[Federal Register Volume 78, Number 90 (Thursday, May 9, 2013)]
[Notices]
[Pages 27263-27265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-11003]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69512; File No. SR-BOX-2013-23]


Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing of Proposed Rule Change To Provide for the Manner in Which 
Mini Options Will Trade as a Complex Order Pursuant to BOX Rule 7240

May 3, 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 May 2, 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 Exchange. 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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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend BOX Rule 7240 (Complex Orders). 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.

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 self-regulatory organization 
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 self-regulatory organization 
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 purpose of the proposed rule change is to provide for the 
manner in which Mini Options will trade as a Complex Order pursuant to 
BOX Rule

[[Page 27264]]

7240. The Exchange previously filed to list and trade Mini Options.\3\ 
Whereas standard options contracts represent a deliverable of 100 
shares of an underlying security, Mini Options contracts represent a 
deliverable of 10 shares. Except for the difference in the number of 
deliverable shares, Mini Options have the same terms and contract 
characteristics as regular-sized equity and ETF options, including 
exercise style. Accordingly, the Exchange noted in its Mini Options 
filing that Exchange rules that apply to the trading of standard 
options contracts would apply to Mini Option contracts as well.\4\
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    \3\ See Securities Exchange Act Release No. 68771 (January 30, 
2013), 78 FR 8208 (February 5, 2013) (Notice of Filing and Immediate 
Effectiveness of SR-BOX-2013-07). The Exchange began trading Mini 
Options on March 18, 2013.
    \4\ Id.
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    Prior to the launch of its new Complex Order Book,\5\ the Exchange 
proposes to amend Rule 7240 (Complex Orders) to provide that while 
Participants may execute complex orders involving Mini Options, if any 
leg of a complex order is a Mini Option contract, all options legs of 
such orders must also be Mini Option contracts.
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    \5\ See Securities Exchange Act Release No. 69419 (April 19, 
2013), 78 FR 24449 (April 25, 2013) (Approving SR-BOX-2013-01). The 
Exchange expects to launch its new Complex Order Book on May 3, 
2013.
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2. 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.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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    Specifically, the Exchange believes that investors and other market 
participants would benefit from the current rule proposal because it 
provides that market participants may take advantage of legitimate 
investment strategies and execute complex orders involving Mini 
Options. Additionally, the Exchange believes the proposed rule change 
will avoid investor confusion by providing how Mini Options will trade 
as compared to standard options with respect to Complex Orders.
    The Exchange's proposal to permit Mini Options to trade as Complex 
Orders provided the strategy does not combine Mini Options and standard 
options serves to maintain the permissible ratios that are applicable 
to Complex Orders by separating the trading of standard Complex Orders 
and Mini Options Complex Orders.

B. 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. All Participants may transact 
Complex Orders on BOX. The rule change does not permit unfair 
discrimination and does not impose a burden on Participants with 
respect to trading Mini Options.

C. 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.

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

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) impose any significant burden on competition; and
    (iii) 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) \8\ of the Act and 
Rule 19b-4(f)(6) \9\ thereunder.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of the 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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    A proposed rule change filed under Rule 19b-4(f)(6) of the Act \10\ 
normally does not become operative prior to 30 days after the date of 
the filing. However, pursuant to Rule 19b-4(f)(6)(iii) of the Act,\11\ 
the Commission may designate a shorter time if such action is 
consistent with the protection of investors and the public interest. 
The Exchange has requested the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. In January 2013, the Exchange filed a proposed rule change to 
amend its rules to list and trade certain mini-options contracts on the 
Exchange, and represented in that filing that the Exchange's rules that 
apply to the trading of standard options contracts would apply to mini-
options contracts.\12\ The Exchange has represented that it intends to 
launch its new complex order book, on which mini-options contracts may 
trade as components of complex orders, on May 3, 2013. The Exchange 
believes that waiver of the 30-day operative delay is consistent with 
the protection of investors and the public interest because such waiver 
would minimize confusion among market participants about how complex 
orders involving mini-options contracts will trade.\13\
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ See Securities Exchange Act Release No. 68771 (January 30, 
2013), 78 FR 8208 (February 5, 2013) (SR-BOX-2013-07).
    \13\ See SR-BOX-2013-23, Item 7.
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Such waiver would allow the Exchange to implement the proposed rule 
change prior to the launch of its new complex order book on May 3, 
2013, thereby mitigating potential investor confusion as to how complex 
orders involving mini-options contracts will trade. For this reason, 
the Commission hereby waives the 30-day operative delay and designates 
the proposed rule change to be operative upon filing with the 
Commission.\14\
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    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

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.

[[Page 27265]]

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-BOX-2013-23 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-2013-23. 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 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 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-BOX-2013-23, and should be submitted on or before May 
30, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-11003 Filed 5-8-13; 8:45 am]
BILLING CODE 8011-01-P