[Federal Register Volume 75, Number 245 (Wednesday, December 22, 2010)]
[Notices]
[Pages 80560-80561]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32067]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63559; File No. SR-CBOE-2010-109]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of a Proposed Rule Change Regarding Rule
4.20--Anti-Money Laundering Compliance Program
December 16, 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 December 2, 2010, the 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 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
CBOE proposes to amend CBOE Rule 4.20 to require all Trading Permit
Holders or TPH organizations to conduct independent testing during the
first calendar year of becoming a Trading Permit Holder or TPH
organization. The text of the proposed rule change is available on the
Exchange's Web site (http://www.cboe.org/legal), at the Exchange's
Office of the Secretary, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, CBOE included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of those statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to amend Rule 4.20--
Anti-Money Laundering Compliance Program to require all Trading Permit
Holders or TPH organizations to conduct independent testing during the
first calendar year of becoming a Trading Permit Holder or TPH
organization. CBOE Rule 4.20 generally requires annual (on a calendar-
year basis) independent testing for compliance. However, if the Trading
Permit Holder or TPH organization does not execute transactions for
customers or otherwise hold customer accounts, or act as an introducing
broker with respect to customer accounts (e.g., engages solely in
proprietary trading or conducts business only with other broker-
dealers), such ``independent testing'' is required every two years (on
a calendar-year basis). The Exchange believes that it is prudent to
amend this rule to require that all Trading Permit Holders or TPH
organizations conduct testing during the first calendar year of the
Trading Permit Holder or TPH organization's existence to ensure anti-
money laundering compliance is in place and established at the outset
of the Trading Permit Holder's or TPH organization's existence, even if
they would thereafter conduct such testing every two years.
CBOE Interpretations and Policies .01 continues to provide that all
Trading Permit Holders should undertake more frequent testing than
required by Rule 4.20 if circumstances warrant (e.g., should the
business mix of the Trading Permit Holder or TPH organization
materially change, in the event of a merger or acquisition, in light of
a systemic weaknesss uncovered via testing of the anti-money laundering
program, or in response to any other ``red flags'').\3\
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\3\ See Securities Exchange Act Release No. 57044 (December 27,
2007), 73 FR 2 (January 3, 2008) (SR-CBOE-2007-130).
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[[Page 80561]]
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) \4\ of the Act and the rules and regulations
thereunder, in general, and furthers the objectives of Section
6(b)(5),\5\ in particular, in that it is 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 facilitating transactions in securities, and to
remove impediments to and perfect the mechanisms of a free and open
market and a national market system, and, in general, to protect
investors and the public interest.
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\4\ 15 U.S.C. 78f(b).
\5\ 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 written comments on the
proposal.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) by order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
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-2010-109 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-2010-109. 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, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the CBOE. 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-2010-109 and should be
submitted on or before January 12, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-32067 Filed 12-21-10; 8:45 am]
BILLING CODE 8011-01-P