Trading Permit Information for 4/11/2013 through 4/17/2013

Transcription

1 April 19, 2013 Volume 41, Number 16 The Bylaws and Rules of Chicago Board Options Exchange, Incorporated ( Exchange ), in certain specific instances, require the Exchange to provide notice to Exchange Trading Permit Holders. To satisfy this requirement, a copy of the Exchange Bulletin, including the Regulatory Bulletin, is delivered by or by hard copy free of charge to all effective Trading Permit Holders on a weekly basis. Trading Permit Holders are encouraged to receive the Exchange and Regulatory Bulletin and Information Circulars via . subscriptions may be obtained by Trading Permit Holders by submitting your name, firm if applicable, address, and phone number, to registration@cboe.com. If you do sign up for delivery, please remember to inform the Registration Services Department of address changes. Subscriptions by Trading Permit Holders for hard copy delivery may be obtained by submitting your name, firm if any, mailing address and telephone number to: Chicago Board Options Exchange, Registration Services Department, 400 South LaSalle, Chicago, Illinois 60605, Attention: Bulletin Subscriptions. Copyright 2013 Chicago Board Options Exchange, Incorporated TERMINATIONS Trading Permit Information for 4/11/2013 through 4/17/2013 Nominee: Termination Date John T Boyle (JTB) 4/11/13 Newedge USA LLC Kenn A Rowe (KEN) 4/15/13 TradeLink LLC Earl M Vraney (PRL) 4/17/13 Equitec Trading, LLC EFFECTIVE TRADING PERMIT HOLDERS Individuals Nominee: Effective Date M Brian Owens (MBN) 4/15/13 Akuna Securities LLC Type of Business to be Conducted: Market Maker Raymond W. Owens (RXO) 4/15/13 Akuna Securities LLC Type of Business to be Conducted: Market Maker Christopher J. Chapin (CJA) 4/15/13 Spot Trading LLC Type of Business to be Conducted: Market Maker April 19, 2013 Volume 41, Number 16 1

2 Research Circulars The following Research Circulars were distributed between April 17, 2013 and April 19, If you wish to read the entire document, please refer to the CBOE website at and click on the Trading Tools Tab. New listings and series information is also available in the Trading Tools section of the website. For questions regarding information discussed in a Research Circular, please call The Options Clearing Corporation at OPTIONS. Research Circular #RS April 15, 2013 Arbitron Inc. ("ARB") Proposed Merger with Nielsen Holdings N.V. Research Circular #RS April 15, 2013 Salesforce.com ("CRM") 4-for-1 Stock Split Ex-Distribution Date: April 18, 2013 Research Circular #RS April 15, 2013 Corrections Corporation of America ("CXW") SPECIAL CASH/STOCK DIVIDEND (ELECTION) Ex-Date: April 17, 2013 Research Circular #RS April 17, 2013 Hudson City Bancorp, Inc. ("HCBK") Proposed Election Merger with M&T Bank Corporation ("MTB") Research Circular #RS April 17, 2013 Paragon Shipping Inc. Class A ("PRGN & adj. PRGN1") To Move and Begin Trading on NASDAQ Global Market Effective Date: April 18, 2013 Research Circular #RS April 17, 2013 Valero Energy Corporation ("VLO") Distribution of Shares of Suburban Propane Partners, L.P. ("CST") Ex-Distribution Date: May 2, 2013 April 19, 2013 Volume 41, Number 16 2

3 April 19, 2013 Volume RB24, Number 16 The Bylaws and Rules of Chicago Board Options Exchange, Incorporated ( Exchange ), in certain specific instances, require the Exchange to provide notice to Trading Permit Holders. The weekly Regulatory Bulletin is delivered to all effective Trading Permit Holders to satisfy this requirement. Copyright 2013 Chicago Board Options Exchange, Incorporated. Regulatory Circulars Regulatory Circular RG Date: April 15, 2013 To: Trading Permit Holders From: Business Development Division RE: Automation of Stock-Option Strategy Orders in Classes that Trade until 3:15 PM CT Effective April 16, 2013, CBOE will automate the handling of complex orders containing a stock leg through the use of the Complex Order Auction (COA), the Complex Order Book (COB), the Automated Improvement Mechanism (AIM), and the AIM AON Solicitation Auction Mechanism (SAM) in option classes underlying Exchange Traded Products that trade until 3:15 PM CT including those listed below. DIA IWN SVXY VIXY XLE XLU EEM MDY UNG VXX XLF XLV EFA OEF UVXY VXZ XLI XLY IWM QQQ VIIX XHB XLK XME SPY7 SPY VIXM XLB XLP XRT Market order splitting functionality is not available within 3 minutes of the close of the above options classes or when the underlying security is subject to a short sale circuit breaker under Rule 201 of Regulation SHO. Complete functionality details are available in Regulatory Circular RG Additional Information: General questions regarding this matter may be directed to CBOE Help Desk at (866) or helpdesk@cboe.com. Charlie Hullihan (312) or hullihan@cboe.com. April 19, 2013 Volume RB24, Number 16 1

4 Regulatory Circular RG Date: April 15, 2013 To: Trading Permit Holders and CBOE Streaming Markets Customers From: Business Development Division RE: Expected Opening Price and Size Messages via CBOE Streaming Markets This circular is regarding the availability of expected opening price and size (EOP/S) and opening imbalance information via the CBOE Streaming Markets (CSM) service offered by CBOE s affiliate, Market Data Express, LLC. Prior to the opening of the underlying, EOP/S and imbalance messages are disseminated at 30-second intervals from 7:30 AM (CT) in SPX and EEM options, and from 8:00 AM (CT) in all other classes until the start of the opening rotation, as long as (i) there are market orders in the book, or the book is crossed or locked, and (ii) at least one quote is present for the series. After the start of rotation, if a series cannot be opened, the system will continue to disseminate updated EOP/S and imbalance messages every second until the series has opened. EOP/S messages are disseminated for individual series that have quantity to trade on the open. Imbalance messages are disseminated when the system identifies an excess of buy or sell interest. If an EOP/S or imbalance message has been generated for a given series and conditions in the series change such that there is no longer an expected opening trade, imbalance, or quote, then an updated message will be generated indicating No Opening Trade or Need Quote to Open. In addition, as detailed further in CBOE Rule 6.2B, a series will not open if certain other conditions are not met, such as when an opening price is not within an acceptable range. In that regard, the Exchange has determined that the calculation for the acceptable opening price range will be the mid-point of the highest quote bid and lowest quote offer plus/minus half of the Opening Exchange Prescribed Width (OEPW), or the best away market(s), if any, whichever is better. (For the applicable OEPW parameters, see Regulatory Circular RG ) Example: In Pre-Open State: Quote: x10 Order BUY 100 x MKT OEPW =.50 Opening Price Range (Midpoint: /-.25) Imbalance Message: Need More Sellers 90 x 1.45 If an order is entered to SELL 100 x 1.45 EOP/S Message: Expected Opening Price 100 x 1.45 If the MKT order is canceled prior to opening: EOP/S Message: No Opening Trade Note that this messaging is utilized for all CBOE openings, including the SPX opening on VIX settlement days. (For the applicable OEPW parameters on VIX settlement days, see Regulatory Circular RG ) Additional Information: Please contact CBOE Help Desk at helpdesk@cboe.com or (866) for additional information. Contact Tom Knorring at knorring@cboe.com or (312) for CSM subscription information and the CBOE API Group for CSM specifications and testing at api@cboe.com or (312) April 19, 2013 Volume RB24, Number 16 2

5 Regulatory Circular RG Date: April 17, 2013 To: CBOE Streaming Markets (CSM) CBOE BBO Data Feed Customers and Trading Permit Holders From: Finance and Administration RE: Data Fee for CBOE BBO Data Feed Data Fee Subject to SEC review, effective May 1, 2013, Chicago Board Options Exchange, Incorporated ("CBOE"), is amending the fees schedule of Market Data Express, LLC ("MDX ), an affiliate of CBOE, for the CSM CBOE BBO Data Feed by eliminating both the direct connect fee and the per user fee and replacing these fees with a data fee, payable by a Customer, of $5,000 per month for internal use and external redistribution of the BBO Data Feed. A Customer is any entity that receives the BBO Data Feed directly from MDX s system or through a connection to MDX provided by an approved redistributor (i.e., a market data vendor or an extranet service provider) and then distributes it internally and/or externally. The data fee would entitle a Customer to provide the BBO Data Feed to an unlimited number of internal users and devices within the Customer. The data fee would also entitle a Customer to distribute externally the BBO Data Feed to other Customers. BBO and last sale data for FLEX options, which are included in the CBOE BBO Data Feed, are available as a separate data feed at no charge. As a result of these changes, the fees for the CBOE BBO Data Feed and the CBOE FLEX BBO Data Feed as of May 1, 2013 are as follows: CBOE: Internal Use and External Distribution $5,000 CBOE FLEX: $ 0 As before, there is not a per-user fee for display and non-display users within a firm. A new MDX Fee Schedule will be sent to all contract holders. This Regulatory Circular supersedes RG ****** Market Data Express, LLC CSM CBOE Fees Schedule Please do not hesitate to contact us with any questions. Tom Knorring Ginny Kowalczyk V.P. Business Development Senior Business Analyst (312) (312) knorring@cboe.com kowalczy@cboe.com April 19, 2013 Volume RB24, Number 16 3

6 Rule Changes EFFECTIVE-ON-FILING RULE CHANGE(S) The following rule filing(s) was submitted to the Securities and Exchange Commission ( SEC ) effective on filing, and may have taken effect pursuant to Section 19(b)(3) of the Securities Exchange Act of 1934 (the Act ). The rule filing(s) will remain in effect barring further action by the SEC within 60 days after publication in the Federal Register. Below, any additions to rule text are underlined, and any deletions are [bracketed]. Copies are available on the CBOE public website at SR-CBOE Fingerprint-Based Background Checks On April 18, 2013, the Exchange filed Rule Change File No. SR-CBOE , which filing proposes to codify the Exchange s current practice of conducting fingerprint-based background checks of directors, officers, employees, temporary personnel, independent contractors, consultants, vendors and service providers of the Exchange. Any questions regarding the rule change may be directed to Jaime Galvan, Legal Division, at The rule filing is available at Rule [Reserved] Fingerprint-Based Background Checks of Exchange Directors, Officers, Employees and Others. (a) In order to enhance the security of the facilities, systems, data, and records of the Exchange (collectively, facilities and records ), the Exchange conducts fingerprint-based criminal records checks of (i) directors, officers and employees of the Exchange, and (ii) temporary personnel, independent contractors, consultants, vendors and service providers who have or are anticipated to have access to its facilities and records (collectively, contractors ). The Exchange also conducts fingerprint-based criminal records checks of Exchange director candidates that are not already serving on the Exchange s Board before they are formally nominated and of employee candidates after an offer of employment has been made by the Exchange. The Exchange may choose to not obtain fingerprints from, or to seek fingerprint-based information with respect to, any contractor due to that contractor s limited, supervised, or restricted access to facilities and records, or the nature or location of his or her work or services, or if the contractor s employer conducts fingerprint based criminal records checks of its personnel. (b) The Exchange shall submit fingerprints obtained pursuant to this rule to the Attorney General of the United States or his or her designee for identification and processing. The Exchange shall at all times maintain the security of all fingerprints provided to, and all criminal history record information received from, the Attorney General or his or her designee. The Exchange shall redisseminate fingerprints and criminal history record information only to the extent permitted by applicable law. (c) The Exchange shall evaluate information received from the Attorney General or his or her designee and otherwise administer this rule in accordance with Exchange fingerprint procedures as in effect from time to time and the provisions of applicable law. Fingerprint-based criminal record information that reflects felony or misdemeanor convictions will be a factor in making employment decisions; engaging or retaining any contractors; or permitting any fingerprinted person access to facilities and records. (d) Any employee who refuses to submit to fingerprinting will be subject to progressive discipline up to and including the termination of employment. Any person who is given an offer of employment with the Exchange who refuses to submit to fingerprinting will have the offer withdrawn. A contractor who refuses to submit to fingerprinting will be denied access to facilities and records. April 19, 2013 Volume RB24, Number 16 4

7 PROPOSED RULE CHANGE(S) Pursuant to Section 19(b)(1) of the Act, and Rule 19b-4 thereunder, the Exchange has filed the following proposed rule change(s) with the SEC. Below, any additions to rule text are underlined and any deletions are [bracketed]. Copies of the rule change filing(s) are available at Trading Permit Holders may submit written comments to the Legal Division. The effective date of a proposed rule change will be the date of approval by the SEC, unless otherwise noted. SR-CBOE Options Communications On April 16, 2013, the Exchange filed Rule Change File No. SR-CBOE , which filing proposes to update CBOE rules regarding options communications to conform with recent changes to FINRA options communications rules. Any questions regarding the rule change may be directed to Megan Malone, Legal Division, at The rule filing is available at Rule Options Communications (a) Definitions. For purposes of this Rule and any interpretation thereof, options communications consist of: (i) [Advertisements. The term advertisements shall include any material concerning options, other than an independently prepared reprint and institutional sales material, that is published, or used in any electronic or other public media, including any website, newspaper, magazine or other periodical, radio, television, telephone or tape recording, video tape display, motion picture, billboards, signs or telephone directories (other than routine listings). (ii) Sales Literature. The term sales literature shall include any written or electronic communication concerning options other than an advertisement, independently prepared reprint, institutional sales material and correspondence, that is generally available to customers or the public, including circulars, research reports, performance reports or summaries, worksheets, form letters, telemarketing scripts, seminar texts, reprints (that are not independently prepared reprints) or excerpts of any other advertisement, sales literature or published article and press release concerning a Trading Permit Holder s products or services. (iii)] Correspondence. The term correspondence shall include any written [letter,] (including electronic) [mail message or market letter] communication distributed or made available [by a Trading Permit Holder] to[: (A) one of more of its existing retail customers; and (B)] 25 or fewer [than 25 prospective] retail customers within any 30 calendar-day period. [(iv)] (iii) Institutional Communication [Sales Material]. The term institutional communication [sales material] shall include any written (including electronic) communication concerning options that is distributed or made available only to institutional investors, but does not include a Trading Permit Holder s internal communications. The term institutional investor shall mean any qualified investor as defined in Section 3(a)(54) of the Securities Exchange Act of (iv) Retail Communication. The term retail communication means any written (including electronic) communication that is distributed or made available to more than 25 retail investors within any 30 calendar-day period. [(v) Public Appearances. The term public appearance shall include any participation in a seminar, forum (including an interactive electronic forum), radio, television or print media interview, or other public speaking activity, or the writing of a print media article, concerning options. (vi) Independently Prepared Reprints. The term independently prepared reprints shall include any reprint or excerpt of an article issued by a publisher concerning options, provided that: the publisher is not an affiliate of the Trading Permit Holder using the reprint or any underwriter or issuer of a security mentioned in the reprint or excerpt that the Trading Permit Holder is promoting; neither the Trading Permit Holder using the reprint or excerpt nor any underwriter or issuer of a security mentioned in the reprint or excerpt has commissioned the reprint or excerpted article; and April 19, 2013 Volume RB24, Number 16 5

8 the Trading Permit Holder using the reprint or excerpt has not materially altered its contents except as necessary to make the reprint or excerpt consistent with applicable regulatory standards or to correct factual errors.] (b) Approval by Registered Options Principal. (i) All retail communications [advertisements, sales literature] (except completed worksheets) [and independently prepared reprints] issued by a Trading Permit Holder or TPH organization pertaining to options shall be approved in advance by a Registered Options Principal designated by the Trading Permit Holder or TPH organization s written supervisory procedures. (ii) Correspondence need not be approved by a Registered Options Principal prior to use[, unless such correspondence is distributed to 25 or more existing retail customers within any 30 calendar-day period and makes any financial or investment recommendation or otherwise promotes a product or service of the Trading Permit Holder]. All correspondence is subject to the supervision and review requirements of Rule 9.8. (iii) Institutional communications. Each Trading Permit Holder or TPH organization shall establish written procedures that are appropriate to its business, size, structure, and customers for the review by a Registered Options Principal [sales material relating to options need not be approved by a Registered Options Principal prior to use, but is subject to the supervision and review requirements as set forth in the written supervisory procedures] of the Trading Permit Holder or TPH organization. (iv) No change. (c) Exchange Approval Required. In addition to the approval required by paragraph (b) of this Rule, [all advertisements, sales literature and independently prepared reprints] retail communications of a Trading Permit Holder or TPH organization pertaining to standardized options that is not accompanied or preceded by the applicable current options disclosure document ( ODD ) shall be submitted to the Exchange at least ten calendar days prior to use (or such shorter period as the Exchange may allow in particular instances) for approval and, if changed or expressly disapproved by the Exchange, shall be withheld from circulation until any changes specified by the Exchange have been made or, in the event of disapproval, until the communication has been resubmitted for, and has received, Exchange approval. The requirements of this paragraph shall not be applicable to: (i) options communications submitted to another self-regulatory organization having comparable standards pertaining to such communications and (ii) communications in which the only reference to options is contained in a listing of the services of the TPH organization[.]; (iii) the ODD; and (iv) the prospectus. (d) General Rule. No Trading Permit Holder or member organization or associated person shall use any options communication which: (i) (iv) No change. (v) Fails to reflect the risks attendant to options transactions and the complexities of certain options investment strategies. [Any statement referring to the potential opportunities presented by options shall be balanced by a statement of the corresponding risks. The risk statement shall reflect the same degree of specificity as the statement of opportunities, and broad generalities must be avoided.] (vi-vii) No change. (viii) would constitute a prospectus as that term is defined in the Securities Act of 1933, unless it meets the requirements of Section 10 of the Act. Paragraphs (vi) and (vii) shall not apply to institutional communications [sales material] as defined in this Rule Any statement in any options communications referring to the potential opportunities or advantages presented by options shall be balanced by a statement of the corresponding risks. The risk statement shall reflect the same degree of specificity as the statement of opportunities, and broad generalities must be avoided. * * * * * April 19, 2013 Volume RB24, Number 16 6