Citation: "79 FR 35196"
Document Number: "Release No. 34-72392; File No. SR-CFE-2014-002"
June 13, 2014.
Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 ("Act"), /1/ notice is hereby given that on
FOOTNOTE 1 15 U.S.C. 78s(b)(7). END FOOTNOTE
FOOTNOTE 2 7 U.S.C. 7a-2(c). END FOOTNOTE
CFE proposes to revise the notification and reporting provisions contained in CFE Rules 414 (Exchange of Contract for Related Position) ("ECRP") and 415 (Block Trading).
The scope of this filing is limited solely to the application of the rule changes 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 ("Volatility Index") security futures.
The text of the proposed rule change is attached as Exhibit 4 to the filing submitted by the Exchange but is not attached to the published notice of the filing.
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.
Last year, CFE implemented a two-phased expansion of extended trading hours in CBOE Volatility Index ("VIX") futures. Because the CFE Help Desk was staffed to support VIX futures trading during longer hours, CFE amended the notification and reporting provisions for ECRP transactions and Block Trades for all products traded on CFE, including security futures. /3/
FOOTNOTE 3 See Securities Exchange Act Release Nos. 70611 (
CFE is again expanding extended trading hours in VIX futures to be nearly 24 hours a day, five days a week. As a result, the Exchange is changing the time frames during which ECRP transactions and Block Trades may be reported. Those time frames will be whenever the Exchange is open for trading VIX futures and from
The Exchange is also limiting the manner in which notification of ECRP transactions and Block Trades may be provided to the CFE Help Desk. Specifically, the manner of notification must be made by email and notification by phone will no longer be permitted.
Finally, the Exchange is clarifying that ECRP transactions and Block Trades in an expiring contract on the last trading day for that contract may not occur after the termination of trading hours in the expiring contract on that trading day. An ECRP transaction or Block Trade in an expiring contract that occurs during the trading hours for that contract may be reported to the Exchange after those trading hours, but only if the transaction is fully reported to the Exchange by no later than the reporting deadline referenced above.
To effectuate these changes, CFE is amending the notification and reporting provisions of CFE Rule 414 (which sets forth requirements relating to ECRP transactions) and CFE Rule 415 (which sets forth requirements relating to Block Trades).
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act, /4/ in general, and furthers the objectives of Section 6(b)(5) /5/ in particular in that it is designed 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.
FOOTNOTE 4 15 U.S.C. 78f(b). END FOOTNOTE
FOOTNOTE 5 15 U.S.C. 78f(b)(5). END FOOTNOTE
The Exchange believes that the proposed rule change would benefit investors and market participants because it would enhance CFE's ECRP and Block Trade reporting provisions by extending the time frames during which ECRP transactions and Block Trades may be reported. The Exchange also believes that requiring notification of ECRP transactions and Block Trades to be made only by email would benefit the marketplace by creating a record evidencing the parties' specific details of the trade previously agreed upon. The Exchange believes that the proposed rule change is equitable and not unfairly discriminatory because amended CFE Rules 414 and 415 would apply to all TPHs and Authorized Reporters and do not discriminate between market participants.
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 makes enhancements to CFE's Block Trade and ECRP reporting process. In addition, the Exchange believes that the expansion of the ability to report Block Trades and ECRP transactions in security futures in conjunction with the expansion of trading hours in VIX futures will promote competition because it will provide for the reporting and dissemination of security futures Block Trades and ECRPs during additional time frames which will serve to promote additional transparency and thus potential further price competition.
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 operative on or after
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. /6/
FOOTNOTE 6 15 U.S.C. 78s(b)(1). END FOOTNOTE
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:
* Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
* Send an email to firstname.lastname@example.org. Please include File Number SR-CFE-2014-002 on the subject line.
* Send paper comments in triplicate to Secretary,
All submissions should refer to File Number SR-CFE-2014-002. 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
For the Commission, by the
FOOTNOTE 7 17 CFR 200.30-3(a)(12). END FOOTNOTE
Kevin M. O'Neill,
[FR Doc. 2014-14310 Filed 6-18-14;
BILLING CODE 8011-01-P
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