Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the CBSX BBO Data Feed and a New CBSX Book Depth Data Feed, 17627-17630 [2014-06887]

Download as PDF Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Notices help deter fraudulent and manipulative acts and practices. The proposed rule change is designed to promote just and equitable principles of trade and to protect investors and the public interest in that the Adviser represents that the proposed change will permit the Adviser to use additional means to achieve the Fund’s investment objective through investments in interest rate futures and U.S. Treasury futures for duration management. The Fund will comply with all initial and continued listing requirements under NYSE Arca Equities Rule 8.600. The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that the Fund will comply with all initial and continued listing requirements under NYSE Arca Equities Rule 8.600. The Adviser represents that the purpose of this change is to permit Fund investments in U.S. Treasury futures and interest rate futures for duration management. The Commission has previously approved investments in such futures contracts for other issues of Managed Fund Shares.13 The Adviser represents that there is no change to the Fund’s investment objective. Except for the change noted above, all other representations made in the Prior Release remain unchanged. interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 14 and Rule 19b–4(f)(6) thereunder.15 The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange states that waiver of this requirement will: (1) Facilitate duration management by the Fund; (2) provide additional means for the Adviser to meet the Fund’s investment objective, which remains unchanged; and (3) allow the Fund to meet its investment objective in the most efficient manner possible. For these reasons, the Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. The Commission also notes that all the interest rate and U.S. Treasury futures in which the Fund will invest will be listed on U.S. futures exchanges regulated by the Commodity Futures Trading Commission. Therefore, the Commission designates the proposed rule change to be operative upon filing.16 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed change to the Fund’s means of achieving the investment objective will permit the Fund to adjust its portfolio to allow the Fund to meet its investment objectives by investing in U.S. Treasury futures and interest rate futures and will enhance competition among issues of Managed Fund Shares that invest in fixed income securities. 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: mstockstill on DSK4VPTVN1PROD with NOTICES 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 Because the proposed rule change does not (i) significantly affect the protection of investors or the public 13 See note 10, supra. VerDate Mar<15>2010 18:57 Mar 27, 2014 Jkt 232001 Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File No. SR– NYSEArca–2014–26 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. 14 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). As required under Rule 19b–4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. 16 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 15 17 PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 17627 All submissions should refer to File No. SR–NYSEArca-2014–26. 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 Web site (http://www.sec.gov/rules/ sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 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 No. SR–NYSEArca– 2014–26 and should be submitted on or before April 18, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–06967 Filed 3–27–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71775; File No. SR–CBOE– 2014–021] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the CBSX BBO Data Feed and a New CBSX Book Depth Data Feed March 24, 2014. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 17 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\28MRN1.SGM 28MRN1 17628 Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Notices notice is hereby given that on March 11, 2014, 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 and II 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 Chicago Board Options Exchange, Incorporated (the ‘‘Exchange’’ or ‘‘CBOE’’) proposes to (i) update the description of the data included in the CBOE Stock Exchange (‘‘CBSX’’) BBO Data Feed and (ii) offer a book depth data feed for securities traded on the CBSX. The text of the proposed rule change is available on the Exchange’s Web site (http://www.cboe.com/About CBOE/CBOELegalRegulatory Home.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 mstockstill on DSK4VPTVN1PROD with NOTICES 1. Purpose The purpose of the proposed rule change is to (i) update the description of the data included in the CBSX BBO Data Feed, and (ii) offer a book depth data feed for securities traded on the CBSX. CBSX is CBOE’s stock trading facility. BBO Data Feed The BBO Data Feed is a real-time, low latency data feed that includes CBSX ‘‘BBO data’’ and last sale data.3 CBOE 3 The CBSX BBO Data Feed includes the ‘‘best bid and offer,’’ or ‘‘BBO’’, consisting of all outstanding quotes and standing orders at the best available VerDate Mar<15>2010 18:57 Mar 27, 2014 Jkt 232001 reports CBSX BBO data under the Consolidated Quotation Plan (‘‘CQ Plan’’) and CBSX last sale data under the Consolidated Tape Association Plan (‘‘CTA Plan’’) with respect to NYSElisted securities and securities listed on exchanges other than NYSE and Nasdaq for inclusion in those Plans’ consolidated data streams. CBOE reports CBSX BBO data and CBSX last sale data under the Nasdaq Unlisted Trading Privileges Plan (‘‘Nasdaq/UTP Plan’’) with respect to Nasdaq-listed securities for inclusion in that Plan’s consolidated data stream. The BBO and last sale data contained in the CBSX BBO Data Feed is identical to the data that CBOE sends to the processors under the CQ, CTA and Nasdaq/UTP Plans for redistribution to the public.4 The BBO Data Feed is made available by CBOE’s affiliate Market Data Express, LLC (‘‘MDX’’). The BBO Data Feed also includes certain data that is not included in the data sent to the processors under the CQ, CTA and Nasdaq/UTP Plans, namely, totals of customer versus noncustomer contracts at the BBO, and Allor-None contingency orders priced better than or equal to the BBO. The Exchange, through MDX, plans to make additional data available in the BBO Data Feed and therefore proposes to update the description of the data included in the feed. Specifically, the Exchange proposes to add end-of-day (‘‘EOD’’) summary messages and recap messages to the feed. EOD summary messages are messages that will be disseminated after the close of a trading session that will include summary information about CBSX traded securities. Such information includes product name, opening price, high and low price during the trading session and last sale price. Recap messages are messages that will be disseminated during a trading session any time there is a change in the open, high, low or last sale price of a CBSX traded security. In addition to open, high, low and last sale prices, such messages will also include product name and total volume traded price level on each side of the market, with aggregate size (‘‘BBO data,’’ sometimes referred to as ‘‘top-of-book data’’). Data with respect to executed trades is referred to as ‘‘last sale’’ data. See Securities Exchange Act Release No. 69399 (April 18, 2013), 78 FR 24258 (April 24, 2013). 4 The Exchange notes that MDX makes available to Customers the BBO data and last sale data that is included in the CBSX BBO Data Feed no earlier than the time at which the Exchange sends that data to the processors under the CQ, CTA and Nasdaq/ UTP Plans. A ‘‘Customer’’ is any entity that receives the BBO Data Feed directly from MDX’s system or through a connection to MDX provided by an approved redistributor (i.e., a market data vendor or extranet service provider) and then redistributes it internally and/or externally. PO 00000 Frm 00135 Fmt 4703 Sfmt 4703 in the product during the trading session. At this time, the Exchange does not intend to amend the fees for the BBO Data Feed. Book Depth Data Feed The Exchange proposes to make available, through MDX, a real-time, low latency data feed that includes all outstanding quotes and standing orders up to the first five price levels on each side of the market, with aggregate size (‘‘Book Depth Data Feed’’).5 The Book Depth Data Feed will also include all of the other data contained in the BBO Data Feed (as described above), including last sale data. The data in the Book Depth Data Feed would be refreshed periodically during the trading session. The Exchange will file a separate proposed rule change to establish the fees to be charged by MDX for the Book Depth Data Feed. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ‘‘Act’’) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.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 because the enhanced BBO Data Feed and the Book Depth Data Feed would be made available by MDX to any market 5 The Exchange notes that MDX will make available the BBO and last sale data that is included in the Book Depth Data Feed no earlier than the time at which the Exchange sends that data to the processors under the CQ, CTA and Nasdaq/UTP Plans. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). 8 Id. E:\FR\FM\28MRN1.SGM 28MRN1 Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Notices participant that wishes to subscribe to either feed. In adopting Regulation NMS, the Commission granted self-regulatory organizations and broker-dealers increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data. The Exchange believes that this proposal is in keeping with those principles by promoting increased transparency through the dissemination of useful data and also by clarifying its availability to market participants. The Exchange believes that updating the description of the BBO Data Feed will benefit users by making clearer what data is included in the feed. The Exchange believes offering the Book Depth Data Feed will increase transparency, help attract order flow and provide investors with additional information that may help to inform their trading decisions. mstockstill on DSK4VPTVN1PROD with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition CBOE 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 proposal to update the description of the BBO Data Feed is intended not to address any competitive issue but rather to reflect the data that is included in the feed. The Exchange notes other exchanges offer depth of market products similar to the Book Depth Data Feed. For example, BATS offers Multicast PITCH, which is their depth of market and last sale feed similar to the Book Depth Data Feed. The NASDAQ Stock Market offers a product entitled ‘‘NASDAQ TotalView ITCH’’ that is similar to the Book Depth Data Feed. NYSE offers market data products entitled ‘‘NYSE OpenBook’’, NYSE ArcaBook’’ and ‘‘NYSE MKT OpenBook’’ that include depth of market data for NYSE, NYSE Arca and NYSE MKT traded securities. In addition, the CQ, CTA and Nasdaq/UTP data feeds are significant competitive alternatives to the BBO Data Feed and the Book Depth Data Feed. The Exchange believes the enhanced BBO Data Feed and the Book Depth Data Feed will help to attract new users and new order flow to the Exchange, thereby improving the Exchange’s ability to compete in the market for options order flow and executions. VerDate Mar<15>2010 18:57 Mar 27, 2014 Jkt 232001 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: A. Significantly affect the protection of investors or the public interest; B. Impose any significant burden on competition; and C. Become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 9 and Rule 19b–4(f)(6) 10 thereunder. The Exchange has requested that the Commission waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange has stated that it does not intend to amend the fees for the BBO Data Feed, and that the proposed Book Depth Data Feed mostly includes data already made available by the Exchange through the BBO Data Feed. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest, because such waiver will enable market participants to receive more market data via the Exchange’s new and existing data feeds at no charge. For this reason, the Commission hereby waives the 30-day operative delay requirement and designates the proposed rule change to be operative upon filing.11 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. 9 15 U.S.C. 78s(b)(3)(A). 17 CFR 240.19b–4(f)(6). 11 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 10 PO 00000 Frm 00136 Fmt 4703 Sfmt 4703 17629 IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– CBOE–2014–021 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–CBOE–2014–021. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 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–CBOE– 2014–021, and should be submitted on or before April 18, 2014. E:\FR\FM\28MRN1.SGM 28MRN1 17630 Federal Register / Vol. 79, No. 60 / Friday, March 28, 2014 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–06887 Filed 3–27–14; 8:45 am] BILLING CODE 8011–01–P A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71782; File No. SR–CHX– 2014–04] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend a Pilot Program Related to Article 20, Rule 10 Concerning the Handling of Clearly Erroneous Transactions March 24, 2014. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 2 thereunder, notice is hereby given that, on March 19, 2014, the Chicago Stock Exchange, Inc. (‘‘CHX’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change CHX proposes to extend a pilot program related to Article 20, Rule 10, entitled ‘‘Handling of Clearly Erroneous Transactions.’’ The Exchange has designated this proposal as noncontroversial and provided the Commission with the notice required by Rule 19b–4(f)(6)(iii) under the Act.3 The text of this proposed rule change is available on the Exchange’s Web site at (www.chx.com) and in the Commission’s Public Reference Room. mstockstill on DSK4VPTVN1PROD with NOTICES II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the CHX included statements concerning the purpose of and basis for the proposed rule changes and discussed any comments it received on the proposed rule change. The text of these 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6)(iii). 12 1 15 VerDate Mar<15>2010 18:57 Mar 27, 2014 Jkt 232001 statements may be examined at the places specified in Item IV below. The CHX has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements. 1. Purpose The purpose of this filing is to extend the effectiveness of the Exchange’s current rule applicable to Clearly Erroneous Executions. Portions of Article 20, Rule 10, explained in further detail below, are currently operating as a pilot program set to expire on April 8, 2014.4 The Exchange proposes to extend the pilot program to coincide with the pilot period for the Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS under the Act (the ‘‘Limit Up-Limit Down Plan’’ or the ‘‘Plan’’), including any extensions to the pilot period for the Plan.5 On September 10, 2010, the Commission approved, on a pilot basis, changes to Article 20, Rule 10 to provide for uniform treatment: (1) Of clearly erroneous execution reviews in multi-stock events involving twenty or more securities; and (2) in the event transactions occur that result in the issuance of an individual stock trading pause by the primary listing market and subsequent transactions that occur before the trading pause is in effect on the Exchange.6 The Exchange also adopted additional changes to Article 20, Rule 10 that reduced the ability of the Exchange to deviate from the objective standards set forth in Article 20, Rule 10,7 and in 2013, adopted a provision designed to address the operation of the Plan.8 The Exchange believes the benefits to market participants from the more objective clearly erroneous executions rule should continue on a pilot basis to coincide with the operation of the Limit Up-Limit Down Plan. The Exchange believes that continuing the pilot will protect against any unanticipated 4 See Securities Exchange Act Release No. 70515 (Sept. 26, 2013), 78 FR 60945 (Oct. 2, 2013) (SR– CHX–2013–17). 5 See Securities Exchange Act Release No. 67091 (May 31, 2012), 77 FR 33498 (June 6, 2012) (the ‘‘Limit Up-Limit Down Release’’). 6 Securities Exchange Act Release No. 62886 (Sept. 10, 2010), 75 FR 56613 (Sept. 16, 2010) (SR– CHX–2010–13). 7 Id. 8 See Securities Exchange Act Release No. 68802 (February 1, 2013), 78 FR 9092 (February 7, 2013) (SR–CHX–2013–04); see also CHX Article 20, Rule 10(i). PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 consequences. Thus, the Exchange believes that the protections of the Clearly Erroneous Rule should continue while the industry gains further experience operating the Plan. 2. Statutory Basis The Exchange believes that its proposal is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.9 In particular, the proposal is consistent with Section 6(b)(5) of the Act,10 because it would promote just and equitable principles of trade, remove impediments to, and perfect the mechanism of, a free and open market and a national market system. Although the Limit Up-Limit Down Plan is operational, the Exchange believes that maintaining the pilot will help to protect against unanticipated consequences. Thus, the Exchange believes that the protections of the Clearly Erroneous Rule should continue while the industry gains further experience operating the Plan. The Exchange also believes that the pilot program promotes just and equitable principles of trade in that it promotes transparency and uniformity across markets concerning review of transactions as clearly erroneous. Thus, the Exchange believes that the extension of the pilot would help assure that the determination of whether a clearly erroneous trade has occurred will be based on clear and objective criteria, and that the resolution of the incident will occur promptly through a transparent process. The proposed rule change would also help assure consistent results in handling erroneous trades across the U.S. markets, thus furthering fair and orderly markets, the protection of investors and the public interest. Based on the foregoing, the Exchange believes the benefits to market participants from the more objective clearly erroneous executions rule should continue on a pilot basis to coincide with the operation of the Limit Up-Limit Down Plan. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change implicates any competitive issues. To the contrary, the Exchange believes that the Financial Industry Regulatory Authority (‘‘FINRA’’) and other national securities exchanges are also filing similar 9 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 10 15 E:\FR\FM\28MRN1.SGM 28MRN1

Agencies

[Federal Register Volume 79, Number 60 (Friday, March 28, 2014)]
[Notices]
[Pages 17627-17630]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-06887]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71775; File No. SR-CBOE-2014-021]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to the CBSX BBO Data Feed and a New CBSX 
Book Depth Data Feed

March 24, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\

[[Page 17628]]

notice is hereby given that on March 11, 2014, 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 and II below, which Items have been 
prepared by the Exchange. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Chicago Board Options Exchange, Incorporated (the ``Exchange'' or 
``CBOE'') proposes to (i) update the description of the data included 
in the CBOE Stock Exchange (``CBSX'') BBO Data Feed and (ii) offer a 
book depth data feed for securities traded on the CBSX. The text of the 
proposed rule change is available on the Exchange's Web site (http://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 purpose of the proposed rule change is to (i) update the 
description of the data included in the CBSX BBO Data Feed, and (ii) 
offer a book depth data feed for securities traded on the CBSX. CBSX is 
CBOE's stock trading facility.
BBO Data Feed
    The BBO Data Feed is a real-time, low latency data feed that 
includes CBSX ``BBO data'' and last sale data.\3\ CBOE reports CBSX BBO 
data under the Consolidated Quotation Plan (``CQ Plan'') and CBSX last 
sale data under the Consolidated Tape Association Plan (``CTA Plan'') 
with respect to NYSE-listed securities and securities listed on 
exchanges other than NYSE and Nasdaq for inclusion in those Plans' 
consolidated data streams. CBOE reports CBSX BBO data and CBSX last 
sale data under the Nasdaq Unlisted Trading Privileges Plan (``Nasdaq/
UTP Plan'') with respect to Nasdaq-listed securities for inclusion in 
that Plan's consolidated data stream. The BBO and last sale data 
contained in the CBSX BBO Data Feed is identical to the data that CBOE 
sends to the processors under the CQ, CTA and Nasdaq/UTP Plans for 
redistribution to the public.\4\ The BBO Data Feed is made available by 
CBOE's affiliate Market Data Express, LLC (``MDX'').
---------------------------------------------------------------------------

    \3\ The CBSX BBO Data Feed includes the ``best bid and offer,'' 
or ``BBO'', consisting of all outstanding quotes and standing orders 
at the best available price level on each side of the market, with 
aggregate size (``BBO data,'' sometimes referred to as ``top-of-book 
data''). Data with respect to executed trades is referred to as 
``last sale'' data. See Securities Exchange Act Release No. 69399 
(April 18, 2013), 78 FR 24258 (April 24, 2013).
    \4\ The Exchange notes that MDX makes available to Customers the 
BBO data and last sale data that is included in the CBSX BBO Data 
Feed no earlier than the time at which the Exchange sends that data 
to the processors under the CQ, CTA and Nasdaq/UTP Plans. A 
``Customer'' is any entity that receives the BBO Data Feed directly 
from MDX's system or through a connection to MDX provided by an 
approved redistributor (i.e., a market data vendor or extranet 
service provider) and then redistributes it internally and/or 
externally.
---------------------------------------------------------------------------

    The BBO Data Feed also includes certain data that is not included 
in the data sent to the processors under the CQ, CTA and Nasdaq/UTP 
Plans, namely, totals of customer versus non-customer contracts at the 
BBO, and All-or-None contingency orders priced better than or equal to 
the BBO.
    The Exchange, through MDX, plans to make additional data available 
in the BBO Data Feed and therefore proposes to update the description 
of the data included in the feed. Specifically, the Exchange proposes 
to add end-of-day (``EOD'') summary messages and recap messages to the 
feed. EOD summary messages are messages that will be disseminated after 
the close of a trading session that will include summary information 
about CBSX traded securities. Such information includes product name, 
opening price, high and low price during the trading session and last 
sale price. Recap messages are messages that will be disseminated 
during a trading session any time there is a change in the open, high, 
low or last sale price of a CBSX traded security. In addition to open, 
high, low and last sale prices, such messages will also include product 
name and total volume traded in the product during the trading session.
    At this time, the Exchange does not intend to amend the fees for 
the BBO Data Feed.
Book Depth Data Feed
    The Exchange proposes to make available, through MDX, a real-time, 
low latency data feed that includes all outstanding quotes and standing 
orders up to the first five price levels on each side of the market, 
with aggregate size (``Book Depth Data Feed'').\5\ The Book Depth Data 
Feed will also include all of the other data contained in the BBO Data 
Feed (as described above), including last sale data. The data in the 
Book Depth Data Feed would be refreshed periodically during the trading 
session.
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    \5\ The Exchange notes that MDX will make available the BBO and 
last sale data that is included in the Book Depth Data Feed no 
earlier than the time at which the Exchange sends that data to the 
processors under the CQ, CTA and Nasdaq/UTP Plans.
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    The Exchange will file a separate proposed rule change to establish 
the fees to be charged by MDX for the Book Depth Data Feed.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\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 because the enhanced BBO Data Feed and the Book 
Depth Data Feed would be made available by MDX to any market

[[Page 17629]]

participant that wishes to subscribe to either feed.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ Id.
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    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations and broker-dealers increased authority and flexibility to 
offer new and unique market data to the public. It was believed that 
this authority would expand the amount of data available to consumers, 
and also spur innovation and competition for the provision of market 
data. The Exchange believes that this proposal is in keeping with those 
principles by promoting increased transparency through the 
dissemination of useful data and also by clarifying its availability to 
market participants. The Exchange believes that updating the 
description of the BBO Data Feed will benefit users by making clearer 
what data is included in the feed. The Exchange believes offering the 
Book Depth Data Feed will increase transparency, help attract order 
flow and provide investors with additional information that may help to 
inform their trading decisions.

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

    CBOE 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 proposal to update the 
description of the BBO Data Feed is intended not to address any 
competitive issue but rather to reflect the data that is included in 
the feed. The Exchange notes other exchanges offer depth of market 
products similar to the Book Depth Data Feed. For example, BATS offers 
Multicast PITCH, which is their depth of market and last sale feed 
similar to the Book Depth Data Feed. The NASDAQ Stock Market offers a 
product entitled ``NASDAQ TotalView ITCH'' that is similar to the Book 
Depth Data Feed. NYSE offers market data products entitled ``NYSE 
OpenBook'', NYSE ArcaBook'' and ``NYSE MKT OpenBook'' that include 
depth of market data for NYSE, NYSE Arca and NYSE MKT traded 
securities. In addition, the CQ, CTA and Nasdaq/UTP data feeds are 
significant competitive alternatives to the BBO Data Feed and the Book 
Depth Data Feed.
    The Exchange believes the enhanced BBO Data Feed and the Book Depth 
Data Feed will help to attract new users and new order flow to the 
Exchange, thereby improving the Exchange's ability to compete in the 
market for options order flow and executions.

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

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

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

    Because the foregoing proposed rule change does not:
    A. Significantly affect the protection of investors or the public 
interest;
    B. Impose any significant burden on competition; and
    C. Become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to Section 19(b)(3)(A) of the Act \9\ and 
Rule 19b-4(f)(6) \10\ thereunder.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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    The Exchange has requested that the Commission waive the 30-day 
operative delay so that the proposal may become operative immediately 
upon filing. The Exchange has stated that it does not intend to amend 
the fees for the BBO Data Feed, and that the proposed Book Depth Data 
Feed mostly includes data already made available by the Exchange 
through the BBO Data Feed. The Commission believes that waiving the 30-
day operative delay is consistent with the protection of investors and 
the public interest, because such waiver will enable market 
participants to receive more market data via the Exchange's new and 
existing data feeds at no charge. For this reason, the Commission 
hereby waives the 30-day operative delay requirement and designates the 
proposed rule change to be operative upon filing.\11\
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    \11\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission will institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2014-021 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2014-021. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of 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-CBOE-2014-021, 
and should be submitted on or before April 18, 2014.


[[Page 17630]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Kevin M. O'Neill,
Deputy Secretary.
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    \12\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2014-06887 Filed 3-27-14; 8:45 am]
BILLING CODE 8011-01-P