Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to establish a rule regarding records of written complaints that is specific to the CBOE Stock Exchange (“CBSX”). The text of the proposed rule change is available on the Exchange's Web site (
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.
The Exchange proposes to establish Rule 53.7—CBSX Record of Written Complaints to formally establish a record keeping procedure for complaints specific to CBSX. CBOE has the options-specific Rule 9.23—Customer Complaints. However, to date there has been no equities-specific customer complaint rule for CBSX. Historically, the majority of CBSX trading activity was proprietary. In recent months, CBSX has seen an increase in customer trading. As such, CBSX desires to adopt a rule regarding records of customer complaints that is specific to CBSX to assist the Exchange's Regulatory Services Division in investigations regarding CBSX-specific customer complaints. Therefore, CBSX proposes to establish Rule 53.7—CBSX Record of Written Complaints. This proposed rule is substantively identical to BATS Exchange, Inc. (“BATS”) Rule 4.3—Record of Written Complaints,
Paragraph (a) of Rule 53.7 will establish that each CBSX Trader shall keep and preserve for a period of not less than five years a file of all written complaints of customers and action taken by the CBSX Trader in respect thereof, if any. Further, for the first two years of the five-year period, the CBSX Trader shall keep such file in a place readily accessible to examination or spot checks. This paragraph (a) of CBOE Rule 53.7 is substantively identical to BATS Rule 4.3(a).
Paragraph (b) of Rule 53.7 will establish that upon request by CBSX, a CBSX Trader shall forward promptly to CBSX any written complaints requested and a report of the action taken thereon. BATS Rule 4.3 has no provision requiring BATS members to forward written complaints to BATS upon request. However, CBSX desires to include such a stipulation in order to ensure CBSX has access to such complaints for regulatory purposes.
Paragraph (c) of Rule 53.7 will establish that a “complaint” shall mean any written statement of a customer or any person acting on behalf of a customer alleging a grievance involving the activities of a CBSX Trader or persons under the control of the CBSX Trader in connection with either the solicitation or execution of any transaction conducted or contemplated to be conducted through the facilities of the CBSX, or the disposition of securities or funds of that customer which activities are related to such a transaction. This paragraph (c) of CBOE Rule 53.7 is substantively identical to BATS Rule 4.3(b).
The proposed Rule 53.7 encompasses electronically submitted complaints (including email). CBSX will issue a Regulatory Circular providing instructions on how to forward formal written complaints specific to CBSX.
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.
In particular, establishing a CBSX-specific rule regarding records of written complaints will assist CBSX's regulatory processes by ensuring that customer complaints are kept by CBSX Traders and are available to be forwarded to CBSX for regulatory purposes. This helps ensure that customer complaints are adequately addressed, thereby removing impediments to, and perfecting the mechanism for a free and open market and a national market system and, in general, protecting investors and the public interest.
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.
The Exchange neither solicited nor received comments on the proposed rule change.
Because the foregoing proposed rule change does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and, by its terms, does not 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
The Exchange has requested that the Commission waive the 30-day operative delay. The Exchange believes that the
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.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Exchange Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.