[Federal Register Volume 78, Number 6 (Wednesday, January 9, 2013)]
[Notices]
[Pages 1904-1906]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-00198]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68571; File No. SR-C2-2012-046]
Self-Regulatory Organizations; C2 Options Exchange, Incorporated;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Amend the Fees Schedule
January 3, 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 December 28, 2012, C2 Options Exchange, Incorporated (the
``Exchange'' or ``C2'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I, II, and III 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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[[Page 1905]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Fees Schedule. The text of the
proposed rule change is provided below.\3\
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\3\ The Commission notes that new text is in italics and deleted
text is in brackets.
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* * * * *
C2 Options Exchange, Incorporated Rules
* * * * *
1.-7. No change.
8. Regulatory Fees
A) Firm Designated Examining Authority Fee $0.[4]60 per $1,000 of
gross revenue (subject to a monthly minimum fee of $[1,000] 1,500 for
clearing firms and $[275] 400 for non-clearing firms)--As reported on
quarterly FOCUS Report, Form X-17A-5. Excludes commodity commission
revenue.
* * * * *
The text of the proposed rule change is also available on the
Exchange's Web site (http://www.c2exchange.com/Legal/ Legal/), at the
Exchange's Office of the Secretary, and at the Commission.
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 Exchange proposes to amend its Fees Schedule.\4\ More
specifically, the Exchange is proposing to make changes to the section
``Regulatory Fees.'' Under the Exchange's Regulatory Fees, the Exchange
charges a fee to firms for which the Exchange is the Designated
Examining Authority (``DEA'') called the ``Firm Designated Examining
Authority Fee.'' Under such fee, the Exchange currently charges these
Trading Permit Holders (``TPHs'') for which the Exchange is the DEA
$0.40 per $1,000 of gross revenue as reported on quarterly FOCUS
reports filed by such TPHs (excluding commodity commission revenue). In
addition, this fee is subject to a monthly minimum fee of $1,000 per
month for Clearing TPHs and $275 for non-Clearing TPHs. The Exchange is
proposing to increase this fee from $.40 per $1,000 of gross revenue to
$0.60 per $1,000 of gross revenue. In addition, the Exchange is
proposing to increase the monthly minimum fee for Clearing TPHs from
$1,000 to $1,500 and the monthly minimum fee for non-Clearing TPHs from
$275 to $400. New proposed text has been added to the ``Regulatory
Fees'' section of the Fees Schedule to reflect this charge.
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\4\ See Exchange Rule 2.1, which authorizes fees to Participants
to be ``fixed from time to time by the Exchange.''
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The Exchange has determined that these changes are necessary to
increase the revenue of the Exchange for the purpose of continuing to
adequately fund its regulatory functions. Specifically, the Exchange is
proposing to increase this fee in order to help more closely cover the
costs of regulating these TPHs for which the Exchange is the DEA. The
proposed modifications are reasonable as they have never been changed
to reflect growing regulatory costs.\5\ In addition, the Exchange
believes the proposed changes to the Fees Schedule are equitably
allocated to all TPHs in which the Exchange is the DEA as all will be
charged based upon their gross revenue.
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\5\ See Securities Exchange Act Release No. 34-63175 (October
25, 2010), 75 FR 66813 (October 29, 2010) (SR-C2-2010-006)
(immediately effective rule establishing, among other things, the
Designated Examining Authority Fee of $.40 per $1,000 of gross
revenue as reported on quarterly FOCUS reports filed and the firm
FOCUS Minimum Monthly Fee of $1000 for clearing members and $275 for
non-clearing members).
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The proposed changes are to take effect on January 1, 2013.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\6\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \7\ 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 facilitation
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
Section 6(b)(4) of the Act,\8\ which provides that Exchange rules may
provide for the equitable allocation of reasonable dues, fees, and
other charges among its Trading Permit Holders and other persons using
its facilities.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
\8\ 15 U.S.C. 78f(b)(4).
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In particular, the proposed rule change is equitable and not
unfairly discriminatory as it is allocated to all Exchange DPMs and
TPHs for which the Exchange is the DEA equally based upon their gross
revenue. In addition, the fee is reasonable as it is a slight increase
to the current Exchange fee which has not recently been updated to
reflect current regulatory costs.\9\ The Exchange believes the proposed
rule change will protect investors and the public interest by
increasing the Exchange's regulatory revenue to allow the Exchange to
more adequately perform its regulatory functions and, thus, also allow
the Exchange to better prevent fraudulent and manipulative acts and
practices.
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\9\ See supra note 5.
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Finally, the Exchange also believes the proposed rule change is
consistent with Section 6(b)(1) of the Act,\10\ which provides that the
Exchange be organized and have the capacity to be able to carry out the
purposes of the Act and to enforce compliance by the Exchange's TPHs
and persons associated with its TPHs with the Act, the rules and
regulations thereunder, and the rules of the Exchange. The proposed
rule change is designed to fund the Exchange's regulatory program, and,
more specifically, to help more closely cover the costs of regulating
Exchange DPMs and those TPHs for which the Exchange is the DEA. Thus,
the proposed changes will help the Exchange to enforce compliance of
its TPHs with the Act and Exchange rules.
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\10\ 15 U.S.C. 78f(b)(1).
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B. Self-Regulatory Organization's Statement on Burden on Competition
C2 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. In particular, the proposed
rule change will serve to aid the Exchange in fulfilling its
obligations as a Self-Regulatory Organization by
[[Page 1906]]
further funding the Exchange regulatory program.
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \11\ and paragraph (f) of Rule 19b-4 \12\
thereunder. 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.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f).
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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 protected]. Please include
File Number SR-C2-2012-046 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-C2-2012-046. 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 Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office 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-C2-2012-046 and should be
submitted on or before January 30, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-00198 Filed 1-8-13; 8:45 am]
BILLING CODE 8011-01-P