Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Exchange's Arbitration Forum, 19713-19715 [2015-08336]

Download as PDF Federal Register / Vol. 80, No. 70 / Monday, April 13, 2015 / Notices (1) Will request and evaluate, and the Fund’s Adviser will furnish, such information as may be reasonably necessary to make an informed determination of whether the Distribution Policy should be continued or continued after amendment; (2) will determine whether continuation, or continuation after amendment, of the Distribution Policy is consistent with the Fund’s investment objective(s) and policies and is in the best interests of the Fund and its stockholders, after considering the information in condition 5(b)(i)(1) above; including, without limitation: (A) Whether the Distribution Policy is accomplishing its purpose(s); (B) the reasonably foreseeable material effects of the Distribution Policy on the Fund’s long-term total return in relation to the market price and NAV of the Fund’s common stock; and (C) the Fund’s current distribution rate, as described in condition 5(b) above, compared with the Fund’s average annual taxable income or total return over the 2-year period, as described in condition 5(b), or such longer period as the Board deems appropriate; and (3) based upon that determination, will approve or disapprove the continuation, or continuation after amendment, of the Distribution Policy; and (ii) The Board will record the information considered by it, including its consideration of the factors listed in condition 5(b)(i)(2) above, and the basis for its approval or disapproval of the continuation, or continuation after amendment, of the Distribution Policy in its meeting minutes, which must be made and preserved for a period of not less than six years from the date of such meeting, the first two years in an easily accessible place. mstockstill on DSK4VPTVN1PROD with NOTICES 6. Public Offerings The Fund will not make a public offering of the Fund’s common stock other than: (a) A rights offering below NAV to holders of the Fund’s common stock; (b) an offering in connection with a dividend reinvestment plan, merger, consolidation, acquisition, spin-off or reorganization of the Fund; or (c) an offering other than an offering described in conditions 6(a) and 6(b) above, provided that, with respect to such other offering: (i) The Fund’s annualized distribution rate for the six months ending on the last day of the month ended immediately prior to the most recent VerDate Sep<11>2014 18:02 Apr 10, 2015 Jkt 235001 distribution record date,6 expressed as a percentage of NAV as of such date, is no more than 1 percentage point greater than the Fund’s average annual total return for the 5-year period ending on such date; 7 and (ii) the transmittal letter accompanying any registration statement filed with the Commission in connection with such offering discloses that the Fund has received an order under section 19(b) to permit it to make periodic distributions of long-term capital gains with respect to its shares of common stock as frequently as twelve times each year, and as frequently as distributions are specified by or determined in accordance with the terms of any outstanding shares of preferred stock as such Fund may issue. 7. Amendments to Rule 19b–1 The requested order will expire on the effective date of any amendment to rule 19b–1 that provides relief permitting certain closed-end investment companies to make periodic distributions of long-term capital gains with respect to their outstanding common stock as frequently as twelve times each year. For the Commission, by the Division of Investment Management, under delegated authority. Brent J. Fields, Secretary. [FR Doc. 2015–08338 Filed 4–10–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–74665; File No. SR–CBOE– 2015–037] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Exchange’s Arbitration Forum April 7, 2015. 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 April 1, 2015, Chicago Board Options Exchange, Incorporated (‘‘Exchange’’ or ‘‘CBOE’’) filed with the Securities and Exchange 6 If the Fund has been in operation fewer than six months, the measured period will begin immediately following the Fund’s first public offering. 7 If the Fund has been in operation fewer than five years, the measured period will begin immediately following the Fund’s first public offering. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 19713 Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. The Exchange filed the proposal as a ‘‘non-controversial’’ proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder.4 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 adopt new Rule 18.1A relating to arbitration. The text of the proposed rule change is available at the Exchange’s Office of the Secretary, on the Exchange’s Web site at https://www.cboe.com/AboutCBOE/ CBOELegalRegulatoryHome.aspx, 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 adopt new Rule 18.1A. Specifically, the Exchange proposes to adopt new Rule 18.1A which would govern all arbitration claims submitted to the Exchange after the proposed rule change becomes operative (‘‘Effective Date’’). By way of background, the Exchange currently offers an arbitration facility for any of its Trading Permit Holders (‘‘TPHs’’), associated persons, or their customers to arbitrate disputes, claims, or controversies arising out of Exchange business. The Exchange’s arbitration program is governed by Chapter XVIII of the CBOE Rules. The Exchange recently entered into a Regulatory Services Agreement (‘‘RSA’’) 3 15 4 17 E:\FR\FM\13APN1.SGM U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 13APN1 19714 Federal Register / Vol. 80, No. 70 / Monday, April 13, 2015 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES with the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’), pursuant to which FINRA, among other things, will provide certain services pertaining to dispute resolution. As such, CBOE would cease to administer an arbitration program for all claims after the Effective Date. More specifically, all arbitration claims filed on and after the Effective Date would be administered by FINRA pursuant to the RSA and the Exchange would continue to administer its arbitration program for all claims filed prior to the Effective Date. Additionally, the Exchange notes that the rules governing the administration of any particular arbitration would depend on the date the case was filed. This would help ensure that any person that filed an arbitration claim under a particular set of arbitration rules would continue to have the case administered pursuant to those rules through the case’s conclusion. Particularly, CBOE Rules 18.1–18.37, with the exception of proposed CBOE Rule 18.1A, would continue to apply to CBOE arbitration cases pending prior to the Effective Date.5 Thereafter, claims involving TPHs, associated persons of TPHs, and/ or customers would be arbitrated under the FINRA Code of Arbitration Procedure for Customer Disputes, the FINRA Code of Arbitration Procedure for Industry Disputes (together, ‘‘FINRA Codes of Arbitration’’), and proposed new Rule 18.1A. Proposed CBOE Rule 18.1A provides detailed guidance concerning claims involving TPHs, associated persons, and/or customers that are asserted on or after the Effective Date. First, disputes, claims, or controversies between or among CBOE TPHs and non-CBOE TPHs to resolve TPH-to-TPH, TPH-toassociated person, TPH-to-non-CBOE TPH, associated person-to-associated person, and associated person-to-nonCBOE TPH disputes arising out of or in connection with Exchange business would be arbitrated pursuant to the FINRA Codes of Arbitration. Proposed subparagraph (b) of CBOE Rule 18.1A provides that a dispute, claim, or controversy alleging employment discrimination (including a sexual harassment claim) in violation of a statute, however, may only be arbitrated if the parties have agreed to arbitrate it after the dispute arose.6 Any type of dispute, claim, or controversy that is not permitted to be arbitrated under the FINRA Codes of Arbitration, such as class action claims, would also not be eligible for arbitration. Proposed CBOE Rule 18.1A would also apply to former CBOE TPHs and former associated persons of CBOE TPHs. Additionally, proposed CBOE Rule 18.1A(d) would explicitly retain the Exchange’s enforcement authority related to arbitration. In appropriate cases, arbitrators refer to the Exchange potential violations of the Exchange’s Rules or the federal securities laws that come to their attention during and in connection with a proceeding. Proposed CBOE Rule 18.1A would specify that the Exchange would retain the ability to take action based on such referrals that may come from arbitrators in cases being arbitrated at FINRA. Proposed CBOE Rule 18.1A(e) would also retain the substance of current CBOE Rule 18.37, regarding the obligation to honor arbitration awards. It would provide that any TPH, or associated person of any TPH, that fails to honor an award of arbitrators rendered under proposed CBOE Rule 18.1A would be subject to disciplinary proceedings in accordance with Chapter 17 of the CBOE Rules. Proposed CBOE Rule 18.1A(f) would also specify that the submission of any matter to arbitration as provided for under the Rule would in no way limit or preclude any right, action, or determination by the Exchange that it would otherwise be authorized to adopt, administer, or enforce. Proposed CBOE Rule 18.1A(c) would also provide that the requirements of FINRA Rule 2268 (Requirements When Using Predispute Arbitration Agreements for Customer Accounts) would apply to predispute arbitration agreements between TPHs and their customers. Finally, the Exchange proposed adding Interpretation and Policy .04 to existing CBOE Rule 18.1, to clarify that the current CBOE arbitration rules (Rules 18.1 through 18.37), would apply only to arbitrations commenced prior to the Effective Date and would be otherwise of no force or effect. Proposed new Interpretation and Policy .04 would also clarify that all arbitrations filed prior to the Effective Date would, until concluded, continue to be administered by the Exchange. 5 The Exchange notes that there are three cases currently pending. 6 The Exchange notes that FINRA rules currently provide that any claim alleging employment discrimination, including any sexual harassment claims, in violation of a statute, is eligible for arbitration pursuant to either a pre-dispute or a post-dispute agreement to arbitrate. In contrast, proposed Rule 18.1A(b) would permit claims to be 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the Act and the rules and regulations VerDate Sep<11>2014 18:02 Apr 10, 2015 Jkt 235001 thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.7 Specifically, the Exchange believes that the proposed rule change is consistent with the Section 6(b)(5) 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.8 Additionally, the Exchange believes that the proposed rule change is consistent with the Section 6(b)(5) requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers.9 In particular, the Exchange believes that the proposed rule change would facilitate the transition of the Exchange’s arbitration forum to FINRA’s pursuant to the RSA the Exchange recently entered into with FINRA. Additionally, the Exchange believes that the proposed rule change would streamline the arbitration process and provide for a unified and efficient arbitration forum with one set of arbitration rules and administrative procedures for all cases filed after the Effective Date. The Exchange also believes that the proposal would provide a clear framework to handle arbitrations in a manner that is designed to prevent fraudulent and manipulative acts and practices, and to promote the protection of investors and the public interest. Further, the Exchange believes that the proposed rule change would provide greater harmonization between Exchange Rules and the rules of similar substance and purpose of FINRA, resulting in less burdensome and more efficient regulatory compliance for members of both the Exchange and FINRA (‘‘Dual Members’’), removing impediments to and perfecting the mechanism of a free and open market and a national market system. Finally, the Exchange believes that the proposed rule change would promote the protection of investors and the public interest by continuing to provide market participants with a simple and inexpensive procedure for resolution of their controversies. 7 15 arbitrated only when the parties have agreed to arbitrate the claim after it has arisen. PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 8 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 9 Id. E:\FR\FM\13APN1.SGM 13APN1 Federal Register / Vol. 80, No. 70 / Monday, April 13, 2015 / Notices Specifically, the Exchange notes that while CBOE would cease to administer an arbitration program, TPHs, associated persons, and their customers would still have an effective forum in which to arbitrate their disputes, claims, or controversies (i.e., TPHs, associated persons, and their customers would still have the availability of an arbitration program; it would just be FINRA’s program in lieu of CBOE’s). The Exchange believes that FINRA maintains a robust dispute resolution system that provides a clear framework to handle arbitrations in a manner that is designed to prevent fraudulent and manipulative acts and practices and promotes the protection of investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition CBOE does not believe that the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. CBOE believes that the proposed rule change is not designed to address any competitive issues. Rather, CBOE believes that the proposed rule change is designed to facilitate the transition of the Exchange’s arbitration forum to FINRA’s pursuant to the RSA and streamline the arbitration process and provide for a unified and efficient arbitration forum with one set of arbitration rules and administrative procedures for all cases filed after the Effective Date. Additionally, CBOE believes that the proposed rule change would provide greater harmonization between the Exchange Rules and FINRA Rules of similar purpose, resulting in less burdensome and more efficient regulatory compliance for Dual Members. 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. mstockstill on DSK4VPTVN1PROD with NOTICES 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 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, it has become effective pursuant to Section VerDate Sep<11>2014 20:28 Apr 10, 2015 Jkt 235001 19(b)(3)(A) of the Act 10 and Rule 19b– 4(f)(6) 11 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) of the Act 12 to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments 19715 public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549–1090 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 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– 2015–037 and should be submitted on or before May 4, 2015. 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Brent J. Fields, Secretary. Electronic Comments BILLING CODE 8011–01–P • 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–2015–037 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–2015–037. 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 at 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 10 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). Rule 19b–4(f)(6) requires a self-regulatory organization to give 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. The Exchange has satisfied this requirement. 12 15 U.S.C. 78s(b)(2)(B). 11 17 PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 [FR Doc. 2015–08336 Filed 4–10–15; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–74664; File No. SR–EDGX– 2015–15] Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rules 11.8, 11.9, 11.10, 11.11, and 11.16 Regarding the Limit Up-Limit Down Plan April 7, 2015. 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 March 26, 2015, EDGX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGX’’) 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 the Substance of the Proposed Rule Change The Exchange filed a proposal to amend Rules 11.8, 11.9, 11.10, 11.11, and 11.16, in order to conform Exchange Rules to the rules of BATS Exchange, Inc. (‘‘BZX’’) and BATS Y-Exchange, 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\13APN1.SGM 13APN1

Agencies

[Federal Register Volume 80, Number 70 (Monday, April 13, 2015)]
[Notices]
[Pages 19713-19715]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-08336]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74665; File No. SR-CBOE-2015-037]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to the Exchange's Arbitration Forum

April 7, 2015.

    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 April 1, 2015, Chicago Board Options Exchange, Incorporated 
(``Exchange'' or ``CBOE'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been substantially 
prepared by the Exchange. The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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

    The Exchange proposes to adopt new Rule 18.1A relating to 
arbitration. The text of the proposed rule change is available at the 
Exchange's Office of the Secretary, on the Exchange's Web site at 
https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx, 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 adopt new Rule 18.1A. Specifically, the 
Exchange proposes to adopt new Rule 18.1A which would govern all 
arbitration claims submitted to the Exchange after the proposed rule 
change becomes operative (``Effective Date''). By way of background, 
the Exchange currently offers an arbitration facility for any of its 
Trading Permit Holders (``TPHs''), associated persons, or their 
customers to arbitrate disputes, claims, or controversies arising out 
of Exchange business. The Exchange's arbitration program is governed by 
Chapter XVIII of the CBOE Rules.
    The Exchange recently entered into a Regulatory Services Agreement 
(``RSA'')

[[Page 19714]]

with the Financial Industry Regulatory Authority, Inc. (``FINRA''), 
pursuant to which FINRA, among other things, will provide certain 
services pertaining to dispute resolution. As such, CBOE would cease to 
administer an arbitration program for all claims after the Effective 
Date. More specifically, all arbitration claims filed on and after the 
Effective Date would be administered by FINRA pursuant to the RSA and 
the Exchange would continue to administer its arbitration program for 
all claims filed prior to the Effective Date.
    Additionally, the Exchange notes that the rules governing the 
administration of any particular arbitration would depend on the date 
the case was filed. This would help ensure that any person that filed 
an arbitration claim under a particular set of arbitration rules would 
continue to have the case administered pursuant to those rules through 
the case's conclusion. Particularly, CBOE Rules 18.1-18.37, with the 
exception of proposed CBOE Rule 18.1A, would continue to apply to CBOE 
arbitration cases pending prior to the Effective Date.\5\ Thereafter, 
claims involving TPHs, associated persons of TPHs, and/or customers 
would be arbitrated under the FINRA Code of Arbitration Procedure for 
Customer Disputes, the FINRA Code of Arbitration Procedure for Industry 
Disputes (together, ``FINRA Codes of Arbitration''), and proposed new 
Rule 18.1A.
---------------------------------------------------------------------------

    \5\ The Exchange notes that there are three cases currently 
pending.
---------------------------------------------------------------------------

    Proposed CBOE Rule 18.1A provides detailed guidance concerning 
claims involving TPHs, associated persons, and/or customers that are 
asserted on or after the Effective Date. First, disputes, claims, or 
controversies between or among CBOE TPHs and non-CBOE TPHs to resolve 
TPH-to-TPH, TPH-to-associated person, TPH-to-non-CBOE TPH, associated 
person-to-associated person, and associated person-to-non-CBOE TPH 
disputes arising out of or in connection with Exchange business would 
be arbitrated pursuant to the FINRA Codes of Arbitration. Proposed 
subparagraph (b) of CBOE Rule 18.1A provides that a dispute, claim, or 
controversy alleging employment discrimination (including a sexual 
harassment claim) in violation of a statute, however, may only be 
arbitrated if the parties have agreed to arbitrate it after the dispute 
arose.\6\ Any type of dispute, claim, or controversy that is not 
permitted to be arbitrated under the FINRA Codes of Arbitration, such 
as class action claims, would also not be eligible for arbitration. 
Proposed CBOE Rule 18.1A would also apply to former CBOE TPHs and 
former associated persons of CBOE TPHs.
---------------------------------------------------------------------------

    \6\ The Exchange notes that FINRA rules currently provide that 
any claim alleging employment discrimination, including any sexual 
harassment claims, in violation of a statute, is eligible for 
arbitration pursuant to either a pre-dispute or a post-dispute 
agreement to arbitrate. In contrast, proposed Rule 18.1A(b) would 
permit claims to be arbitrated only when the parties have agreed to 
arbitrate the claim after it has arisen.
---------------------------------------------------------------------------

    Additionally, proposed CBOE Rule 18.1A(d) would explicitly retain 
the Exchange's enforcement authority related to arbitration. In 
appropriate cases, arbitrators refer to the Exchange potential 
violations of the Exchange's Rules or the federal securities laws that 
come to their attention during and in connection with a proceeding. 
Proposed CBOE Rule 18.1A would specify that the Exchange would retain 
the ability to take action based on such referrals that may come from 
arbitrators in cases being arbitrated at FINRA.
    Proposed CBOE Rule 18.1A(e) would also retain the substance of 
current CBOE Rule 18.37, regarding the obligation to honor arbitration 
awards. It would provide that any TPH, or associated person of any TPH, 
that fails to honor an award of arbitrators rendered under proposed 
CBOE Rule 18.1A would be subject to disciplinary proceedings in 
accordance with Chapter 17 of the CBOE Rules. Proposed CBOE Rule 
18.1A(f) would also specify that the submission of any matter to 
arbitration as provided for under the Rule would in no way limit or 
preclude any right, action, or determination by the Exchange that it 
would otherwise be authorized to adopt, administer, or enforce. 
Proposed CBOE Rule 18.1A(c) would also provide that the requirements of 
FINRA Rule 2268 (Requirements When Using Predispute Arbitration 
Agreements for Customer Accounts) would apply to predispute arbitration 
agreements between TPHs and their customers.
    Finally, the Exchange proposed adding Interpretation and Policy .04 
to existing CBOE Rule 18.1, to clarify that the current CBOE 
arbitration rules (Rules 18.1 through 18.37), would apply only to 
arbitrations commenced prior to the Effective Date and would be 
otherwise of no force or effect. Proposed new Interpretation and Policy 
.04 would also clarify that all arbitrations filed prior to the 
Effective Date would, until concluded, continue to be administered by 
the Exchange.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\7\ Specifically, the Exchange believes that the proposed rule 
change is consistent with the Section 6(b)(5) 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.\8\ Additionally, the Exchange believes that the proposed rule 
change is consistent with the Section 6(b)(5) requirement that the 
rules of an exchange not be designed to permit unfair discrimination 
between customers, issuers, brokers, or dealers.\9\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ Id.
---------------------------------------------------------------------------

    In particular, the Exchange believes that the proposed rule change 
would facilitate the transition of the Exchange's arbitration forum to 
FINRA's pursuant to the RSA the Exchange recently entered into with 
FINRA. Additionally, the Exchange believes that the proposed rule 
change would streamline the arbitration process and provide for a 
unified and efficient arbitration forum with one set of arbitration 
rules and administrative procedures for all cases filed after the 
Effective Date. The Exchange also believes that the proposal would 
provide a clear framework to handle arbitrations in a manner that is 
designed to prevent fraudulent and manipulative acts and practices, and 
to promote the protection of investors and the public interest. 
Further, the Exchange believes that the proposed rule change would 
provide greater harmonization between Exchange Rules and the rules of 
similar substance and purpose of FINRA, resulting in less burdensome 
and more efficient regulatory compliance for members of both the 
Exchange and FINRA (``Dual Members''), removing impediments to and 
perfecting the mechanism of a free and open market and a national 
market system.
    Finally, the Exchange believes that the proposed rule change would 
promote the protection of investors and the public interest by 
continuing to provide market participants with a simple and inexpensive 
procedure for resolution of their controversies.

[[Page 19715]]

Specifically, the Exchange notes that while CBOE would cease to 
administer an arbitration program, TPHs, associated persons, and their 
customers would still have an effective forum in which to arbitrate 
their disputes, claims, or controversies (i.e., TPHs, associated 
persons, and their customers would still have the availability of an 
arbitration program; it would just be FINRA's program in lieu of 
CBOE's). The Exchange believes that FINRA maintains a robust dispute 
resolution system that provides a clear framework to handle 
arbitrations in a manner that is designed to prevent fraudulent and 
manipulative acts and practices and promotes the protection of 
investors and the public interest.

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

    CBOE does not believe that the proposed rule change would impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. CBOE believes that the proposed 
rule change is not designed to address any competitive issues. Rather, 
CBOE believes that the proposed rule change is designed to facilitate 
the transition of the Exchange's arbitration forum to FINRA's pursuant 
to the RSA and streamline the arbitration process and provide for a 
unified and efficient arbitration forum with one set of arbitration 
rules and administrative procedures for all cases filed after the 
Effective Date. Additionally, CBOE believes that the proposed rule 
change would provide greater harmonization between the Exchange Rules 
and FINRA Rules of similar purpose, resulting in less burdensome and 
more efficient regulatory compliance for Dual Members.

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 proposed rule change 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, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) \11\ thereunder.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). Rule 19b-4(f)(6) requires a self-
regulatory organization to give 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. The Exchange has 
satisfied this requirement.
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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 shall institute proceedings under 
Section 19(b)(2)(B) of the Act \12\ to determine whether the proposed 
rule change should be approved or disapproved.
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    \12\ 15 U.S.C. 78s(b)(2)(B).
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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-2015-037 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-2015-037. 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 at https://www.sec.gov/rules/sro.shtml. Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549-1090 on official business days between the hours 
of 10:00 a.m. and 3:00 p.m. Copies of 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-2015-037 and should be 
submitted on or before May 4, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-08336 Filed 4-10-15; 8:45 am]
 BILLING CODE 8011-01-P
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