Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Notification and Reporting Provisions for Exchange of Contract for Related Position Transactions and Block Trades, 62817-62820 [2013-24567]
Download as PDF
Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
markets. Moreover, other options
exchanges have adopted rules that are
substantially similar to the change in
ADV calculation being proposed by the
Exchange.13
The Exchange also notes that other
exchanges have substantially similar
requirements for aggregating affiliated
Member ADV in determining applicable
tiered rebates. As provided in the initial
filing, the Exchange currently aggregates
affiliated Member ADV in calculating
rebate tiers, and this proposed rule
change merely explains the how affiliate
status is determined for that purpose,
which will have no competitive impact.
Furthermore, the Exchange believes
that the clarifying text being added to
the Schedule of Fees is non-substantive,
and therefore does not impact the
competition analysis.
The Exchange operates in a highly
competitive market in which market
participants can readily direct their
order flow to competing venues. In such
an environment, the Exchange must
continually review, and consider
adjusting, its fees and rebates to remain
competitive with other exchanges. For
the reasons described above, the
Exchange believes that the proposed fee
changes reflect this competitive
environment.
sroberts on DSK5SPTVN1PROD with FRONT MATTER
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any
unsolicited written comments from
members or other interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act,14 and
subparagraph (f)(2) of Rule 19b–4
thereunder,15 because it establishes a
due, fee, or other charge imposed by
Topaz.
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
13 See, e.g., Securities Exchange Act Release Nos.
70472 (Sept. 23, 2013) (PHLX–2013–93); 70470
(Sept. 23, 2013) (NASDAQ–2013–117).
14 15 U.S.C. 78s(b)(3)(A)(ii).
15 17 CFR 240.19b–4(f)(2).
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Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
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 No. SR–
Topaz–2013–08 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 No.
SR–Topaz–2013–08. This file number
should be included on the subject line
if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method.
The Commission will post all
comments on the Commission’s Internet
Web site (https://www.sec.gov/rules/
sro.shtml). Copies of the submission, all
subsequent amendments, all written
statements with respect to the proposed
rule change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
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 No. SR–Topaz–
2013–08, and should be submitted on or
before November 12, 2013.
Frm 00235
Fmt 4703
Sfmt 4703
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–24662 Filed 10–21–13; 8:45 am]
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:
PO 00000
62817
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70611; File No. SR–CFE–
2013–005]
Self-Regulatory Organizations; CBOE
Futures Exchange, LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Relating to
the Notification and Reporting
Provisions for Exchange of Contract
for Related Position Transactions and
Block Trades
October 4, 2013.
Pursuant to Section 19(b)(7) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
September 20, 2013, CBOE Futures
Exchange, LLC (‘‘CFE’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change described in
Items I, II, and III below, which Items
have been prepared by CFE. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons. CFE
also has filed this proposed rule change
with the Commodity Futures Trading
Commission (‘‘CFTC’’). CFE filed a
written certification with the CFTC
under Section 5c(c) of the Commodity
Exchange Act (‘‘CEA’’) 2 on September
20, 2013.
I. Self-Regulatory Organization’s
Description of the Proposed Rule
Change
CFE proposes to revise the
notification and reporting provisions
contained in CFE Rules 414 (Exchange
of Contract for Related Position)
(‘‘ECRP’’) and 415 (Block Trading).
The scope of this filing is limited
solely to the application of the rule
changes to security futures traded on
CFE. The only security futures currently
traded on CFE are traded under Chapter
16 of CFE’s Rulebook which is
applicable to Individual Stock Based
and Exchange-Traded Fund Based
Volatility Index (‘‘Volatility Index’’)
security futures.
The text of the proposed rule change
is attached as Exhibit 4 to the filing
16 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(7).
2 7 U.S.C. 7a–2(c).
1 15
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62818
Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
submitted by the Exchange but is not
attached to the published notice of the
filing.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, CFE
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. CFE has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
• If the transaction is agreed upon between
the time that Trading Hours commence in the
relevant Contract and 3:15 p.m., the
notification to the CFE Help Desk must be
made without delay and by no later than ten
minutes after the transaction is agreed upon
(in which event the CFE Help Desk will
report the transaction to CFE’s trading system
and provide a written transaction summary
on that day); 6
• if the transaction is agreed upon between
3:15 p.m. and 3:25 p.m., the notification to
the CFE Help Desk must be made either
• on the day the transaction is agreed upon
by no later than 3:25 p.m. (in which event
the CFE Help Desk will report the transaction
to CFE’s trading system and provide a written
transaction summary to the Authorized
Reporters on that day) or
• on the following business day by no later
than ten minutes from the time that Trading
Hours commence in the relevant Contract (in
which event the CFE Help Desk will report
the transaction to CFE’s trading system and
provide and provide a written transaction
Notification method
Business day for which contract Leg/Block
Trade submitted for clearing
When Help Desk reports contract Leg/Block
Trade
Phone or E-Mail .........
Business Day of transaction ...........................
As soon as practicable following required notifications to Help Desk.
1. Purpose
CFE Rule 414 sets forth requirements
relating to ECRP transactions, and CFE
Rule 415 sets forth requirements relating
to Block Trades. Each of these types of
transactions occurs off-exchange, and
CFE Rules 414(i) and 415(g) each set
forth notification and reporting
requirements, which are substantially
the same. The current proposal seeks to
amend these provisions. The impetus
for these proposed changes is the
planned expansion of extended trading
hours for CBOE Volatility Index (VIX)
futures, which is planned to occur in
two phases with the first phase to begin
in late September and the second phase
to begin in the weeks that follow.3
Because CFE’s Help Desk will be
staffed during longer periods of time
than previously, the Exchange is
proposing to amend the notification and
reporting provisions contained in CFE
7:00 a.m.–3:15 p.m.
Monday–Friday.
summary to the Authorized Reporters on that
business day); and
• if the transaction is agreed upon after
3:25 p.m. and prior to the time that Trading
Hours commence in the relevant Contract on
the following business day, the notification
to the CFE Help Desk must be made on that
following business day by no later than ten
minutes from the time that Trading Hours
commence in the relevant Contract (in which
event the CFE Help Desk will report the
transaction to CFE’s trading system and
provide a written transaction summary to the
Authorized Reporters on that business day).
The current proposal would extend
the time frames during which ECRP
transactions and Block Trades may be
reported. Also, the notification
provisions would be described in terms
of the time of notification to the
Exchange (instead of when there is
agreement to the transaction).7
Specifically, based upon the time of
notification to the CFE Help Desk of an
ECRP or Block Trade, these Rules would
be amended to include charts that
specify the manner in which the
notification of an ECRP or Block Trade
must be provided to the CFE Help Desk,
the Business Day for which the ECRP
Contract leg or Block Trade will be
submitted for clearing, and when the
Help Desk will report the ECRP Contract
leg or Block Trade to CFE’s trading
system. The CFE Help Desk will provide
a written transaction summary to each
Authorized Reporter on the Business
Day for which the ECRP Contract leg or
Block Trade is submitted for clearing.
The Exchange notes that between 7:00
a.m. and 4:00 p.m. on each business
day, notification may be made by phone
or email. The Exchange proposes to
limit the method of notification to email
only during all other times. The
proposed rule charts 8 would be as
follows:
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Time of notification to
the Exchange
Rules 414 (Exchange of Contract for
Related Position) and 415 (Block
Trades), which apply to all products
traded on the Exchange.
For purposes of efficiency, the
Exchange will describe below the
current notification and reporting
provisions and the proposed changes to
those provisions, which would apply
equally to both CFE Rule 414 and CFE
Rule 415.
The current notification and reporting
provisions require that each party to the
transaction have an Authorized Reporter
call or email the CFE Help Desk after the
transaction is agreed upon to notify CFE
of the terms of the transaction.4 These
provisions are described in terms of
when there is agreement to the
transaction, which triggers the tenminute time period during which the
transaction must be reported to the CFE
Help Desk.5 Unless otherwise specified
in the rules governing the relevant
Contract:
sroberts on DSK5SPTVN1PROD with FRONT MATTER
Next Business Day for Trade at Settlement
(TAS) transactions reported after 3:12 p.m.
3 See CFE Information Circular IC13–029 for
additional information regarding the expansion of
extended trading hours for VIX futures. This rule
filing is intended to address how the notification
and reporting provisions for ECRP transactions and
Block Trades will operate when CFE introduces a
new 45-minute extended trading hours period for
VIX futures. This new trading period of extended
trading hours in VIX futures will be from 3:30 p.m.–
4:15 p.m. on Mondays through Thursdays.
4 For this purpose, agreement to the transaction
includes, without limitation, agreement to the
actual price or premium of the Contract leg of the
ECRP transaction or Block Trade (except in the case
of a trade at settlement (‘‘TAS’’) transaction that is
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21:08 Oct 21, 2013
Jkt 232001
permitted by the rules governing the relevant
Contract, in which case agreement to the
transaction includes, without limitation, agreement
upon whether the price or premium of the Contract
leg of the ECRP transaction or Block Trade will be
the daily settlement price or an agreed upon
differential above or below the daily settlement
price). The Exchange is also taking this opportunity
to make further explicit that agreement to the terms
of an ECRP transaction or Block Trade includes
agreement to the quantity of the Contract leg of an
ECRP transaction or the quantity of the Block Trade.
5 All times included in this filing and in CFE’s
Rules are Chicago time.
PO 00000
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Fmt 4703
Sfmt 4703
6 Additional details regarding the written
transaction summary prepared by the CFE Help
Desk are set forth in CFE Rules 414(k) and 415(i).
7 The Exchange notes that Authorized Reporters
would still be required to notify the CFE Help Desk
without delay and by no later than ten minutes after
the transaction is agreed upon.
8 A separate chart would be set forth in both CFE
Rule 414 and CFE Rule 415 and each chart would
set forth the same reporting and notification
provisions. For purposes of efficiency, the Exchange
is setting forth one chart in the purpose section of
this filing.
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Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
62819
Time of notification to
the Exchange
Notification method
Business day for which contract Leg/Block
Trade submitted for clearing
When Help Desk reports contract Leg/Block
Trade
3:15 p.m. to 3:30 p.m.
Monday–Friday.
Phone or E-Mail .........
As soon as practicable after trading next
commences following required notifications
to Help Desk.
3:30 p.m. to 4:00 p.m.
Monday–Thursday 9.
Phone or E-Mail
3:30 p.m. Friday to
7:00 a.m. Monday.
E-Mail .........................
Calendar day of transaction or next Business
Day, as designated by Authorized Reporters.
Next Business Day for TAS transactions.
Calendar day of transaction or Business Day
of transaction, as designated by Authorized
Reporters.
Business Day of transaction for TAS transactions.
Next Business Day .........................................
4:00 p.m. to 4:15 p.m.
Monday–Thursday.
Phone or E-Mail .........
Business Day of transaction ...........................
4:15 p.m. to 7:00 am
(next calendar day)
Monday–Thursday.
E-Mail .........................
Business Day of transaction ...........................
extending the time frames during which
ECRP transactions and Block Trades
may be reported. The Exchange also
believes that the proposed rule change
is equitable and not unfairly
discriminatory because amended CFE
Rules 414 and 415 would apply to all
TPHs and Authorized Reporters and do
not discriminate between market
participants.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,10 in general, and
furthers the objectives of Section
6(b)(5) 11 in particular in that it is
designed 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.
The Exchange believes that the
proposed rule change would benefit
investors and market participants
because it would enhance CFE’s ECRP
and Block Trade reporting provisions by
sroberts on DSK5SPTVN1PROD with FRONT MATTER
CFE also proposes to amend CFE
Rules 414(i) and 415(g) by providing
that the Exchange may modify the days
and times during which the notification,
reporting, and clearance submission
provisions set forth in the chart above
would be applicable in the event that
the Exchange is not be open for business
or has shortened Trading Hours in
connection with a holiday or a period of
mourning.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
9 As described in footnote 4, the Exchange will be
introducing a new trading period of extended
trading hours in VIX futures that will be from 3:30
p.m.–4:15 p.m. on Mondays through Thursdays.
Authorized Reporters are able between 3:30 p.m.
and 4:00 p.m. to report the Contract leg of an ECRP
transaction or a Block Trade for clearing on either
the calendar day of the transaction or the next
business day. However, after 4:00 p.m., Authorized
Traders will only be able to report trades for
clearing on the next Business Day. The Exchange
is providing this detail as background as to why the
chart does not line up directly with the new trading
period of extended trading hours being introduced
for VIX futures.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
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21:08 Oct 21, 2013
Jkt 232001
CFE 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, in that the rule
change makes enhancements to CFE’s
Block Trade and ECRP reporting
process. In addition, the Exchange
believes that the expansion of the ability
to report Block Trades and ECRP
transactions in security futures in
conjunction with the expansion of
trading hours in VIX futures will
promote competition because it will
provide for the reporting and
dissemination of security futures Block
Trades and ECRPs during additional
time frames which will serve to promote
additional transparency and thus
potential further price competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
PO 00000
As soon as practicable following required notifications to Help Desk.
As soon as practicable after trading next
commences following required notifications
to Help Desk.
As soon as practicable following required notifications to Help Desk (which may occur
either during first period of extended trading hours or after trading next commences).
As soon as practicable after trading next
commences following required notifications
to Help Desk.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The proposed rule change will
become operative on or after October 7,
2013.
At any time within 60 days of the date
of effectiveness of the proposed rule
change, the Commission, after
consultation with the CFTC, may
summarily abrogate the proposed rule
change and require that the proposed
rule change be refiled in accordance
with the provisions of Section 19(b)(1)
of the Act.12
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–
CFE–2013–005 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–CFE–2013–005. This file
number should be included on the
subject line if email is used. To help the
12 15
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E:\FR\FM\22OCN1.SGM
U.S.C. 78s(b)(1).
22OCN1
62820
Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
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–CFE–
2013–005, and should be submitted on
or before November 12, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–24567 Filed 10–21–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70575; File No. SR–
NASDAQ–2013–126]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Extend Fee
Pilot Program for NASDAQ Last Sale
sroberts on DSK5SPTVN1PROD with FRONT MATTER
September 30, 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
September 25, 2013, The NASDAQ
Stock Market LLC (‘‘NASDAQ’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) a proposed rule change
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b-4.
1 15
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21:08 Oct 21, 2013
Jkt 232001
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 the Substance
of the Proposed Rule Change
NASDAQ is proposing to extend for
three months the fee pilot pursuant to
which NASDAQ distributes the
NASDAQ Last Sale (‘‘NLS’’) market data
products. NLS allows data distributors
to have access to real-time market data
for a capped fee, enabling those
distributors to provide free access to the
data to millions of individual investors
via the internet and television.
Specifically, NASDAQ offers the
‘‘NASDAQ Last Sale for NASDAQ’’ and
‘‘NASDAQ Last Sale for NYSE/NYSE
MKT’’ data feeds containing last sale
activity in U.S. equities within the
NASDAQ Market Center and reported to
the FINRA/NASDAQ Trade Reporting
Facility (‘‘FINRA/NASDAQ TRF’’),
which is jointly operated by NASDAQ
and the Financial Industry Regulatory
Authority (‘‘FINRA’’). The purpose of
this proposal is to extend the existing
pilot program for three months, from
October 1, 2013 to December 31, 2013.
This pilot program supports the
aspiration of Regulation NMS to
increase the availability of proprietary
data by allowing market forces to
determine the amount of proprietary
market data information that is made
available to the public and at what
price. During the pilot period, the
program has vastly increased the
availability of NASDAQ proprietary
market data to individual investors.
Based upon data from NLS distributors,
NASDAQ believes that since its launch
in July 2008, the NLS data has been
viewed by millions of investors on Web
sites operated by Google, Interactive
Data, and Dow Jones, among others.
The text of the proposed rule change
is below. Proposed new language is in
italics; proposed deletions are in
brackets.
*
*
*
*
*
7039. NASDAQ Last Sale Data Feeds
(a) For a three month pilot period
commencing on [July] October 1, 2013,
NASDAQ shall offer two proprietary
data feeds containing real-time last sale
information for trades executed on
NASDAQ or reported to the NASDAQ/
FINRA Trade Reporting Facility.
(1)–(2) No change.
(b)–(c) No change.
*
*
*
*
*
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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, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Prior to the launch of NLS, public
investors that wished to view market
data to monitor their portfolios
generally had two choices: (1) pay for
real-time market data or (2) use free data
that is 15 to 20 minutes delayed. To
increase consumer choice, NASDAQ
proposed a pilot to offer access to realtime market data to data distributors for
a capped fee, enabling those distributors
to disseminate the data at no cost to
millions of internet users and television
viewers. NASDAQ now proposes a
three-month extension of that pilot
program, subject to the same fee
structure as is applicable today.
NLS consists of two separate ‘‘Level
1’’ products containing last sale activity
within the NASDAQ market and
reported to the jointly-operated FINRA/
NASDAQ TRF. First, the ‘‘NASDAQ
Last Sale for NASDAQ’’ data product is
a real-time data feed that provides realtime last sale information including
execution price, volume, and time for
executions occurring within the
NASDAQ system as well as those
reported to the FINRA/NASDAQ TRF.
Second, the ‘‘NASDAQ Last Sale for
NYSE/NYSE MKT’’ data product
provides real-time last sale information
including execution price, volume, and
time for NYSE- and NYSE MKTsecurities executions occurring within
the NASDAQ system as well as those
reported to the FINRA/NASDAQ TRF.
By contrast, the securities information
processors (‘‘SIPs’’) that provide ‘‘core’’
data consolidate last sale information
from all exchanges and trade reporting
facilities (‘‘TRFs’’). Thus, NLS replicates
a subset of the information provided by
the SIPs.
NASDAQ established two different
pricing models, one for clients that are
able to maintain username/password
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Agencies
[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62817-62820]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24567]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70611; File No. SR-CFE-2013-005]
Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to the Notification and Reporting Provisions for Exchange of
Contract for Related Position Transactions and Block Trades
October 4, 2013.
Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on September 20, 2013, CBOE
Futures Exchange, LLC (``CFE'' or ``Exchange'') filed with the
Securities and Exchange Commission (``SEC'' or ``Commission'') the
proposed rule change described in Items I, II, and III below, which
Items have been prepared by CFE. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons. CFE also has filed this proposed rule change with the
Commodity Futures Trading Commission (``CFTC''). CFE filed a written
certification with the CFTC under Section 5c(c) of the Commodity
Exchange Act (``CEA'') \2\ on September 20, 2013.
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\1\ 15 U.S.C. 78s(b)(7).
\2\ 7 U.S.C. 7a-2(c).
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I. Self-Regulatory Organization's Description of the Proposed Rule
Change
CFE proposes to revise the notification and reporting provisions
contained in CFE Rules 414 (Exchange of Contract for Related Position)
(``ECRP'') and 415 (Block Trading).
The scope of this filing is limited solely to the application of
the rule changes to security futures traded on CFE. The only security
futures currently traded on CFE are traded under Chapter 16 of CFE's
Rulebook which is applicable to Individual Stock Based and Exchange-
Traded Fund Based Volatility Index (``Volatility Index'') security
futures.
The text of the proposed rule change is attached as Exhibit 4 to
the filing
[[Page 62818]]
submitted by the Exchange but is not attached to the published notice
of the filing.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, CFE 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. CFE 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
CFE Rule 414 sets forth requirements relating to ECRP transactions,
and CFE Rule 415 sets forth requirements relating to Block Trades. Each
of these types of transactions occurs off-exchange, and CFE Rules
414(i) and 415(g) each set forth notification and reporting
requirements, which are substantially the same. The current proposal
seeks to amend these provisions. The impetus for these proposed changes
is the planned expansion of extended trading hours for CBOE Volatility
Index (VIX) futures, which is planned to occur in two phases with the
first phase to begin in late September and the second phase to begin in
the weeks that follow.\3\
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\3\ See CFE Information Circular IC13-029 for additional
information regarding the expansion of extended trading hours for
VIX futures. This rule filing is intended to address how the
notification and reporting provisions for ECRP transactions and
Block Trades will operate when CFE introduces a new 45-minute
extended trading hours period for VIX futures. This new trading
period of extended trading hours in VIX futures will be from 3:30
p.m.-4:15 p.m. on Mondays through Thursdays.
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Because CFE's Help Desk will be staffed during longer periods of
time than previously, the Exchange is proposing to amend the
notification and reporting provisions contained in CFE Rules 414
(Exchange of Contract for Related Position) and 415 (Block Trades),
which apply to all products traded on the Exchange.
For purposes of efficiency, the Exchange will describe below the
current notification and reporting provisions and the proposed changes
to those provisions, which would apply equally to both CFE Rule 414 and
CFE Rule 415.
The current notification and reporting provisions require that each
party to the transaction have an Authorized Reporter call or email the
CFE Help Desk after the transaction is agreed upon to notify CFE of the
terms of the transaction.\4\ These provisions are described in terms of
when there is agreement to the transaction, which triggers the ten-
minute time period during which the transaction must be reported to the
CFE Help Desk.\5\ Unless otherwise specified in the rules governing the
relevant Contract:
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\4\ For this purpose, agreement to the transaction includes,
without limitation, agreement to the actual price or premium of the
Contract leg of the ECRP transaction or Block Trade (except in the
case of a trade at settlement (``TAS'') transaction that is
permitted by the rules governing the relevant Contract, in which
case agreement to the transaction includes, without limitation,
agreement upon whether the price or premium of the Contract leg of
the ECRP transaction or Block Trade will be the daily settlement
price or an agreed upon differential above or below the daily
settlement price). The Exchange is also taking this opportunity to
make further explicit that agreement to the terms of an ECRP
transaction or Block Trade includes agreement to the quantity of the
Contract leg of an ECRP transaction or the quantity of the Block
Trade.
\5\ All times included in this filing and in CFE's Rules are
Chicago time.
If the transaction is agreed upon between the time that
Trading Hours commence in the relevant Contract and 3:15 p.m., the
notification to the CFE Help Desk must be made without delay and by
no later than ten minutes after the transaction is agreed upon (in
which event the CFE Help Desk will report the transaction to CFE's
trading system and provide a written transaction summary on that
day); \6\
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\6\ Additional details regarding the written transaction summary
prepared by the CFE Help Desk are set forth in CFE Rules 414(k) and
415(i).
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if the transaction is agreed upon between 3:15 p.m. and
3:25 p.m., the notification to the CFE Help Desk must be made either
on the day the transaction is agreed upon by no later
than 3:25 p.m. (in which event the CFE Help Desk will report the
transaction to CFE's trading system and provide a written
transaction summary to the Authorized Reporters on that day) or
on the following business day by no later than ten
minutes from the time that Trading Hours commence in the relevant
Contract (in which event the CFE Help Desk will report the
transaction to CFE's trading system and provide and provide a
written transaction summary to the Authorized Reporters on that
business day); and
if the transaction is agreed upon after 3:25 p.m. and
prior to the time that Trading Hours commence in the relevant
Contract on the following business day, the notification to the CFE
Help Desk must be made on that following business day by no later
than ten minutes from the time that Trading Hours commence in the
relevant Contract (in which event the CFE Help Desk will report the
transaction to CFE's trading system and provide a written
transaction summary to the Authorized Reporters on that business
day).
The current proposal would extend the time frames during which ECRP
transactions and Block Trades may be reported. Also, the notification
provisions would be described in terms of the time of notification to
the Exchange (instead of when there is agreement to the
transaction).\7\
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\7\ The Exchange notes that Authorized Reporters would still be
required to notify the CFE Help Desk without delay and by no later
than ten minutes after the transaction is agreed upon.
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Specifically, based upon the time of notification to the CFE Help
Desk of an ECRP or Block Trade, these Rules would be amended to include
charts that specify the manner in which the notification of an ECRP or
Block Trade must be provided to the CFE Help Desk, the Business Day for
which the ECRP Contract leg or Block Trade will be submitted for
clearing, and when the Help Desk will report the ECRP Contract leg or
Block Trade to CFE's trading system. The CFE Help Desk will provide a
written transaction summary to each Authorized Reporter on the Business
Day for which the ECRP Contract leg or Block Trade is submitted for
clearing. The Exchange notes that between 7:00 a.m. and 4:00 p.m. on
each business day, notification may be made by phone or email. The
Exchange proposes to limit the method of notification to email only
during all other times. The proposed rule charts \8\ would be as
follows:
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\8\ A separate chart would be set forth in both CFE Rule 414 and
CFE Rule 415 and each chart would set forth the same reporting and
notification provisions. For purposes of efficiency, the Exchange is
setting forth one chart in the purpose section of this filing.
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Business day for which
Time of notification to the Notification method contract Leg/Block Trade When Help Desk reports
Exchange submitted for clearing contract Leg/Block Trade
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7:00 a.m.-3:15 p.m. Monday-Friday. Phone or E-Mail...... Business Day of As soon as practicable
transaction. following required
notifications to Help
Desk.
Next Business Day for
Trade at Settlement (TAS)
transactions reported
after 3:12 p.m.
[[Page 62819]]
3:15 p.m. to 3:30 p.m. Monday- Phone or E-Mail...... Calendar day of As soon as practicable
Friday. transaction or next after trading next
Business Day, as commences following
designated by Authorized required notifications
Reporters. to Help Desk.
Next Business Day for TAS
transactions..
3:30 p.m. to 4:00 p.m. Monday- Phone or E-Mail Calendar day of As soon as practicable
Thursday \9\. transaction or Business following required
Day of transaction, as notifications to Help
designated by Authorized Desk.
Reporters.
Business Day of
transaction for TAS
transactions.
3:30 p.m. Friday to 7:00 a.m. E-Mail............... Next Business Day......... As soon as practicable
Monday. after trading next
commences following
required notifications
to Help Desk.
4:00 p.m. to 4:15 p.m. Monday- Phone or E-Mail...... Business Day of As soon as practicable
Thursday. transaction. following required
notifications to Help
Desk (which may occur
either during first
period of extended
trading hours or after
trading next commences).
4:15 p.m. to 7:00 am (next E-Mail............... Business Day of As soon as practicable
calendar day) Monday-Thursday. transaction. after trading next
commences following
required notifications
to Help Desk.
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CFE also proposes to amend CFE Rules 414(i) and 415(g) by providing
that the Exchange may modify the days and times during which the
notification, reporting, and clearance submission provisions set forth
in the chart above would be applicable in the event that the Exchange
is not be open for business or has shortened Trading Hours in
connection with a holiday or a period of mourning.
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\9\ As described in footnote 4, the Exchange will be introducing
a new trading period of extended trading hours in VIX futures that
will be from 3:30 p.m.-4:15 p.m. on Mondays through Thursdays.
Authorized Reporters are able between 3:30 p.m. and 4:00 p.m. to
report the Contract leg of an ECRP transaction or a Block Trade for
clearing on either the calendar day of the transaction or the next
business day. However, after 4:00 p.m., Authorized Traders will only
be able to report trades for clearing on the next Business Day. The
Exchange is providing this detail as background as to why the chart
does not line up directly with the new trading period of extended
trading hours being introduced for VIX futures.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\10\ in general, and furthers the
objectives of Section 6(b)(5) \11\ in particular in that it is designed
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.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change would benefit
investors and market participants because it would enhance CFE's ECRP
and Block Trade reporting provisions by extending the time frames
during which ECRP transactions and Block Trades may be reported. The
Exchange also believes that the proposed rule change is equitable and
not unfairly discriminatory because amended CFE Rules 414 and 415 would
apply to all TPHs and Authorized Reporters and do not discriminate
between market participants.
B. Self-Regulatory Organization's Statement on Burden on Competition
CFE 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, in that the rule change makes enhancements to
CFE's Block Trade and ECRP reporting process. In addition, the Exchange
believes that the expansion of the ability to report Block Trades and
ECRP transactions in security futures in conjunction with the expansion
of trading hours in VIX futures will promote competition because it
will provide for the reporting and dissemination of security futures
Block Trades and ECRPs during additional time frames which will serve
to promote additional transparency and thus potential further price
competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change will become operative on or after October
7, 2013.
At any time within 60 days of the date of effectiveness of the
proposed rule change, the Commission, after consultation with the CFTC,
may summarily abrogate the proposed rule change and require that the
proposed rule change be refiled in accordance with the provisions of
Section 19(b)(1) of the Act.\12\
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\12\ 15 U.S.C. 78s(b)(1).
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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-CFE-2013-005 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-CFE-2013-005. This file
number should be included on the subject line if email is used. To help
the
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Commission process and review your comments more efficiently, please
use only one method. The Commission will post all comments on the
Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filing also will be available for inspection
and copying at the principal 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-CFE-2013-005, and should be
submitted on or before November 12, 2013.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24567 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P