81 FR 90889 - Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice of Filing of a Proposed Rule Change Regarding Attempted Fraudulent Acts

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 241 (December 15, 2016)

[Federal Register Volume 81, Number 241 (Thursday, December 15, 2016)]
[Notices]
[Pages 90889-90890]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-30078]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79514; File No. SR-CFE-2016-004]


Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice 
of Filing of a Proposed Rule Change Regarding Attempted Fraudulent Acts

December 9, 2016.
    Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on December 2, 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 and II 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 December 1, 2016.
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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 Rule 601 related to fraudulent 
acts. The scope of this filing is limited solely to the application of 
the rule amendments to security futures that may be traded on CFE. 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.

[[Page 90890]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed CFE rule amendments included as part of 
this rule change is to amend CFE Rule 601 (Fraudulent Acts) to broaden 
the language of Rule 601 to also prohibit attempts to engage in any 
fraudulent act or scheme prohibited by Rule 601. The amendment to CFE 
Rule 601 is being made at the request of the CFTC. The rule amendments 
included as part of this rule change are to apply to all products 
traded on CFE, including both non-security futures and security 
futures.
    CFE Rule 601 currently prohibits CFE Trading Privilege Holders and 
their related parties from engaging in any fraudulent act or in any 
scheme to defraud, deceive, or trick, in connection with or related to 
any trade on or other activity related to the Exchange or the clearing 
organization for the Exchange. Pursuant to CFE Rule 308, Rule 601 also 
applies to any person that initiates or executes a transaction on or 
subject to Exchange rules directly or through an intermediary and to 
any person for whose benefit such a transaction is initiated or 
executed.
    The proposed rule change broadens the language of Rule 601 to also 
prohibit attempts to engage in any fraudulent act or any scheme 
prohibited by Rule 601.
    This change is consistent with CFE Rule 604 (Adherence to Law) 
which prohibits conduct in violation of applicable law, including any 
provisions of the CEA and CFTC regulations which prohibit attempts to 
engage in fraudulent acts, such as CFTC Regulation 180.1 \3\ 
(Prohibition on the employment, or attempted employment, of 
manipulative and deceptive devices).
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    \3\ 17 CFR 180.1.
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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:
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 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, 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 would 
strengthen its ability to carry out its responsibilities as a self-
regulatory organization by providing further guidance with regard to 
attempted fraudulent acts by TPHs, their related parties, and others 
that access CFE's market. In particular, the proposed rule change makes 
it clear that attempts to engage in fraudulent acts are prohibited. The 
proposed rule change would also contribute to enhanced protection of 
CFE markets and market participants.

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 will enhance CFE's 
ability to carry out its responsibilities as a self-regulatory 
organization. The Exchange believes that the proposed rule change is 
equitable and not unfairly discriminatory because the amendments 
regarding attempted fraudulent acts or schemes apply equally to all 
market participants.

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 operative on December 15, 
2016. At any time within 60 days of the date of the filing by the 
Exchange of a written certification with the CFTC under Section 5c(c) 
of the CEA, 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\
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    \7\ 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-2016-004 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-2016-004. 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-2016-004, and should be 
submitted on or before January 5, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(73).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2016-30078 Filed 12-14-16; 8:45 am]
 BILLING CODE 8011-01-P