80 FR 52070 - Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice of Proposed Rule Change Regarding Reportable Position and Ownership and Control Reporting Clarifications

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 166 (August 27, 2015)

[Federal Register Volume 80, Number 166 (Thursday, August 27, 2015)]
[Notices]
[Pages 52070-52071]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-21209]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75748; File No. SR-CFE-2015-006]


Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice 
of Proposed Rule Change Regarding Reportable Position and Ownership and 
Control Reporting Clarifications

August 21, 2015.
    Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on August 14, 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 August 14, 2015.
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    \1\ 15 U.S.C. 78s(b)(7).
    \2\ 7 U.S.C. 7a-2(c).
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I. Self-Regulatory Organization's Description of the Proposed Rule 
Change

    The Exchange proposes to amend CFE rules to clarify the application 
of CFE requirements relating to reportable positions and ownership and 
control reports. 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 that have been traded on CFE were traded 
under Chapter 16 of CFE's Rulebook which is applicable to Individual 
Stock Based and Exchange-Traded Fund Based Volatility Index security 
futures. CFE does not currently list any security futures for trading. 
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
    CFE submitted CFE Rule Certification Submission Number CFE-2015-003 
(``CFE-2015-003'') to the CFTC and CFE Rule Filing Number SR-CFE-2015-
001 (``SR-CFE-2015-001'') \3\ to the Commission on January 28, 2015 
(collectively, the ``Prior Filings'') to amend CFE Rule 412B (Ownership 
and Control Reports) to require CFE Trading Privilege Holders 
(``TPHs'') and non-TPHs to concurrently file with the Exchange 
submissions relating to CFE contracts that are required to be filed 
with the CFTC pursuant to the Final Rule adopted by the CFTC under the 
caption Ownership and Control Reports (``OCR Rule'').\4\ In particular, 
the Prior Filings amended Rule 412B to require each TPH and non-TPH to 
file concurrently with the Exchange the new CFTC Forms 102A, 102B, and 
71 (including any attachments, related submissions, or related 
information) relating to CFE contracts that each TPH or non-TPH is 
required to report to the CFTC under the OCR Rule. In addition, CFE-
2015-003 amended Rule 412B to require each TPH that is not a Clearing 
Member to report to the Exchange the same information regarding the 
identification and reporting of special accounts relating to CFE 
contracts that the OCR Rule requires each TPH that is a Clearing Member 
to report to the CFTC. CFE-2015-003 provided that these changes would 
become effective on or after February 11, 2015, on a date to be 
announced by the Exchange through the issuance of a circular. The 
Exchange has not yet made these changes effective and intends to do so 
consistent with the compliance dates under the OCR Rule as provided for 
by the CFTC.\5\
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    \3\ See Securities Exchange Act Release No. 74204 (February 4, 
2015), 80 FR 7518 (February 10, 2015).
    \4\ See CFTC RIN 3038-AD31, Ownership and Control Reports, Forms 
102/102S, 40/40S, and 71, Final Rule, 78 FR 69178 (November 18, 
2013).
    \5\ See CFTC No-Action Letter No. 15-03 (February 10, 2015) 
(which provided conditional time-limited no-action relief to extend 
certain compliance dates under the OCR Rule).
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    The purpose of the proposed rule change is to make some clarifying 
changes with respect to the rule amendments included in the Prior 
Filings.
    First, CFE proposes to further amend Rule 412B to make clear that 
TPHs and non-TPHs will continue to be required to concurrently report 
to the Exchange reportable positions relating to Exchange contracts 
that they are required to report to the CFTC pursuant to CFTC 
regulations. This is required under current Rule 412B, and the Exchange 
believes that it continues to be required by Rule 412B as amended by 
the Prior Filings. However, in order to eliminate any potential 
ambiguity in this regard, CFE is further amending Rule 412B as amended 
by the Prior Filings to make this explicit and is changing the title of 
Rule 412B to specifically reference reportable positions.
    Second, CFE proposes to amend CFE Rule 714 (Imposition of Fines for 
Minor Rule Violations) to make new paragraph (c) of Rule 412B added by 
the Prior Filings subject to the same summary fine schedule under Rule 
714(f)(vii) that already applies with respect to violations of 
paragraphs (a) and (b) of Rule 412B. Rule 412B(c) is the provision of 
Rule 412B that requires each TPH that is not a Clearing Member to 
report to the Exchange the same information regarding the 
identification and reporting of special accounts relating to CFE 
contracts that the OCR Rule requires each TPH that is a Clearing Member 
to report to the CFTC. The summary fine schedule under Rule 714(f)(vii) 
is a Letter of Caution for a first offense, a $7,500 fine for a second 
offense, a $15,000 fine for a third

[[Page 52071]]

offense, and referral to CFE's Business Conduct Committee for 
subsequent offenses (all as measured over any twelve month rolling 
period).
    Third, CFE is further revising the reportable volume provision in 
CFE Rule 1602(n)(ii) that is included in CFE's contract specification 
rule chapter for Individual Stock Based and Exchange-Traded Fund Based 
Volatility Index security futures to make clear that this provision is 
referencing the reportable trading volume in one of those products that 
triggers the requirement to report a volume threshold account to the 
CFTC.
    The Amendment also includes some minor, non-substantive wording 
changes, such as to delete a reference in Rule 412B(b) to CFTC Form 
102S which is not applicable with respect to CFE products.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Sections 6(b)(5) \7\ and 6(b)(7) \8\ in particular in 
that it is designed:
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ 15 U.S.C. 78f(b)(7).
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     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,
     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 will strengthen 
its ability to carry out its responsibilities as a self-regulatory 
organization. CFE needs to receive the same information relating to 
reportable positions in CFE contracts from TPHs and non-TPHs that is 
required to be reported to the CFTC, as well as the information that 
TPHs and non-TPHs provide to the CFTC under the new OCR Rule, in order 
to carry out CFE's market surveillance program. The proposed rule 
change facilitates CFE's ability to receive this information in a form 
and manner that will allow its seamless integration into the market 
surveillance program and systems utilized by CFE and its regulatory 
services provider by making explicit that TPHs and non-TPHs are 
required to provide this information to CFE in a form and manner 
prescribed by the Exchange.

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 enhances CFE's market 
surveillance program. The Exchange believes that the proposed rule 
change is equitable and not unfairly discriminatory because the 
amendments would apply equally to all TPHs and non-TPHs 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 
September 30, 2015, on a date to be announced by the Exchange through 
the issuance of a circular. 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.\9\
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    \9\ 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CFE-2015-006 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-2015-006. 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 (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 
10:00 a.m. and 3:00 p.m. Copies of such 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-2015-006, and should be 
submitted on or before September 17, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(73).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-21209 Filed 8-26-15; 8:45 am]
 BILLING CODE 8011-01-P