Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Regulatory Cooperation, 30213-30215 [2014-12074]

Download as PDF Federal Register / Vol. 79, No. 101 / Tuesday, May 27, 2014 / Notices 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 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 NOTICES 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–2014–042 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–2014–042. 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 description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. VerDate Mar<15>2010 19:12 May 23, 2014 Jkt 232001 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–2014–042 and should be submitted on or before June 17, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–12076 Filed 5–23–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–72195; File No. SR–CBOE– 2014–044] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Regulatory Cooperation May 20, 2014. 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 May 8, 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 amend its rules related to regulatory cooperation. 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. 9 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00141 Fmt 4703 30213 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 Rule 15.9(a) to make explicit the Exchange’s authority to enter into information sharing agreements with the Public Company Accounting Oversight Board (the ‘‘PCAOB’’). The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the ‘‘Dodd-Frank Act’’) 3 amended the Sarbanes-Oxley Act of 2002 (‘‘SarbanesOxley’’) 4 to give the PCAOB authority to oversee the audits of brokers and dealers registered with the Securities and Exchange Commission (the ‘‘SEC’’ or the ‘‘Commission’’). Among other things, Section 104(a)(2) of SarbanesOxley authorizes the PCAOB to establish an inspection program by rule. In August 2011, the Commission approved Temporary Rule 4020T of the PCAOB to implement this new authority.5 By granting the PCAOB regulatory authority over the audits of registered brokers and dealers, Congress granted the PCAOB authority to receive financial data and related underlying data about registered broker-dealers, such as that which would be provided by the Exchange under the proposed rule change. The Exchange has entered into an information sharing agreement with the PCAOB. The Exchange intends to share, for example, Trading Permit Holder FOCUS Report 6 data with the PCAOB. 3 Public Law 111–203, 124 Stat 1376 (July 21, 2010). 4 Public Law 107–204, 116 Stat. 745. 5 See Securities Exchange Act Release No. 65163 (August 18, 2011), 76 FR 52996 (August 24, 2011) (approving PCAOB temporary rule for an interim program of inspections related to registered public accounting firm audits of broker-dealers). 6 The ‘‘FOCUS Report (Form X–17A–5) constitutes the basic financial and operational report required of those brokers or dealers subject Continued Sfmt 4703 E:\FR\FM\27MYN1.SGM 27MYN1 30214 Federal Register / Vol. 79, No. 101 / Tuesday, May 27, 2014 / Notices Under the information sharing agreement, the PCAOB has agreed to treat all information provided to it by the Exchange as confidential and to assert such confidentiality and other applicable privileges in response to requests for such information from third parties.7 Under the agreement shared information may be used by the recipient solely to fulfill its regulatory duties and purposes. The proposed rule makes explicit the Exchange’s authority to enter into an agreement under such terms. As discussed above, Congress has expressly granted the PCAOB authority to inspect broker-dealers and the Commission has approved the PCAOB’s interim rule to implement that authority. The Exchange believes sharing information with the PCAOB, due to its audit oversight role over broker-dealers, including CBOE Trading Permit Holders, will assist the PCAOB in performing the oversight intended by Congress, under terms approved by the Commission.8 By explicitly permitting the Exchange to share confidential information with the PCAOB for the purposes stated in Rule 15.9, the proposed rule change will therefore make express the Exchange’s authority to assist the PCAOB to fulfill its Congressional mandate, under terms approved by the Commission. Further, the proposed rule change will notify Trading Permit Holders of the Exchange’s authority to enter into such information sharing agreements with the PCAOB. sroberts on DSK5SPTVN1PROD with NOTICES 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.9 Specifically, the Exchange believes the proposed rule change is consistent with the Section to any minimum net capital requirement set forth in Rule 15c3–1.’’ General Instructions to FOCUS Report Form X–17A–5 Part IIA, OMB Number 3235–0123, available at: https://www.sec.gov/about/ forms/formx-17a-5_2a.pdf. 7 The recipient of shared information under the agreement may provide shared information to the SEC, if the information is accompanied by a Freedom of Information Act confidential treatment request, and to other self-regulatory or regulatory organizations pursuant to information sharing agreements that require the organizations to maintain the confidentiality of the shared information. 8 See supra, note 5. The Exchange notes that if Temporary Rule 4020T of the PCAOB is not renewed, the Exchange would no longer have authority to share information with PCAOB pursuant to CBOE Rule 15.9(a). 9 15 U.S.C. 78f(b). VerDate Mar<15>2010 19:12 May 23, 2014 Jkt 232001 6(b)(5) 10 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) 11 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The proposed rule change is in the public’s interest as it will explicitly authorize the Exchange to enter into an information sharing agreement with the PCAOB, thereby facilitating the sharing of information with the PCAOB. The ability to obtain information from the Exchange will better enable the PCAOB to perform its functions related to broker-dealer audit oversight. Better oversight of registered broker-dealer audits is in the public’s interest and will serve to prevent fraudulent and manipulative acts and practices. Additionally, one of the essential purposes of the proposed rule change is to foster cooperation and coordination with persons engaged in regulating and processing information related to transactions in securities. The Exchange also believes the proposed rule change is consistent with Section 6(b)(1) of the Act,12 which provides that the Exchange be organized and have the capacity to be able to carry out the purposes of the Act and to enforce compliance by the Exchange’s Trading Permit Holders and persons associated with its Trading Permit Holders with the Act, the rules and regulations thereunder, and the rules of the Exchange. The PCAOB has agreed to reciprocate in sharing information of regulatory interest to the Exchange, which will provide the Exchange with more tools and information to enforce compliance by Trading Permit Holders and persons associated with Trading Permit Holders. As further evidence of its intent to reciprocate in sharing information with the Exchange, the PCAOB has filed a proposed change to its Rule 5108 to ‘‘conform to the DoddFrank amendments that permit the [PCAOB] to share confidential 10 15 U.S.C. 78f(b)(5). 11 Id. 12 15 PO 00000 U.S.C. 78f(b)(1). Frm 00142 Fmt 4703 Sfmt 4703 information with ‘a self-regulatory organization, with respect to an audit report for a broker or dealer that is under the jurisdiction of such selfregulatory organization.’’’ 13 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 proposed rule change is not designed to address any competitive issues but rather is designed to facilitate the sharing of information between PCAOB and the Exchange to better enable each to fulfill its respective regulatory duties and responsibilities. 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 rule does not (i) significantly affect the protection of investors or the public 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 if consistent with the protection of investors and the public interest, provided that the selfregulatory organization has given the Commission written notice of its intent to file 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,14 the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 15 and Rule 19b–4(f)(6) thereunder.16 At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the 13 See Securities Exchange Act Release No. 34– 71237 (January 6, 2014), 79 FR 6272 (February 3, 2014) (notice of filing of proposed rules on amendments to conform the PCAOB’s rules and forms to the Dodd-Frank Act and make certain updates and clarifications). The Commission notes that it has since taken action on the PCAOB proposal. See Securities Exchange Act Release No. 72087 (May 2, 2014), 79 FR 26491 (May 8, 2014) (File No. PCAOB–2013–03) (notice of filing of Amendment No. 1, and order granting accelerated approval). 14 The Exchange has fulfilled this requirement. 15 15 U.S.C. 78s(b)(3)(A). 16 17 CFR 240.19b–4(f)(6). E:\FR\FM\27MYN1.SGM 27MYN1 Federal Register / Vol. 79, No. 101 / Tuesday, May 27, 2014 / Notices 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. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Kevin M. O’Neill, Deputy Secretary. IV. Solicitation of Comments [FR Doc. 2014–12074 Filed 5–23–14; 8:45 am] BILLING CODE 8011–01–P 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 rulecomments@sec.gov. Please include File Number SR–CBOE–2014–044 on the subject line. sroberts on DSK5SPTVN1PROD with NOTICES 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–2014–044. 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–CBOE– 2014–044 and should be submitted on or before June 17, 2014. VerDate Mar<15>2010 19:12 May 23, 2014 Jkt 232001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–72190; File No. SR– NYSEMKT–2014–47] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Commentary .02 to NYSE Amex Options Rule 960NY in Order to Extend the Penny Pilot in Options Classes in Certain Issues Through December 31, 2014 May 20, 2014. 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 May 14, 2014, NYSE MKT LLC (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) 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 self-regulatory organization. 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 Commentary .02 to NYSE Amex Options Rule 960NY in order to extend the Penny Pilot in options classes in certain issues (‘‘Pilot Program’’) previously approved by the Securities and Exchange Commission (‘‘Commission’’) through December 31, 2014. 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. 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, 17 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 00143 Fmt 4703 Sfmt 4703 30215 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange hereby proposes to amend Commentary .02 to Exchange Rule 960NY to extend the time period of the Pilot Program,4 which is currently scheduled to expire on June 30, 2014, through December 31, 2014. The Exchange also proposes that the dates to replace issues in the Pilot Program that have been delisted be revised to the second trading day following July 1, 2014.5 This filing does not propose any substantive changes to the Pilot Program: all classes currently participating will remain the same and all minimum increments will remain unchanged. The Exchange believes the benefits to public customers and other market participants who will be able to express their true prices to buy and sell options have been demonstrated to outweigh the increase in quote traffic. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) 6 of the Securities Exchange Act of 1934 (the ‘‘Act’’), in general, and furthers the objectives of Section 6(b)(5),7 in particular, in that it is 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 facilitating transactions in securities, and to remove impediments to and perfect the mechanisms of a free and open market and a national market system. The 4 See Securities Exchange Act Release No. 71163 (December 20, 2013), 78 FR 79049 (December 27, 2013) (SR–NYSEMKT–2013–104). 5 The month immediately preceding a replacement class’s addition to the Pilot Program (i.e., June) would not be used for purposes of the analysis for determining the replacement class. Thus, a replacement class to be added on the second trading day following July 1, 2014 would be identified based on The Option Clearing Corporation’s trading volume data from December 1, 2013 through May 31, 2014. The Exchange will announce the replacement issues to the Exchange’s membership through a Trader Update. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). E:\FR\FM\27MYN1.SGM 27MYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 79, Number 101 (Tuesday, May 27, 2014)]
[Notices]
[Pages 30213-30215]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-12074]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72195; File No. SR-CBOE-2014-044]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change Relating to Regulatory Cooperation

May 20, 2014.
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 May 8, 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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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 amend its rules related to regulatory
cooperation. 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 Rule 15.9(a) to make explicit the
Exchange's authority to enter into information sharing agreements with
the Public Company Accounting Oversight Board (the ``PCAOB'').
The Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010 (the ``Dodd-Frank Act'') \3\ amended the Sarbanes-Oxley Act of
2002 (``Sarbanes-Oxley'') \4\ to give the PCAOB authority to oversee
the audits of brokers and dealers registered with the Securities and
Exchange Commission (the ``SEC'' or the ``Commission''). Among other
things, Section 104(a)(2) of Sarbanes-Oxley authorizes the PCAOB to
establish an inspection program by rule. In August 2011, the Commission
approved Temporary Rule 4020T of the PCAOB to implement this new
authority.\5\ By granting the PCAOB regulatory authority over the
audits of registered brokers and dealers, Congress granted the PCAOB
authority to receive financial data and related underlying data about
registered broker-dealers, such as that which would be provided by the
Exchange under the proposed rule change.
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\3\ Public Law 111-203, 124 Stat 1376 (July 21, 2010).
\4\ Public Law 107-204, 116 Stat. 745.
\5\ See Securities Exchange Act Release No. 65163 (August 18,
2011), 76 FR 52996 (August 24, 2011) (approving PCAOB temporary rule
for an interim program of inspections related to registered public
accounting firm audits of broker-dealers).
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The Exchange has entered into an information sharing agreement with
the PCAOB. The Exchange intends to share, for example, Trading Permit
Holder FOCUS Report \6\ data with the PCAOB.

[[Page 30214]]

Under the information sharing agreement, the PCAOB has agreed to treat
all information provided to it by the Exchange as confidential and to
assert such confidentiality and other applicable privileges in response
to requests for such information from third parties.\7\ Under the
agreement shared information may be used by the recipient solely to
fulfill its regulatory duties and purposes. The proposed rule makes
explicit the Exchange's authority to enter into an agreement under such
terms.
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\6\ The ``FOCUS Report (Form X-17A-5) constitutes the basic
financial and operational report required of those brokers or
dealers subject to any minimum net capital requirement set forth in
Rule 15c3-1.'' General Instructions to FOCUS Report Form X-17A-5
Part IIA, OMB Number 3235-0123, available at: https://www.sec.gov/about/forms/formx-17a-5_2a.pdf.
\7\ The recipient of shared information under the agreement may
provide shared information to the SEC, if the information is
accompanied by a Freedom of Information Act confidential treatment
request, and to other self-regulatory or regulatory organizations
pursuant to information sharing agreements that require the
organizations to maintain the confidentiality of the shared
information.
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As discussed above, Congress has expressly granted the PCAOB
authority to inspect broker-dealers and the Commission has approved the
PCAOB's interim rule to implement that authority. The Exchange believes
sharing information with the PCAOB, due to its audit oversight role
over broker-dealers, including CBOE Trading Permit Holders, will assist
the PCAOB in performing the oversight intended by Congress, under terms
approved by the Commission.\8\ By explicitly permitting the Exchange to
share confidential information with the PCAOB for the purposes stated
in Rule 15.9, the proposed rule change will therefore make express the
Exchange's authority to assist the PCAOB to fulfill its Congressional
mandate, under terms approved by the Commission. Further, the proposed
rule change will notify Trading Permit Holders of the Exchange's
authority to enter into such information sharing agreements with the
PCAOB.
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\8\ See supra, note 5. The Exchange notes that if Temporary Rule
4020T of the PCAOB is not renewed, the Exchange would no longer have
authority to share information with PCAOB pursuant to CBOE Rule
15.9(a).
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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.\9\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \10\ 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) \11\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
\11\ Id.
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The proposed rule change is in the public's interest as it will
explicitly authorize the Exchange to enter into an information sharing
agreement with the PCAOB, thereby facilitating the sharing of
information with the PCAOB. The ability to obtain information from the
Exchange will better enable the PCAOB to perform its functions related
to broker-dealer audit oversight. Better oversight of registered
broker-dealer audits is in the public's interest and will serve to
prevent fraudulent and manipulative acts and practices. Additionally,
one of the essential purposes of the proposed rule change is to foster
cooperation and coordination with persons engaged in regulating and
processing information related to transactions in securities.
The Exchange also believes the proposed rule change is consistent
with Section 6(b)(1) of the Act,\12\ which provides that the Exchange
be organized and have the capacity to be able to carry out the purposes
of the Act and to enforce compliance by the Exchange's Trading Permit
Holders and persons associated with its Trading Permit Holders with the
Act, the rules and regulations thereunder, and the rules of the
Exchange. The PCAOB has agreed to reciprocate in sharing information of
regulatory interest to the Exchange, which will provide the Exchange
with more tools and information to enforce compliance by Trading Permit
Holders and persons associated with Trading Permit Holders. As further
evidence of its intent to reciprocate in sharing information with the
Exchange, the PCAOB has filed a proposed change to its Rule 5108 to
``conform to the Dodd-Frank amendments that permit the [PCAOB] to share
confidential information with `a self-regulatory organization, with
respect to an audit report for a broker or dealer that is under the
jurisdiction of such self-regulatory organization.''' \13\
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\12\ 15 U.S.C. 78f(b)(1).
\13\ See Securities Exchange Act Release No. 34-71237 (January
6, 2014), 79 FR 6272 (February 3, 2014) (notice of filing of
proposed rules on amendments to conform the PCAOB's rules and forms
to the Dodd-Frank Act and make certain updates and clarifications).
The Commission notes that it has since taken action on the PCAOB
proposal. See Securities Exchange Act Release No. 72087 (May 2,
2014), 79 FR 26491 (May 8, 2014) (File No. PCAOB-2013-03) (notice of
filing of Amendment No. 1, and order granting accelerated approval).
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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 proposed rule change is not
designed to address any competitive issues but rather is designed to
facilitate the sharing of information between PCAOB and the Exchange to
better enable each to fulfill its respective regulatory duties and
responsibilities.

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 rule does not (i) significantly affect the
protection of investors or the public 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 if consistent with the protection of investors
and the public interest, provided that the self-regulatory organization
has given the Commission written notice of its intent to file 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,\14\ the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-4(f)(6)
thereunder.\16\ At any time within 60 days of the filing of such
proposed rule change, the Commission summarily may temporarily suspend
such rule change if it appears to the

[[Page 30215]]

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.
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\14\ The Exchange has fulfilled this requirement.
\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f)(6).
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IV. Solicitation of Comments

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

Electronic Comments

Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-CBOE-2014-044 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-2014-044. 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-CBOE-2014-044 and should be
submitted on or before June 17, 2014.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-12074 Filed 5-23-14; 8:45 am]
BILLING CODE 8011-01-P

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