[Federal Register Volume 78, Number 139 (Friday, July 19, 2013)]
[Notices]
[Pages 43254-43258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-17312]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69987; File No. SR-CBOE-2013-026]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing of Amendment No. 2 and Order Granting 
Accelerated Approval of a Proposed Rule Change, as Modified by 
Amendment Nos. 1 and 2, Relating to Complex Orders

July 15, 2013.

I. Introduction

    On March 28, 2013, Chicago Board Options Exchange, Incorporated 
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange 
Commission (the ``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (the ``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to amend its rules governing the 
trading of complex orders on the Exchange to adopt a new order type 
called ``leg orders.'' On April 11, 2013, the Exchange filed Amendment 
No. 1 to the proposal. The proposed rule change, as modified by 
Amendment No. 1, was published for comment in the Federal Register on 
April 17, 2013.\3\ The Commission received no comment letters regarding 
the proposed rule change, as modified by Amendment No. 1. On June 26, 
2013, the Exchange filed Amendment No. 2 to the proposal.\4\ The 
Commission is publishing this notice to solicit comments on Amendment 
No. 2 from interested persons and is approving the proposed rule 
change, as modified by Amendment Nos. 1 and 2, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 69364 (April 11, 
2013), 78 FR 22326.
    \4\ See infra Section II.B for a description of Amendment No. 2.
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II. Description

A. Leg Orders

    CBOE proposes to adopt CBOE Rule 6.53C(c)(iv) relating to the 
generation and execution of leg orders. A leg order would be a limit 
order on the CBOE electronic book (``EBook'') that represents one leg 
of a non-contingent complex order resting on the complex order book 
(``COB'') if the ratio of that leg to the other legs of the complex 
order is equal to or can be reduced to one (e.g., 1:1, 1:2, or 1:3).\5\ 
A leg order

[[Page 43255]]

would be a firm order that may be included in the Exchange's displayed 
best bid or offer (``Exchange BBO'') on the EBook.\6\ According to 
CBOE, leg orders are designed to increase opportunities for complex 
orders resting on the COB to leg into the CBOE individual options 
market and execute.\7\
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    \5\ See proposed CBOE Rule 6.53(x). See also Notice, 78 FR 
22928, n. 4 for an explanation of conforming ratios as applied to 
the generation of leg orders.
    \6\ See proposed CBOE Rule 6.53(x).
    \7\ See Notice, 78 FR 22928.
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1. Generation of Leg Orders
    CBOE proposes that leg orders may be automatically generated on 
behalf of complex orders so that they are represented in the individual 
leg markets.\8\ CBOE proposes that a leg order would be automatically 
generated for a leg of a complex order resting on the top of the COB: 
(1) If the price of the complex order is inside the ``derived net 
market,'' which is based on the derived net price of the best-priced 
orders or quotes (other than leg orders) in the EBook; and (2) at a 
price at which the net price execution of the complex order can be 
achieved if the other leg(s) of the complex order executes against the 
best-priced orders or quotes (other than leg orders).\9\ To determine 
whether leg orders may be generated or displayed in accordance with 
proposed CBOE Rule 6.53C(c)(iv)(1)(A)-(C), CBOE would evaluate the COB 
when a complex order enters the COB, when the Exchange BBO changes, and 
at a regular time interval to be determined by the Exchange (which 
would not exceed one second).\10\
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    \8\ See proposed CBOE Rule 6.53C(c)(iv)(1).
    \9\ See proposed CBOE Rule 6.53C(c) (iv)(1)(A); Notice, 78 FR 
22928, Example A, for an illustration of how leg orders would be 
generated and priced.
    \10\ See proposed CBOE Rule 6.53C(c)(iv)(1).
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    CBOE states that the derived net market and the price of leg orders 
would be based on the best-priced non-leg orders in the other leg 
series, as those are the orders against which a complex order may 
execute.\11\ CBOE proposes that the size of a leg order would be the 
lesser of (1) the size of the complex order, and (2) the maximum size 
available in the EBook for the other leg(s) of the complex order 
(divided by the leg ratio, if applicable).\12\
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    \11\ See Notice, 78 FR 22928, n. 6.
    \12\ See proposed CBOE Rule 6.53C(c)(iv)(1)(C); Notice, 78 FR 
22930, Example D for an illustration of the maximum size limit as 
applied to the generation of leg orders.
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    CBOE proposes that it may, on an objective basis, limit the number 
of leg orders generated.\13\ According to CBOE, leg orders may be made 
available on a class-by-class basis and may not be available for all of 
its systems.\14\ CBOE believes that this would help the Exchange manage 
the number of leg orders generated to ensure that leg orders do not 
negatively impact the Exchange's system capacity and performance.\15\ 
CBOE represents that it would not limit the generation of leg orders on 
the basis of the entering participant or the participant category of 
the order (i.e., professional, professional customer, or public 
customer).\16\
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    \13\ See proposed CBOE Rule 6.53C(c)(iv)(1).
    \14\ See id.
    \15\ See Notice, 78 FR 22928, n. 5. See also infra Section II.C.
    \16\ See Notice, 78 FR 22930, n. 15.
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    Finally, CBOE proposes not to generate a leg order if the price of 
the leg order would lock or cross the national best bid or offer 
(``NBBO'').\17\ CBOE also proposes to not generate leg orders for 
stock-option orders.\18\
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    \17\ See proposed CBOE Rule 6.53C(c)(iv)(1)(A).
    \18\ See proposed CBOE Rule 6.53C, Interpretation and Policy 
.06.
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2. Display and Nondisplay of Leg Orders; Aggregation of Size
    CBOE's proposed rule change specifies when a leg order would be 
displayed and when it would be nondisplayed. A leg order would only be 
displayed on the EBook if the price of the leg order matches or 
improves the Exchange BBO pursuant to proposed CBOE Rule 
6.53C(c)(iv)(1)(B).\19\ A leg order would not be displayed on the Ebook 
if the price of the leg order does not match or improve the Exchange 
BBO.\20\ If multiple resting complex orders in different strategies 
generate leg orders for the same price on the same side of an options 
series and both leg orders are eligible for display (i.e., both leg 
orders match or improve the Exchange BBO), then the leg order with the 
largest size would be displayed and the other leg orders would not be 
displayed.\21\ If such leg orders are for the same size, then the first 
leg order generated would be displayed and the other leg order(s) would 
not be displayed.\22\ If multiple resting complex orders in the same 
strategy generate leg orders for the same price on the same side of an 
options series, then the sizes of the leg orders would be aggregated 
and treated as a single order until execution.\23\ If such an 
aggregated order matched or improved the Exchange BBO, the aggregated 
order would be displayed.\24\
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    \19\ See proposed CBOE Rule 6.53C(c)(iv)(1)(B).
    \20\ See proposed CBOE Rule 6.53C, Interpretation and Policies 
.12 and proposed CBOE Rule 6.53C(c)(iv)(1)(B).
    \21\ See proposed CBOE Rule 6.53C(c)(iv)(1)(B); Notice, 78 FR 
22929-22930, n. 10-11, and Example C for an illustration of this 
concept.
    \22\ See proposed CBOE Rule 6.53C(c)(iv)(1)(B).
    \23\ See proposed CBOE Rule 6.53C(c)(iv)(1)(C).
    \24\ See Notice, 78 FR 22930, n. 14.
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    CBOE represents that nondisplayed leg orders, including leg orders 
that were displayed but subsequently become nondisplayed, would remain 
in the EBook and would be eligible for execution under proposed CBOE 
Rule 6.53C(c)(iv)(2), but would not be visible in the EBook depth, 
which, according to CBOE, contains resting orders and quotes not at the 
BBO.\25\
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    \25\ See proposed CBOE Rule 6.53C, Interpretation and Policies 
.12; Notice, 78 FR 22929, Example B, for an illustration of the 
generation of nondisplayed leg orders.
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3. Priority and Execution of Leg Orders; Cancellation and Removal
    CBOE represents that the generation of a leg order would not affect 
the existing priority, or execution opportunities, currently provided 
to market participants in the regular market in any way.\26\ In this 
regard, CBOE proposes that leg orders (including nondisplayed leg 
orders) would execute only after all other executable orders and quotes 
(including any nondisplayed size) at the same price are executed in 
full and that a leg order may not execute against another leg 
order.\27\ Leg orders at the same price would execute pursuant to the 
priority and execution rules for complex orders on the COB, except that 
displayed leg orders would have execution priority over nondisplayed 
leg orders.\28\
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    \26\ See Notice, 78 FR 22930.
    \27\ See proposed CBOE Rule 6.53C(c)(iv)(2)(A); Notice, 78 FR 
22928, n. 6.
    \28\ See proposed CBOE Rule 6.53C(c)(iv)(2)(A).
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    CBOE proposes that when a leg order executes against an incoming 
order or quote, the other leg(s) of the complex order represented by 
the leg order would automatically execute against the best-priced 
resting orders or quotes (other than leg orders) so that the complex 
order would be executed in full or in a permissible ratio).\29\ Prior 
to the execution of the complex order, any leg orders on the opposite 
side of the legs of the executing complex order would be canceled.\30\ 
Upon execution of the complex order, any leg orders that represent 
other legs of the executing complex order would be canceled.\31\ 
According to CBOE, after the complex order executes, new leg orders may 
be generated to ``replace'' any leg orders representing other complex 
orders resting on the COB that were canceled as a result of the 
execution of the complex order, assuming such resting complex orders 
meet the requirements for the generation of leg orders under

[[Page 43256]]

CBOE Rule 6.53C(c)(iv)(1).\32\ In such an instance, CBOE states that 
the newly generated leg order(s) would have the same priority as the 
leg order(s) it replaced with respect to any other leg orders at the 
same price representing complex orders in the same strategy because the 
priority of the new leg order(s) (which would be aggregated) would be 
based on the priority of the complex orders they represent (which would 
remain unchanged regardless of cancellations of leg orders).\33\ If 
execution of the complex order is partial, CBOE would be able to 
generate and display leg orders for the remaining size of the complex 
order assuming the conditions of Rule 6.53C(c)(iv)(1) are 
satisfied.\34\
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    \29\ See proposed CBOE Rule 6.53C(c)(iv)(2)(B).
    \30\ See id.
    \31\ See proposed CBOE Rule 6.53C(c)(iv)(2).
    \32\ See Notice, 78 FR 22930, n. 17.
    \33\ See id.
    \34\ See proposed CBOE Rule 6.53C(c)(iv)(2)(B); Notice 78 FR 
22931, Example F, for an illustration of a partial execution of a 
complex order through its leg orders.
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    CBOE proposes that a leg order would also be canceled if: (1) 
Execution at the price of the leg order would no longer achieve the net 
price of the complex order when the other leg(s) executes against the 
best-priced orders or quotes (other than leg orders); (2) the complex 
order executes in full or in part against another complex order; or (3) 
the complex order from which the leg order was generated is canceled or 
modified.\35\ CBOE proposes that a leg order would be removed from 
display in the EBook if the price of the leg order is no longer at the 
Exchange BBO or if a complex order in a different strategy generates a 
larger-sized leg order at the same price.\36\ Any leg order that is 
removed from display in the EBook would be nondisplayed, but would 
still be eligible for execution.\37\
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    \35\ CBOE may also cancel a leg order that might trade ahead of 
a non-leg order against an all-or-none order. See proposed CBOE Rule 
6.53C(c)(iv)(2)(C).
    \36\ See proposed CBOE Rule 6.53C(c)(iv)(3)(A); Notice 78 FR 
22932, Example H for an illustration of cancellation and removal of 
leg orders generated from complex orders in different strategies.
    \37\ See proposed CBOE Rule 6.53C(c)(iv)(3)(A); Notice 78 FR 
22931-22932, Examples G and H, for illustrations of how leg orders 
are canceled and removed.
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4. Leg Orders and CBOE Auctions
    CBOE proposes to amend certain provisions of CBOE Rule 6.53C, 
Interpretation and Policies, to provide for how leg orders would 
interact with the various auction functions available on the Exchange. 
First, CBOE proposes to amend CBOE Rule 6.53C, Interpretation and 
Policy .04(b) to provide that if a leg order has been generated for a 
complex order resting in the COB, the complex order would not be 
eligible for the automated complex order request for responses 
(``RFR'') auction process (``COA'').\38\ CBOE believes that this 
provision is appropriate because leg orders would more effectively 
create opportunities for the execution of complex orders resting in the 
COB than having those complex orders participate in a COA after the 
complex order has reached the COB.\39\
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    \38\ See proposed CBOE Rule 6.53C, Interpretation and Policy 
.04.
    \39\ See Notice, 78 FR 22932.
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    Second, CBOE proposes to add CBOE Rule 6.53C, Interpretation and 
Policy .07 to determine whether CBOE would generate a leg order if a 
simple order auction \40\ is occurring in a leg series at the time that 
a leg order in that series would otherwise be generated pursuant to 
CBOE Rule 6.53C(c)(iv). CBOE proposes that:
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    \40\ CBOE's simple order auctions include the Hybrid Agency 
Liaison (``HAL'') auction described in CBOE Rule 6.14A and Automated 
Improvement Mechanism (``AIM'') auction described in CBOE Rule 
6.74A.
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     If the leg order would be on the same side of the market 
as the auctioned order with a price worse than the initial auction 
price of the auctioned order, then the leg order would be generated and 
the auction would continue.\41\
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    \41\ See proposed CBOE Rule 6.53C, Interpretation and Policy 
.07(a).
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     If the leg order would be on the same side of the market 
as the auctioned order with a price equal to or better than the initial 
auction price of the auctioned order, then no leg order would be 
generated and the auction would continue. A leg order may later be 
generated after execution of the auctioned order.\42\
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    \42\ See proposed CBOE Rule 6.53C, Interpretation and Policy 
.07(b).
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     If the leg order would be on the opposite side of the 
market as the auctioned order with a price that locks or crosses the 
initial auction price of the auctioned order, then no leg order would 
be generated and the auction would continue. A leg order may later be 
generated after execution of the auctioned order.\43\
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    \43\ See proposed CBOE Rule 6.53C, Interpretation and Policy 
.07(c).
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     If the leg order would be on the opposite side of the 
market as the auctioned order with a price that does not lock or cross 
the initial auction price of the auctioned order, then the leg order 
would be generated and the auction would continue.\44\
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    \44\ See proposed CBOE Rule 6.53C, Interpretation and Policy 
.07(d).
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    CBOE notes that a leg order would not participate in an auction if 
a leg order would (a) be displayed in an options series at the time an 
auction order enters the system and (b) be at the same price as the 
starting price of the auction order and on the opposite side of the 
auction order.\45\ According to CBOE, the auction order would instead 
trade with other resting interest at that price and/or any contra order 
that stopped the auctioned order, while the leg order could continue to 
be displayed during the auction.\46\ According to the Exchange, this 
result occurs because leg orders only trade after all other executable 
orders and quotes are executed first.\47\
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    \45\ See Notice, 78 FR 22933.
    \46\ See id.
    \47\ See id.
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    CBOE believes the proposal would ensure that leg orders would not 
interact with simple order auctions in order to avoid the system 
complexities that would result from combining the execution of complex 
orders with the already complex auction processes.\48\ The Exchange 
believes that market participants would continue to have the same 
opportunities for execution and potential price improvement through 
simple order auctions as they would if there were no leg orders 
present.\49\
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    \48\ See Notice, 78 FR 22932.
    \49\ See Notice, 78 FR 22933.
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B. Amendment No. 2 to the Proposed Rule Change

    In Amendment No. 2, the Exchange proposes to make two changes to 
proposed CBOE Rule 6.53C(c)(iv). First, Amendment No. 2 adds a 
provision to proposed CBOE Rule 6.53C(c)(iv) to provide that leg orders 
will only be generated in the minimum increment of the leg series, and 
the price of a leg order will be rounded down (bid) or up (offer) to 
the nearest minimum increment if it would otherwise be priced in a 
smaller increment than the minimum.\50\ CBOE represents in Amendment 
No. 2 that leg orders rounded pursuant to this provision will be 
ranked, displayed, and eligible to execute with incoming orders at the 
rounded price. According to Amendment No. 2, a leg order rounded to the 
nearest increment will function in the same manner as a non-rounded leg 
order at the rounded increment. Second, Amendment No. 2 eliminates 
proposed CBOE Rule 6.53C(c)(iv)(2)(C), which governed the interaction 
of leg orders with all-or-none orders. The Exchange originally proposed 
that an all-or-none order \51\ would only execute against a leg order 
if it was at least the same size as the all-or-none order and there 
were no non-leg orders at the Exchange BBO.\52\

[[Page 43257]]

Under proposed CBOE Rule 6.53C(c)(iv)(2)(C), as originally proposed, if 
a leg order and a non-leg order(s) were at the Exchange BBO, then the 
all-or-none order would have either (a) executed against the non-leg 
order(s) if it was at least the same size as the all-or-none order or 
(b) the leg order would have been cancelled and the all-or-none order 
would have been handled pursuant to CBOE's existing rules governing 
all-or-none orders.\53\ Pursuant to CBOE Rule 6.53C(c)(iv)(2)(C), no 
new leg orders in the applicable options series would have been 
generated until the all-or-none order was executed or cancelled.\54\ As 
amended, proposed CBOE Rule 6.53(c)(iv)(2)(C) will be eliminated in its 
entirety and, as a result, a marketable all-or-none order could execute 
against a leg-order and a non-leg order displayed at the Exchange BBO 
if such orders were together sufficient to fill the marketable all-or-
none order.
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    \50\ See proposed CBOE Rule 6.53C(iv)(1)(A).
    \51\ See CBOE Rule 6.53(i) defining an all-or-none order as: ``a 
market or limit order which is to be executed in its entirety or not 
at all.''
    \52\ See proposed CBOE Rule 6.53C(c)(iv)(2)(C).
    \53\ See id. See generally CBOE Rule 6.44 Interpretations and 
Policies .01-.03.
    \54\ See proposed CBOE Rule 6.53C(c)(iv)(2)(C).
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C. CBOE Trading System Capacity

    CBOE represents that it maintains a rigorous capacity planning 
program that monitors system performance and projected capacity demands 
and that, as a general matter, considers the potential system capacity 
impact of all new initiatives.\55\ CBOE represents that it has analyzed 
the potential impact on system capacity that may result from the 
proposed rule change and has concluded that the Exchange has sufficient 
system capacity to handle the generation of leg orders without 
degrading the performance of its systems or reducing the number of 
complex order instruments it currently supports.\56\ The Exchange 
represented that it would closely monitor the generation of leg orders 
and its effect on CBOE's systems, and would carefully manage and 
curtail the number of leg orders being generated, to ensure that they 
do not negatively impact system capacity and performance.\57\
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    \55\ See Notice, 78 FR 22933.
    \56\ See id.
    \57\ See id.
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III. Discussion

    After careful review, the Commission finds that the proposed rule 
change, as modified by Amendment Nos. 1 and 2, is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to a national securities exchange.\58\ In particular, the 
Commission finds that the proposed rule change, as amended, is 
consistent with Section 6(b)(5) of the Act,\59\ which requires, among 
other things, that the rules of a national securities exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, 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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    \58\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \59\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that leg orders could facilitate the 
execution of complex orders resting on CBOE's COB by increasing the 
opportunities for eligible complex orders to execute against interest 
in the leg market on CBOE's EBook, thereby benefitting investors 
seeking to execute complex orders. In addition, the Commission believes 
that leg orders could benefit participants in the leg market by 
providing additional liquidity, and potentially more favorable 
executions, for leg market interest. The Commission notes that it 
previously approved proposals by other options exchanges to implement 
leg orders.\60\
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    \60\ See Securities Exchange Act Release Nos. 66234 (January 25, 
2012), 77 FR 4852 (January 31, 2012) (order approving File No. SR-
ISE-2011-82) and 69419 (April 19, 2013), 78 FR 24449 (April 25, 
2013) (order approving File No. SR-BOX-2013-01).
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    Leg orders will be firm orders that represent one leg of a non-
contingent complex order resting on the COB if the ratio of that leg to 
the other legs of the complex order is equal to or can be reduced to 
one.\61\ The Commission notes that, on CBOE, leg orders will only be 
generated in the minimum increment of the leg series, and the price of 
the leg order will be rounded down (bid) or up (offer) to the nearest 
minimum increment if it would otherwise be priced in a smaller 
increment than the minimum.\62\ As noted above, the Exchange represents 
that a leg order rounded to the nearest increment will be ranked, 
displayed, and eligible to execute with incoming orders at the rounded 
price and that rounded leg orders will function in the same manner as 
non-rounded leg orders.\63\ Under CBOE's proposal, leg orders will not 
be generated if the price of the leg order would lock or cross the 
NBBO.\64\
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    \61\ See supra Section II.A.
    \62\ See proposed CBOE Rule 6.53C(iv)(1)(A). See also supra 
Section II.B.
    \63\ See supra Section II.B.
    \64\ See proposed CBOE Rule 6.53C(c)(iv)(1)(A). See also supra 
note 17 and accompanying text.
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    The Commission notes that a leg order will be executed only after 
all other executable orders and quotes (including any nondisplayed size 
of any non-leg orders) at the same price are executed in full and that 
a leg order may not execute against another leg order.\65\ Accordingly, 
CBOE represents that the generation of a leg order would not affect the 
existing priority, or execution opportunities, currently provided to 
market participants in the regular market in any way.\66\
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    \65\ See proposed CBOE Rule 6.53C(c)(iv)(2)(A); Notice, 78 FR 
22928, n. 6. See also supra notes 27 and 46 and accompanying text.
    \66\ See Notice, 78 FR 22930. See also infra note 26 and 
accompanying text.
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    The Commission notes that the proposal provides for when a leg 
order will be displayed and when it would be nondisplayed. The Exchange 
represents that nondisplayed leg orders will function in the same 
manner as displayed leg orders except that displayed leg orders will 
have priority over nondisplayed leg orders.\67\
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    \67\ See Notice, 78 FR 22929.
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    As noted above, CBOE represents that it will carefully manage and 
curtail the number of leg orders being generated so that they do not 
negatively impact system capacity and performance.\68\ CBOE represents, 
further, that it will curtail the number of leg orders on an objective 
basis, such as by limiting the number of leg orders generated in a 
particular class, and that it will not limit the generation of leg 
orders on the basis of the entering participant or the participant 
category of the order (i.e., professional, professional customer, or 
public customer).\69\
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    \68\ See supra Section II.C.
    \69\ See Notice, 78 FR 22930, n. 15.
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether Amendment No. 2 
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-CBOE-2013-026 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission,

[[Page 43258]]

100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2013-026. 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 20549-1090 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-
CBOE-2013-026, and should be submitted on or before August 9, 2013.

V. Accelerated Approval of Proposed Rule Change, as Modified by 
Amendment No. 2

    The Commission finds good cause for approving the proposed rule 
change, as amended by Amendment No. 2, prior to the 30th day after the 
date of publication of notice in the Federal Register. Amendment No. 2 
revises the proposal, to, among other things, eliminate proposed CBOE 
Rule 6.53C(c)(iv)(2)(C) in its entirety because the provision would be 
inconsistent with Section 11A of the Act \70\ and Rule 602(a) of 
Regulation NMS (``Quote Rule'').\71\ For this reason, the Commission 
finds good cause for approving the proposed rule change, as amended, on 
an accelerated basis, pursuant to Section 19(b)(2) of the Act.
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    \70\ 15 U.S.C. 78k-1.
    \71\ 17 CFR 242.602(a). See 17 CFR 242.602(a)(1)(i).
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VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\72\ that the proposed rule change (SR-CBOE-2013-26), as amended, 
be, and hereby is, approved.
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    \72\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\73\
Kevin M. O'Neill,
Deputy Secretary.
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    \73\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2013-17312 Filed 7-18-13; 8:45 am]
BILLING CODE 8011-01-P