Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to amend its rules related to account and order ticket information. The scope of this filing is limited solely to the application of the rule amendments to security futures that may be traded on CFE. The text of the proposed rule change is attached as Exhibit 4 to the filing but is not attached to the publication of this notice.
In its filing with the Commission, CFE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. CFE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The purpose of the proposed CFE rule amendments included as part of this rule change is to amend CFE Rules 403 (Order Entry), 414 (Exchange of Contract for Related Position) (“ECRP”), and 415 (Block Trading) to clarify information that must be included as part of an order. The rule amendments included as part of this rule change are to apply to all products traded on CFE, including both non-security futures and security futures.
CFE Rule 403(a) currently provides that Trading Privilege Holders (“TPHs”) are required to include certain information when entering an order into CFE's trading system. Pursuant to CFE Rule 403(a), each order currently must contain the following information: (i) Whether the order is a buy or sell order; (ii) order type; (iii) commodity; (iv) contract expiration; (v) price; (vi) quantity; (vii) account type; (viii) account designation (the number assigned by a TPH to each of its accounts); (ix) in the case of orders for options, strike price, type of option (put or call) and expiration month; and (x) such additional information as may be prescribed from time to time by the Exchange.
CFE Rule 414(f) currently provides that TPHs must identify and mark an ECRP order as an ECRP.
CFE Rule 415(e) currently provides that TPHs are required to include specified information on the order ticket for a Block Trade. Pursuant to CFE Rule 415(e), each TPH that is a party to a Block Trade currently must record the following information on the order ticket: The contract (including the expiration) to which the Block Trade relates; the number of contracts traded; the price of execution or premium; the time of execution (
The proposed amendments provide additional detail regarding certain order information that must be provided under these Rules in the following manner:
First, the proposed amendments specify that, under CFE Rule 403(a), the account designation that must be included in any order submitted to CFE's trading system is the account number of the account of the party for which the order was placed (except that a different account designation may be included in the case of a bunched order or in the case of an order for which there will be a post-trade allocation of the resulting trade(s) to a different clearing member).
A bunched order is an order that is entered on behalf of multiple customer accounts and then allocated to the individual customer accounts in accordance with applicable regulatory requirements.
Second, the proposed amendments specify that, under CFE Rule 414(f), each TPH that acts as agent for an ECRP transaction must include on the order ticket for the ECRP specified information provided for in this proposed rule change. Specifically, CFE Rule 414(f) is proposed to be revised to make clear that each TPH that acts as agent for an ECRP must record the following details with respect to the contract leg of the ECRP on its order ticket: The contract (including the expiration); the number of contracts traded; the price of execution or premium; the time of execution (
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,
• 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 facilitating transactions in securities, and
• 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.
The Exchange believes that the proposed rule change would strengthen its ability to carry out its responsibilities as a self-regulatory organization by providing further clarity and guidance regarding the type of information that must be included as part of an order. First, the proposed rule change will provide market participants with greater clarity regarding the information that
CFE does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act, in that the rule change will enhance CFE's ability to carry out its responsibilities as a self-regulatory organization. The Exchange believes that the proposed rule change is equitable and not unfairly discriminatory because the amendments regarding account and order ticket information apply equally to all market participants.
No written comments were solicited or received with respect to the proposed rule change.
The proposed rule change will become effective on June 23, 2016. At any time within 60 days of the date of effectiveness of the proposed rule change, the Commission, after consultation with the CFTC, may summarily abrogate the proposed rule change and require that the proposed rule change be refiled in accordance with the provisions of Section 19(b)(1) of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to 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.