. Accordingly, the
Exchange noted in its Mini Options
filing that Exchange rules that apply to
the trading of standard options contracts
would apply to Mini Option contracts as
well.4
Prior to the launch of its new
Complex Order Book,5 the Exchange
proposes to amend Rule 7240 (Complex
Orders) to provide that while
Participants may execute complex
orders involving Mini Options, if any
leg of a complex order is a Mini Option
contract, all options legs of such orders
must also be Mini Option contracts.
2. Statutory Basis
mstockstill on DSK4VPTVN1PROD with NOTICES
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),6 in general, and Section 6(b)(5)
of the Act,7 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities, 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.
Specifically, the Exchange believes
that investors and other market
participants would benefit from the
current rule proposal because it
provides that market participants may
take advantage of legitimate investment
strategies and execute complex orders
involving Mini Options. Additionally,
the Exchange believes the proposed rule
change will avoid investor confusion by
providing how Mini Options will trade
3 See Securities Exchange Act Release No. 68771
(January 30, 2013), 78 FR 8208 (February 5, 2013)
(Notice of Filing and Immediate Effectiveness of
SR–BOX–2013–07). The Exchange began trading
Mini Options on March 18, 2013.
4 Id.
5 See Securities Exchange Act Release No. 69419
(April 19, 2013), 78 FR 24449 (April 25, 2013)
(Approving SR–BOX–2013–01). The Exchange
expects to launch its new Complex Order Book on
May 3, 2013.
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
VerDate Mar<15>2010
17:18 May 08, 2013
Jkt 229001
as compared to standard options with
respect to Complex Orders.
The Exchange’s proposal to permit
Mini Options to trade as Complex
Orders provided the strategy does not
combine Mini Options and standard
options serves to maintain the
permissible ratios that are applicable to
Complex Orders by separating the
trading of standard Complex Orders and
Mini Options Complex Orders.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
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. All
Participants may transact Complex
Orders on BOX. The rule change does
not permit unfair discrimination and
does not impose a burden on
Participants with respect to trading Mini
Options.
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
Because the foregoing proposed rule
change does not:
(i) Significantly affect the protection
of investors or the public interest;
(ii) impose any significant burden on
competition; and
(iii) become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate, it has become effective
pursuant to Section 19(b)(3)(A) 8 of the
Act and Rule 19b–4(f)(6) 9 thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) of the Act 10 normally
does not become operative prior to 30
days after the date of the filing.
However, pursuant to Rule 19b–
4(f)(6)(iii) of the Act,11 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has requested the Commission
8 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of the filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
10 17 CFR 240.19b–4(f)(6).
11 17 CFR 240.19b–4(f)(6)(iii).
to waive the 30-day operative delay so
that the proposal may become operative
immediately upon filing. In January
2013, the Exchange filed a proposed
rule change to amend its rules to list
and trade certain mini-options contracts
on the Exchange, and represented in
that filing that the Exchange’s rules that
apply to the trading of standard options
contracts would apply to mini-options
contracts.12 The Exchange has
represented that it intends to launch its
new complex order book, on which
mini-options contracts may trade as
components of complex orders, on May
3, 2013. The Exchange believes that
waiver of the 30-day operative delay is
consistent with the protection of
investors and the public interest
because such waiver would minimize
confusion among market participants
about how complex orders involving
mini-options contracts will trade.13
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest. Such
waiver would allow the Exchange to
implement the proposed rule change
prior to the launch of its new complex
order book on May 3, 2013, thereby
mitigating potential investor confusion
as to how complex orders involving
mini-options contracts will trade. For
this reason, the Commission hereby
waives the 30-day operative delay and
designates the proposed rule change to
be operative upon filing with the
Commission.14
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change 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.
9 17
PO 00000
Frm 00087
Fmt 4703
Sfmt 4703
12 See Securities Exchange Act Release No. 68771
(January 30, 2013), 78 FR 8208 (February 5, 2013)
(SR–BOX–2013–07).
13 See SR–BOX–2013–23, Item 7.
14 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
E:\FR\FM\09MYN1.SGM
09MYN1
Federal Register / Vol. 78, No. 90 / Thursday, May 9, 2013 / Notices
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–2013–23 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.
mstockstill on DSK4VPTVN1PROD with NOTICES
All submissions should refer to File
Number SR–BOX–2013–23. 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 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 offices 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–
2013–23, and should be submitted on or
before May 30, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Kevin M. O’Neill,
Deputy Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69505; File No. SR–EDGA–
2013–12]
Self-Regulatory Organizations; EDGA
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to Amendments
to the EDGA Exchange, Inc. Fee
Schedule
May 3, 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 May 1,
2013, EDGA Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGA’’) 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 change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
fees and rebates applicable to Members 3
of the Exchange pursuant to EDGA Rule
15.1(a) and (c). All of the changes
described herein are applicable to EDGA
Members. The text of the proposed rule
change is available on the Exchange’s
Internet Web site at
www.directedge.com, at the Exchange’s
principal office, and at the Public
Reference Room of 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 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.
[FR Doc. 2013–11003 Filed 5–8–13; 8:45 am]
BILLING CODE 8011–01–P
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 As defined in Exchange Rule 1.5(n).
2 17
15 17
CFR 200.30–3(a)(12).
VerDate Mar<15>2010
17:18 May 08, 2013
Jkt 229001
PO 00000
Frm 00088
Fmt 4703
Sfmt 4703
27265
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
In securities priced at or above $1.00,
the Exchange currently provides a
rebate of $0.0002 per share for Members’
orders that yield Flag BY, which routes
to BATS BYX (‘‘BYX’’) and removes
liquidity using routing strategies ROUC,
ROUE, ROBY, ROBB or ROCO.4 The
Exchange proposes to amend its fee
schedule to increase the rebate it
provides Members from $0.0002 per
share to $0.0005 per share for Flag BY.
The proposed change represents a pass
through of the rate that Direct Edge ECN
LLC (d/b/a DE Route) (‘‘DE Route’’), the
Exchange’s affiliated routing brokerdealer, is rebated for adding an average
volume of 50,000 shares per day on
BYX.5 DE Route passes through the
rebate to the Exchange and the
Exchange, in turn, passes through the
rebate to its Members. The Exchange
notes that the proposed change is in
response to BYX’s April 2013 fee filing
with the Commission, wherein BYX
increased the rate it rebates its
customers, such as DE Route, from
$0.0002 per share to a rebate of $0.0005
per share for orders that are routed to
BYX and add a daily volume of at least
50,000 shares and remove liquidity.6
In securities priced at $1.00 or above,
the Exchange currently assesses a charge
of $0.0005 per share for Members’
orders that yield Flag RY, which routes
to BYX and adds liquidity. The
Exchange proposes to amend its fee
schedule to increase the rate it charges
Members from $0.0005 per share to
$0.0007 per share for Flag RY. The
proposed change represents a pass
through of the rate that DE Route is
charged for routing orders to BYX that
do not qualify for additional volume
tiered discounts.7 DE Route passes
through the charge to the Exchange and
the Exchange, in turn, passes through
the charge to its Members. The
Exchange notes that the proposed
change is in response to BYX’s April
2013 fee filing with the Commission,
4 As
defined in Exchange Rule 11.9(b)(2).
Exchange notes that to the extent DE Route
does or does not achieve any volume tiered rebate
on BYX, its rate for Flag BY will not change.
6 See Securities Exchange Act Release No. 69317
(April 5, 2013), 78 FR 21651 (April 11, 2013) (SR–
BYX–2013–012) (amending the rebate BYX
provides for removing liquidity from the BYX order
book for executions by members that add a daily
average volume of at least 50,000 shares from
$0.0002 per share to $0.0005 per share).
7 The Exchange notes that to the extent DE Route
does or does not achieve any volume tiered rebate
on BYX, its rate for Flag RY will not change.
5 The
E:\FR\FM\09MYN1.SGM
09MYN1
]]>Agencies
[Federal Register Volume 78, Number 90 (Thursday, May 9, 2013)]
[Notices]
[Pages 27263-27265]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-11003]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69512; File No. SR-BOX-2013-23]
Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing of Proposed Rule Change To Provide for the Manner in Which
Mini Options Will Trade as a Complex Order Pursuant to BOX Rule 7240
May 3, 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 May 2, 2013, BOX Options Exchange LLC (the ``Exchange'') filed with
the Securities and Exchange Commission (``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 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 the
Substance of the Proposed Rule Change
The Exchange proposes to amend BOX Rule 7240 (Complex Orders). 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 purpose of the proposed rule change is to provide for the
manner in which Mini Options will trade as a Complex Order pursuant to
BOX Rule
[[Page 27264]]
7240. The Exchange previously filed to list and trade Mini Options.\3\
Whereas standard options contracts represent a deliverable of 100
shares of an underlying security, Mini Options contracts represent a
deliverable of 10 shares. Except for the difference in the number of
deliverable shares, Mini Options have the same terms and contract
characteristics as regular-sized equity and ETF options, including
exercise style. Accordingly, the Exchange noted in its Mini Options
filing that Exchange rules that apply to the trading of standard
options contracts would apply to Mini Option contracts as well.\4\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 68771 (January 30,
2013), 78 FR 8208 (February 5, 2013) (Notice of Filing and Immediate
Effectiveness of SR-BOX-2013-07). The Exchange began trading Mini
Options on March 18, 2013.
\4\ Id.
---------------------------------------------------------------------------
Prior to the launch of its new Complex Order Book,\5\ the Exchange
proposes to amend Rule 7240 (Complex Orders) to provide that while
Participants may execute complex orders involving Mini Options, if any
leg of a complex order is a Mini Option contract, all options legs of
such orders must also be Mini Option contracts.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 69419 (April 19,
2013), 78 FR 24449 (April 25, 2013) (Approving SR-BOX-2013-01). The
Exchange expects to launch its new Complex Order Book on May 3,
2013.
---------------------------------------------------------------------------
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''),\6\ in general, and Section 6(b)(5) of the Act,\7\ in
particular, in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, 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.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
Specifically, the Exchange believes that investors and other market
participants would benefit from the current rule proposal because it
provides that market participants may take advantage of legitimate
investment strategies and execute complex orders involving Mini
Options. Additionally, the Exchange believes the proposed rule change
will avoid investor confusion by providing how Mini Options will trade
as compared to standard options with respect to Complex Orders.
The Exchange's proposal to permit Mini Options to trade as Complex
Orders provided the strategy does not combine Mini Options and standard
options serves to maintain the permissible ratios that are applicable
to Complex Orders by separating the trading of standard Complex Orders
and Mini Options Complex Orders.
B. Self-Regulatory Organization's Statement on Burden on Competition
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. All Participants may transact
Complex Orders on BOX. The rule change does not permit unfair
discrimination and does not impose a burden on Participants with
respect to trading Mini Options.
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
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public
interest;
(ii) impose any significant burden on competition; and
(iii) become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) \8\ of the Act and
Rule 19b-4(f)(6) \9\ thereunder.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of the filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Exchange has satisfied this requirement.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) of the Act \10\
normally does not become operative prior to 30 days after the date of
the filing. However, pursuant to Rule 19b-4(f)(6)(iii) of the Act,\11\
the Commission may designate a shorter time if such action is
consistent with the protection of investors and the public interest.
The Exchange has requested the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. In January 2013, the Exchange filed a proposed rule change to
amend its rules to list and trade certain mini-options contracts on the
Exchange, and represented in that filing that the Exchange's rules that
apply to the trading of standard options contracts would apply to mini-
options contracts.\12\ The Exchange has represented that it intends to
launch its new complex order book, on which mini-options contracts may
trade as components of complex orders, on May 3, 2013. The Exchange
believes that waiver of the 30-day operative delay is consistent with
the protection of investors and the public interest because such waiver
would minimize confusion among market participants about how complex
orders involving mini-options contracts will trade.\13\
---------------------------------------------------------------------------
\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ See Securities Exchange Act Release No. 68771 (January 30,
2013), 78 FR 8208 (February 5, 2013) (SR-BOX-2013-07).
\13\ See SR-BOX-2013-23, Item 7.
---------------------------------------------------------------------------
The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
Such waiver would allow the Exchange to implement the proposed rule
change prior to the launch of its new complex order book on May 3,
2013, thereby mitigating potential investor confusion as to how complex
orders involving mini-options contracts will trade. For this reason,
the Commission hereby waives the 30-day operative delay and designates
the proposed rule change to be operative upon filing with the
Commission.\14\
---------------------------------------------------------------------------
\14\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change 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.
[[Page 27265]]
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-2013-23 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-2013-23. 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 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 offices 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-2013-23, and should be submitted on or before May
30, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-11003 Filed 5-8-13; 8:45 am]
BILLING CODE 8011-01-P
