Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amending Exchange Rules To Clarify Rules 6.1 and 6.32, 47452-47453 [2013-18748]

Download as PDF 47452 Federal Register / Vol. 78, No. 150 / Monday, August 5, 2013 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70060; File No. SR–C2– 2013–027] Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amending Exchange Rules To Clarify Rules 6.1 and 6.32 July 30, 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 July 17, 2013, C2 Options Exchange, Incorporated (the ‘‘Exchange’’ or ‘‘C2’’) 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 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 The Exchange is proposing to change its rules to clarify when it will be open for trading along with when trading halts on underlying securities will inhibit trading on the Exchange. The text of the proposed rule change is available on the Exchange’s Web site (http://www.c2exchange.com/Legal/), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. mstockstill on DSK4VPTVN1PROD with NOTICES II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. VerDate Mar<15>2010 19:07 Aug 02, 2013 Jkt 229001 1. Purpose The Exchange is proposing to change its rules to clarify when it will be open for trading along with when trading halts on underlying securities will inhibit trading on the Exchange. The Exchange is proposing to amend its rules to clarify that it will not be solely dependent upon the ‘‘primary market’’ when determining when to open and/or halt securities. Instead, the Exchange is proposing to clarify in its rules that it will be open if there is ample liquidity in the underlying market for that security. Generally, the national equity exchanges have similar core business hours.3 With this proposal, the Exchange is attempting to clarify in its rules that it can remain open to trade options during such business hours even if the ‘‘primary market’’ of the underlying securities is not open for business. The Exchange believes that the proposed changes will allow the markets [sic] to continue to function in an instance where all exchanges may not be open. In addition, the Exchange believes the proposed changes will bring greater clarity to its Trading Permit Holders (‘‘TPHs’’) regarding when the Exchange will be open for trading. First, the Exchange is proposing to add language to Rule 6.1.01 to specify that the Exchange will not solely rely on the ‘‘primary market’’ of an underlying security to determine whether the Exchange may trade the option for such security. The Exchange believes that the proposed rule change will specify that if there is an ample market in the underlying security, the Exchange has the authority to trade the option even if the primary market is not open. The Exchange believes that allowing such discretion will create a lesser market disruption if the primary exchange is unable to open for trading. Next, Exchange Rule 6.32 specifies when the Exchange may halt trading.4 Specifically, Rule 6.32(a) lists factors that may be considered by the Exchange when making that determination. Currently, Rule 6.32(a)(1) lists, as a factor in the decision with respect to options, ‘‘trading in the underlying security has been halted or suspended in the primary market.’’ The Exchange is proposing to add language to state, 3 See, e.g., New York Stock Exchange Rule 51(a) and Bats Exchange Rule 1.5(w) which describes regular trading hours as 9:30 a.m. through 4:00 p.m. Eastern. 4 See Exchange Rule 6.32. PO 00000 Frm 00182 Fmt 4703 Sfmt 4703 instead of the ‘‘primary market,’’ that the Exchange may factor in if ‘‘trading in the underlying security has been halted or suspended in one or more of the markets trading the underlying security.’’ The Exchange believes the proposed changes will allow the Exchange to trade options for underlying stocks even if that underlying listing market shall be unable to trade due to an emergency or other circumstance unique to that stock exchange. Making these proposed changes will allow the Exchange to trade options when an underlying security is trading on any national securities exchange regardless of where that security is formally listed. The proposed discretion attempts to create a lessor market disruption if a listing or primary market is unable to trade due to some circumstance. Because of the connectivity of the national securities exchanges today, the Exchange believes limiting its ability to trade options to when the primary market of the underlying security is open might hurt investors if some circumstance should render the primary exchange inoperable. In addition, the Exchange believes that the reference to ‘‘primary market’’ is ambiguous and has the potential to cause confusion. Thus, the Exchange believes by further clarifying the language, it is clearer when the Exchange will be open for trading. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ‘‘Act’’) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.5 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 6 requirements that the rules of an exchange be designed to 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. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 7 requirement that the rules of an exchange not be designed 5 15 6 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 7 Id. E:\FR\FM\05AUN1.SGM 05AUN1 Federal Register / Vol. 78, No. 150 / Monday, August 5, 2013 / Notices to permit unfair discrimination between customers, issuers, brokers, or dealers. In particular, the Exchange believes the proposed rule change protects investors by allowing trading in options as long as the underlying security is trading on another exchange. Instead of relying on the ‘‘primary market,’’ the proposed rule change attempts to clarify when options will trade on the Exchange to allow greater continuity in the marketplace. By allowing the Exchange to trade options whenever the underlying securities are trading, the proposed changes seek to create less of a disconnect if the ‘‘primary’’ market should be experiencing technical difficulties, an emergency, or situation that may inhibit it to be connected to the marketplace. B. Self-Regulatory Organization’s Statement on Burden on Competition C2 does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe the proposed rule change imposes any burden on intramarket competition because it is applied to all TPHs. In addition, the Exchange does not believe the proposed rule change will impose any burden on intermarket competition as it will merely give the Exchange discretion to trade options when there is an ample market for the underlying security of those options. Thus, the Exchange believes the proposed rule change will promote competition by giving the Exchange the ability to trade options when the underlying security is trading anywhere, and, thus, helping the Exchange to better participate in the marketplace. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. mstockstill on DSK4VPTVN1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: A. Significantly affect the protection of investors or the public interest; B. impose any significant burden on competition; and C. 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) of the VerDate Mar<15>2010 19:07 Aug 02, 2013 Jkt 229001 Act 8 and Rule 19b–4(f)(6) 9 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will 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. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–C2–2013–027 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–C2–2013–027. 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 (http://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 8 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b–4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange’s intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 9 17 PO 00000 Frm 00183 Fmt 4703 Sfmt 4703 47453 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–C2– 2013–027 and should be submitted on or before August 26, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–18748 Filed 8–2–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70068; File No. SR–FICC– 2013–06] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Order Approving Proposed Rule Change To Extend the Pilot Program for Certain Government Securities Division Rules Relating to the GCF Repo® Service July 30, 2013. On June 5, 2013, the Fixed Income Clearing Corporation (‘‘FICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) proposed rule change SR–FICC–2013–06 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder.2 The proposed rule change was published for comment in the Federal Register on June 21, 2013.3 The Commission received no comments on the proposed rule change. For the reasons discussed below, the Commission is approving the proposed rule change. I. Description of the Proposed Rule Change FICC seeks the Commission’s approval to extend the pilot program that is currently in effect for the GCF 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Securities Exchange Act Release No. 69653 (May 29, 2013), 78 FR 33456 (June 4, 2013) (SR–FICC– 2013–05). 1 15 E:\FR\FM\05AUN1.SGM 05AUN1

Agencies

[Federal Register Volume 78, Number 150 (Monday, August 5, 2013)]
[Notices]
[Pages 47452-47453]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-18748]



[[Page 47452]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70060; File No. SR-C2-2013-027]


Self-Regulatory Organizations; C2 Options Exchange, Incorporated; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating To Amending Exchange Rules To Clarify Rules 6.1 and 6.32

July 30, 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 July 17, 2013, C2 Options Exchange, Incorporated (the 
``Exchange'' or ``C2'') 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 
Exchange. The Commission is publishing this notice to solicit comments 
on the proposed rule change 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 is proposing to change its rules to clarify when it 
will be open for trading along with when trading halts on underlying 
securities will inhibit trading on the Exchange. The text of the 
proposed rule change is available on the Exchange's Web site (http://www.c2exchange.com/Legal/), at the Exchange's Office of the Secretary, 
and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

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

1. Purpose
    The Exchange is proposing to change its rules to clarify when it 
will be open for trading along with when trading halts on underlying 
securities will inhibit trading on the Exchange. The Exchange is 
proposing to amend its rules to clarify that it will not be solely 
dependent upon the ``primary market'' when determining when to open 
and/or halt securities. Instead, the Exchange is proposing to clarify 
in its rules that it will be open if there is ample liquidity in the 
underlying market for that security. Generally, the national equity 
exchanges have similar core business hours.\3\ With this proposal, the 
Exchange is attempting to clarify in its rules that it can remain open 
to trade options during such business hours even if the ``primary 
market'' of the underlying securities is not open for business. The 
Exchange believes that the proposed changes will allow the markets 
[sic] to continue to function in an instance where all exchanges may 
not be open. In addition, the Exchange believes the proposed changes 
will bring greater clarity to its Trading Permit Holders (``TPHs'') 
regarding when the Exchange will be open for trading.
---------------------------------------------------------------------------

    \3\ See, e.g., New York Stock Exchange Rule 51(a) and Bats 
Exchange Rule 1.5(w) which describes regular trading hours as 9:30 
a.m. through 4:00 p.m. Eastern.
---------------------------------------------------------------------------

    First, the Exchange is proposing to add language to Rule 6.1.01 to 
specify that the Exchange will not solely rely on the ``primary 
market'' of an underlying security to determine whether the Exchange 
may trade the option for such security. The Exchange believes that the 
proposed rule change will specify that if there is an ample market in 
the underlying security, the Exchange has the authority to trade the 
option even if the primary market is not open. The Exchange believes 
that allowing such discretion will create a lesser market disruption if 
the primary exchange is unable to open for trading.
    Next, Exchange Rule 6.32 specifies when the Exchange may halt 
trading.\4\ Specifically, Rule 6.32(a) lists factors that may be 
considered by the Exchange when making that determination. Currently, 
Rule 6.32(a)(1) lists, as a factor in the decision with respect to 
options, ``trading in the underlying security has been halted or 
suspended in the primary market.'' The Exchange is proposing to add 
language to state, instead of the ``primary market,'' that the Exchange 
may factor in if ``trading in the underlying security has been halted 
or suspended in one or more of the markets trading the underlying 
security.''
---------------------------------------------------------------------------

    \4\ See Exchange Rule 6.32.
---------------------------------------------------------------------------

    The Exchange believes the proposed changes will allow the Exchange 
to trade options for underlying stocks even if that underlying listing 
market shall be unable to trade due to an emergency or other 
circumstance unique to that stock exchange. Making these proposed 
changes will allow the Exchange to trade options when an underlying 
security is trading on any national securities exchange regardless of 
where that security is formally listed. The proposed discretion 
attempts to create a lessor market disruption if a listing or primary 
market is unable to trade due to some circumstance. Because of the 
connectivity of the national securities exchanges today, the Exchange 
believes limiting its ability to trade options to when the primary 
market of the underlying security is open might hurt investors if some 
circumstance should render the primary exchange inoperable. In 
addition, the Exchange believes that the reference to ``primary 
market'' is ambiguous and has the potential to cause confusion. Thus, 
the Exchange believes by further clarifying the language, it is clearer 
when the Exchange will be open for trading.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\5\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \6\ requirements that the rules of an exchange be 
designed to 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. Additionally, 
the Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \7\ requirement that the rules of an exchange not be 
designed

[[Page 47453]]

to permit unfair discrimination between customers, issuers, brokers, or 
dealers.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ Id.
---------------------------------------------------------------------------

    In particular, the Exchange believes the proposed rule change 
protects investors by allowing trading in options as long as the 
underlying security is trading on another exchange. Instead of relying 
on the ``primary market,'' the proposed rule change attempts to clarify 
when options will trade on the Exchange to allow greater continuity in 
the marketplace. By allowing the Exchange to trade options whenever the 
underlying securities are trading, the proposed changes seek to create 
less of a disconnect if the ``primary'' market should be experiencing 
technical difficulties, an emergency, or situation that may inhibit it 
to be connected to the marketplace.

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

    C2 does not believe that the proposed rule change will impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange does not believe 
the proposed rule change imposes any burden on intramarket competition 
because it is applied to all TPHs. In addition, the Exchange does not 
believe the proposed rule change will impose any burden on intermarket 
competition as it will merely give the Exchange discretion to trade 
options when there is an ample market for the underlying security of 
those options. Thus, the Exchange believes the proposed rule change 
will promote competition by giving the Exchange the ability to trade 
options when the underlying security is trading anywhere, and, thus, 
helping the Exchange to better participate in the marketplace.

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

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

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

    Because the foregoing proposed rule change does not:
    A. Significantly affect the protection of investors or the public 
interest;
    B. impose any significant burden on competition; and
    C. 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) of the Act \8\ and 
Rule 19b-4(f)(6) \9\ thereunder. At any time within 60 days of the 
filing of the proposed rule change, the Commission summarily may 
temporarily suspend such rule change if it appears to the Commission 
that such action is necessary or appropriate in the public interest, 
for the protection of investors, or otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission will institute proceedings to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-C2-2013-027 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-C2-2013-027. 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 (http://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-C2-2013-027 and should be 
submitted on or before August 26, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-18748 Filed 8-2-13; 8:45 am]
BILLING CODE 8011-01-P