[Federal Register Volume 76, Number 65 (Tuesday, April 5, 2011)]
[Notices]
[Pages 18816-18817]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-7980]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64152; File No. SR-CFE-2011-001]
Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Certain Rules Relating to Listing and Trading Security Futures
March 30, 2011.
Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on March 18, 2011, 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 filed this proposed rule change concurrently 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 March 18, 2011.
---------------------------------------------------------------------------
\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 certain rules relating to the
listing and trading of security futures on the Exchange. The changes
are being proposed to conform certain CFE rules to current parallel
rules of OneChicago, LLC (``OCX''). The text of the proposed rule
change is available on the Exchange's Web site at http://www.cfe.cboe.com, on the Commission's Web site at http://www.sec.gov,
at the principal office of the Exchange, 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, 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 this proposed rule is to amend certain rules
governing the listing and trading of security futures on the Exchange.
The changes are being made to conform certain CFE rules to current
parallel rules of OCX.
Regulatory Halt Amendments
CFE is proposing to amend Rule 417 by adding provisions for
regulatory halts. OCX made a similar rule change to make clear that a
``regulatory halt'' applies not only to the suspending of all trading
in equity securities on the underlying national securities exchange but
also to a trading pause on an individual underlying equity security
that has been imposed by the rules of the national securities
exchange.\3\ CFE is also proposing to amend CFE Policy and Procedure
III by adding a cross-reference to Rule 417 and setting forth the
ability of the help desk to bust any trade in a Single Stock Future or
in a Narrow-Based Index Future that occurs after the time a regulatory
halt is instituted and before trading has been resumed in the affected
Single Stock Future or Narrow-Based Index Future.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 62582 (July 28,
2010), 75 FR 47039 (August 4, 2010) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change by OneChicago, Amending Rule
419(a), Regulatory Halts) (SR-OC-2010-03).
---------------------------------------------------------------------------
Change Quoting Requirements for Market Makers
CFE is proposing to amend Rule 517 and CFE Policy and Procedure VII
to change the quoting requirements for Market Makers. Presently, a
market maker, when providing quotations, quotes with a maximum bid/ask
spread of no more than the greater of $0.20 (the ``20 Cent Spread'') of
150 percent of the bid/ask spread in the primary market for the
security underlying the Security Future. The proposed rule change will
raise the 20 Cent Spread to $5. This change will be affected by
amending subparagraph (n) to Rule 517 and subparagraph C to CFE Policy
and Procedure VII. OCX made a similar rule change raising its 20 Cent
Spread to $5, which was nearly identical to one approved by the SEC for
security options.\4\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 60143 (June 19,
2009), 74 FR 30345 (June 25, 2009) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change Widening the Bid/Ask Spread
for Quoting Market-Makers) (SR-OC-2009-02).
---------------------------------------------------------------------------
Maintenance Standard Amendments
First, CFE is proposing to amend CFE Policy and Procedure VIII by
eliminating the $3 market price maintenance standard. This change will
be affected by deleting subparagraph B.1.(v) to CFE Policy and
Procedure VIII. OCX made a similar rule change eliminating the $3
market price per share requirement, which was nearly identical to one
approved by the SEC for security options.\5\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 59744 (April 9,
2009), 74 FR 17706 (April 16, 2009) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change Eliminating the $3 Market
Price Maintenance Standard) (SR-OC-2009-01).
---------------------------------------------------------------------------
Second, CFE is proposing to eliminate the prohibition against
opening trading in a Single Stock Future with a new delivery month
unless the issuer of the underlying satisfies applicable Exchange Act
reporting requirements, or corrects any failure within 30 days after
the date the report was due to be filed. This change will be affected
by deleting subparagraph B.2.(i) to CFE Policy and Procedure VIII. OCX
made a similar rule change eliminating this maintenance requirement,
which was nearly identical to one approved by the SEC for security
options.\6\
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 54454 (September 15,
2006), 71 FR 5539 (September 22, 2006) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change Relating to
Listing Standards of Security Futures Products) (SR-OC-2006-02).
---------------------------------------------------------------------------
[[Page 18817]]
New Listing Standard Conforming With Joint Order
CFE is proposing to conform its listing standards to those approved
by the SEC and the Commodity Futures Trading Commission in their Joint
Order dated November 19, 2009.\7\ To affect this change, CFE is
proposing to add new paragraph E to CFE Policy and Procedure VIII that
references the Joint Order and provides that, ``the Exchange may list
security futures on any security that is eligible to underlie options
on a national securities exchange.'' CFE notes that OCX made a similar
change conforming its listing standards to those set forth in the Joint
Order.\8\
---------------------------------------------------------------------------
\7\ 74 FR 61380 (November 24, 2009).
\8\ See Securities Exchange Act Release No. 61346 (January 13,
2010), 75 FR 3515 (January 21, 2010) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change, as Modified by Amendment
No. 1, Changing Its Listing Standards in Conformance with the
November 9, 2009 Joint Order Modifying the Listing Standards
Requirements under Section 6(h) of the Securities Exchange Act of
1934 and the Criteria under Section 2(a)(1) of the Commodity
Exchange Act) (SR-OC-2009-04).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) \9\ of the Securities Exchange Act (the ``Act''), in
general, and furthers the objectives of Section 6(b)(5) \10\ 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 mechanism of a free and open
market and a national market system. The proposed rule change updates
certain CFE listing and trading rules for security futures and conforms
them to ones previously changed by OCX for security futures.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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.
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 has become effective on March 22, 2011.
At any time within 60 days of 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.
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-CFE-2011-001 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-CFE-2011-001. 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 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-CFE-2011-001 and should be
submitted on or before April 26, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-7980 Filed 4-4-11; 8:45 am]
BILLING CODE 8011-01-P