Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice of Filing of a Proposed Rule Change Regarding Audit Trail Retention Requirements, 30503-30505 [2015-12831]
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Federal Register / Vol. 80, No. 102 / Thursday, May 28, 2015 / Notices
The Commission is noticing a
recent Postal Service filing concerning
an amendment to Priority Mail Contract
105 negotiated service agreement. This
notice informs the public of the filing,
invites public comment, and takes other
administrative steps.
DATES: Comments are due: May 29,
2015.
SUMMARY:
Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Notice of Filings
III. Ordering Paragraphs
asabaliauskas on DSK5VPTVN1PROD with NOTICES
I. Introduction
On May 21, 2015, the Postal Service
filed notice that it has agreed to an
Amendment to the existing Priority Mail
Contract 105 negotiated service
agreement (Existing Agreement)
approved in this docket.1 In support of
its Notice, the Postal Service includes a
redacted copy of the Amendment. Id.
Attachment A.
The Postal Service also filed the
unredacted Amendment under seal. The
Postal Service seeks to incorporate by
reference the Application for NonPublic Treatment originally filed in this
docket for the protection of information
it has filed under seal. Notice at 1. The
Postal Service states that the
Amendment does not materially affect
cost coverage; therefore, it asserts that
the supporting financial documentation
and certification remain applicable. Id.
The Amendment replaces section I.B
of the Existing Agreement, which
concerns the minimum commitment
required for eligibility for certain prices.
Id. Attachment A at 1.
The Postal Service intends for the
Amendment to become effective one
business day after the date that the
Commission completes its review of the
Notice. Notice at 1.
II. Notice of Filing
The Commission invites comments on
whether the changes presented in the
1 Notice of United States Postal Service of
Amendment to Priority Mail Contract 105, with
Portions Filed Under Seal, May 21, 2015 (Notice).
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18:18 May 27, 2015
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Postal Service’s Notice are consistent
with the policies of 39 U.S.C. 3632,
3633, or 3642, 39 CFR 3015.5, and 39
CFR part 3020, subpart B. Comments are
due no later than May 29, 2015. The
public portions of these filings can be
accessed via the Commission’s Web site
(https://www.prc.gov).
The Commission appoints James F.
Callow to represent the interests of the
general public (Public Representative)
in this docket.
III. Ordering Paragraphs
It is ordered:
1. The Commission reopens Docket
No. CP2015–25 for consideration of
matters raised by the Postal Service’s
Notice.
2. Pursuant to 39 U.S.C. 505, the
Commission appoints James F. Callow
to serve as an officer of the Commission
(Public Representative) to represent the
interests of the general public in this
proceeding.
3. Comments are due no later than
May 29, 2015.
4. The Secretary shall arrange for
publication of this order in the Federal
Register.
By the Commission.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2015–12906 Filed 5–27–15; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75025; File No. SR–CFE–
2015–004]
Self-Regulatory Organizations; CBOE
Futures Exchange, LLC; Notice of
Filing of a Proposed Rule Change
Regarding Audit Trail Retention
Requirements
May 21, 2015.
Pursuant to Section 19(b)(7) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
May 8, 2015 CBOE Futures Exchange,
LLC (‘‘CFE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change described in
Items I, II, and III below, which Items
have been prepared by CFE. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons. CFE
also has filed this proposed rule change
with the Commodity Futures Trading
Commission (‘‘CFTC’’). CFE filed a
written certification with the CFTC
1 15
PO 00000
U.S.C. 78s(b)(7).
Frm 00073
Fmt 4703
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30503
under Section 5c(c) of the Commodity
Exchange Act (‘‘CEA’’) 2 on May 8, 2015.
I. Self-Regulatory Organization’s
Description of the Proposed Rule
Change
The Exchange proposes to amend its
rules related to audit trail retention
requirements. The scope of this filing is
limited solely to the application of the
rule amendments to security futures
traded on CFE. The only security futures
currently traded on CFE are traded
under Chapter 16 of CFE’s Rulebook
which is applicable to Individual Stock
Based and Exchange-Traded Fund
Based Volatility Index security futures.
The text of the proposed rule change is
attached as Exhibit 4 to the filing but is
not attached to the publication of this
notice.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, CFE
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. CFE has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed CFE rule
amendments included as part of this
rule change is to amend CFE’s
requirements regarding the maintenance
of front-end audit trail information
under CFE Rule 403 (Order Entry). The
rule amendments included as part of
this rule change are to apply to all
products traded on CFE, including both
non-security futures and security
futures.
CFE Rule 403(c) currently requires
every CFE Trading Privilege Holder
(‘‘TPH’’) to maintain front-end audit
trail information for all electronic orders
entered into CFE’s trading system,
including order modifications and
cancellations. The amendments provide
that only CFE clearing members 3 and
27
U.S.C. 7a–2(c).
Rule 121 defines ‘‘Clearing Member’’ to
mean a member of The Options Clearing
Corporation (‘‘OCC’’) that is a CFE TPH and that is
authorized under OCC Rules to clear trades in any
or all CFE contracts.
3 CFE
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Federal Register / Vol. 80, No. 102 / Thursday, May 28, 2015 / Notices
TPHs that are futures commission
merchants (‘‘FCMs’’) or introducing
brokers (‘‘IBs’’) are required by Rule
403(c) to maintain front-end audit trail
information for all electronic orders as
well as quotes entered by that party into
CFE’s trading system, including all
related modifications and cancellations.
In addition, the amendments provide
that each CFE clearing member must
also maintain, or cause to be
maintained, front-end audit trail
information for all electronic orders and
quotes entered into CFE’s trading
system by any TPH for which the
clearing member is identified in the
order or quote submission as the
clearing member for the execution of the
order or quote, including all related
modifications and cancellations.
Because the first amended sentence of
Rule 403(c) requires each CFE clearing
member to maintain audit trail
information entered by that party and
the second amended sentence of Rule
403(c) requires each CFE clearing
member to maintain audit trail
information where the clearing member
has been identified as the clearing
member for the execution, there is the
potential for some limited overlap in the
information CFE clearing members must
maintain under these two provisions. In
addition, the amendments make clear
that each TPH is still obligated to
comply with the provisions of CFTC
Regulation 1.35 4 as applicable to that
TPH notwithstanding any of the
provisions of Rule 403(c). Among other
things, CFTC Regulation 1.35 provides
requirements relating to records that
FCMs, IBs, and members of a designated
contract market (‘‘DCM’’) must retain.
Lastly, the amendments change the title
of Rule 403 from ‘‘Order Entry’’ to
‘‘Order Entry and Maintenance of FrontEnd Audit Trail Information’’ to provide
greater clarity as to the requirements
covered by the Rule.
Front-end audit trail information is a
chronological record that provides
documentary evidence of the
transactions effected on CFE’s trading
system. The CFTC’s DCM Core Principle
10 (Trade Information) 5 and the CFTC’s
related regulations codified in CFTC
Regulations 38.551–553 6 require that a
DCM maintain an audit trail program in
order to prevent and detect customer
and market abuse.
CFE is proposing these amendments
for the following reasons. First, when
CFE initially established its audit trail
program and set forth CFE Rule 403,
CFE provided that each TPH was
4 17
CFR 1.35.
CFR 38.550.
6 17 CFR 38.551–553.
5 17
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required to maintain front-end audit
trail information sufficient to allow CFE
to conduct an annual audit trail exam of
that TPH, a requirement that went above
and beyond what the CFTC requires.
The CFTC permits CFE to require
clearing members to retain this
information for purposes of audit trail
exams and to conduct audit trail exams
of clearing members in lieu of
conducting them of a clearing member’s
TPH customers. Since Rule 403’s
inception, there is now an efficient
format and mechanism for CFE clearing
members to obtain CFE audit trail data
for their TPH customers, whereas there
was no such format and mechanism
when CFE established its current
requirements related to the maintenance
of front-end audit trail information.
Second, it is more efficient for CFE to
collect audit trail data from its clearing
members than all of its TPHs for audit
trail reviews and doing so will enhance
the effectiveness of CFE’s regulatory
program. CFE clearing members now
have a standardized method for
maintaining and submitting audit trail
data of their TPHs, and CFE will be able
to access all of the same audit trail
information CFE currently can access
under Rule 403’s current language.
Finally, other futures exchanges
currently have similar requirements in
place.7
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,8 in general, and
furthers the objectives of Sections
6(b)(5) 9 and 6(b)(7) 10 in particular in
that it is designed:
• To promote just and equitable
principles of trade,
• to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities,
and
• to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and in general, to protect
investors and the public interest.
The Exchange believes that the
proposed rule change would strengthen
7 See CME Rule 536.B.2 (‘‘Clearing members
guaranteeing a connection to Globex are responsible
for maintaining or causing to be maintained the
electronic audit trail for such systems.’’); ICE
Futures U.S. Rule 27.12A (‘‘Each Clearing Member
connecting to the ETS [ICE electronic trading
system] by Direct Access is responsible for (1)
maintaining or causing to be maintained . . . the
audit trail for all orders submitted to the Exchange
through its Direct Access connection and any Order
Routing system. . . .’’).
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
10 15 U.S.C. 78f(b)(7).
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
and make more efficient and effective
CFE’s administration of its audit trail
program which will contribute to
preventing and detecting customer and
market abuse. The change provides that
only CFE clearing members and TPHs
that are FCMs or IBs, rather than all
TPHs, are required to maintain frontend audit trail information for all
electronic orders as well as quotes
entered into CFE’s trading system,
including all related modifications and
cancellations. In addition, the change
provides that CFE clearing members
must also maintain, or cause to be
maintained, this information for their
TPH customers. This proposed rule
change promotes efficiencies because
CFE clearing members now have
available an efficient format and
mechanism to obtain CFE audit trail
data for their TPH customers. In
addition, it is more efficient for CFE to
collect audit trail data from its clearing
members than all of its TPHs for audit
trail reviews and doing so will enhance
the effectiveness of CFE’s regulatory
program. Finally, this proposed rule
change is consistent with the
requirements of other futures exchanges.
In summary, CFE is requiring the same
audit information to be maintained and
is simply changing who is required to
keep it.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CFE does not believe that the
proposed rule change will impose any
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Act, in that the rule
change will enhance CFE’s ability to
carry out its responsibilities as a selfregulatory organization. The Exchange
believes that the proposed rule change
is equitable and not unfairly
discriminatory because the amendments
regarding the maintenance of front-end
audit trail information apply equally to
all parties that are subject to the
applicable requirements.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The proposed rule change will
become effective on or after May 22,
2015, on a date to be announced by the
Exchange through the issuance of a
circular. At any time within 60 days of
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Federal Register / Vol. 80, No. 102 / Thursday, May 28, 2015 / Notices
the date of effectiveness of the proposed
rule change, the Commission, after
consultation with the CFTC, may
summarily abrogate the proposed rule
change and require that the proposed
rule change be refiled in accordance
with the provisions of Section 19(b)(1)
of the Act.11
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:
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CFE–2015–004 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–CFE–2015–004. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
offices of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
11 15
U.S.C. 78s(b)(1).
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18:18 May 27, 2015
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30505
should refer to File Number SR–CFE–
2015–004, and should be submitted on
or before June 18, 2015.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Robert W. Errett,
Deputy Secretary.
In its filing with the Commission,
DTC 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. DTC has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
[FR Doc. 2015–12831 Filed 5–27–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75030; File No. SR–DTC–
2015–006]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Clarify That
Participants Are Required To
Participate in Operational Testing by
DTC, Including Testing of DTC’s
Business Continuity and Disaster
Recovery Plans
May 21, 2015.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (‘‘Act’’)
and Rule 19b–4 2 thereunder, notice is
hereby given that on May 12, 2015, The
Depository Trust Company (‘‘DTC’’)
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 prepared by DTC. DTC filed
the proposed rule change pursuant to
Section 19(b)(3)(A) 3 of the Act and Rule
19b–4(f)(1) 4 thereunder. The proposed
rule change was effective upon filing
with the Commission. The Commission
is publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change consists of
a change to Rule 2 of the Rules of DTC
to clarify that Participants are required
to participate in operational testing by
DTC, including testing of DTC’s
business continuity and disaster
recovery plans, as more fully described
below.5
12 17
CFR 200.30–3(a)(73).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(1).
5 Terms not otherwise defined herein have the
meaning set forth in the DTC Rules, available at
https://www.dtcc.com/legal/rules-andprocedures.aspx.
1 15
PO 00000
Frm 00075
Fmt 4703
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(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
1. Purpose
Pursuant to DTC’s Rule 2 (Participants
and Pledgees), a DTC Participant is
required to have ‘‘adequate physical
facilities, books and records and
procedures to fulfill its anticipated
commitments to, and to meet the
operational requirements of, the
Corporation, other Participants and
Pledgees with necessary promptness
and accuracy and to conform to any
condition and requirement which the
Corporation reasonably deems necessary
for its protection.’’ DTC is proposing to
update Rule 2, as marked on Exhibit 5
hereto,6 in order to clarify that this
requirement may include engagement in
operational testing, including testing of
DTC’s business continuity and disaster
recovery plans. The proposed change to
Rule 2 reflects an existing policy with
respect to the meaning of an existing
rule, and will provide transparency
regarding an existing requirement.
2. Statutory Basis
The proposed rule change is
consistent with the Ac [sic], and the
rules and regulations thereunder, in
particular Section 17A(b)(3)(F) 7 because
it will promote the prompt and accurate
clearance and settlement of securities
transactions in that it will provide
clarity to DTC Participants regarding
their membership requirements.
(B) Clearing Agency’s Statement on
Burden on Competition
The proposed rule change will not
have any impact, or impose any burden,
on competition.
6 The Commission notes that Exhibit 5 is attached
to the filing, not to this Notice.
7 15 U.S.C. 78q–1(b)(3)(F).
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]]>Agencies
[Federal Register Volume 80, Number 102 (Thursday, May 28, 2015)]
[Notices]
[Pages 30503-30505]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12831]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-75025; File No. SR-CFE-2015-004]
Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice
of Filing of a Proposed Rule Change Regarding Audit Trail Retention
Requirements
May 21, 2015.
Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on May 8, 2015 CBOE Futures
Exchange, LLC (``CFE'' or ``Exchange'') filed with the Securities and
Exchange Commission (``SEC'' or ``Commission'') the proposed rule
change described in Items I, II, and III below, which Items have been
prepared by CFE. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons. CFE also
has filed this proposed rule change with the Commodity Futures Trading
Commission (``CFTC''). CFE filed a written certification with the CFTC
under Section 5c(c) of the Commodity Exchange Act (``CEA'') \2\ on May
8, 2015.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(7).
\2\ 7 U.S.C. 7a-2(c).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Description of the Proposed Rule
Change
The Exchange proposes to amend its rules related to audit trail
retention requirements. The scope of this filing is limited solely to
the application of the rule amendments to security futures traded on
CFE. The only security futures currently traded on CFE are traded under
Chapter 16 of CFE's Rulebook which is applicable to Individual Stock
Based and Exchange-Traded Fund Based Volatility Index security futures.
The text of the proposed rule change is attached as Exhibit 4 to the
filing but is not attached to the publication of this notice.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, CFE 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. CFE has prepared summaries, set forth in Sections A, B,
and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed CFE rule amendments included as part of
this rule change is to amend CFE's requirements regarding the
maintenance of front-end audit trail information under CFE Rule 403
(Order Entry). The rule amendments included as part of this rule change
are to apply to all products traded on CFE, including both non-security
futures and security futures.
CFE Rule 403(c) currently requires every CFE Trading Privilege
Holder (``TPH'') to maintain front-end audit trail information for all
electronic orders entered into CFE's trading system, including order
modifications and cancellations. The amendments provide that only CFE
clearing members \3\ and
[[Page 30504]]
TPHs that are futures commission merchants (``FCMs'') or introducing
brokers (``IBs'') are required by Rule 403(c) to maintain front-end
audit trail information for all electronic orders as well as quotes
entered by that party into CFE's trading system, including all related
modifications and cancellations. In addition, the amendments provide
that each CFE clearing member must also maintain, or cause to be
maintained, front-end audit trail information for all electronic orders
and quotes entered into CFE's trading system by any TPH for which the
clearing member is identified in the order or quote submission as the
clearing member for the execution of the order or quote, including all
related modifications and cancellations. Because the first amended
sentence of Rule 403(c) requires each CFE clearing member to maintain
audit trail information entered by that party and the second amended
sentence of Rule 403(c) requires each CFE clearing member to maintain
audit trail information where the clearing member has been identified
as the clearing member for the execution, there is the potential for
some limited overlap in the information CFE clearing members must
maintain under these two provisions. In addition, the amendments make
clear that each TPH is still obligated to comply with the provisions of
CFTC Regulation 1.35 \4\ as applicable to that TPH notwithstanding any
of the provisions of Rule 403(c). Among other things, CFTC Regulation
1.35 provides requirements relating to records that FCMs, IBs, and
members of a designated contract market (``DCM'') must retain. Lastly,
the amendments change the title of Rule 403 from ``Order Entry'' to
``Order Entry and Maintenance of Front-End Audit Trail Information'' to
provide greater clarity as to the requirements covered by the Rule.
---------------------------------------------------------------------------
\3\ CFE Rule 121 defines ``Clearing Member'' to mean a member of
The Options Clearing Corporation (``OCC'') that is a CFE TPH and
that is authorized under OCC Rules to clear trades in any or all CFE
contracts.
\4\ 17 CFR 1.35.
---------------------------------------------------------------------------
Front-end audit trail information is a chronological record that
provides documentary evidence of the transactions effected on CFE's
trading system. The CFTC's DCM Core Principle 10 (Trade Information)
\5\ and the CFTC's related regulations codified in CFTC Regulations
38.551-553 \6\ require that a DCM maintain an audit trail program in
order to prevent and detect customer and market abuse.
---------------------------------------------------------------------------
\5\ 17 CFR 38.550.
\6\ 17 CFR 38.551-553.
---------------------------------------------------------------------------
CFE is proposing these amendments for the following reasons. First,
when CFE initially established its audit trail program and set forth
CFE Rule 403, CFE provided that each TPH was required to maintain
front-end audit trail information sufficient to allow CFE to conduct an
annual audit trail exam of that TPH, a requirement that went above and
beyond what the CFTC requires. The CFTC permits CFE to require clearing
members to retain this information for purposes of audit trail exams
and to conduct audit trail exams of clearing members in lieu of
conducting them of a clearing member's TPH customers. Since Rule 403's
inception, there is now an efficient format and mechanism for CFE
clearing members to obtain CFE audit trail data for their TPH
customers, whereas there was no such format and mechanism when CFE
established its current requirements related to the maintenance of
front-end audit trail information. Second, it is more efficient for CFE
to collect audit trail data from its clearing members than all of its
TPHs for audit trail reviews and doing so will enhance the
effectiveness of CFE's regulatory program. CFE clearing members now
have a standardized method for maintaining and submitting audit trail
data of their TPHs, and CFE will be able to access all of the same
audit trail information CFE currently can access under Rule 403's
current language. Finally, other futures exchanges currently have
similar requirements in place.\7\
---------------------------------------------------------------------------
\7\ See CME Rule 536.B.2 (``Clearing members guaranteeing a
connection to Globex are responsible for maintaining or causing to
be maintained the electronic audit trail for such systems.''); ICE
Futures U.S. Rule 27.12A (``Each Clearing Member connecting to the
ETS [ICE electronic trading system] by Direct Access is responsible
for (1) maintaining or causing to be maintained . . . the audit
trail for all orders submitted to the Exchange through its Direct
Access connection and any Order Routing system. . . .'').
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\8\ in general, and furthers the
objectives of Sections 6(b)(5) \9\ and 6(b)(7) \10\ in particular in
that it is designed:
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ 15 U.S.C. 78f(b)(7).
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To promote just and equitable principles of trade,
to foster cooperation and coordination with persons
engaged in facilitating transactions in securities, and
to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and in general, to
protect investors and the public interest.
The Exchange believes that the proposed rule change would
strengthen and make more efficient and effective CFE's administration
of its audit trail program which will contribute to preventing and
detecting customer and market abuse. The change provides that only CFE
clearing members and TPHs that are FCMs or IBs, rather than all TPHs,
are required to maintain front-end audit trail information for all
electronic orders as well as quotes entered into CFE's trading system,
including all related modifications and cancellations. In addition, the
change provides that CFE clearing members must also maintain, or cause
to be maintained, this information for their TPH customers. This
proposed rule change promotes efficiencies because CFE clearing members
now have available an efficient format and mechanism to obtain CFE
audit trail data for their TPH customers. In addition, it is more
efficient for CFE to collect audit trail data from its clearing members
than all of its TPHs for audit trail reviews and doing so will enhance
the effectiveness of CFE's regulatory program. Finally, this proposed
rule change is consistent with the requirements of other futures
exchanges. In summary, CFE is requiring the same audit information to
be maintained and is simply changing who is required to keep it.
B. Self-Regulatory Organization's Statement on Burden on Competition
CFE does not believe that the proposed rule change will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act, in that the rule change will enhance CFE's
ability to carry out its responsibilities as a self-regulatory
organization. The Exchange believes that the proposed rule change is
equitable and not unfairly discriminatory because the amendments
regarding the maintenance of front-end audit trail information apply
equally to all parties that are subject to the applicable requirements.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change will become effective on or after May 22,
2015, on a date to be announced by the Exchange through the issuance of
a circular. At any time within 60 days of
[[Page 30505]]
the date of effectiveness of the proposed rule change, the Commission,
after consultation with the CFTC, may summarily abrogate the proposed
rule change and require that the proposed rule change be refiled in
accordance with the provisions of Section 19(b)(1) of the Act.\11\
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\11\ 15 U.S.C. 78s(b)(1).
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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-CFE-2015-004 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-CFE-2015-004. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal offices of the Exchange.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-CFE-2015-004,
and should be submitted on or before June 18, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(73).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-12831 Filed 5-27-15; 8:45 am]
BILLING CODE 8011-01-P
