[Federal Register Volume 78, Number 110 (Friday, June 7, 2013)]
[Notices]
[Pages 34421-34423]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-13505]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69681; File No. SR-CBOE-2013-056]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend the Fees Schedule
June 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 May 20, 2013, Chicago Board Options Exchange, Incorporated
(the ``Exchange'' or ``CBOE'') 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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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 available on the Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's
Office of the Secretary, and at the Commission's Public Reference Room.
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
[[Page 34422]]
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 recently amended its Fees Schedule to add to Footnote
25 the statement that any Floor Broker Trading Permit Holder that
executes an average of 15,000 customer open-outcry contracts per day
(``CPD'') over the course of a calendar month in multiply-listed
options classes will receive a rebate of $7,500 on that Floor Broker
Trading Permit Holder's Floor Broker Trading Permit fees (the
``Rebate'').\3\ Footnote 25 describes Floor Broker Trading Permit Fees
and the Floor Broker Trading Permit Sliding Scale, and states that the
Floor Broker Trading Permit Sliding Scale will be available for all
Floor Broker Trading Permits held by affiliated Trading Permit Holders
and TPH organizations.\4\ As such, the Exchange believed that it was
implied that the trading volume of all Floor Broker Trading Permit
Holders affiliated with a single TPH organization would be aggregated
for the purposes of reaching the 15,000-contract threshold, and that
each TPH organization would receive one $7,500 rebate (as opposed to a
rebate for each affiliated Floor Broker Trading Permit Holder that
reached the 15,000-contract threshold).
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\3\ See Securities Exchange Act Release No. 69569 (May 14, 2013)
(SR-CBOE-2013-049).
\4\ See CBOE Fees Schedule, Footnote 25.
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However, in an effort to make the Rebate program's details clear,
the Exchange now proposes to add the following clarifying language to
the end of Footnote 25: For purposes of determining the rebate, the
qualifying volume of all Floor Broker Trading Permit Holders affiliated
with a single TPH organization will be aggregated, and, if such total
meets or exceeds the 15,000 customer open-outcry contracts per day
threshold in multiply-listed options classes, that TPH organization
will receive a single $7,500 rebate, regardless of the number of Floor
Broker Trading Permits affiliated with that TPH organization. The
purpose of aggregating the qualifying volume of all Floor Broker
Trading Permit Holders affiliated with a single TPH organization is to
make it easier for such TPH organizations that have a number of Floor
Broker Trading Permit Holders affiliated with them to be able to reach
the threshold. The purpose of stipulating that each TPH organization
will receive a single rebate is to ensure that the Rebate program is
economically viable for the Exchange.
2. Statutory Basis
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.\5\ Specifically, the Exchange believes the proposed rule change is
consistent with Section 6(b)(4) of the Act,\6\ which requires that
Exchange rules provide for the equitable allocation of reasonable dues,
fees, and other charges among its Trading Permit Holders and other
persons using its facilities. The Exchange believes that aggregating
the qualifying volume of all Floor Broker Trading Permit Holders
affiliated with a single TPH organization is reasonable because it will
allow more TPH organizations to reach the threshold and therefore
receive the Rebate. The Exchange believes that this is equitable and
not unfairly discriminatory because it will incentivize TPH
organizations with affiliated Floor Broker Trading Permit Holders to
encourage such Floor Broker Trading Permit Holders to transact more
qualifying volume, which should increase volume, which would benefit
all market participants (including Floor Broker Trading Permit Holders
and TPH organizations with affiliated Floor Broker Trading Permit
Holders who do not hit the 15,000 contracts-per-day threshold (indeed,
this increased volume could make it possible for some such Floor
Brokers and/or TPH organizations to hit the 15,000 contracts-per-day
threshold)). The Exchange believes that it is reasonable to limit TPH
organizations to receiving one $7,500 rebate per month because this is
necessary to ensure that the Rebate program is economically viable for
the Exchange. The Exchange believes that this limitation is equitable
and not unfairly discriminatory because it applies to all qualifying
TPH organizations.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
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. CBOE does not believe that
aggregating the qualifying volume of all Floor Broker Trading Permit
Holders affiliated with a single TPH organization will impose any
burden on intramarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act because it will incentivize
TPH organizations with affiliated Floor Broker Trading Permit Holders
to encourage such Floor Broker Trading Permit Holders to transact more
qualifying volume, which should increase volume, which would benefit
all market participants (including Floor Broker Trading Permit Holders
and TPH organizations with affiliated Floor Broker Trading Permit
Holders who do not hit the 15,000 contracts-per-day threshold (indeed,
this increased volume could make it possible for some such Floor
Brokers and/or TPH organizations to hit the 15,000 contracts-per-day
threshold)). CBOE does not believe that limiting TPH organizations to
receiving one $7,500 rebate per month will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because this limitation applies
to all qualifying TPH organizations.
CBOE does not believe that the proposed rule change will impose any
burden on intermarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act because the proposed changes
only apply to Floor Brokers at CBOE. To the extent that aggregating the
qualifying volume of all Floor Broker Trading Permit Holders affiliated
with a single TPH organization proves attractive to market participants
on other exchanges, such Floor Brokers or market participants may elect
to become Floor Brokers or market participants at CBOE.
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 \7\ and paragraph (f) of Rule 19b-4 \8\
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. If the
[[Page 34423]]
Commission takes such action, the Commission will institute proceedings
to determine whether the proposed rule change should be approved or
disapproved.
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 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-CBOE-2013-056 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-CBOE-2013-056. 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-CBOE-2013-056 and should be
submitted on or before June 28, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-13505 Filed 6-6-13; 8:45 am]
BILLING CODE 8011-01-P