Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change To Amend Rule 24.19, 45560-45562 [2014-18379]

Download as PDF 45560 Federal Register / Vol. 79, No. 150 / Tuesday, August 5, 2014 / Notices should refer to File Number SR– NASDAQ–2014–038 and should be submitted on or before August 26, 2014. Rebuttal comments should be submitted by September 9, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.28 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–18389 Filed 8–4–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–72704; File No. SR–CBOE– 2014–060 Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change To Amend Rule 24.19 July 29, 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 July 25, 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. mstockstill on DSK4VPTVN1PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its rule related to Multi-Class Broad-Based Index Option Spread Orders. 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 28 17 CFR 200.30–3(a)(57). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Mar<15>2010 18:16 Aug 04, 2014 Jkt 232001 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 24.19. This Rule allows Trading Permit Holders (‘‘TPHs’’) to execute Multi-Class Broad-Based Index Option Spread Orders (‘‘Multi-Class Spread Orders’’) that meet certain qualifying criteria. Currently, not all Multi-Class Spread Orders may be entered electronically due to systems constraints. The Exchange is in the process of modifying its electronic order-entry systems to provide for the electronic entry and validation of all Multi-Class Spread Orders to the floor of the Exchange. This will provide for an enhanced audit trail that will better allow regulatory oversight in connection with the provisions of Rule 24.19. For the Exchange’s systems to determine that two separate legs are part of the same Multi-Class Spread Order (allowing for treatment as a Multi-Class Spread Order), both legs must be entered together on a single order ticket. As such, the Exchange proposes to amend Rule 24.19 to state that ‘‘MultiClass Spread Orders must be entered on a single order ticket at time of systemization to be eligible for the procedures and relief set out in this Rule.’’ 3 The Multi-Class Spread Order type will enforce the permitted combinations of options covered by Rule 24.19. The Exchange will not accept Multi-Class Spread Orders with invalid combinations. While the proposed rule change allows for all Multi-Class Spread Orders to be entered electronically, all Multi-Class Spread Orders will still be executed in open outcry on the Exchange’s trading floor. Because the current method for representing and executing Multi-Class Spread Orders is manual and must occur only in open outcry, the current 3 The Exchange notes that the substance of this proposal was published in a prior proposal which was published for the entire 21 day comment period, and no comments were received. That prior proposal provided for several changes to Rule 24.19; however, this proposal specifically relates to the electronic entry and validation of Multi-Class Spread Orders and can be considered and approved without reference to the other proposed changes in the prior proposal. See Securities Exchange Act Release No. 71872 (April 4, 2014), 79 FR 19940 (April 10, 2014) (SR–CBOE–2014–026). PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 language states that a Multi-Class Spread Order may be represented at the trading station of either Broad-Based Option comprising the order, and also requires that the TPH initiating the order in the trading crowd to contact an Order Book Official (‘‘OBO’’), Designated Primary Market-Maker (‘‘DPM’’), or appropriate Exchange staff, as applicable, at the other trading station to have a notice of such order disseminated to the other trading crowd. The proposed rule change will require that a Multi-Class Spread Order be represented at the primary trading station, and states that the TPH representing the order must contact the DPM or Exchange staff 4 (as applicable) at the other trading station in order to provide notice of such order for dissemination to the other trading crowd. Each Broad-Based Index Option has a trading station. The primary trading station is the first trading station at which the Multi-Class Spread Order is represented. The floor broker representing the Multi-Class Spread Order may determine which trading station should be the primary trading station. The current rule states that notice of a Multi-Class Spread order ‘‘shall be disseminated by the Recipient who shall verbalize the terms of the order to the other trading crowd.’’ However, the Exchange proposes to replace the word ‘‘verbalize’’ with the word ‘‘announce’’, as the Exchange is currently contemplating changes that will allow such notice to be posted on screens electronically to the other trading crowd (which could be a more efficient method of posting such order information). This ensures that all market participants at both physical trading locations are aware of the terms of the order being processed. The proposed rule change will enhance and improve the process of sending Multi-Class Spread Orders to the floor of the Exchange, as well as enhance the Exchange’s audit trail with respect to such orders. No later than 90 days following the effective date of the proposed rule change, the Exchange will announce to TPHs via Regulatory Circular the implementation date by which TPHs must be in compliance with the changes described herein. The implementation date will be no later than 180 days following the effective date of the proposed rule change, and will be at least 30 days following the release of the abovementioned Regulatory Circular (in order to give TPHs ample time to come into 4 The Exchange proposes to remove the reference to contacting an OBO, as the Exchange no longer has OBOs. E:\FR\FM\05AUN1.SGM 05AUN1 Federal Register / Vol. 79, No. 150 / Tuesday, August 5, 2014 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES compliance with the changes described herein). regulations thereunder, and the rules of the Exchange. 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.5 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 6 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) 7 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. In particular, the Exchange believes that automating the Multi-Class Spread Order creation process for all MultiClass Spread Orders serves to remove impediments to and to perfect the mechanism for a free and open market and a national market system by providing market participants the ability to route Multi-Class Spread Orders to the Exchange electronically. Further, enhancing the audit trail with respect to Multi-Class Spread Orders promotes transparency and aids in surveillance, thereby protecting investors. The Exchange also believes the proposed rule change is consistent with Section 6(b)(1) of the Act,8 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. Enhancing the audit trail with respect to Multi-Class Spread Orders will allow the Exchange to better enforce compliance by the Exchange’s TPHs and persons associated with its TPHs with the Act, the rules and B. Self-Regulatory Organization’s Statement on Burden on Competition 5 15 6 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 7 Id. 8 15 U.S.C. 78f(b)(1). VerDate Mar<15>2010 18:16 Aug 04, 2014 Jkt 232001 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 Exchange believes that automating the Multi-Class Spread Order creation process for all Multi-Class Spread Orders promotes fair and orderly markets, as well as assists the Exchange in its ability to effectively attract order flow and liquidity to its market, and ultimately benefits all CBOE TPHs and all investors. The Exchange does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because Multi-Class Spread Orders are available to all market participants through CBOE TPHs. The Exchange does not believe that the proposed rule change will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because, again, Multi-Class Spread Orders are available to all market participants through CBOE TPHs, which makes CBOE a more effective marketplace. Further, the proposed changes only affect trading on CBOE. To the extent that the proposed changes make CBOE more attractive to market participants at other exchanges, such market participants may elect to become CBOE market participants. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents, the Commission will: A. by order approve or disapprove such proposed rule change, or B. institute proceedings to determine whether the proposed rule change should be disapproved. PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 45561 The Exchange has requested accelerated approval of the proposed rule change. The Commission is considering granting accelerated approval of the proposed rule change at the end of a 15-day comment period. 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–2014–060 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–2014–060. 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 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– 2014–060 and should be submitted on or before August 20, 2014. E:\FR\FM\05AUN1.SGM 05AUN1 45562 Federal Register / Vol. 79, No. 150 / Tuesday, August 5, 2014 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Kevin M. O’Neill. Deputy Secretary. [FR Doc. 2014–18379 Filed 8–4–14; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–72721; File No. SR–NYSE– 2014–37] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Price List Related to Co-Location Services July 30, 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 July 23, 2014, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the selfregulatory 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 amend its Price List related to co-location services. The Exchange proposes to implement the fee change effective July 28, 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. 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 self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, 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 VerDate Mar<15>2010 18:16 Aug 04, 2014 Jkt 232001 A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose SECURITIES AND EXCHANGE COMMISSION 9 17 set forth in sections A, B, and C below, of the most significant parts of such statements. The Exchange proposes to amend its Price List related to co-location services. The Exchange proposes to implement the fee change effective July 28, 2014.4 The proposed change is intended to, among other things, streamline the offerings available to Users in the data center, make the Price List easier to understand and administer, and eliminate references to services that would be discontinued because they are no longer utilized by Users.5 Cages A User is able to purchase a cage to house its cabinets within the data center. A cage would typically be purchased by a User that has several cabinets within the data center and that wishes to arrange its cabinets contiguously while also enhancing privacy around its cabinets. The Exchange charges fees for cages based on the size of the cage, which directly corresponds to the number of cabinets housed therein.6 The Exchange proposes to amend the Price List to reflect that a User must have at least two cabinets in the data center to purchase a cage. Existing pricing for cages would not change. 4 The Securities and Exchange Commission (‘‘Commission’’) initially approved the Exchange’s co-location services in Securities Exchange Act Release No. 62960 (September 21, 2010), 75 FR 59310 (September 27, 2010) (SR–NYSE–2010–56) (the ‘‘Original Co-location Approval’’). The Exchange operates a data center in Mahwah, New Jersey (the ‘‘data center’’) from which it provides co-location services to Users. 5 For purposes of the Exchange’s co-location services, the term ‘‘User’’ includes (i) member organizations, as that term is defined in NYSE Rule 2(b); (ii) Sponsored Participants, as that term is defined in NYSE Rule 123B.30(a)(ii)(B); and (iii) non-member organization broker-dealers and vendors that request to receive co-location services directly from the Exchange. See, e.g., Securities Exchange Act Release No. 65973 (December 15, 2011), 76 FR 79232 (December 21, 2011) (SR– NYSE–2011–53). As specified in the Price List, a User that incurs co-location fees for a particular colocation service pursuant thereto would not be subject to co-location fees for the same co-location service charged by the Exchange’s affiliates NYSE MKT LLC and NYSE Arca, Inc. See Securities Exchange Act Release No. 70206 (August 15, 2013), 78 FR 51765 (August 21, 2013) (SR–NYSE–2013– 59). 6 See Securities Exchange Act Release No. 67666 (August 15, 2012), 77 FR 50742 (August 22, 2012) (SR–NYSE–2012–18). PO 00000 Frm 00141 Fmt 4703 Sfmt 4703 LCN CSP Access The Exchange’s ‘‘Liquidity Center Network’’ (‘‘LCN’’) is a local area network that is available in the data center. A User is currently able to act as a content service provider (a ‘‘CSP’’ User) and deliver services to another User in the data center (a ‘‘Subscribing’’ User).7 These services could include, for example, order routing/brokerage services and/or data delivery services. LCN CSP connections allow the CSP User to send data to, and communicate with, all the properly authorized Subscribing Users at once, via a specific, dedicated LCN connection (an ‘‘LCN CSP’’ connection). The Price List includes related pricing. The Exchange proposes to discontinue the one gigabit (‘‘Gb’’) LCN CSP connection offering, which is no longer utilized by Users, and to remove references to related pricing from the Price List. The 10 Gb LCN CSP connection offering would remain available, as would the related pricing in the Price List. Also, a CSP User would remain able to deliver its services to a Subscribing User via direct cross connect, as is currently the case and as was the case prior to the introduction of the LCN CSP connection offering. Bundled Network Access A User is currently able to select from three ‘‘bundled’’ connectivity options, at various bandwidths (i.e., one, 10 and 40 Gb), when connecting to the data center. The Exchange proposes to discontinue ‘‘bundled’’ connectivity options that are no longer utilized by Users and to remove references to related pricing from the Price List. In particular, the Exchange would discontinue (1) ‘‘Option 2’’ completely, (2) the 10 Gb LX and 40 Gb bandwidth ‘‘bundles’’ under ‘‘Option 1,’’ and (3) the one Gb, 10 Gb LX and 40 Gb ‘‘bundles’’ under Option 3. Current ‘‘Option 3’’ would be renumbered as ‘‘Option 2.’’ Initial Install Services When a User selects a new cabinet in the data center it is charged the ‘‘Initial Install Services’’ fee ($800 per dedicated cabinet or $400 for per eight-rack unit in a partial cabinet), which includes initial racking of equipment in the cabinet, provision of a certain number of cables (10 per dedicated cabinet or five per eight-rack unit in a partial cabinet), and a certain number of hours of labor (four per dedicated cabinet or two per eight-rack unit in a partial cabinet).8 7 Id. 8 The Exchange explained the Initial Install Services fee when it introduced partial cabinet offerings. See Securities Exchange Act Release No. E:\FR\FM\05AUN1.SGM 05AUN1

Agencies

[Federal Register Volume 79, Number 150 (Tuesday, August 5, 2014)]
[Notices]
[Pages 45560-45562]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-18379]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72704; File No. SR-CBOE-2014-060


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing of a Proposed Rule Change To Amend Rule 
24.19

July 29, 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 July 25, 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

    The Exchange proposes to amend its rule related to Multi-Class 
Broad-Based Index Option Spread Orders. 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 Exchange proposes to amend Rule 24.19. This Rule allows Trading 
Permit Holders (``TPHs'') to execute Multi-Class Broad-Based Index 
Option Spread Orders (``Multi-Class Spread Orders'') that meet certain 
qualifying criteria. Currently, not all Multi-Class Spread Orders may 
be entered electronically due to systems constraints. The Exchange is 
in the process of modifying its electronic order-entry systems to 
provide for the electronic entry and validation of all Multi-Class 
Spread Orders to the floor of the Exchange. This will provide for an 
enhanced audit trail that will better allow regulatory oversight in 
connection with the provisions of Rule 24.19. For the Exchange's 
systems to determine that two separate legs are part of the same Multi-
Class Spread Order (allowing for treatment as a Multi-Class Spread 
Order), both legs must be entered together on a single order ticket. As 
such, the Exchange proposes to amend Rule 24.19 to state that ``Multi-
Class Spread Orders must be entered on a single order ticket at time of 
systemization to be eligible for the procedures and relief set out in 
this Rule.'' \3\ The Multi-Class Spread Order type will enforce the 
permitted combinations of options covered by Rule 24.19. The Exchange 
will not accept Multi-Class Spread Orders with invalid combinations. 
While the proposed rule change allows for all Multi-Class Spread Orders 
to be entered electronically, all Multi-Class Spread Orders will still 
be executed in open outcry on the Exchange's trading floor.
---------------------------------------------------------------------------

    \3\ The Exchange notes that the substance of this proposal was 
published in a prior proposal which was published for the entire 21 
day comment period, and no comments were received. That prior 
proposal provided for several changes to Rule 24.19; however, this 
proposal specifically relates to the electronic entry and validation 
of Multi-Class Spread Orders and can be considered and approved 
without reference to the other proposed changes in the prior 
proposal. See Securities Exchange Act Release No. 71872 (April 4, 
2014), 79 FR 19940 (April 10, 2014) (SR-CBOE-2014-026).
---------------------------------------------------------------------------

    Because the current method for representing and executing Multi-
Class Spread Orders is manual and must occur only in open outcry, the 
current language states that a Multi-Class Spread Order may be 
represented at the trading station of either Broad-Based Option 
comprising the order, and also requires that the TPH initiating the 
order in the trading crowd to contact an Order Book Official (``OBO''), 
Designated Primary Market-Maker (``DPM''), or appropriate Exchange 
staff, as applicable, at the other trading station to have a notice of 
such order disseminated to the other trading crowd. The proposed rule 
change will require that a Multi-Class Spread Order be represented at 
the primary trading station, and states that the TPH representing the 
order must contact the DPM or Exchange staff \4\ (as applicable) at the 
other trading station in order to provide notice of such order for 
dissemination to the other trading crowd. Each Broad-Based Index Option 
has a trading station. The primary trading station is the first trading 
station at which the Multi-Class Spread Order is represented. The floor 
broker representing the Multi-Class Spread Order may determine which 
trading station should be the primary trading station. The current rule 
states that notice of a Multi-Class Spread order ``shall be 
disseminated by the Recipient who shall verbalize the terms of the 
order to the other trading crowd.'' However, the Exchange proposes to 
replace the word ``verbalize'' with the word ``announce'', as the 
Exchange is currently contemplating changes that will allow such notice 
to be posted on screens electronically to the other trading crowd 
(which could be a more efficient method of posting such order 
information). This ensures that all market participants at both 
physical trading locations are aware of the terms of the order being 
processed.
---------------------------------------------------------------------------

    \4\ The Exchange proposes to remove the reference to contacting 
an OBO, as the Exchange no longer has OBOs.
---------------------------------------------------------------------------

    The proposed rule change will enhance and improve the process of 
sending Multi-Class Spread Orders to the floor of the Exchange, as well 
as enhance the Exchange's audit trail with respect to such orders. No 
later than 90 days following the effective date of the proposed rule 
change, the Exchange will announce to TPHs via Regulatory Circular the 
implementation date by which TPHs must be in compliance with the 
changes described herein. The implementation date will be no later than 
180 days following the effective date of the proposed rule change, and 
will be at least 30 days following the release of the abovementioned 
Regulatory Circular (in order to give TPHs ample time to come into

[[Page 45561]]

compliance with the changes described herein).
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.\5\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \6\ 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) \7\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ Id.
---------------------------------------------------------------------------

    In particular, the Exchange believes that automating the Multi-
Class Spread Order creation process for all Multi-Class Spread Orders 
serves to remove impediments to and to perfect the mechanism for a free 
and open market and a national market system by providing market 
participants the ability to route Multi-Class Spread Orders to the 
Exchange electronically. Further, enhancing the audit trail with 
respect to Multi-Class Spread Orders promotes transparency and aids in 
surveillance, thereby protecting investors.
    The Exchange also believes the proposed rule change is consistent 
with Section 6(b)(1) of the Act,\8\ 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. Enhancing the audit trail with respect to Multi-Class Spread 
Orders will allow the Exchange to better enforce compliance by the 
Exchange's TPHs and persons associated with its TPHs with the Act, the 
rules and regulations thereunder, and the rules of the Exchange.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------

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 Exchange believes that 
automating the Multi-Class Spread Order creation process for all Multi-
Class Spread Orders promotes fair and orderly markets, as well as 
assists the Exchange in its ability to effectively attract order flow 
and liquidity to its market, and ultimately benefits all CBOE TPHs and 
all investors. The Exchange does not believe that the proposed rule 
change will impose any burden on intramarket competition that is not 
necessary or appropriate in furtherance of the purposes of the Act 
because Multi-Class Spread Orders are available to all market 
participants through CBOE TPHs. The Exchange does not believe that the 
proposed rule change will impose any burden on intermarket competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act because, again, Multi-Class Spread Orders are available to all 
market participants through CBOE TPHs, which makes CBOE a more 
effective marketplace. Further, the proposed changes only affect 
trading on CBOE. To the extent that the proposed changes make CBOE more 
attractive to market participants at other exchanges, such market 
participants may elect to become CBOE market participants.

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

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

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    A. by order approve or disapprove such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule 
change should be disapproved.
    The Exchange has requested accelerated approval of the proposed 
rule change. The Commission is considering granting accelerated 
approval of the proposed rule change at the end of a 15-day comment 
period.

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-2014-060 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-2014-060. 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 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-2014-060 and should be 
submitted on or before August 20, 2014.


[[Page 45562]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill.
Deputy Secretary.
[FR Doc. 2014-18379 Filed 8-4-14; 8:45 am]
BILLING CODE 8011-01-P