[Federal Register Volume 75, Number 151 (Friday, August 6, 2010)]
[Notices]
[Pages 47672-47674]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-19332]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62602; File No. SR-CBOE-2010-069]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Amend Its Minor Rule Violation Plan
July 24, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on July 20, 2010, the Chicago Board Options Exchange,
Incorporated (``Exchange'' or ``CBOE'') filed with the Securities and
Exchange Commission (the ``Commission'') the proposed rule change as
described in Items I and II below, which Items have been prepared by
the Exchange. The 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.
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\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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend CBOE Rule 17.50--Imposition of Fines
for Minor Rule Violations. The text of the proposed rule change is
available on the Exchange's Web site (http://www.cboe.com/Legal), at
the Exchange's principal office, and at the Commission's Public
Reference Room.
[[Page 47673]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of and basis for the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below and is set forth in sections (A),
(B), and (C) below.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
In August 2009, the U.S. Securities and Exchange Commission
(``Commission'') approved a CBOE rule filing amending Rule 17.50--
Imposition of Fines for Minor Rule Violations.\5\ Among other things,
the rule filing incorporated a number of additional violations into
CBOE's Minor Rule Violation Plan.\6\ However, that filing did not add
references to those additional violations to Rule 17.50(c)(1), which
sets forth the procedures for the appeal of certain fines imposed under
the Minor Rule Violation Plan. The Exchange is proposing to add the
subsections that were added to the Minor Rule Violation Plan in August
2009 to Rule 17.50(c)(1) to allow for the same appeal process for these
additional violations.
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\5\ See Securities Exchange Act Release No. 34-60488 (August 12,
2009), 74 FR 42139 (August 20, 2009) (SR-CBOE-2009-037).
\6\ See CBOE Rule 17.50(g)(11)-(g)(18).
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In addition, CBOE proposes to revise Rule 17.50(g)(2) to
incorporate violations relating to the late filing of monthly and
quarterly FOCUS reports into the Minor Rule Violation Plan. Rule
17.50(g)(2) currently sets forth the fine schedule for the failure to
file annual FOCUS reports on Form X-17A-5 in accordance with Rule 17a-
10 \7\ under the Securities and Exchange Act of 1934 (``Exchange
Act''). CBOE proposes to expand this provision to include violations
for failure to file FOCUS reports on Form X-17A-5 in accordance with
Rule 17a-5 \8\ under the Exchange Act. Thus, a Trading Permit Holder
that submits a late monthly or quarterly FOCUS filing shall be assessed
a fine between $200 and $800 pursuant to the minor rule violation plan
depending on the number of days the FOCUS filing is late. If a Trading
Permit Holder submits a FOCUS filing more than ninety days late, the
Exchange will refer the matter to the Business Conduct Committee. CBOE
notes that the minor rule violation plan in place at the NYSE AMEX LLC
(``AMEX'') currently includes fines for similar violations under
Exchange Act Rules 17a-5 and 17a-10.\9\
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\7\ 17 CFR 240.17a-10.
\8\ 17 CFR 240.17a-5.
\9\ See Parts 3(a) and 3(g)(A) of AMEX Rule 590.
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The Exchange also recently revised its order handling rules in
connection with a new options industry linkage structure.\10\ Prior to
that rule change, Rule 6.83 governed Order Protection and Rule 6.84
governed Locked or Crossed Markets. However, this amendment revised the
rule numbers such that Rule 6.81 now governs Order Protection and Rule
6.82 governs Locked or Crossed Markets. However, the Exchange
inadvertently failed to update references to those Rules in CBOE Rule
17.50(g)(12) and 17.50(g)(13), which set forth the fines for Order
Protection Violations and Locked or Crossed Market Violations,
respectively, under the Exchange's Minor Rule Violation Plan. The
Exchange is proposing to modify these rule references such that Rule
17.50(g)(12) refers to Rule 6.81 and Rule 17.50(g)(13) refers to Rule
6.82.
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\10\ See Securities Exchange Act Release No. 34-60551 (August
20, 2009), 74 FR 43196 (August 26, 2009) (SR-CBOE-2009-040).
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act \11\ and the rules and regulations thereunder and, in
particular, the requirements of Section 6(b) of the Act.\12\
Specifically, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \13\ requirements that the rules of
an exchange be designed to promote just and equitable principles of
trade, to prevent fraudulent and manipulative acts, to remove
impediments to and to perfect the mechanism for 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
changes will strengthen its ability to carry out its oversight
responsibilities as a self-regulatory organization and reinforce its
surveillance and enforcement functions.
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\11\ 15 U.S.C. 78a et seq.
\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
CBOE does not believe that the proposed rule change will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act.
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
proposal.
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, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-
4(f)(6) thereunder.\15\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied the five-day pre-filing requirement.
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The Exchange has asked the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. The Commission believes that waiving the 30-day operative delay
is consistent with the protection of investors and the public interest,
because the proposed change makes technical changes to the rule,
clarifies minor omissions from the rule based on recent rule changes,
and is generally consistent with the rules of another exchange.\16\
Therefore, the Commission designates the proposed rule change as
operative upon filing.\17\
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\16\ See Parts 3(a) and 3(g)(A) of AMEX Rule 590.
\17\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such proposed rule
change the Commission may summarily abrogate 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.
[[Page 47674]]
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-CBOE-2010-069 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2010-069. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, on official
business days between the hours of 10 a.m. and 3 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-2010-069 and should be submitted on or before
August 27, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12) and 200.30-3(a)(44).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-19332 Filed 8-5-10; 8:45 am]
BILLING CODE 8010-01-P