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

SECURITIES AND EXCHANGE COMMISSION

[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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