Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend BOX Rule 3150 (Reports Related to Position Limits)
Federal Register, Volume 78 Issue 122 (Tuesday, June 25, 2013)
Federal Register Volume 78, Number 122 (Tuesday, June 25, 2013)
Notices
Pages 38087-38089
From the Federal Register Online via the Government Printing Office www.gpo.gov
FR Doc No: 2013-15084
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SECURITIES AND EXCHANGE COMMISSION
Release No. 34-69802; File No. SR-BOX-2013-30
Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend BOX Rule 3150 (Reports Related to Position Limits)
June 19, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on June 6, 2013, BOX Options Exchange LLC (the ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule 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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Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange proposes to amend BOX Rule 3150 (Reports Related to Position Limits). The text of the proposed rule change is available from the principal office of the Exchange, at the Commission's Public Reference Room and also on the Exchange's Internet Web site at http://boxexchange.com.
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Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization included
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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. The self-regulatory organization has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
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Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
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Purpose
The Exchange proposes to amend BOX Rule 3150 (Reports Related to Position Limits) to exempt BOX Market Makers \3\ from the requirement to provide daily position reports. This change will permit the Exchange to harmonize BOX's Rules with the rules of other options exchanges, specifically the Chicago Board Options Exchange (``CBOE''), NYSE MKT LLC (``NYSE MKT''), NYSE Arca, Inc. (``NYSE Arca''), BATS Exchange, Inc. (``BATS''), International Securities Exchange, LLC (``ISE''), Miami International Securities Exchange, LLC (``MIAX''), and NASDAQ OMX PHLX LLC (``Phlx'').\4\
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\3\ As defined in BOX Rule 100(a)(30).
\4\ See CBOE Rule 4.13(b), NYSE MKT Rule 906(b), NYSE Arca Rule 6.6(b), BATS Rule 18.10(b), ISE Rule 415(b), MIAX Rule 310(b), and Phlx Rule 1003(b).
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The proposed rule change would amend the language in BOX Rule 3150(b). Specifically, the proposed rule change will exempt a Market Maker that maintains an end of day position in excess of 10,000 non-
FLEX equity options contracts on the same side of the market from reporting whether such position is hedged and providing documentation as to how such position is hedged. This report is required at the time the subject account exceeds the 10,000 contract threshold and thereafter, for Customer accounts, when the position increases by 2,500 contracts, and for proprietary accounts when the position increases by 5,000 contracts. Currently all Options Participants, including Market Makers are required to provide these reports. The proposed language will eliminate the reporting burden for Market Makers, whose position information the Exchange can access as needed through the Options Clearing Corporation (``OCC''). Furthermore, as stated above the amended rule will make BOX's position limit reporting requirement consistent with that of other options exchanges.\5\
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\5\ Id.
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Statutory Basis
The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Securities Exchange Act of 1934 (the ``Act''),\6\ in general, and Section 6(b)(5) of the Act,\7\ 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, 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. In particular, the Exchange believes the proposed rule change will harmonize BOX's rules with the rules of other options exchanges. In addition, the Exchange believes that the proposed rule change will help ensure efficiency by exempting BOX Market Makers, whose position information can already be accessed through the OCC.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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 this regard and as indicated above, the Exchange notes that the rule change is being proposed as a competitive response to harmonize BOX's rules with those of other options exchanges. The Exchange believes this proposed rule change is necessary to establish uniform rules regarding position limit reporting.
Specifically, the proposed rule change will create consistency among industry rules. The Exchange does not believe the proposed rule filing will bring any unnecessary burden on intermarket competition as it is consistent with the other options exchanges' rules.\8\
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\8\ See supra, note 4.
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Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received comments on the proposed rule change.
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Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
Because the foregoing proposed rule change does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and, by its terms, does not become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange's intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement.
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At any time within sixty (60) days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
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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 rule-comments@sec.gov. Please include File Number SR-BOX-2013-30 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-BOX-2013-30. 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
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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 offices of BOX. 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-BOX-2013-30, and should be submitted on or before July 16, 2013.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
FR Doc. 2013-15084 Filed 6-24-13; 8:45 am
BILLING CODE 8011-01-P
