
[Federal Register Volume 78, Number 212 (Friday, November 1, 2013)]
[Notices]
[Pages 65741-65743]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-26034]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70766; File No. SR-CBOE-2013-101]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Adopt the Concept of a ``Responsible Person'' 
on the CBOE Stock Exchange

October 28, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on October 15, 2013, Chicago Board Options Exchange, Incorporated 
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange 
Commission (the ``Commission'') the proposed rule change as described 
in Items I, II, and III below, which Items have been prepared by the 
Exchange. The Commission is publishing this notice to solicit comments 
on the proposed rule change 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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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to adopt the concept of a ``Responsible 
Person'' on its CBOE Stock Exchange (``CBSX''). The text of the 
proposed rule change is available on the Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's 
Office of the Secretary, 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, the Exchange 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. The Exchange 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 Exchange proposes to adopt Rule 53.9--Responsible Persons--to 
its CBSX rules. The proposed rule is to read: The term ``Responsible 
Person'' shall mean an individual designated by a CBSX Trader to 
represent the CBSX Trader in all matters relating to the Exchange. Each 
CBSX Trader must designate an individual as the Responsible Person for 
the CBSX Trader. If a CBSX Trader is an individual (and not an 
organization), that individual will automatically be designated as the 
CBSX Trader's Responsible Person. The Responsible Person must be 
affiliated with the CBSX Trader. The Responsible Person must be a 
United States-based officer, director or management-level employee of 
the CBSX Trader, who is responsible for the direct supervision and 
control of Associated Persons of that CBSX Trader.
    The purpose of the adoption of the proposed rule is to have a 
designated person associated with each CBSX Trader whom CBSX may 
contact whenever an issue arises regarding that CBSX Trader or CBSX 
otherwise needs to contact that CBSX Trader. The Responsible Person 
will serve as CBSX's person to contact with regards to that CBSX 
Trader.
    The Exchange will conduct a background investigation and review of 
each Responsible Person. This investigation and review may include a 
fingerprint criminal background check (while a Form U-4 (which includes 
a fingerprint check) would already have been filed with FINRA for the 
person, the Exchange may elect to perform another fingerprint check if 
the Form U-4 fingerprint check was performed over one year prior to the 
processing of the Responsible Person application) and the individual's 
consent to the Exchange's jurisdiction over the individual. The 
investigation may also include the engagement of an outside 
investigatory firm to look into the Responsible Person's background, 
check references, perform a credit check, look into the Responsible 
Person's registration, education and regulatory background, and ensure 
that the Responsible Person is not on any government watch lists.
    The proposed rule requires that the Responsible Person be 
affiliated with the CBSX Trader, be a United States-based officer, 
director or management-level employee of the CBSX Trader, and be 
responsible for the direct supervision and control of Associated 
Persons of that CBSX Trader. These requirements

[[Page 65742]]

are in place in order to ensure that the Responsible Person is a person 
who is affiliated with the CBSX Trader and is a person who has 
sufficient responsibility and control with the CBSX Trader to be able 
to effectively participate and assist with CBSX and to work out any 
issues that may arise, as well as to be a relevant point of contact to 
ensure that any necessary information that is communicated to the 
Responsible Person is communicated to anyone else relevant that is 
involved with the CBSX Trader (and to ensure that CBSX can easily 
contact the Responsible Person and have jurisdiction over the 
Responsible Person).
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\3\ Specifically, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \4\ requirements that the rules of 
an exchange be 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 regulating, 
clearing, settling, processing information with respect to, and 
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. 
Additionally, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \5\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers. The Exchange also believes the 
proposed rule change is consistent with Section 6(b)(1) of the Act,\6\ 
which provides that the Exchange be organized and have the capacity to 
be able to carry out the purposes of the Act and to enforce compliance 
by CBSX Traders and persons associated with CBSX Traders with the Act, 
the rules and regulations thereunder, and the rules of the Exchange.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
    \5\ Id.
    \6\ 15 U.S.C. 78f(b)(1).
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    Requiring each CBSX Trader to identify a Responsible Person will 
make it easier for CBSX to effectively contact and work out issues with 
a CBSX Trader. This, in turn, will foster cooperation and coordination 
with persons engaged in regulating trading on CBSX and help to ensure 
compliance by CBSX Traders with Exchange rules. Simplifying contact 
between CBSX and CBSX Traders will also remove an impediment to and 
perfect the mechanism of a free and open market and a national market 
system. All CBSX Traders will be required to identify a Responsible 
Person, so this proposed rule change will be applied equally. Finally, 
another exchange has a similar ``Responsible Person'' requirement.\7\
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    \7\ See C2 Options Exchange, Incorporated (``C2'') Rules 1.1 
(definition of ``Responsible Person'') and 3.8.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE does not believe that the proposed rule change will impose any 
burden on intramarket competition that is not necessary or appropriate 
in furtherance of the purposes of the Act because all CBSX Traders will 
be required to identify a Responsible Person, so this proposed rule 
change will be applied equally. CBOE does not believe that the proposed 
rule change will impose any burden on intermarket competition that is 
not necessary or appropriate in furtherance of the purposes of the Act 
because the proposed change only applies to CBSX Traders and CBSX, and 
does not impact trading or competition between CBSX and other 
exchanges.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not:
    A. significantly affect the protection of investors or the public 
interest;
    B. impose any significant burden on competition; and
    C. 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 \8\ and 
Rule 19b-4(f)(6) \9\ thereunder. At any time within 60 days of the 
filing of the 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. If the Commission takes such action, the 
Commission will institute proceedings to determine whether the proposed 
rule change should be approved or disapproved.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
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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 rule-comments@sec.gov. Please include 
File Number SR-CBOE-2013-101 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-CBOE-2013-101. 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 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-CBOE-

[[Page 65743]]

2013-101 and should be submitted on or before November 22, 2013.

    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)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-26034 Filed 10-31-13; 8:45 am]
BILLING CODE 8011-01-P


