[Federal Register Volume 80, Number 27 (Tuesday, February 10, 2015)]
[Notices]
[Pages 7518-7520]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-02643]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74204; File No. SR-CFE-2015-001]


Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change 
Regarding Ownership and Control Reports

February 4, 2015.
    Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on January 28, 2015 CBOE 
Futures Exchange, LLC (``CFE'' or ``Exchange'') filed with the 
Securities and Exchange Commission (``SEC'' or ``Commission'') the 
proposed rule change described in Items I, II, and III below, which 
Items have been prepared by CFE. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons. CFE also has filed this proposed rule change with the 
Commodity Futures Trading Commission (``CFTC''). CFE filed a written 
certification with the CFTC under Section 5c(c) of the Commodity 
Exchange Act (``CEA'') \2\ on January 28, 2015.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(7).
    \2\ 7 U.S.C. 7a-2(c).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Description of the Proposed Rule 
Change

    The Exchange proposes to amend its rule related to reportable 
positions. The scope of this filing is limited solely to the 
application of the rule amendments to security futures traded on CFE. 
The only security futures currently traded on CFE are traded under 
Chapter 16 of CFE's Rulebook which is applicable to Individual Stock 
Based and Exchange-Traded Fund Based Volatility Index security futures. 
The text of the proposed rule change is attached as Exhibit 4 to the 
filing but is not attached to the publication of this notice.

[[Page 7519]]

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, CFE 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. CFE 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 CFE rule amendments included as part of 
this rule change is to amend CFE Rule 412B (Reportable Positions): (i) 
To require that CFE Trading Privilege Holders (``TPHs'') and non-TPHs 
must, in a form and manner prescribed by the Exchange, concurrently 
file with the Exchange a copy of all submissions required by the CFTC 
pursuant to the Final Rule adopted by the CFTC under the caption 
Ownership and Control Reports (``new OCR Rule'')\3\; and (ii) to 
require that TPHs that are not CFE clearing members report to the 
Exchange certain information that the new OCR Rule requires for TPHs 
that are clearing members. The rule amendments included as part of this 
rule change are to apply to all products traded on CFE, including both 
non-security futures and security futures. CFE is making these rule 
amendments in conjunction with other rule amendments to CFE Rules that 
are not required to be submitted to the Commission pursuant to Section 
19(b)(7) of the Act \4\ and thus are not included as part of this rule 
change.
---------------------------------------------------------------------------

    \3\ 78 FR 69178 (Nov. 18, 2013).
    \4\ 15 U.S.C. 78s(b)(7).
---------------------------------------------------------------------------

    CFE currently requires TPHs and non-TPHs to report to the Exchange, 
in a form and manner prescribed by the Exchange, reportable positions 
and related information relating to Exchange contracts that TPHs and 
non-TPHs are required to report to the CFTC under the CFTC's prior 
reporting rules. The new OCR Rule revises the information that TPHs and 
non-TPHs are required to report to the CFTC, including, among other 
things, a new CFTC Form 102 (Identification of Special Accounts, Volume 
Threshold Accounts, and Consolidated Accounts), which includes a new 
CFTC Form 102A (Identifying and reporting a special account) and a new 
CFTC Form 102B (Identifying and reporting a volume threshold account), 
and a new CFTC Form 71 (Identification of Omnibus Accounts and Sub-
Accounts). In order for CFE to receive these new Forms relating to 
Exchange contracts that TPHs and non-TPHs will be required to report to 
the CFTC under the new OCR Rule, CFE is amending Rule 412B to expressly 
require TPHs and non-TPHs to file these new Forms with CFE concurrently 
with filing them to the CFTC. In addition, CFE is amending Rule 412B to 
require TPHs that are not clearing members (and are not covered under 
the new OCR Rule) to report certain information that relates to the 
identification and reporting of special accounts to the Exchange. CFE 
already requires that TPHs that are not clearing members report this 
type of information under existing CFE Rule 412B(a). To require TPHs 
that are not clearing members to continue to report certain information 
to CFE that is consistent with what they already report to CFE in this 
regard, CFE is proposing to add CFE Rule 412B(c) to make this clear.
    Specifically, CFE is proposing to amend the title of CFE Rule 412B 
(Reportable Positions) by replacing the currently existing rule title 
with CFE Rule 412B (Ownership and Control Reports). This change 
incorporates the title of the new OCR Rule.
    CFE is proposing to replace CFE Rule 412B(a) to reflect the new OCR 
Rule. CFE Rule 412B(a) currently provides that all TPHs shall report to 
the Exchange in a form and manner prescribed by the Exchange reportable 
positions and related information relating to Exchange contracts that 
TPHs are required to report to the CFTC pursuant to CFTC regulations. 
The amendments replace this language and provide that each TPH shall, 
in a form and manner prescribed by the Exchange, concurrently file with 
the Exchange a copy of all CFTC Form 102 (including CFTC Form 102A and 
CFTC Form 102B) and CFTC Form 71 submissions (including any 
attachments, related submissions, or related information) relating to 
Exchange Contracts that each TPH is required to report to the CFTC 
pursuant to CFTC regulations.
    CFE is also proposing to replace CFE Rule 412B(b) to reflect the 
new OCR Rule. CFE Rule 412B(b) currently provides that any Person 
(which is defined in CFE Rule 155 \5\) that is not a TPH and that is 
required to report to the CFTC pursuant to CFTC regulations reportable 
positions and related information relating to Exchange contracts shall 
report the foregoing reportable positions and related information to 
the Exchange in a form and manner prescribed by the Exchange. The 
amendments replace this language and provide that any Person that is 
not a TPH and that is required to make to the CFTC pursuant to CFTC 
regulations CFTC Form 102 (including CFTC Form 102A and CFTC Form 102B) 
or CFTC Form 71 submissions (including any attachments, related 
submissions, or related information) relating to Exchange contracts 
shall concurrently file with the Exchange copies of all of the 
foregoing CFTC Form 102 (including CFTC Form 102A, CFTC Form 102B, and 
CFTC Form 102S) or CFTC Form 71 submissions (including any attachments, 
related submissions, or related information) in a form and manner 
prescribed by the Exchange.
---------------------------------------------------------------------------

    \5\ CFE Rule 155 defines Person to mean any natural person, 
association, partnership, limited liability company, joint venture, 
trust or corporation.
---------------------------------------------------------------------------

    CFE is proposing to amend CFE Rule 412B to add CFE Rule 412B(c) to 
require that each TPH that is a not a clearing member shall, in a form 
and manner prescribed by the Exchange, report to the Exchange the same 
information regarding the identification and reporting of special 
accounts relating to Exchange contracts that each TPH that is a 
clearing member is required to report to the CFTC pursuant to CFTC 
regulations.
    Lastly, CFE is proposing to amend the contract specifications for 
its security futures products to reflect the new OCR Rule's definition 
of reportable trading volume as trading volume of 50 or more contracts, 
during a single trading day, on a single reporting market that is a 
designated contract market or swap execution facility, in all 
instruments that such reporting market designates with the same product 
identifier. Specifically, CFE is amending CFE Rule 1602(n) to provide, 
``Pursuant to Commission Regulation Sec.  15.04 and Commission 
Regulation Part 17, the trading volume that is required to be reported 
to the Commission is 50 or more futures contracts in a Volatility Index 
futures contract during a single trading day.'' \6\
---------------------------------------------------------------------------

    \6\ CFE Rule 1601 defines Volatility Index futures contracts as 
Individual Stock Based and Exchange-Traded Fund Based Volatility 
Index security futures contracts and provides a list of the 
Volatility Index futures contracts that CFE may list for trading.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with

[[Page 7520]]

Section 6(b) of the Act,\7\ in general, and furthers the objectives of 
Sections 6(b)(5) \8\ and 6(b)(7) \9\ in particular in that it is 
designed:
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ 15 U.S.C. 78f(b)(7).
---------------------------------------------------------------------------

     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.
    The Exchange believes that the proposed rule change will strengthen 
its ability to carry out its responsibilities as a self-regulatory 
organization. CFE must receive the information that TPHs and non-TPHs 
provide to the CFTC under the new OCR Rule in order to carry out CFE's 
market surveillance program. For this same reason, CFE also must 
receive the information that TPHs that are not clearing members provide 
to the CFTC regarding the identification and reporting of special 
accounts that TPHs that clearing members must provide to the CFTC under 
the OCR Rule. In addition, the amendments expressly provide that these 
TPHs and non-TPHs must provide this information in the form and manner 
prescribed by the Exchange, which will allow the information's seamless 
integration into the Exchange's market surveillance program and systems 
utilized by CFE and its regulatory services provider.

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

    CFE 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 that the rule change enhances CFE's market 
surveillance program. The Exchange believes that the proposed rule 
change is equitable and not unfairly discriminatory because the 
amendments would apply equally to all TPHs and non-TPHs that are 
subject to the applicable requirements.

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

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    The proposed rule change will become effective on or after February 
11, 2015, on a date to be announced by the Exchange through the 
issuance of a circular. The Exchange will make the effective date of 
the rule change consistent with the timing of the implementation of the 
new OCR Rule by the CFTC.
    At any time within 60 days of the date of effectiveness of the 
proposed rule change, the Commission, after consultation with the CFTC, 
may summarily abrogate the proposed rule change and require that the 
proposed rule change be refiled in accordance with the provisions of 
Section 19(b)(1) of the Act.\10\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

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-CFE-2015-001 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-CFE-2015-001. 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 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-CFE-2015-001, 
and should be submitted on or before March 3, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2015-02643 Filed 2-9-15; 8:45 am]
BILLING CODE 8011-01-P