[Federal Register Volume 78, Number 154 (Friday, August 9, 2013)]
[Notices]
[Pages 48757-48758]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-19266]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70118; File No. SR-CBOE-2013-070]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Offer a New Data Feed

August 5, 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 July 24, 2013, the Chicago Board Options Exchange, Incorporated (the 
``Exchange'' or ``CBOE'') 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. 
CBOE has designated the proposed rule change as constituting a ``non-
controversial'' rule change under paragraph (f)(6) of Rule 19b-4 under 
the Act,\3\ which renders the proposal effective upon receipt of this 
filing by the Commission. 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.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to offer a new data feed. There are no 
proposed changes to Exchange rule text.

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
    CBOE proposes to offer a new data feed. CBOE already offers a BBO 
Data Feed, which is a real-time, low latency data feed that includes 
CBOE ``BBO data'' and last sale data.\4\ The BBO and last sale data 
contained in the BBO Data Feed is identical to the data that CBOE sends 
to the Options Price Reporting Authority (``OPRA'') for redistribution 
to the public.\5\ The BBO Data Feed also includes certain data that is 
not included in the data sent to OPRA, namely, (i) totals of customer 
versus non-customer contracts at the BBO, (ii) All-or-None contingency 
orders priced better than or equal to the BBO, (iii) BBO data and last 
sale data for complex strategies (e.g., spreads, straddles, buy-writes, 
etc.) (``Spread Data''), (iv) BBO data and last sale data for Flexible 
Exchange (``FLEX'') options traded on the CBOE FLEX Hybrid Trading 
System, including BBO data and last sale data for FLEX complex 
strategies (collectively, ``FLEX BBO data''), and (v) expected opening 
price (``EOP'') and expected opening size (``EOS'') information that is 
disseminated prior to the opening of the market and during trading 
rotations (collectively, ``EOP/EOS data'').\6\
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    \4\ The BBO Data Feed includes the ``best bid and offer,'' or 
``BBO'', consisting of all outstanding quotes and standing orders at 
the best available price level on each side of the market, with 
aggregate size (``BBO data,'' sometimes referred to as ``top-of-book 
data''). Data with respect to executed trades is referred to as 
``last sale'' data.
    \5\ The Exchange notes that Market Data Express, LLC (``MDX''), 
an affiliate of CBOE, makes available to Customers the BBO data and 
last sale data that is included in the BBO Data Feed no earlier than 
the time at which the Exchange sends that data to OPRA.
    \6\ The Exchange identified the inclusion of FLEX BBO data and 
EOP/EOS data in the BBO Data Feed in a proposed rule change filed in 
January 2013. See Securities Exchange Act Release No. 68696 (January 
18, 2013), 78 FR 5527 (January 25, 2013). MDX also makes the FLEX 
BBO data available as a separate data feed at no charge to any 
Customer that wishes to subscribe to only that data. EOP/EOS data is 
not offered separate from the BBO Data Feed.
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    The Exchange proposes to offer a new data feed (the ``COB Feed''). 
This new COB Feed will provide data regarding the Exchange's Complex 
Order Book (``COB'') and related complex order information. The COB 
Feed will include BBO quotes and identifying information for all CBOE-
traded complex order strategies, as well as all executed CBOE complex 
order trades (and identify whether the trade was a customer trade, or 
whether a complex order in the COB is a customer order). All of this 
data is also currently included in the BBO Data Feed. At this time, the 
Exchange has determined to offer the COB Feed to all market 
participants free of charge.\7\
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    \7\ All Exchange market participants will be afforded equal 
access to the COB Feed and the Exchange will not discriminate 
amongst who may be able to access the COB Feed.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Act and the rules and regulations thereunder applicable to the Exchange 
and, in particular, the requirements of Section 6(b) of the Act.\8\ 
Specifically, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \9\ 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.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations and broker-dealers increased authority and flexibility to 
offer new and unique market data to the public. It was believed that 
this authority would expand the amount of data available to consumers, 
and also spur innovation and competition for the provision of market 
data. CBOE believes that this proposal is in keeping with those 
principles by promoting increased transparency through the 
dissemination of useful data and also by clarifying its availability to 
market participants.
    Additionally, CBOE is making a voluntary decision to make this data 
available. CBOE is not required by the Act in the first instance to 
make the data available, unlike the best bid and offer which must be 
made available under the Act. CBOE chooses to make the data available 
as proposed in order to improve market quality, to attract order flow, 
and to increase transparency. Further, all of the data included in the 
COB Feed is already available in the BBO Data Feed, so no new data is 
being made available by the introduction of the COB Feed.

B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE does not believe that the proposed rule change will impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. 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 the

[[Page 48758]]

COB Feed is available to all market participants. The Exchange does not 
believe that offering the COB Feed will impose any burden on 
intermarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because the COB Feed involves 
data that is specific to CBOE. Further, to the extent creating the COB 
Feed (and offering it for free) makes CBOE a more attractive 
marketplace for market participants on other exchanges, such market 
participants may elect to become CBOE market participants. Indeed, this 
may enhance competition by spurring other options exchanges to create 
more data feeds (and offer such new feeds for free).

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: (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) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its 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. 
CBOE has satisfied this requirement.
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    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Exchange has stated that it is prepared to offer the COB 
Feed immediately and does not intend to assess a fee for such feed at 
this time, so waiving the 30-day operative delay would allow Exchange 
market participants to begin to receive the data in the COB Feed 
immediately instead of having to wait 30 days. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest, because such waiver 
will enable market participants to receive the COB data free of charge 
immediately, which data is otherwise only available to market 
participants for a fee (as part of the BBO Data Feed) until the 
proposal becomes effective. For this reason, the Commission hereby 
waives the 30-day operative delay requirement and designates the 
proposed rule change as operative upon filing.\12\
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    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has 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 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 shall institute proceedings to 
determine whether the proposed rule 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. 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-2013-070 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-2013-070. 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-2013-070 and should be 
submitted on or before August 30, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-19266 Filed 8-8-13; 8:45 am]
BILLING CODE 8011-01-P