Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving a Proposed Rule Change To Amend CBOE Rule 6.42, 71688-71689 [2013-28573]
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71688
Federal Register / Vol. 78, No. 230 / Friday, November 29, 2013 / Notices
of underlying securities. Where the
underlying final money amounts are not
exactly matched between obligations
being paired off, the pair off would
result in a cash adjustment, which
would be reflected in the Members’
money settlement with NSCC on the
following business day.
Implementation Timeframe
Subject to approval of this filing,
NSCC proposes to implement the Pair
Off function during the first quarter of
2014. Pending Commission approval,
Members will be advised of the
implementation date through issuance
of an NSCC Important Notice.
Proposed Rule Changes
NSCC is proposing to amend Rule 51
(Obligation Warehouse) and add a new
Section E to the existing Procedure IIA
(Obligation Warehouse) describing the
Pair Off function.
2. Statutory Basis
NSCC believes the proposed rule
change is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
NSCC, in particular Section 17A(b)(3)(F)
of the Act,8 which requires that NSCC’s
Rules be designed to promote the
prompt and accurate clearance and
settlement of securities transactions. By
providing for greater efficiency and
transparency with respect to obligations
processed through the OW, the
proposed rule change promotes the
prompt and accurate clearance and
settlement of securities transactions.
(B) Self-Regulatory Organization’s
Statement on Burden on Competition
NSCC does not believe that the
proposed rule change will have any
impact, or impose any burden, on
competition.
(C) Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
sroberts on DSK5SPTVN1PROD with NOTICES
Written comments relating to the
proposed rule change have not yet been
solicited or received. NSCC will notify
the Commission of any written
comments received by NSCC.
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
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
8 15
U.S.C. 78q–1(b)(3)(F).
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to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
(A) by order approve or disapprove
such a 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 No. SR–
NSCC–2013–11 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–NSCC–2013–11. 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
filings also will be available for
inspection and copying at the principal
office of NSCC and on NSCC’s Web site
at https://dtcc.com/downloads/legal/
rule_filings/2013/nscc/SR-NSCC-201302.pdf.
All comments received will be posted
without change; the Commission does
not edit personal identifying
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Sfmt 4703
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File No.
SR–NSCC–2013–11 and should be
submitted on or before December 20,
2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–28723 Filed 11–27–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70930; File No. SR–CBOE–
2013–093]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Order Approving a
Proposed Rule Change To Amend
CBOE Rule 6.42
November 22, 2013.
I. Introduction
On September 27, 2013, the Chicago
Board Options Exchange, Incorporated
(the ‘‘Exchange’’ or ‘‘CBOE’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule change to amend CBOE
Rule 6.42, ‘‘Minimum Increments for
Bids and Offers,’’ to establish a
minimum quoting increment for
complex orders. The proposed rule
change was published for comment in
the Federal Register on October 22,
2013.3 The Commission received no
comment letters regarding the proposed
rule change. This order approves the
proposed rule change.
II. Description of the Proposal
Currently, CBOE Rule 6.42(4)
provides 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.4 CBOE
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 70618
(October 7, 2013), 78 FR 62887 (‘‘Notice’’).
4 For the purposes of CBOE Rule 6.42, a complex
order is a spread, straddle, combination, or ratio
order as defined in CBOE Rule 6.53, a stock-option
order as defined in CBOE Rule 1.1(ii), a security
future-option order as defined in Rule 1.1(zz), or
any other complex order as defined in CBOE Rule
6.53C. See CBOE Rule 6.42, Interpretation and
Policy .01.
1 15
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Federal Register / Vol. 78, No. 230 / Friday, November 29, 2013 / Notices
states that this language allows bids and
offers for complex orders to be
expressed in any increment
whatsoever.5 To establish a minimum
quoting increment for complex orders,
CBOE proposes to revise CBOE Rule
6.42(4) to state that bids and offers for
complex orders may be expressed in any
net price increment that may not be less
than $0.01, which CBOE may determine
on a class-by-class basis and announce
to Trading Permit Holders (‘‘TPHs’’) via
Regulatory Circular.6 CBOE would
notify TPHs of the minimum quoting
increments for complex orders via
Regulatory Circular.7 CBOE would not
change the minimum quoting
increments for complex orders on an
intra-day basis.8
According to CBOE, many web-based
services that public customers use to
enter options orders do not permit the
entry of orders in sub-penny
increments, a limitation that other
market participants may not face.9
CBOE believes that the proposal will
establish a minimum complex order
quoting increment that all market
participants will be able to monitor and
in which all market participants will be
able to enter orders.10 In addition,
because CBOE’s electronic complex
order execution systems, the Complex
Order Book (‘‘COB’’) and Complex
Order Auction (‘‘COA’’), are not
configured to permit quoting in subpenny increments, the $0.01 minimum
increment would place electronic and
manually entered complex orders on an
even footing.11 CBOE also believes that
establishing a minimum quoting
increment of $0.01 will assure that price
improvement occurs at a meaningful
increment, and will prevent market
participants from jumping ahead of an
5 See
Notice 78 FR at 62887.
states that the rule would allow the
Exchange to establish uniform complex order
quoting increments within a class, and to set and
vary the minimum complex order quoting
increments for different classes in response to
different market conditions in those classes and to
encourage more trading in those classes. CBOE
notes that its rules currently allow it to establish
minimum quoting increments for complex orders in
options on the S&P 500 Index (‘‘SPX’’), the p.m.settled S&P 500 Index (‘‘SPXPM’’), and on the S&P
100 Index (‘‘OEX’’ and ‘‘XEO’’). See Notice 78 FR
at 62888 and CBOE Rule 6.42(4).
7 See Notice 78 FR at 62888.
8 See id. at note 4.
9 See Notice 78 FR at 62887.
10 See id.
11 See Notice 78 FR at 62887–62888. See also
CBOE Rules 6.53C(c)(ii) and 6.53C(d)(iii)(1)
(providing for quoting increments of no less than
$0.01 in the COB and Requests for Responses
(‘‘RFRs’’) in increments of no less than $0.01 in the
COA). CBOE notes that the $0.01 minimum
increment would prevent sophisticated market
participants from manually entering complex order
quotations in sub-penny amounts. See Notice 78 FR
at 62888, note 5.
sroberts on DSK5SPTVN1PROD with NOTICES
6 CBOE
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17:56 Nov 27, 2013
Jkt 232001
existing quote by providing a de
minimus amount of price
improvement.12
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.13 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,14 which requires,
among other things, that the rules of a
national securities exchange be
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to 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. As
discussed above, CBOE Rule 6.42(4)
currently allows bids and offers for
complex orders to be expressed in any
increment, which potentially could
permit bids and offers for complex
orders to be expressed in increments
smaller than $0.01. In contrast, complex
orders entered in the COB and RFR
Responses to a COA auction may not be
entered in increments smaller than
$0.01.15 Thus, under CBOE’s current
rules, complex orders that are entered
manually potentially could be entered
in increments smaller than $0.01, while
complex order trading interest entered
electronically in the COB and the COA
may not be entered in increments
smaller than $0.01. By establishing a
$0.01 minimum quoting increment for
complex orders, the proposal is
designed to protect investors by
establishing a consistent minimum
quoting increment for complex orders
that are entered manually and complex
orders that are entered electronically
through the COB and COA.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,16 that the
proposed rule change (SR–CBOE–2013–
093) is approved.
12 See
Notice 78 FR at 62888.
approving this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
14 15 U.S.C. 78f(b)(5).
15 See CBOE Rules 6.53C(c)(ii) and (d)(iii)(1).
16 15 U.S.C. 78s(b)(2).
13 In
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71689
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–28573 Filed 11–27–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70927; File No. 4–669]
Self-Regulatory Organizations; Topaz
Exchange, LLC; Notice of Filing of
Proposed Minor Rule Violation Plan
November 22, 2013.
Pursuant to Section 19(d)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19d–1(c)(2)
thereunder,2 notice is hereby given that
on November 14, 2013, Topaz Exchange,
LLC (d/b/a ISE Gemini) (the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) a proposed minor rule
violation plan (‘‘MRVP’’) with sanctions
not exceeding $2,500 which would not
be subject to the provisions of Rule 19d–
1(c)(1) of the Act 3 requiring that a selfregulatory organization (‘‘SRO’’)
promptly file notice with the
Commission of any final disciplinary
action taken with respect to any person
or organization.4 In accordance with
Rule 19d–1(c)(2) under the Act,5 the
Exchange proposes to designate certain
specified rule violations as minor rule
violations, and requests that it be
relieved of the prompt reporting
requirements regarding such violations,
provided it gives notice of such
violations to the Commission on a
quarterly basis.
The Exchange proposes to include in
its MRVP the procedures and violations
currently included in Exchange Rule
1614 (‘‘Imposition of Fines for Minor
Rule Violations’’), which has been
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(d)(1).
2 17 CFR 240.19d–1(c)(2).
3 17 CFR 240.19d–1(c)(1).
4 The Commission adopted amendments to
paragraph (c) of Rule 19d–1 to allow SROs to
submit for Commission approval plans for the
abbreviated reporting of minor disciplinary
infractions. See Securities Exchange Act Release
No. 21013 (June 1, 1984), 49 FR 23828 (June 8,
1984). Any disciplinary action taken by an SRO
against any person for violation of a rule of the SRO
which has been designated as a minor rule violation
pursuant to such a plan filed with and declared
effective by the Commission shall not be considered
‘‘final’’ for purposes of Section 19(d)(1) of the Act
if the sanction imposed consists of a fine not
exceeding $2,500 and the sanctioned person has not
sought an adjudication, including a hearing, or
otherwise exhausted his administrative remedies.
5 17 CFR 240.19d–1(c)(2).
1 15
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Agencies
[Federal Register Volume 78, Number 230 (Friday, November 29, 2013)]
[Notices]
[Pages 71688-71689]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-28573]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70930; File No. SR-CBOE-2013-093]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Order Approving a Proposed Rule Change To Amend CBOE Rule
6.42
November 22, 2013.
I. Introduction
On September 27, 2013, the Chicago Board Options Exchange,
Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities
and Exchange Commission (the ``Commission''), pursuant to Section
19(b)(1) of the Securities Exchange Act of 1934 (the ``Act'') \1\ and
Rule 19b-4 thereunder,\2\ a proposed rule change to amend CBOE Rule
6.42, ``Minimum Increments for Bids and Offers,'' to establish a
minimum quoting increment for complex orders. The proposed rule change
was published for comment in the Federal Register on October 22,
2013.\3\ The Commission received no comment letters regarding the
proposed rule change. This order approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 70618 (October 7,
2013), 78 FR 62887 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposal
Currently, CBOE Rule 6.42(4) provides 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.\4\ CBOE
[[Page 71689]]
states that this language allows bids and offers for complex orders to
be expressed in any increment whatsoever.\5\ To establish a minimum
quoting increment for complex orders, CBOE proposes to revise CBOE Rule
6.42(4) to state that bids and offers for complex orders may be
expressed in any net price increment that may not be less than $0.01,
which CBOE may determine on a class-by-class basis and announce to
Trading Permit Holders (``TPHs'') via Regulatory Circular.\6\ CBOE
would notify TPHs of the minimum quoting increments for complex orders
via Regulatory Circular.\7\ CBOE would not change the minimum quoting
increments for complex orders on an intra-day basis.\8\
---------------------------------------------------------------------------
\4\ For the purposes of CBOE Rule 6.42, a complex order is a
spread, straddle, combination, or ratio order as defined in CBOE
Rule 6.53, a stock-option order as defined in CBOE Rule 1.1(ii), a
security future-option order as defined in Rule 1.1(zz), or any
other complex order as defined in CBOE Rule 6.53C. See CBOE Rule
6.42, Interpretation and Policy .01.
\5\ See Notice 78 FR at 62887.
\6\ CBOE states that the rule would allow the Exchange to
establish uniform complex order quoting increments within a class,
and to set and vary the minimum complex order quoting increments for
different classes in response to different market conditions in
those classes and to encourage more trading in those classes. CBOE
notes that its rules currently allow it to establish minimum quoting
increments for complex orders in options on the S&P 500 Index
(``SPX''), the p.m.-settled S&P 500 Index (``SPXPM''), and on the
S&P 100 Index (``OEX'' and ``XEO''). See Notice 78 FR at 62888 and
CBOE Rule 6.42(4).
\7\ See Notice 78 FR at 62888.
\8\ See id. at note 4.
---------------------------------------------------------------------------
According to CBOE, many web-based services that public customers
use to enter options orders do not permit the entry of orders in sub-
penny increments, a limitation that other market participants may not
face.\9\ CBOE believes that the proposal will establish a minimum
complex order quoting increment that all market participants will be
able to monitor and in which all market participants will be able to
enter orders.\10\ In addition, because CBOE's electronic complex order
execution systems, the Complex Order Book (``COB'') and Complex Order
Auction (``COA''), are not configured to permit quoting in sub-penny
increments, the $0.01 minimum increment would place electronic and
manually entered complex orders on an even footing.\11\ CBOE also
believes that establishing a minimum quoting increment of $0.01 will
assure that price improvement occurs at a meaningful increment, and
will prevent market participants from jumping ahead of an existing
quote by providing a de minimus amount of price improvement.\12\
---------------------------------------------------------------------------
\9\ See Notice 78 FR at 62887.
\10\ See id.
\11\ See Notice 78 FR at 62887-62888. See also CBOE Rules
6.53C(c)(ii) and 6.53C(d)(iii)(1) (providing for quoting increments
of no less than $0.01 in the COB and Requests for Responses
(``RFRs'') in increments of no less than $0.01 in the COA). CBOE
notes that the $0.01 minimum increment would prevent sophisticated
market participants from manually entering complex order quotations
in sub-penny amounts. See Notice 78 FR at 62888, note 5.
\12\ See Notice 78 FR at 62888.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\13\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\14\ which
requires, among other things, that the rules of a national securities
exchange be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to 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. As discussed above, CBOE Rule 6.42(4) currently allows
bids and offers for complex orders to be expressed in any increment,
which potentially could permit bids and offers for complex orders to be
expressed in increments smaller than $0.01. In contrast, complex orders
entered in the COB and RFR Responses to a COA auction may not be
entered in increments smaller than $0.01.\15\ Thus, under CBOE's
current rules, complex orders that are entered manually potentially
could be entered in increments smaller than $0.01, while complex order
trading interest entered electronically in the COB and the COA may not
be entered in increments smaller than $0.01. By establishing a $0.01
minimum quoting increment for complex orders, the proposal is designed
to protect investors by establishing a consistent minimum quoting
increment for complex orders that are entered manually and complex
orders that are entered electronically through the COB and COA.
---------------------------------------------------------------------------
\13\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
\14\ 15 U.S.C. 78f(b)(5).
\15\ See CBOE Rules 6.53C(c)(ii) and (d)(iii)(1).
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\16\ that the proposed rule change (SR-CBOE-2013-093) is approved.
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------
\17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-28573 Filed 11-27-13; 8:45 am]
BILLING CODE 8011-01-P