81 FR 42386 - Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice of Proposed Rule Change To Make Clarifying Updates to Prohibited Disruptive Trading Practices
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 125 (June 29, 2016)
Federal Register Volume 81, Issue 125 (June 29, 2016)
| Page Range | 42386-42388 | |
| FR Document | 2016-15322 |
[Federal Register Volume 81, Number 125 (Wednesday, June 29, 2016)] [Notices] [Pages 42386-42388] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-15322] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78143; File No. SR-CFE-2016-002] Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice of Proposed Rule Change To Make Clarifying Updates to Prohibited Disruptive Trading Practices June 23, 2016. Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 [[Page 42387]] (``Act''),\1\ notice is hereby given that on May 31, 2016 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 27, 2016. --------------------------------------------------------------------------- \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 rule provisions related to disruptive trading practices. 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 offered for trading 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 Rule 620 (Disruptive Trading Practices) prohibits various disruptive trading practices and CFE Policy and Procedure XVIII of the Policies and Procedures section of the CFE Rulebook lists various factors that CFE may consider in assessing whether conduct violates Rule 620. The proposed rule change proposes clarifying updates in relation to these provisions with respect to security futures. These rule amendments will also apply to all other products traded on CFE. List of Rules Applicable to Market Participants Subject to CFE Jurisdiction CFE Rule 308(d) sets forth the list of rules which are applicable to market participants that are not CFE Trading Privilege Holders (``TPHs'') or related parties of TPHs and are subject to CFE jurisdiction under CFE Rule 308 (Consent to Exchange Jurisdiction). The proposed rule change adds Policy and Procedure XVIII to the list of rules that already apply to these market participants. This is a clarifying change since Rule 620 is one of the rules listed in Rule 308(d) and Policy and Procedure XVIII simply describes how CFE applies Rule 620. Submission of Trade at Settlement Orders Policy and Procedure XVIII currently provides guidance on prohibited disruptive trading practices. The proposed rule change adds reference to an existing prohibition under CFE Rule 404A(c) as an example of conduct that could also violate Rule 620. Rule 404A(c) provides that during the time period between business days for a CFE contract, entry into CFE's trading system of a Trade at Settlement order in that contract prior to the time at which CFE's trading system disseminates the pre-opening notice for that contract is prohibited. Bona Fide Orders That Also Serve a Risk Management Purpose Additionally, the amendment clarifies that a market participant is not precluded from entering a bona fide order that is intended to be executed where that execution may also serve some other risk management purpose, such as verifying the flow of the executed trades through the market participant's back-office systems. The proposed rule change is consistent with similar updated guidance provided by other designated contract markets (``DCMs'') regarding disruptive practices.\3\ --------------------------------------------------------------------------- \3\ These DCMs are Chicago Mercantile Exchange, Inc. (``CME''), The Board of Trade of the City of Chicago, Inc., New York Mercantile Exchange, Inc., and Commodity Exchange, Inc. Each submitted self- certification rule filings to the CFTC pursuant to CFTC Regulation Sec. 40.6(a) to effectuate their respective updated guidance. See, e.g., CME Submission No. 15-436 (October 8, 2015), which is available on the CFTC's Web site. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,\4\ in general, and furthers the objectives of Sections 6(b)(5) \5\ and 6(b)(7) \6\ in particular in that it is designed: --------------------------------------------------------------------------- \4\ 15 U.S.C. 78f(b). \5\ 15 U.S.C. 78f(b)(5). \6\ 15 U.S.C. 78f(b)(7). ---------------------------------------------------------------------------To prevent fraudulent and manipulative acts and practices; to promote just and equitable principles of trade; 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 will benefit market participants because it will provide greater clarity regarding the Exchange's current prohibited disruptive trading practices and the various factors that CFE may consider in assessing whether conduct violates Rule 620. Additionally, the Exchange believes that the proposed rule change will strengthen its ability to carry out its responsibilities as a self-regulatory organization by providing further guidance regarding the type of activity that is prohibited under CFE Rule 620. In addition, the proposed rule change benefits market participants by contributing to the protection of CFE's market and market participants from abusive practices and to the promotion of a fair and orderly market . 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. Specifically, the Exchange believes that the proposed rule change will not burden competition because the new clarifying updates to the prohibited disruptive trading practices will apply equally to all market participants and will help to foster a fair and orderly market. Additionally, the proposed rule change is designed to make CFE's disruptive trading practice rules consistent with the existing rules and guidance published by other DCMs. 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. [[Page 42388]] III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The proposed rule change will become effective on June 13, 2016. 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.\7\ --------------------------------------------------------------------------- \7\ 15 U.S.C. 78s(b)(1). --------------------------------------------------------------------------- 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 CommentsUse 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-2016-002 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-2016-002. 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-2016-002, and should be submitted on or before July 20, 2016. --------------------------------------------------------------------------- \8\ 17 CFR 200.30-3(a)(73). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\8\ Brent J. Fields, Secretary. [FR Doc. 2016-15322 Filed 6-28-16; 8:45 am] BILLING CODE 8011-01-P
![42386 Federal Register / Vol. 81, No. 125 / Wednesday, June 29, 2016 / Notices
the Pilot was an appropriate, data- of subparagraph (f)(6) of Rule 19b–4 50 Securities and Exchange Commission,
driven test that was designed to evaluate because it would not significantly affect 100 F Street NE., Washington, DC
the impact of a wider tick size on the protection of investors or the public 20549.
trading, liquidity, and the market interest; rather, the proposed rule All submissions should refer to File No.
quality of securities of smaller change will benefit investors because it SR–CHX–2016–09. This file number
capitalization companies, and was implements, interprets, and clarifies the should be included on the subject line
therefore in furtherance of the purposes provisions of the Plan, and is designed if email is used. To help the
of the Act. To the extent that this to assist the Exchange and CHX Commission process and review your
proposal implements, interprets, and Participants in meeting regulatory comments more efficiently, please use
clarifies the Plan and applies specific obligations pursuant to the Plan. To the only one method. The Commission will
requirements to CHX Participants, the extent that this proposal implements, post all comments on the Commission’s
Exchange believes that this proposal is interprets, and clarifies the Plan and Internet Web site (http://www.sec.gov/
in furtherance of the objectives of the applies specific requirements to CHX rules/sro.shtml). Copies of the
Plan, as identified by the SEC, and is Participants, the Exchange believes that submission, all subsequent
therefore consistent with the Act. this proposal is in furtherance of the amendments, all written statements
objectives of the Plan, as identified by with respect to the proposed rule
B. Self-Regulatory Organization’s the SEC, and is therefore consistent with
Statement of Burden on Competition change that are filed with the
the Act, the protection of investors and Commission, and all written
The Exchange does not believe that the public interest. In addition, the communications relating to the
the proposed rule change will result in proposed rule change is substantially proposed rule changes between the
any burden on competition that is not similar to a proposed rule change by Commission and any person, other than
necessary or appropriate in furtherance BZX that was approved by the those that may be withheld from the
of the purposes of the Act. The Commission.51 Therefore, the proposed public in accordance with the
Exchange notes that the proposed rule rule change does not present any unique provisions of 5 U.S.C. 552, will be
change implements the provisions of the issues not previously considered by the available for Web site viewing and
Plan, and is designed to assist the Commission. Based on the foregoing, printing in the Commission’s Public
Exchange in meeting its regulatory the Exchange has designated this rule
Reference Room, 100 F Street NE.,
obligations pursuant to the Plan. The filing as ‘‘non-controversial’’ under
Washington, DC 20549–1090 on official
Exchange also notes that the quoting Section 19(b)(3)(A) of the Act 52 and
business days between the hours of
and trading requirements of the Plan paragraph (f)(6) of Rule 19b–4
10:00 a.m. and 3:00 p.m. Copies of the
will apply equally to all CHX thereunder.53
At any time within 60 days of the filing also will be available for
Participants that trade Pilot Securities. inspection and copying at the principal
filing of the proposed rule change, the
C. Self-Regulatory Organization’s Commission may summarily office of the CHX. All comments
Statement on Comments Regarding the temporarily suspend such rule change if received will be posted without change;
Proposed Rule Changes Received From it appears to the Commission that such the Commission does not edit personal
Members, Participants or Others action is: (1) Necessary or appropriate in identifying information from
the public interest; (2) for the protection submissions. You should submit only
No written comments were either
of investors; or (3) otherwise in information that you wish to make
solicited or received.
furtherance of the purposes of the Act. available publicly. All submissions
III. Date of Effectiveness of the If the Commission takes such action, the should refer to File No. SR–CHX–2016–
Proposed Rule Changes and Timing for Commission shall institute proceedings 09 and should be submitted on or before
Commission Action to determine whether the proposed rule July 20, 2016.
The Exchange has designated this rule should be approved or disapproved. For the Commission, by the Division of
filing as non-controversial under Trading and Markets, pursuant to delegated
IV. Solicitation of Comments authority.54
Section 19(b)(3)(A) of the Act 47 and
paragraph (f)(6) of Rule 19b–4 Interested persons are invited to Brent J. Fields,
thereunder.48 The Exchange asserts that submit written data, views and Secretary.
the proposed rule change: (1) Will not arguments concerning the foregoing, [FR Doc. 2016–15324 Filed 6–28–16; 8:45 am]
significantly affect the protection of including whether the proposal is BILLING CODE 8011–01–P
investors or the public interest, (2) will consistent with the Act. Comments may
not impose any significant burden on be submitted by any of the following
competition, (3) and will not become methods: SECURITIES AND EXCHANGE
operative for 30 days from the date on Electronic Comments COMMISSION
which it was filed, or such shorter time
• Use the Commission’s Internet
as the Commission may designate. In [Release No. 34–78143; File No. SR–CFE–
comment form (http://www.sec.gov/
addition, the Exchange provided the 2016–002]
rules/sro.shtml); or
Commission with written notice of its • Send an email to rule-comments@
intent to file the proposed rule change, Self-Regulatory Organizations; CBOE
sec.gov. Please include File No. SR–
along with a brief description and text Futures Exchange, LLC; Notice of
CHX–2016–09 on the subject line.
of the proposed rule change, at least five Proposed Rule Change To Make
mstockstill on DSK3G9T082PROD with NOTICES
business days prior to the date of Paper Comments Clarifying Updates to Prohibited
filing.49 • Send paper comments in triplicate Disruptive Trading Practices
The Exchange believes that the to [Name of Secretary], Secretary, June 23, 2016.
proposed rule change meets the criteria
50 17
Pursuant to Section 19(b)(7) of the
CFR 240.19b–4(f)(6).
47 15 U.S.C. 78s(b)(3)(A). 51 See supra note 3. Securities Exchange Act of 1934
48 17 CFR 240.19b–4. 52 15 U.S.C. 78s(b)(3)(A).
49 17 CFR 240.19b–4(f)(6)(iii). 53 17 CFR 240.19b–4. 54 17 CFR 200.30–3(a)(12).
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![42388 Federal Register / Vol. 81, No. 125 / Wednesday, June 29, 2016 / Notices
III. Date of Effectiveness of the office of the Exchange. All comments SECURITIES AND EXCHANGE
Proposed Rule Change and Timing for received will be posted without change; COMMISSION
Commission Action the Commission does not edit personal
The proposed rule change will identifying information from [Release No. 34–78149; File No. SR–
become effective on June 13, 2016. submissions. You should submit only NASDAQ–2016–085]
At any time within 60 days of the date information that you wish to make
of effectiveness of the proposed rule available publicly. All submissions Self-Regulatory Organizations; The
change, the Commission, after should refer to File Number SR–CFE– NASDAQ Stock Market LLC; Notice of
consultation with the CFTC, may 2016–002, and should be submitted on Filing and Immediate Effectiveness of
summarily abrogate the proposed rule or before July 20, 2016. Proposed Rule Change To Allow Listed
change and require that the proposed For the Commission, by the Division of
Companies Not Currently Subject to
rule change be refiled in accordance Trading and Markets, pursuant to delegated Nasdaq’s All-Inclusive Annual Listing
with the provisions of Section 19(b)(1) authority.8 Fee To Opt In to That Fee Program for
of the Act.7 2017
Brent J. Fields,
IV. Solicitation of Comments Secretary. June 24, 2016.
Interested persons are invited to [FR Doc. 2016–15322 Filed 6–28–16; 8:45 am] Pursuant to Section 19(b)(1) of the
submit written data, views, and BILLING CODE 8011–01–P Securities Exchange Act of 1934
arguments concerning the foregoing, (‘‘Act’’),1 and Rule 19b–4 thereunder,2
including whether the proposed rule notice is hereby given that on June 10,
change is consistent with the Act. SECURITIES AND EXCHANGE 2016, The NASDAQ Stock Market LLC
Comments may be submitted by any of COMMISSION (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
the following methods: Securities and Exchange Commission
Electronic Comments [Release No. 34–78029; File No. SR– (‘‘SEC’’ or ‘‘Commission’’) the proposed
NYSEMKT–2016–45] rule change as described in Items I, II,
• Use the Commission’s Internet
and III, below, which Items have been
comment form (http://www.sec.gov/ Self-Regulatory Organizations; NYSE prepared by the Exchange. The
rules/sro.shtml); or MKT LLC; Suspension of and Order Commission is publishing this notice to
• Send an email to rule-comments@ Instituting Proceedings To Determine solicit comments on the proposed rule
sec.gov. Please include File Number SR– Whether To Approve or Disapprove a
CFE–2016–002 on the subject line. change from interested persons.
Proposed Rule Change To Modify the
Paper Comments NYSE Amex Options Fee Schedule I. Self-Regulatory Organization’s
With Respect to Fees, Rebates, and Statement of the Terms of Substance of
• Send paper comments in triplicate the Proposed Rule Change
to Secretary, Securities and Exchange Credits for Transactions in the
Commission, 100 F Street NE., Customer Best Execution Auction The Exchange proposes to allow listed
Washington, DC 20549–1090. June 9, 2016. companies not currently subject to
All submissions should refer to File Nasdaq’s all-inclusive annual listing fee
Number SR–CFE–2016–002. This file Correction to opt in to that fee program for 2017.
number should be included on the The changes proposed herein are
In notice document 2016–14086,
subject line if email is used. To help the effective upon filing.
beginning on page 39089 in the issue of
Commission process and review your The text of the proposed rule change
Wednesday, June 15, 2016, make the
comments more efficiently, please use is available on the Exchange’s Web site
following corrections:
only one method. The Commission will at http://nasdaq.cchwallstreet.com, at
post all comments on the Commission’s 1. On page 39091, in the third the principal office of the Exchange, and
Internet Web site (http://www.sec.gov/ column, in the ninth and tenth lines, at the Commission’s Public Reference
rules/sro.shtml). Copies of the ‘‘July 5, 2016’’ should read ‘‘July 6, Room.
submission, all subsequent 2016’’.
amendments, all written statements 2. On the same page, in the eleventh II. Self-Regulatory Organization’s
with respect to the proposed rule line, ‘‘July 19, 2016’’ should read ‘‘July Statement of the Purpose of, and
change that are filed with the 20, 2016’’. Statutory Basis for, the Proposed Rule
Commission, and all written Change
[FR Doc. C1–2016–14086 Filed 6–28–16; 8:45 am]
communications relating to the
proposed rule change between the BILLING CODE 1505–01–D In its filing with the Commission, the
Commission and any person, other than Exchange included statements
those that may be withheld from the concerning the purpose of and basis for
public in accordance with the the proposed rule change and discussed
provisions of 5 U.S.C. 552, will be any comments it received on the
available for Web site viewing and proposed rule change. The text of these
printing in the Commission’s Public statements may be examined at the
places specified in Item IV below. The
mstockstill on DSK3G9T082PROD with NOTICES
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official Exchange has prepared summaries, set
business days between the hours of forth in sections A, B, and C below, of
10:00 a.m. and 3:00 p.m. Copies of such the most significant aspects of such
filing also will be available for statements.
inspection and copying at the principal
1 15 U.S.C. 78s(b)(1).
7 15 U.S.C. 78s(b)(1). 8 17 CFR 200.30–3(a)(73). 2 17 CFR 240.19b–4.
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Document Created: 2018-02-08 07:43:08
Document Modified: 2018-02-08 07:43:08
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 81 FR 42386 |
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