Trading Permit Information for 4/4/2013 through 4/10/2013

Transcription

1 April 12, 2013 Volume 41, Number 15 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 Trading Permit Information for 4/4/2013 through 4/10/2013 EFFECTIVE TRADING PERMIT HOLDERS Individuals Nominee: Effective Date Daniel J Tabb (TAB) 4/4/13 Belvedere Trading LLC Type of Business to be Conducted: Market Maker Benjamin W Dooley (BDL) 4/10/13 Brian Ludden LLC Type of Business to be Conducted: Market Maker April 12, 2013 Volume 41, Number 15 1

2 Research Circulars The following Research Circulars were distributed between April 8, 2013 and April 11, 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 8, 2013 Ecopetrol S.A. ("EC") CONTRACT ADJUSTMENT FOR SPECIAL CASH DIVIDEND Ex-Date: April 9, 2013 Research Circular #RS April 8, 2013 Wipro Limited ("WIT") % ADS Dividend Ex-Distribution Date: April 9, 2013 Research Circular #RS April 8, 2013 Saba Software, Inc. ("SABA") Change in Marketplace Effective Date: April 9, 2013 Research Circular #RS April 12, 2013 Gramercy Capital Corp. ("GKK") Name, Stock and Option Symbol Change to Gramercy Property Trust Inc. ("GPT") Effective Date: April 15, 2013 Research Circular #RS April 12, 2013 Metals USA Holdings Corp. ("MUSA") Merger COMPLET ED with Reliance Steel & Aluminum Co. ("RS") Research Circular #RS April 8, 2013 Enersis S.A. ("ENI/ENI1") Rights Expiration/Determination of Rights Cash in Lieu Amount and Position Consolidation Research Circular #RS April 9, 2013 Obagi Medical Products, Inc. ("OMPI") Tender Offer by Odysseus Acquisition Corp. Research Circular #RS April 10, 2013 Metals USA Holdings Corp. ("MUSA") Proposed Merger with Reliance Steel & Aluminum Co. ("RS") Research Circular #RS April 10, 2013 Brookfield Asset Management Inc. ("BAM") Distribution of Limited Partnership Units of Brookfield Property Partners, L.P. ("BPY") Ex-Distribution Date: April 15, 2013 Research Circular #RS April 10, 2013 Radware Ltd. ("RDWR") 2-for-1 Stock Split Ex-Distribution Date: April 15, 2013 Research Circular #RS April 11, 2013 Central European Distribution Corporation ("CEDC") Move and Begin Trading on the Other-OTC Market and Stock Symbol and Option Symbol Change to ("CEDCQ") Effective Date: April 12, 2013 Research Circular #RS April 11, 2013 Cardiome Pharma Corporation ("CRME") 1-for-5 Reverse Ordinary Share Split Ex-Distribution Date: April 12, 2013 Research Circular #RS Date: April 12, 2013 *****UPDATE*****UPDATE*****UPDATE***** Brookfield Asset Management Inc. ("BAM") Distribution of Limited Partnership Units of Brookfield Property Partners, L.P. ("BPY") Ex-Distribution Date: April 15, 2013 April 12, 2013 Volume 41, Number 15 2

3 April 12, 2013 Volume RB24, Number 15 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 5, 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 April 5, 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. The data fee will be prorated for April 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 April 5, 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 April 12, 2013 Volume RB24, Number 15 1

4 Please do not hesitate to contact us with any questions. Tom Knorring Ginny Kowalczyk V.P. Business Development Senior Business Analyst (312) (312) Regulatory Circular RG Date: April 5, 2013 To: Trading Permit Holders From: Business Development Division RE: Automatic Release of Orders Routed to Away Exchanges CBOE may route option orders to away exchanges under certain circumstances, such as if CBOE is not at the national best bid or offer ( NBBO ). Routing brokers perform these routing services for CBOE pursuant to Rule 6.14B. In the normal course, after a routing broker sends an order to another exchange, the routing broker immediately reports an execution or cancellation of the routed order back to the Exchange and passes the fill or cancellation onto the Trading Permit Holder ( TPH ). After an order is routed, CBOE holds any instructions from the TPH to cancel the order (i.e. the order is locked ) until CBOE receives that response or releases the order. As set forth in Rule 6.6A(b), CBOE may release orders being held on CBOE that are awaiting an away exchange execution as CBOE deems necessary to maintain fair and orderly markets if, among other things, a technical or systems issue occurs at CBOE. Technical or system issues would include instances where CBOE has not received confirmation of a fill or cancellation on the away exchange from a routing broker within a response time interval designated by CBOE through Regulatory Circular. CBOE designates that interval to be 15 seconds. Therefore, if the Exchange does not receive confirmation of an execution or cancellation of a routed order from a routing broker within the 15-second period, CBOE will automatically release the order for normal processing, which will be eligible for execution or posting on CBOE. This automatic release functionality will be rolled out to one trade server, Business Cluster (BC) 9, effective Monday, April 8, 2013, and is planned to be rolled out to all remaining BCs by Thursday, April 11, Please contact the CBOE Help Desk for additional information and updates on the particular BC rollout schedule, as well as a list of classes traded on each BC. Additional Information: General questions regarding this matter may be directed to the CBOE Help Desk at (866) or helpdesk@cboe.com, or to Charlie Hullihan (312) or hullian@cboe.com. Please also see Rule Change Filing No. SR-CBOE for additional information on the cancellation or release of routed orders and the use of error accounts to liquidate error positions. April 12, 2013 Volume RB24, Number 15 2

5 Regulatory Circular RG Date: April 9, 2013 To: Trading Permit Holders From: Market Operations Department RE: Restrictions on Transactions in Saba Software, Inc (SABA) Effective April 9, 2013, Saba Software, Inc. (SABA) will be delisted from the NASDAQ Global Select Market (NASDAQ). Trading in SABA will commence on the Other-OTC market. The symbol will remain the same. No adjustment to SABA option contracts will be made to reflect this move from NASDAQ. Trading on CBOE in existing series of SABA options will be subject to the following restrictions. Only closing transactions may be affected in any series of SABA options except for (i) opening transactions by Market-Makers executed to accommodate closing transactions of other market participants and (ii) opening transactions by CBOE TPH organizations to facilitate the closing transactions of public customers executed as crosses pursuant to and in accordance with CBOE Rule 6.74(b) or (d). The execution of opening transactions in SABA options, except as permitted above, and/or the misrepresentation as to whether an order is opening or closing, will constitute a violation of CBOE rules, and may result in disciplinary action. TPH organizations should ensure that they have appropriate procedures in place to prevent their customers from entering opening orders in this restricted option class. In addition, transactions in contravention of this restriction may be subject to nullification pursuant to Exchange Rule There are no restrictions in place with respect to the exercise of SABA options. Any questions regarding this circular may be directed to Kerry Winters at helpdesk@cboe.com and (312) or the Regulatory Interpretations and Guidance team at RegInterps@cboe.com and by telephone at (312) CBOE restricted class memos can be accessed from CBOE.org at the following web address: CBOE Regulatory Circular RG C2 Regulatory Circular RG Date: April 10, 2013 To: Trading Permit Holders From: Market Operations RE: Change to OCC, CBOE and C2 Deadlines for Daily Submission of Trade Input (2 nd Pass) Effective: Monday, April 22, 2013 The Options Clearing Corporation (OCC) has notified Chicago Board Options Exchange, Incorporated (CBOE) and C2 Options Exchange, Incorporated (C2) that the deadline for daily submission of trade input will change from 5:00 p.m. (CT) to 4:45 p.m. (CT) as of Monday, April 22, 2013 for all trading days, including expiration days. April 12, 2013 Volume RB24, Number 15 3

6 Meeting the new OCC deadline is particularly important with respect to accomplishing the industry wide goal of eliminating expiration Saturday processing and moving it to expiration Friday evening instead. For additional information on this topic, please review CBOE Regulatory Circular RG12-135/C2 Regulatory Circular RG available at: All TPHs must ensure that they are adequately staffed to complete and/or verify all post-trade changes prior to the daily OCC input deadline of 4:45 p.m. (CT). Accordingly, in order to fulfill CBOE and C2 s obligation to complete trade submission by 4:45 p.m. (CT), the current CBOE and C2 deadlines for daily submission of trade input (2 nd Pass) will change from 4:50 p.m. (CT) to 4:35 p.m. (CT) on all trading days, including expiration days, as of Monday, April 22, All intraday unmatched reports and 1 st Pass trade input deadlines will remain the same. Below is the new trade processing schedule that will go into effect on Monday, April 22, TPH and Clearing Firm reports available: 9:15 a.m., 10:15 a.m., 11:15 a.m., 12:15 p.m., 1:15 p.m., 2:15 p.m. and 3:15p.m. (CT). 1 st Pass input cutoff - 4:00 p.m. (CT). 2 nd Pass input cutoff - 4:35 p.m. (CT). Additional Information: Please contact CBOE Market Services at (312) or marketservices@cboe.com or Omarr Woodhouse at (312) or woodhous@cboe.com for any additional information. Regulatory Circular RG Date: April 11, 2013 To: Trading Permit Holders From: Legal Division RE: Changes to Market-Makers Continuous Electronic Quoting Obligations in Hybrid Classes This Circular replaces RG and RG Effective May 1, 2013, the continuous quoting obligation will be amended for all Market-Makers in Hybrid classes (all classes except Hybrid 3.0 class SPX). Market-Makers currently must continuously quote as follows: Preferred Market-Makers (PMMs), Lead Market-Makers (LMMs) and Electronic Designated Primary Market-Makers (edpms) are required to provide continuous electronic quotes in at least 90% of the non-adjusted option series of each option class allocated to them pursuant to Rules 8.13, 8.15A and 8.93, respectively. Designated Primary Market-Makers (DPMs) are required to provide continuous electronic quotes in at least 90% of the non-adjusted option series of each appointed multiply listed option class and in 100% of the non-adjusted option series of each appointed singly listed option class pursuant to Rule All other Market-Makers are required to provide continuous electronic quotes in at least 60% of the non-adjusted series for the front nine months when quoting in a particular appointed class on a given trading day pursuant to Rule 8.7. April 12, 2013 Volume RB24, Number 15 4

7 For all Market-Makers in Hybrid classes, continuous electronic quotes means 99% of the time that the Market-Maker is required to provide electronic quotes in an appointed class on a trading day pursuant to Rule 1.1(ccc). Effective May 1, 2013, Market-Makers in Hybrid classes will be required to continuously quote as follows: LMMs, DPMs and e-dpms will be required to provide continuous electronic quotes in the lesser of at least 99% of the non-adjusted option series or 100% of the non-adjusted option series minus one callput pair of each appointed option class, with the term call-put pair referring to one call and one put that cover the same underlying instrument and have the same expiration (call-put pair) pursuant to Rules 8.15A, 8.85 and 8.93, respectively. PMMs will be required to provide continuous electronic quotes in the lesser of at least 99% of the non-adjusted option series that have a time to expiration of less than nine months or 100% of the non-adjusted option series that have a time to expiration of less than nine months minus one call-put pair of each appointed option class pursuant to Rule PMMs may still receive a participation entitlement in series that have a time to expiration of nine months or more if a PMM decides to quote in such series and otherwise satisfies the requirements set forth in Rule 8.13(b). All other Market-Makers will continue to be required to provide continuous electronic quotes in 60% of the non-adjusted option series that have a time to expiration of less than nine months when quoting in a particular appointed class on a given trading day pursuant to Rule 8.7. For all Market-Makers in Hybrid classes, continuous electronic quotes will mean 90% of the time that Market-Makers are required to provide electronic quotes in each appointed class on a trading day pursuant to Rule 1.1(ccc). For all Market-Makers in Hybrid classes, these continuous quoting obligations will not apply to intraday add-on series on the day during which the series are added. PMMs, LMMs, DPMs and e-dpms may still receive a participation entitlement for intra-day add on series on the day in which the series are added if a PMM, LMM, DPM or e-dpm decides to quote in those series and otherwise satisfies the requirements set forth in the applicable rule. For additional details on Market-Maker quoting obligations in Hybrid classes, please review Rule 8.7 relating to Market-Makers, Rule 8.13 relating to PMMs, Rule 8.15A relating to LMMs, Rule 8.85 relating to DPMs, and Rule 8.93 relating to e-dpms. All CBOE Rules are available on CBOE s website at Additional Information: Please contact the Regulation Department at RegInterps@cboe.com if there are any questions. Please also see Rule Change Filing Nos. SR-CBOE , SR-CBOE , and SR-CBOE for additional information on Market-Maker continuous quoting obligations in Hybrid classes. April 12, 2013 Volume RB24, Number 15 5

8 Regulatory Circular RG Date: April 11, 2013 To: Trading Permit Holders From: Market Operations Department RE: Restrictions on Transactions in Central European Distribution Corp (CEDC) Effective April 12, 2013, Central European Distribution Corp. (CEDC) will be delisted from the NASDAQ Global Select Market. Trading in CEDC will commence on the Other OTC market under the symbol CEDCQ. Trading on CBOE in existing series of CEDCQ options will be subject to the following restrictions. Only closing transactions may be affected in any series of CEDCQ options except for (i) opening transactions by Market-Makers executed to accommodate closing transactions of other market participants and (ii) opening transactions by CBOE TPH organizations to facilitate the closing transactions of public customers executed as crosses pursuant to and in accordance with CBOE Rule 6.74(b) or (d). The execution of opening transactions in CEDCQ options, except as permitted above, and/or the misrepresentation as to whether an order is opening or closing, will constitute a violation of CBOE rules, and may result in disciplinary action. TPH organizations should ensure that they have appropriate procedures in place to prevent their customers from entering opening orders in this restricted option class. In addition, transactions in contravention of this restriction may be subject to nullification pursuant to Exchange Rule There are no restrictions in place with respect to the exercise of CEDCQ options. Any questions regarding this circular may be directed to Kerry Winters at helpdesk@cboe.com and (312) or the Regulatory Interpretations and Guidance team at RegInterps@cboe.com and by telephone at (312) CBOE restricted class memos can be accessed from CBOE.org at the following web address: April 12, 2013 Volume RB24, Number 15 6

9 Rule Changes APPROVED RULE CHANGE(S) The Securities and Exchange Commission ( SEC ) has approved the following change(s) to Exchange rules pursuant to Section 19(b) of the Securities Exchange Act of 1934 (the Act ). Below, any additions to rule text are underlined and any deletions are [bracketed]. Copies are available on the CBOE public website at The effective date of the rule change is the date of approval unless otherwise noted. SR-CBOE Market-Maker Quoting Obligations On April 8, 2013, the SEC approved Rule Change File No. SR-CBOE , which filing excludes intra-day add-on series on the day during which such series are added for trading from Market-Makers continuous quoting obligations. Additionally, the filing clarifies that Market-Makers may still receive the participation entitlements pursuant to those rules in intra-day add-on series if they decide to quote in such series. Any questions regarding the rule change may be directed to Megan Malone, Legal Division, at The rule filing is available at pdf. Rule 8.7. Obligations of Market-Makers (a) (c) No changes. (d) Market-Making Obligations in Applicable Hybrid Classes No changes. (i) Market-Maker Trades 20% or Less Contract Volume Electronically: No changes. (ii) Market-Maker Trades More Than 20% Contract Volume Electronically: If a Market-Maker on the CBOE Hybrid System transacts more than 20% of the Market- Maker s contract volume electronically in an appointed Hybrid class during any calendar quarter, commencing the next calendar quarter the Market-Maker will be subject to the following quoting obligations in that class for as long as he remains in that class: (A) No changes. (B) Continuous Electronic Quoting Obligation: A Market-Maker will be required to maintain continuous electronic quotes (as defined in Rule 1.1 (ccc)) in 60% of the nonadjusted option series of the Market-Maker s appointed class that have a time to expiration of less than nine months. The initial size of a Market-Maker s quote must be for the minimum number of contracts determined by the Exchange on a class by class basis, which minimum shall be at least one contract. This obligation does not apply to intra-day add-on series on the day during which such series are added for trading. (C) No changes..01 Price continuity is an ongoing obligation of Market-Makers and thus applies not only intra-day but also from one day s close to the next day s opening. Notwithstanding the foregoing, as set forth in paragraph (d)(ii)(b), the continuous electronic quoting obligation does not apply to intraday add-on series on the day during which such series are added for trading No changes. Rule Preferred Market-Maker Program (a) No changes. (b) Eligibility. Any Exchange Market-Maker type (e.g. Lead Market-Maker, and Designated Primary Market-Maker) may be designated as a Preferred Market-Maker, however, the Hybrid System is April 12, 2013 Volume RB24, Number 15 7

10 programmed so that a recipient of a Preferred Market-Maker order will only receive a participation entitlement for such order if the following provisions are met: (i) The Preferred Market-Maker has an appointment/allocation in the relevant option class. (ii) The Preferred Market-Maker is quoting at the best bid/offer on the Exchange. (c) Entitlement Rate. Provided the provisions of subparagraph (b) above have been met, the Preferred Market-Maker participation entitlement shall be 40% when there are two or more Market- Makers also quoting at the best bid/offer on the Exchange, and 50% when there is only one other Market-Maker quoting at the best bid/offer on the Exchange. In addition, the following shall apply: (i) A Preferred Market-Maker may not be allocated a total quantity greater than the quantity that the Preferred Market-Maker is quoting at the best bid/offer on the Exchange. (ii) The participation entitlement rate is based on the number of contracts remaining after all public customer orders in the book at the best bid/offer on the Exchange have been satisfied. (iii) If a Preferred Market-Maker receives a participation entitlement under this Rule, then no other participation entitlements set forth in Exchange Rules ( e.g. Rule 8.87 Participation Entitlement of DPMs and e-dpms and Rule 8.15B Participation Entitlement of LMMs) shall apply to such order. (d) Quoting Obligations: The Preferred Market-Maker must comply with the quoting obligations applicable to its Market-Maker type under Exchange rules and must provide continuous electronic quotes (as defined in Rule 1.1(ccc)) in at least the lesser of 99% of the non-adjusted option series that have a time to expiration of less than nine months or 100% of the non-adjusted option series that have a time to expiration of less than nine months minus one call-put pair of each class for which it receives Preferred Market-Maker orders, with the term call-put pair referring to one call and one put that cover the same underlying instrument and have the same expiration date and exercise price. This obligation does not apply to intra-day add-on series on the day during which such series are added for trading..01 No changes..02 Rule 8.13(d) does not require a Preferred Market-Maker to provide continuous electronic quotes in intra-day add-on series or series that have a time to expiration of nine months or more in the classes for which it receives Preferred Market-Maker orders. However, a Preferred Market- Maker may still receive a participation entitlement in such series if it elects to quote in such series and otherwise satisfies the requirements set forth in Rule 8.13(b). Rule 8.15A. Lead Market-Makers in Hybrid Classes (a) No changes. (b) LMM Obligations. LMMs are required to: (i) provide continuous electronic quotes (as defined in Rule 1.1(ccc)) that comply with the bid/ask differential requirements determined by the Exchange on a class by class basis in at least the lesser of 99% of the non-adjusted option series or 100% of the non-adjusted option series minus one callput pair within their assigned classes, with the term call-put pair referring to one call and one put that cover the same underlying instrument and have the same expiration date and exercise price. This obligation does not apply to intra-day add-on series on the day during which such series are added for trading. In option classes in which both an On-Floor LMM and an Off-Floor DPM have been appointed, the On-Floor LMM shall not be obligated to comply with this paragraph (b)(i) and instead shall be obligated to comply with the obligations of Market-Makers in Hybrid classes in Rule 8.7(d); (ii) (vii) No changes..01 No changes. Rule 8.15B. Participation Entitlements of LLMs (a) No changes. (b) To be entitled to a participation entitlement, the LMM must be quoting at the best bid/offer on the Exchange and the LMM may not be allocated a total quantity greater than the quantity for which the LMM is quoting at the best bid/offer on the Exchange. The participation entitlement is based on the number of contracts remaining after all public customer orders in the book at the April 12, 2013 Volume RB24, Number 15 8

11 best bid/offer on the Exchange have been satisfied. In option classes in which both an On-Floor LMM and an Off-Floor DPM have been appointed, the On-Floor LMM may receive a participation entitlement with respect to orders represented in open outcry, but shall not be eligible to receive a participation entitlement for trades executed electronically. The participation entitlement set forth in this Rule shall not apply in instances where a Preferred Market-Maker receives a participation entitlement pursuant to Rule 8.13 and is subject to the limitations for Off-Floor LMMs set forth in Rule 8.15A.01(a). (c) The LMM participation entitlement shall be: 50% when there is one Market-Maker also quoting at the best bid/offer on the Exchange; 40% when there are two Market-Makers also quoting at the best bid/offer on the Exchange; and, 30% when there are three or more Market-Makers also quoting at the best bid/offer on the Exchange. If more than one LMM is entitled to a participation entitlement, such entitlement shall be distributed equally among all eligible LMMs provided, however, that an LMM may not be allocated a total quantity greater than the quantity for which the LMM is quoting at the best bid/offer on the Exchange. The Exchange may determine, on a class-by-class basis, to decrease the LMM participation entitlement percentages from the percentages specified in paragraph (c). Such changes will be announced to the Trading Permit Holders in advance of implementation via Regulatory Circular..01 Rule 8.15A(b)(i) does not require a LMM to provide continuous electronic quotes in intra-day add-on series on the day during which such series are added for trading. However, a LMM may still receive a participation entitlement in such series if it elects to quote in such series and otherwise satisfies the requirements set forth in Rule 8.15B(b). Rule DPM Obligations (a) Dealer Transactions. Each DPM shall fulfill all of the obligations of a Market-Maker under the Rules, and shall satisfy each of the following requirements in respect of each of the securities allocated to the DPM. To the extent that there is any inconsistency between the specific obligations of a DPM set forth in subparagraphs (a)(i) through (a)(xii) of this Rule and the general obligations of a Market-Maker under the Rules, subparagraphs (a)(i) through (a)(xii) of this Rule shall govern. Each DPM shall: (i) provide continuous electronic quotes (as defined in Rule 1.1(ccc)) in at least the lesser of 99% of the non-adjusted option series or 100% of the non-adjusted option series minus one call-put pair of each option class allocated to it, with the term call-put pair referring to one call and one put that cover the same underlying instrument and have the same expiration date and exercise price, and assure that its disseminated market quotations are accurate. This obligation does not apply to intraday add-on series on the day during which such series are added for trading; (ii) (xii) No changes No changes. Rule Participation Entitlement of DPMs and e-dpms (a) No changes. (b) The participation entitlement for DPMs and e-dpms (as defined in Rule 8.92) shall operate as follows: (1) Generally. (i) To be entitled to a participation entitlement, the DPM/e-DPM must be quoting at the best bid/offer on the Exchange. (ii) A DPM/e-DPM may not be allocated a total quantity greater than the quantity that the DPM/e-DPM is quoting at the best bid/offer on the Exchange. (iii) The participation entitlement is based on the number of contracts remaining after all public customer orders in the book at the best bid/offer on the Exchange have been satisfied. (iv) An Off-Floor DPM shall not receive a participation entitlement with respect to orders represented in open outcry on CBOE s trading floor. April 12, 2013 Volume RB24, Number 15 9

12 (2) Participation Rates applicable to DPM Complex. The collective DPM/e-DPM participation entitlement shall be: 50% when there is one Market-Maker also quoting at the best bid/offer on the Exchange; 40% when there are two Market-Makers also quoting at the best bid/offer on the Exchange; and, 30% when there are three or more Market-Makers also quoting at the best bid/offer on the Exchange. (3) Allocation of Participation Entitlement Between DPMs and e-dpms. The participation entitlement shall be as follows: If the DPM and one or more e-dpms are quoting at the best bid/offer on the Exchange, the e-dpm participation entitlement shall be one-half (50%) of the total DPM/e- DPM entitlement and shall be divided equally by the number of e-dpms quoting at the best bid/offer on the Exchange. The remaining half shall be allocated to the DPM. If the DPM is not quoting at the best bid/offer on the Exchange and one or more e-dpms are quoting at the best bid/offer on the Exchange, then the e-dpms shall be allocated the entire participation entitlement (divided equally between them). If no e-dpms are quoting at the best bid/offer on the Exchange and the DPM is quoting at the best bid/offer on the Exchange, then the DPM shall be allocated the entire participation entitlement. If only the DPM and/or e-dpms are quoting at the best bid/offer on the Exchange (with no Market-Makers at that price), the participation entitlement shall not be applicable and the allocation procedures under Rule 6.45A shall apply. (4) Participation Entitlement In Instances Where a Preferred Market-Maker Receives a Participation Entitlement Pursuant to Rule The participation entitlement set forth in this Rule shall not apply in instances where a Preferred Market-Maker receives a participation entitlement pursuant to Rule No changes..02 Rule 8.85(a)(i) and Rule 8.93(i) do not require a DPM or e-dpm, respectively, to provide continuous electronic quotes in intra-day add-on series on the day during which such series are added for trading. However, a DPM or e-dpm may still receive a participation entitlement in such series if it elects to quote in such series and otherwise satisfies the requirements set forth in Rule 8.87(b). Rule e-dpm Obligations Each e-dpm shall fulfill all of the obligations of a Market-Maker and of a DPM under the Rules (except those contained in Rules 8.85(a)(i), (iv), (v), (vii) (x), and (xii), 8.85(c)(i) and (v), and 8.85(e)), and shall satisfy each of the following requirements: (i) provide continuous electronic quotes (as defined in Rule 1.1(ccc)) in at least the lesser of 99% of the non-adjusted option series or 100% of the non-adjusted option series minus one call-put pair of each allocated class, with the term call-put pair referring to one call and one put that cover the same underlying instrument and have the same expiration date and exercise price. This obligation does not apply to intra-day add-on series on the day during which such series are added for trading; (ii) (xi) No changes. SR-CBOE CBOE Limit Up-Limit Down On April 5, 2013, the SEC approved Rule Change File No. SR-CBOE , which filing updates CBOE-related rules to coincide with the implementation of the Limit Up-Limit Down Plan, which became operative on April 8, Any questions regarding the rule change may be directed to Megan Malone, Legal Division, at The rule text is shown below and the rule filing is available at Rule 6.2B. Hybrid Opening System ( HOSS ).07 Limit Up-Limit Down States: If the underlying security for an option class is in a limit up- limit down state as defined in Rule 6.3A when the class moves to opening rotation, then all market orders April 12, 2013 Volume RB24, Number 15 10

13 in the system will be cancelled except market orders that are considered limit orders pursuant to Rule 6.13(b)(iv) and entered the previous trading day. Rule 6.3A. Equity Market Plan to Address Extraordinary Market Volatility [Trading Halt] [Deleted May 31, 1995.] This Rule shall be in effect during a pilot period to coincide with the pilot period for the Regulation NMS Plan to Address Extraordinary Market Volatility (the Limit Up-Limit Down Plan or the Plan ). The Exchange shall modify option order processing during a limit up-limit down state. For purposes of this rule, a limit up-limit down state shall mean the period of time when the underlying security of an option enters a limit or straddle state as defined in the Plan. (a) Exchange Order Types. The following order types will be handled specially during a limit up-limit down state: market orders, market-on-close orders, stop orders, and stock-option orders. Refer to Rule 6.53 and Rule 6.53C for descriptions of how such orders will be handled during a limit up-limit down state. (b) Order Handling. The following electronic order handling features shall operate differently during a limit up-limit down state: (1) HOSS. Refer to Rule 6.2B for a description of how HOSS will behave during a limit uplimit down state. (2) Hybrid Agency Liaison. Refer to Rule 6.14A for a description of how HAL will operate during a limit up-limit down state. (3) Complex Order Request for Responses Auction. Refer to Rule 6.53C for a description of how a complex order request for responses auction (referred to as COA ) will operate during a limit up-limit down state. (4) Canceling/Replacing Orders. If a request to replace a limit order with a market order is received while the underlying security is in a limit up-limit down state, then the market order and the original limit order will be returned. (c) Obvious Error. Refer to Rule 6.25 for a description of how the Exchange will handle potential obvious error executions during a limit up-limit down state. (d) Market-Maker Quoting Obligations. Subject to certain limitations specified in the rules identified below, the Exchange will not require Market-Makers to quote in series of options when the underlying security is in a limit up-limit down state. Market-Maker participation entitlements will continue to apply during a limit up-limit down state. For the particular limitations, refer to the specific Market-Maker category, and corresponding obligations. Rule 6.14A. Hybrid Agency Liaison (HAL) This Rule governs the operation of the Hybrid Agency Liaison ( HAL ) system. HAL is a feature within the Hybrid System that provides automated order handling in designated classes trading on Hybrid for qualifying electronic orders that are not automatically executed by the Hybrid System. (a) (c) No change. (d) Early Termination of Exposure Period. In addition to the receipt of a response to trade the entire exposed order at the NBBO or better, the exposure period will also terminate early under the following circumstances: (i) (iii) No change. (iv) If during the exposure period of a market order the underlying security enters a limit uplimit down state, as defined in Rule 6.3A, then the exposure period shall terminate and any unexecuted portion of the exposed order shall cancelled. Rule Nullification and Adjustment of Options Transactions No change. April 12, 2013 Volume RB24, Number 15 11

14 .06 Limit Up-Limit Down State. For purposes of the obvious pricing error provision in paragraph (a)(1) of this Rule, executions will not be adjusted or nullified if they occurred while the underlying security was in a limit up-limit down state, as defined in Rule 6.3A. Nothing in this provision shall prevent such executions to be reviewed on an Exchange motion pursuant to Rule 6.25(b)(3). This provision will be on a one year pilot basis following the adoption of this paragraph. The Exchange will provide the Commission with data and analysis during the duration of this pilot as requested. Rule Certain Types of Orders Defined One or more of the following order types may be made available on a class-by-class basis. Certain order types may not be made available for all Exchange systems. The classes and/or systems for which the order types shall be available will be as provided in the Rules, as the context may indicate, or as otherwise specified via Regulatory Circular. (a) - (v) No change..01 Certain order types may be handled in a different manner when the underlying security is in a limit up-limit down state, as defined in Rule 6.3A. A. Market Order. A market order shall be returned by the System if the underlying security is in a limit up-limit down state. As an exception, market orders submitted to initiate an Automated Improvement Mechanism Auction will be accepted. In addition, market orders will not be returned if a Trading Permit Holder elects to route that order for manual handling. B. Market-on-close order. A market-on-close order shall not be elected if the underlying security is in a limit up-limit down state, as defined in Rule 6.3A. If, near the conclusion of trading, the underlying security exits the limit up-limit down state, the system will attempt to re-evaluate, elect, and execute the order. C. Stop (stop-loss) order. A stop order will not be triggered if the underlying security is in a limit up-limit down state. Such order will be held until the end of the limit up-limit down state, at which point the order will become eligible to be triggered if the market for the particular option contract reaches the specified contract price. Rule 6.53C. Complex Orders on the Hybrid System. (a) (c) No change. (d) Process for Complex Order RFR Auction: Prior to routing to the COB or once on PAR, eligible complex orders may be subject to an automated request for responses ( RFR ) auction process. (i) (viii) No change. (ix) Limit Up-Limit Down State. If during a COA of a market order, the underlying security of an option in a complex order of a COA-eligible order enters a limit up-limit down state, as defined in Rule 6.3A, the COA will end upon the entering of the limit up-limit down state and the remaining portion of the order will be cancelled..06 Special Provisions Applicable to Stock-Options Orders: Stock-option orders may be executed against other stock-option orders through the COB and COA. Stock-option orders will not be legged against the individual component legs, except as provided in paragraph (d) below. (a) (e) No change. (f) Limit up-limit Down State. When the underlying security on a Stock-option order is in a limit uplimit down state as defined in Rule 6.3A, such order will only execute if the calculated stock price is within the permissible Price Bands as defined in Rule If the calculated price is not within the permissible Price Bands, the Stock-option order will be routed for manual handling. Rule 8.7. Obligations of Market-Makers (a) (c) No changes. (d) Market-Making Obligations in Applicable Hybrid Classes No changes. April 12, 2013 Volume RB24, Number 15 12

15 (i) (ii) No change No change..12 [Reserved.] When the underlying security for a class is in a limit up-limit down state, as defined in Rule 6.3A, Market-Makers shall have no quoting obligations in the class. Rule Preferred Market-Maker Program (a) (d) No changes No change..03 When the underlying security for a class is in a limit up-limit down state, as defined in Rule 6.3A, Preferred Market-Makers shall have no quoting obligations in the class. However, a Preferred Market-Maker may still receive a participation entitlement in series of such a class when the underlying security is in a limit up-limit down state if it elects to quote in such series and otherwise satisfies the requirements set forth in Rule 8.13(b). Rule 8.15A. Lead Market-Makers in Hybrid Classes (a) (b) No changes..01 No change..02 When the underlying security for a class is in a limit up-limit down state, as defined in Rule 6.3A, LMMs shall have no quoting obligations in the class. Rule 8.15B. Participation Entitlements of LLMs (a) (c) No changes..01 No Change..02 When the underlying security for a class is in a limit up-limit down state, as defined in Rule 6.3A, LMMs shall have no quoting obligations in the class. However, an LMM may still receive a participation entitlement in series of such a class when the underlying security is in a limit up-limit down state if it elects to quote in such series and otherwise satisfies the requirements set forth in Rule 8.15B(b). Rule DPM Obligations (a) (c) No change..01 No change..02 [Reserved.] When the underlying security for a class is in a limit up-limit down state, as defined in Rule 6.3A, DPMs shall have no quoting obligations in the class. Rule Participation Entitlement of DPMs and e-dpms (a) (b) No changes No change..03 Where the underlying security for a class is in a limit up-limit down state, as defined in Rule 6.3A, DPMs and e-dpms shall have no quoting obligations in the class. However, a DPM or e-dpm may receive a participation entitlement in series of such a class when the underlying security has entered a limit up limit down state if it elects to quote in such series and otherwise satisfies the requirements set forth in Rule 8.87(b). April 12, 2013 Volume RB24, Number 15 13

16 Rule e-dpm Obligations Each e-dpm shall fulfill all of the obligations of a Market-Maker and of a DPM under the Rules (except those contained in Rules 8.85(a)(i), (iv), (v), (vii) (x), and (xii), 8.85(c)(i) and (v), and 8.85(e)), and shall satisfy each of the following requirements: (i) (xi) No change..01 When the underlying security for a class is in a limit up-limit down state, as defined in Rule 6.3A, e-dpms shall have no quoting obligations in the class. EFFECTIVE-ON-FILING RULE CHANGE(S) The following rule filings were submitted to the SEC effective on filing, and may have taken effect pursuant to Section 19(b)(3) of the Act. They 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 Fees Schedule On April 10, 2013, the Exchange filed Rule Change File No. SR-CBOE , which filing proposes to amend the CBOE Fees Schedule to make a number of technical, non-substantive changes. Any questions regarding the rule change may be directed to Jeff Dritz, Legal Division, at The rule filing is available at April 12, 2013 Volume RB24, Number 15 14