[Federal Register Volume 78, Number 93 (Tuesday, May 14, 2013)]
[Notices]
[Pages 28265-28267]
[FR Doc No: 2013-11359]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69528; File No. SR-CBOE-2013-048]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Rule 6.74A

May 7, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on May 02, 2013, Chicago Board Options Exchange, Incorporated (the
``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (the ``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 change 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 Substance
of the Proposed Rule Change

    The Exchange proposes to amend Rule 6.74A. The text of the proposed
rule change is provided below.
    (Additions are italicized; deletions are [bracketed].)
* * * * *

Chicago Board Options Exchange, Incorporated Rules

* * * * *

Rule 6.74A. Automated Improvement Mechanism (``AIM'')

    Notwithstanding the provisions of Rule 6.74, a Trading Permit
Holder that represents agency orders may electronically execute an
order it represents as agent (``Agency Order'') against principal
interest or against a solicited order provided it submits the Agency
Order for electronic execution into the AIM auction (``Auction'')
pursuant to this Rule.
    (a) No change
    (b) Auction Process. Only one Auction may be ongoing at any given
time in a series and Auctions in the same series may not queue or
overlap in any manner. The Auction may not be cancelled and shall
proceed as follows:
    (1) Auction Period and Request for Responses (RFRs).
    (A) To initiate the Auction, the Initiating Trading Permit Holder
must mark the Agency Order for Auction processing, and specify (i) a
single price at which it seeks to cross the Agency Order (with
principal interest or a solicited order) (a ``single-price
submission''), including whether the Initiating Trading Permit Holder
elects to have last priority in allocation, or (ii) that it is willing
to automatically match (``auto-match'') as principal the price and size
of all Auction responses up to an optional designated limit
price[(``auto-match'')] in which case the Agency Order will be stopped
at the NBBO (if 50 standard option contracts or 500 mini-option
contracts or greater) or one cent/one minimum increment better than the
NBBO (if less than 50 standard option contracts or 500 mini-option
contracts). Once the Initiating Trading Permit Holder has submitted an
Agency Order for processing pursuant to this subparagraph, such
submission may not be modified or cancelled.
    (B)-(I) No change
    (2)-(3) No change
     * * * Interpretations and Policies:
    .01-.08 No change
* * * * *
    The text of the proposed rule change is also available on the
Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.

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
    The purpose of the proposed rule change is to amend Rule 6.74A
related to the Automated Improvement Mechanism (``AIM''). AIM allows a
Trading Permit Holder (the ``Initiating Trading Permit Holder'') to
submit an order it represents as agent (the ``Agency Order'') along
with a contra-side second order (a principal order or a solicited order
for the same size as the Agency Order) into an auction (an ``Auction'')
for electronic execution.\3\ During the Auction, other participants can
compete with the Initiating Trading Permit Holder's second order to
execute against the Agency Order, which guarantees that the Agency
Order will receive an execution.\4\ Initiating Trading Permit Holders
must stop the Agency Order at the better of the national best bid or
offer (``NBBO'') or the Agency Order's limit price, if the Agency Order
is for 50 standard contracts or 500 mini-option contracts or more, or
at the better of one minimum increment better than the NBBO or the
Agency Order's limit price, if the Agency Order is for fewer than 50
standard contracts or 500 mini-option contracts.\5\ Once an Auction
commences, the Initiating Trading Permit Holder cannot cancel it.\6\
Upon receipt of an Agency Order (and the Initiating Trading Permit
Holder's second order), the Exchange will commence the Auction by
issuing a request for responses (``RFR'') detailing

the side and size of the Agency Order.\7\ The RFR will last for one
second.\8\ At the conclusion of an Auction, an Agency Order will be
allocated at the best price(s) in accordance with the applicable
matching algorithm rules for that class, subject to the allocation
provisions of Rule 6.74A(b)(3).
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    \3\ See Rule 6.74A.
    \4\ Id.
    \5\ Rule 6.74A(a)(2) and (3).
    \6\ Rule 6.74A(b)(1)(A).
    \7\ Rule 6.74A(b)(1)(B).
    \8\ Rule 6.74A(b)(1)(C). Several types of events will cause an
Auction to conclude. See Rule 6.74A(b)(2).
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    Rule 6.74A(b)(1)(A) currently allows an Initiating Trading Permit
Holder to enter its contra-side second order in one of two formats: (1)
A single price or (2) a non-price specific commitment to auto-match all
Auction responses received during the Auction. In this second case, the
Initiating Trading Permit Holder would have no control over the match
price. The Exchange is proposing to provide Initiating Trading Permit
Holders with the additional option to auto-match competing prices from
other market participants up to a designated limit price. The
Initiating Trading Permit Holder will still not be able to cancel the
auto-match instruction after an Auction commences and will have no
control over the prices at which it receives an allocation of the
Auction other than the outside boundary established by the designated
limit price.
    The Exchange notes that when an Initiating Trading Permit Holder
selects the auto-match feature prior to the start of an Auction (with
or without a designated limit price), the available liquidity at
improved prices increases, and the competitive final pricing is out of
the Initiating Trading Permit Holder's control. The Exchange believes
this proposed rule change will incent more Trading Permit Holders to
initiate Auctions, because the additional flexibility encourages
Trading Permit Holders willing to trade with Agency Orders at a price
better than the NBBO, but only up to a certain price, to initiate an
Auction. Additionally, this proposal provides the possibility that
other TPHs may receive increased order allocations through AIM, which
the Exchange believes could increase participation in Auctions. As a
result, the Exchange expects the proposal will increase the number of
Auctions, which would enhance competition in the Auctions and
ultimately provide additional opportunities for price improvement over
the NBBO for the Exchange's customers.
    In support of this proposed rule change, the Exchange notes that
each of the Automated Improvement Mechanism (``C2 AIM'') of C2 Options
Exchange, Incorporated (``C2''),\9\ Price Improvement Period (``PIP'')
of Boston Options Exchange LLC (``BOX''),\10\ and the Price Improvement
Mechanism (``PIM'') of International Securities Exchange, LLC (``ISE'')
\11\ permits initiating participants to elect to auto-match up to a
designated limit price.\12\ The Exchange believes that AIM, and in turn
the customers that benefit from AIM, would be disadvantaged if Trading
Permit Holders are not provided with the option to auto-match up to a
designated limit price because this lack of flexibility reduces the
number of Auctions and, as a result, opportunities for price
improvement. Because C2, BOX, and ISE currently allow initiating
participants the option to auto-match up to the best-priced response
received during an auction or up to a designated limit price, the
Exchange believes it is important for competitive purposes that it be
able to offer the same opportunities for price improvement on CBOE
through AIM.
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    \9\ See C2 Rule 6.51(b)(1)(A); see also Securities Exchange Act
Release No. 34-66552 (March 9, 2012), 77 FR 15438 (March 15, 2012)
(SR-C2-2011-043) (order approving, among other things, the option to
auto-match up to a designated limit price).
    \10\ See BOX Rule 7150(f); see also Securities Exchange Act
Release No. 34-61805 (March 31, 2010), 75 FR 17454 (April 6, 2010)
(SR-BX-2010-022) (notice of filing and immediate effectiveness of
rule change to implement the auto-match feature with the option to
auto-match up to a designated limit price).
    \11\ See ISE Rule 723(d)(4); see also Securities Exchange Act
Release No. 34-62644 (August 4, 2010), 75 FR 48395 (August 10, 2010)
(SR-ISE-2010-61) (notice of filing and immediate effectiveness of
rule change to implement the auto-match feature with the option to
auto-match up to a designated limit price).
    \12\ AIM, C2 AIM, PIP and PIM have certain characteristics in
common with each other. All three mechanisms (a) provide for the
opportunity for customer price improvement, (b) have certain periods
where the initial orders are exposed for potential price
improvement, (c) have certain guidelines regarding the types of
orders that may be eligible for price improvement, and (d) have
certain defined rules related to the allocation of trades within
price improvement auctions.
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    The Exchange will provide the Commission with the following data:
(1) The percentage of trades effected through AIM in which the
Initiating Trading Permit Holder submitted an Agency Order with an
auto-match instruction that included a designated limit price and the
percentage that did not include a designated limit price; and (2) the
average amount of price improvement provided to Agency Orders when the
Initiating Trading Permit Holder submitted an auto-match instruction
that included a designated limit price and the average amount that did
not include a designated limit price, versus the average amount of
price improvement provided to Agency Orders when the Initiating Trading
Permit Holder submitted a single price (with no auto-match
instruction).
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\13\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \14\ 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.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \15\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
    \15\ Id.
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    In particular, the Exchange believes the proposed rule change is a
reasonable modification designed to provide additional flexibility for
Trading Permit Holders to obtain executions on behalf of their
customers while continuing to provide meaningful, competitive Auctions.
The Exchange also believes that the proposed rule change will increase
the number of and participation in Auctions, which will ultimately
enhance competition in the Auctions and provide customers with
additional opportunities for price improvement. The proposed rule
change is consistent with the rules of other exchanges related to price
improvement auctions and thus serves to remove impediments to and to
perfect the mechanism for a free and open market and a national market
system.

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. All Trading Permit Holders that
represent Agency Orders may initiate an Auction and have the option to
auto-match up to a

designated limit price. Initiating Trading Permit Holders will not be
required to designate such a limit price, and may still instead enter
the contra-side order with a specified single price or auto-match all
Auction responses. The Exchange believes that this additional
flexibility for Trading Permit Holders to obtain executions on behalf
of their customers while continuing to provide meaningful, competitive
Auctions will increase the number of Auctions, which will ultimately
enhance competition in the Auctions and provide customers with
additional opportunities for price improvement. The proposed rule
change also provides the possibility that other TPHs may receive
increased order allocations through AIM, which the Exchange believes
could increase participation in Auctions and further enhance
competition.
    CBOE believes that the proposed rule change will in fact relieve
any burden on, or otherwise promote, competition. The Exchange believes
the proposed rule change is procompetitive because it would provide
Initiating Trading Permit Holders with the same flexibility as the
rules at other exchanges that also permit initiating participants to
elect to auto-match up to a designated limit price in those exchanges'
price improvement auctions.\16\ The Exchange believes that AIM, and in
turn the customers that benefit from AIM, would be disadvantaged if
Trading Permit Holders are not provided with the option to auto-match
up to a designated limit price because this lack of flexibility reduces
the number of Auctions and, as a result, opportunities for price
improvement. Because C2, BOX, and ISE currently allow initiating
participants the option to auto-match up to the best-priced response
received during an auction or up to a designated limit price, the
Exchange believes it is important for competitive purposes that it be
able to offer the same opportunities for price improvement on CBOE
through AIM. The Exchange believes adding this same flexibility will
promote trading activity on the Exchange to the benefit of the
Exchange, its Trading Permit Holders, and market participants.
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    \16\ See supra notes 9-11.
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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 \17\ and
Rule 19b-4(f)(6) \18\ thereunder.
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 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, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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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.

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_ADDRESS>Please include
File Number SR-CBOE-2013-048 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-2013-048. 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 St. 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-CBOE-2013-048,
and should be submitted on or before June 4, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-11359 Filed 5-13-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 52 (Friday, March 16, 2018)]
[Notices]
[Pages 11811-11812]
[FR Doc No: 2018-05344]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Thirty Ninth RTCA SC-216 Aeronautical Systems Security Plenary

AGENCY: Federal Aviation Administration (FAA), U.S. Department of
Transportation (DOT).

ACTION: Thirty Ninth RTCA SC-216 Aeronautical Systems Security Plenary.

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SUMMARY: The FAA is issuing this notice to advise the public of a
meeting of Thirty Ninth RTCA SC-216 Aeronautical Systems Security
Plenary.

DATES: The meeting will be held April 09-13, 2018 9:00 a.m.-5:00 p.m.

ADDRESSES: The meeting will be held at: RTCA Headquarters, 1150 18th
Street NW, Suite 910, Washington, DC 20036.

FOR FURTHER INFORMATION CONTACT: Karan Hofmann at [email protected] or
202-330-0680, or The RTCA Secretariat, 1150 18th Street NW, Suite 910,
Washington, DC 20036, or by

telephone at<PHONE_NUMBER>, fax at<PHONE_NUMBER>, or website at
http://www.rtca.org.

SUPPLEMENTARY INFORMATION: Pursuant to section 10(a) (2) of the Federal
Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., App.), notice is
hereby given for a meeting of the Thirty Ninth RTCA SC-216 Aeronautical
Systems Security Plenary.
    The agenda will include the following:

1. Welcome and Administrative Remarks
2. Introductions
3. Agenda Review
4. Meeting-Minutes Review
5. Review Joint Action List
6. Review/Resolution of DO-356A/ED-203A Final Review and Comment(Frac)/
Open Consultation Comments
7. Decision to Approve Release of DO-356A/Ed-203A for Presentation to
Program Management Committee/Council for Publication
8. Schedule Update
9. Potential Future Joint Activities
10. Date, Place and Time of Next Meeting
11. New Business
12. Adjourn Plenary

    Attendance is open to the interested public but limited to space
availability. With the approval of the chairman, members of the public
may present oral statements at the meeting. Persons wishing to present
statements or obtain information should contact the person listed in
the FOR FURTHER INFORMATION CONTACT section. Members of the public may
present a written statement to the committee at any time.

    Issued in Washington, DC on March 13, 2018.
Michelle Swearingen,
Systems and Equipment Standards Branch, AIR-6B0, Policy and Innovation
Division, AIR-600, Federal Aviation Administration.
[FR Doc. 2018-05344 Filed 3-15-18; 8:45 am]
 BILLING CODE 4910-13-P