Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change To Amend Rule 6.42, 62887-62889 [2013-24630]

Download as PDF Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices 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 The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 12 and paragraph (f) of Rule 19b–4 13 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: sroberts on DSK5SPTVN1PROD with FRONT MATTER 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– C2–2013–036 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–C2–2013–036. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–C2– 2013–036 and should be submitted on or before November 12, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–24544 Filed 10–21–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70618; File No. SR–CBOE– 2013–093] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change To Amend Rule 6.42 October 7, 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 September 27, 2013, Chicago Board Options Exchange, Incorporated (the ‘‘Exchange’’ or ‘‘CBOE’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 14 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 12 15 U.S.C. 78s(b)(3)(A). 13 17 CFR 240.19b–4(f). VerDate Mar<15>2010 21:08 Oct 21, 2013 1 15 Jkt 232001 PO 00000 Frm 00305 Fmt 4703 Sfmt 4703 62887 I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to amend Rule 6.42. The text of the proposed rule change is available on the Exchange’s Web site (https://www.cboe.com/ AboutCBOE/ CBOELegalRegulatoryHome.aspx), 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 Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its Rule 6.42—Minimum Increments for Bids and The Exchange proposes to amend its Rule 6.42—Minimum Increments for Bids and Offers— regarding minimum increments of bids and offers for complex orders. Currently, Rule 6.42(4) states that bids and offers on complex orders may be expressed in any increment regardless of the minimum increments otherwise appropriate to the individual legs of the order. This language allows for complex order bids and offers to be expressed in any increment whatsoever. The Exchange believes that setting a minimum increment for bids and offers on complex orders of $0.01 will ensure that there is a lowest minimum increment for bids and offers that makes it simple to monitor and participate for all market participants (for example, many of the web-based services that public customers use to enter options orders do not permit the entry of orders in sub-penny increments, while other types of market participants may not face that limitation). Further, this $0.01 minimum increment will put the electronic and manual entry of complex orders on even footing (as the Exchange’s Complex Order Book (‘‘COB’’) and Complex Order Auction E:\FR\FM\22OCN1.SGM 22OCN1 sroberts on DSK5SPTVN1PROD with FRONT MATTER 62888 Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices (‘‘COA’’) (both being electronic complex order execution systems) are not configured to permit quoting in subpenny increments.3) Further, setting a minimum increment for bids and offers at $0.01 ensures that price improvement occurs at a meaningful increment. Without this minimum, it would be possible for a market participant to jump ahead of another market participant’s quoted price by a de minimis amount, and the knowledge that this could occur could discourage competitive quoting. As such, in order to limit the potential to express orders in any increment, the Exchange hereby proposes to state that bids and offers on complex orders, as defined in Interpretation and Policy .01 below, may be expressed in any net price increment (that may not be less than $0.01) that may be determined by the Exchange on a class-by-class basis and announced to the Trading Permit Holders (‘‘TPHs’’) via Regulatory Circular, regardless of the minimum increments otherwise appropriate to the individual legs of the order. The Exchange proposes adding the parenthetical language which allows the Exchange to set minimum increments for bids and offers on complex orders on a class-by-class basis and announce such minimum increments to TPHs via Regulatory Circular in order to ensure uniformity of minimum bid and offer increments within a class (as the Exchange may already do for bids and offers on complex orders in options on the S&P 500 Index (‘‘SPX’’), p.m.-settled S&P 500 Index (‘‘SPXPM’’) or on the S&P 100 Index (‘‘OEX’’ and ‘‘XEO’’)). The proposed parenthetical language would allow the Exchange to set and vary minimum increments for bids and offers on complex orders for different classes in response to different market conditions in those classes and in order to encourage more trading in such classes.4 This language will also ensure that TPHs are notified of such minimum increments via Regulatory Circular. For example, the Exchange could release a Regulatory Circular stating that the minimum increments for complex order bids and offers within a certain class would be $0.01, or $0.05. This proposed change will ensure that there is a lowest minimum increment for bids and offers on complex orders that makes it simple to monitor and participate for all market participants and places market participants entering orders manually and electronically on 3 See CBOE Rules 6.53C(c)(ii) and 6.53C(d)(iii)(1). Exchange would not make changes to minimum increments for bids and offers on complex orders on an intra-day basis. 4 The VerDate Mar<15>2010 21:08 Oct 21, 2013 Jkt 232001 an equal footing. This is simpler and more restrictive than the current rule, which permits the expression of bids and offers on complex orders in any increment (though only complex orders entered manually can be in sub-penny increments), which would allow more sophisticated market participants entering orders electronically [sic] 5 to express bids and offers in complex orders in infinitesimally small amounts. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.6 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 7 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) 8 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange believes that setting a minimum increment for bids and offers on complex orders of $0.01 will ensure that there is a lowest minimum increment for bids and offers in complex orders that makes it simple to monitor and participate for all market participants, thereby removing impediments to and perfecting the mechanism of a free and open market. Some market participants, such as public customers, may not have 5 The Commission notes that the word ‘‘electronically’’ here is a typographical error. In an email from CBOE to Commission staff on October 2, 2013, CBOE made clear that it meant ‘‘manually’’ where it presently says ‘‘electronically.’’ Accordingly, the sentence should read: ‘‘This is simpler and more restrictive than the current rule, which permits the expression of bids and offers on complex orders in any increment (though only complex orders entered manually can be in subpenny increments), which would allow more sophisticated market participants entering orders manually to express bids and offers in complex orders in infinitesimally small amounts.’’ (emphasis added). 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). 8 Id. PO 00000 Frm 00306 Fmt 4703 Sfmt 4703 sophisticated enough order entry systems to quote in sub-penny increments, and this would ensure that they are placed on the same competitive footing as those that can do so. Further, the proposed change would place market participants bidding and offering electronically and manually on the same competitive footing, as well, since COB and COA both are not configured to permit quoting in sub-penny increments.9 Moreover, setting a minimum increment for bids and offers at $0.01 ensures that price improvement occurs at a meaningful increment. Without this minimum, it would be possible for a market participant to jump ahead of another market participant’s quoted price by a de minimis amount, and the knowledge that this could occur could discourage competitive quoting (which would be an impediment to a free and open market). The proposed minimum increment would apply to all CBOE market participants. B. Self-Regulatory Organization’s Statement on Burden on Competition BOE 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 believes that the proposed change will not impose an unnecessary burden on intramarket competition because it applies to minimum increments for bids and offers on complex orders from all market participants. The Exchange believes that the proposed change will not impose an unnecessary burden on intermarket competition because it applies only to CBOE. To the extent that setting the lowest possible minimum increment for bids and offers in complex orders at $0.01 (and the other changes proposed herein) may be attractive to market participants at other options exchange, such market participants are always welcome to become CBOE market participants. 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 Within 45 days of the date of publication of this notice in the Federal 9 See E:\FR\FM\22OCN1.SGM CBOE Rules 6.53C(c)(ii) and 6.53C(d)(iii)(1). 22OCN1 Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents, the Commission will: A. by order approve or disapprove such proposed rule change, or B. institute proceedings to determine whether the proposed rule change should be 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: sroberts on DSK5SPTVN1PROD with FRONT MATTER 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– CBOE–2013–093 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–CBOE–2013–093. 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 20549–1090, 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 office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from VerDate Mar<15>2010 21:08 Oct 21, 2013 Jkt 232001 submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CBOE– 2013–093, and should be submitted on or before November 12, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–24630 Filed 10–21–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70628; File No. SR–NYSE– 2013–68] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Amending Section 907.00 of the Listed Company Manual To Expand the Suite of Complimentary Products and Services That Are Offered to Certain Current and Newly Listed Companies October 8, 2013. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on October 1, 2013, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Section 907.00 of the Listed Company Manual to expand the suite of complimentary products and services that are offered to certain current and newly listed companies. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00307 Fmt 4703 Sfmt 4703 62889 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 The Exchange proposed to amend Section 907.00 of the Manual to expand the suite of complimentary products and services that it offers to certain listed companies. All listed issuers receive some complimentary products and services through NYSE Market Access Center. Presently, the Exchange offers products and services in the following general categories to certain current and newly listed companies: Market surveillance, web-hosting, market analytics and news distribution. The available products and services have approximate commercial values ranging from $10,000 to $45,000 annually 4 and are offered to companies under a tiered system based on shares outstanding or global market value, as the case may be. With respect to currently listed companies, the Exchange offers complimentary products and services based on the number of shares such company has issued and outstanding. Companies that have more than 270 million shares issued and outstanding (each a ‘‘Tier One Company’’) are offered (i) a choice of market surveillance or market analytics products and services, and (ii) webhosting products and services on a complimentary basis. Companies that have between 160 million and 269.9 million shares issued and outstanding (each a ‘‘Tier Two Company’’) are offered a choice of market analytics or web-hosting products and services. 4 The market surveillance products and services have a commercial value of approximately $45,000 annually, web-hosting products and services have a commercial value of approximately $12,000– $16,000 annually, market analytics products and services have a commercial value of approximately $20,000 annually and news distribution products and services have a commercial value of approximately $10,000 annually. E:\FR\FM\22OCN1.SGM 22OCN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62887-62889]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24630]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70618; File No. SR-CBOE-2013-093]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of a Proposed Rule Change To Amend Rule
6.42

October 7, 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 September 27, 2013, Chicago Board Options Exchange,
Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities
and Exchange Commission (the ``Commission'') the proposed rule change
as described in Items I, II, and III below, which Items have been
prepared by the Exchange. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

\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 Rule 6.42. The text of the proposed
rule change is available on the Exchange's Web site (https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), 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
Statutory Basis for, the Proposed Rule Change

1. Purpose
The Exchange proposes to amend its Rule 6.42--Minimum Increments
for Bids and The Exchange proposes to amend its Rule 6.42--Minimum
Increments for Bids and Offers--regarding minimum increments of bids
and offers for complex orders. Currently, Rule 6.42(4) states that bids
and offers on complex orders may be expressed in any increment
regardless of the minimum increments otherwise appropriate to the
individual legs of the order. This language allows for complex order
bids and offers to be expressed in any increment whatsoever. The
Exchange believes that setting a minimum increment for bids and offers
on complex orders of $0.01 will ensure that there is a lowest minimum
increment for bids and offers that makes it simple to monitor and
participate for all market participants (for example, many of the web-
based services that public customers use to enter options orders do not
permit the entry of orders in sub-penny increments, while other types
of market participants may not face that limitation). Further, this
$0.01 minimum increment will put the electronic and manual entry of
complex orders on even footing (as the Exchange's Complex Order Book
(``COB'') and Complex Order Auction

[[Page 62888]]

(``COA'') (both being electronic complex order execution systems) are
not configured to permit quoting in sub-penny increments.\3\) Further,
setting a minimum increment for bids and offers at $0.01 ensures that
price improvement occurs at a meaningful increment. Without this
minimum, it would be possible for a market participant to jump ahead of
another market participant's quoted price by a de minimis amount, and
the knowledge that this could occur could discourage competitive
quoting.
---------------------------------------------------------------------------

\3\ See CBOE Rules 6.53C(c)(ii) and 6.53C(d)(iii)(1).
---------------------------------------------------------------------------

As such, in order to limit the potential to express orders in any
increment, the Exchange hereby proposes to state that bids and offers
on complex orders, as defined in Interpretation and Policy .01 below,
may be expressed in any net price increment (that may not be less than
$0.01) that may be determined by the Exchange on a class-by-class basis
and announced to the Trading Permit Holders (``TPHs'') via Regulatory
Circular, regardless of the minimum increments otherwise appropriate to
the individual legs of the order.
The Exchange proposes adding the parenthetical language which
allows the Exchange to set minimum increments for bids and offers on
complex orders on a class-by-class basis and announce such minimum
increments to TPHs via Regulatory Circular in order to ensure
uniformity of minimum bid and offer increments within a class (as the
Exchange may already do for bids and offers on complex orders in
options on the S&P 500 Index (``SPX''), p.m.-settled S&P 500 Index
(``SPXPM'') or on the S&P 100 Index (``OEX'' and ``XEO'')). The
proposed parenthetical language would allow the Exchange to set and
vary minimum increments for bids and offers on complex orders for
different classes in response to different market conditions in those
classes and in order to encourage more trading in such classes.\4\ This
language will also ensure that TPHs are notified of such minimum
increments via Regulatory Circular. For example, the Exchange could
release a Regulatory Circular stating that the minimum increments for
complex order bids and offers within a certain class would be $0.01, or
$0.05.
---------------------------------------------------------------------------

\4\ The Exchange would not make changes to minimum increments
for bids and offers on complex orders on an intra-day basis.
---------------------------------------------------------------------------

This proposed change will ensure that there is a lowest minimum
increment for bids and offers on complex orders that makes it simple to
monitor and participate for all market participants and places market
participants entering orders manually and electronically on an equal
footing. This is simpler and more restrictive than the current rule,
which permits the expression of bids and offers on complex orders in
any increment (though only complex orders entered manually can be in
sub-penny increments), which would allow more sophisticated market
participants entering orders electronically [sic] \5\ to express bids
and offers in complex orders in infinitesimally small amounts.
---------------------------------------------------------------------------

\5\ The Commission notes that the word ``electronically'' here
is a typographical error. In an email from CBOE to Commission staff
on October 2, 2013, CBOE made clear that it meant ``manually'' where
it presently says ``electronically.'' Accordingly, the sentence
should read: ``This is simpler and more restrictive than the current
rule, which permits the expression of bids and offers on complex
orders in any increment (though only complex orders entered manually
can be in sub-penny increments), which would allow more
sophisticated market participants entering orders manually to
express bids and offers in complex orders in infinitesimally small
amounts.'' (emphasis added).
---------------------------------------------------------------------------

2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\6\ Specifically, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \7\ 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) \8\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. The Exchange believes that
setting a minimum increment for bids and offers on complex orders of
$0.01 will ensure that there is a lowest minimum increment for bids and
offers in complex orders that makes it simple to monitor and
participate for all market participants, thereby removing impediments
to and perfecting the mechanism of a free and open market. Some market
participants, such as public customers, may not have sophisticated
enough order entry systems to quote in sub-penny increments, and this
would ensure that they are placed on the same competitive footing as
those that can do so. Further, the proposed change would place market
participants bidding and offering electronically and manually on the
same competitive footing, as well, since COB and COA both are not
configured to permit quoting in sub-penny increments.\9\ Moreover,
setting a minimum increment for bids and offers at $0.01 ensures that
price improvement occurs at a meaningful increment. Without this
minimum, it would be possible for a market participant to jump ahead of
another market participant's quoted price by a de minimis amount, and
the knowledge that this could occur could discourage competitive
quoting (which would be an impediment to a free and open market). The
proposed minimum increment would apply to all CBOE market participants.
---------------------------------------------------------------------------

\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
\8\ Id.
\9\ See CBOE Rules 6.53C(c)(ii) and 6.53C(d)(iii)(1).
---------------------------------------------------------------------------

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

BOE 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 believes that the
proposed change will not impose an unnecessary burden on intramarket
competition because it applies to minimum increments for bids and
offers on complex orders from all market participants. The Exchange
believes that the proposed change will not impose an unnecessary burden
on intermarket competition because it applies only to CBOE. To the
extent that setting the lowest possible minimum increment for bids and
offers in complex orders at $0.01 (and the other changes proposed
herein) may be attractive to market participants at other options
exchange, such market participants are always welcome to become CBOE
market participants.

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

Within 45 days of the date of publication of this notice in the
Federal

[[Page 62889]]

Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
A. by order approve or disapprove such proposed rule change, or
B. institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-CBOE-2013-093 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-CBOE-2013-093. 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 20549-1090, 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 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-
CBOE-2013-093, and should be submitted on or before November 12, 2013.
---------------------------------------------------------------------------

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

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24630 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P

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