[Federal Register Volume 78, Number 150 (Monday, August 5, 2013)]
[Notices]
[Pages 47469-47471]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-18752]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70064; File No. SR-CBOE-2013-078]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend the Fees Schedule To Include a $60
Session Fee for the Series 56 (S501) Continuing Education
July 30, 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 July 25, 2013, the 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 and II 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 its 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 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.\3\ More
specifically, the Exchange is proposing to make changes to the section
``Regulatory Fees.'' Currently under the Exchange's Regulatory Fees,
the Exchange charges a $100 session fee to registered persons at the
Exchange for a continuing education (``CE'') requirement that is
outlined in Exchange Rule 9.3A. The Exchange is now proposing to add a
$60 session fee for those individuals that only have the Proprietary
Trader (``Series 56'') registration.
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\3\ See Exchange Rule 2.20, which authorizes the Exchange, from
time to time, to ``fix the fee and charges payable by Trading Permit
Holders.''
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Exchange Rule 3.6A.08 outlines the registration and qualification
requirements (including prerequisite examinations) for TPHs and TPH
organizations conducting proprietary trading, market-making and/or
effecting transactions on behalf of other broker dealers.\4\ Exchange
Rule 9.3A requires all TPHs and TPH organizations to complete the
Regulatory Element of the CE program beginning with the occurrence of
``their second registration anniversary date and every three years
thereafter or as otherwise prescribed by the Exchange.'' \5\ Recently,
the Exchange amended Rule 9.3A to enumerate the different CE programs
offered by the Exchange including the S501 Series 56 Proprietary Trader
Continuing Education Program (``S501'').\6\ The Exchange is now
proposing to outline the necessary fees associated with the Regulatory
Element of the S501.
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\4\ See Exchange Rule 3.6A.08.
\5\ See Exchange Rule 9.3A(a).
\6\ See Securities Exchange Act Release No. 34-70027 (July 23,
2013) (SR-CBOE-2013-076) (immediately effective rule change to
specify the different CE requirements for registered persons based
upon their registration with the Exchange).
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The Exchange has determined that these changes are necessary to
administer the Series 56 CE program. Specifically, the $60 session fee
will be used to fund the CE program administered to Proprietary Traders
that have a Series 56 registration \7\ and are required to complete the
S501. The $60 session fee is less than the $100 session fee (currently
in the Exchange's fee schedule) for the S101 General Program for Series
7 registered persons (``S101'') as the Series 7 examination is a more
comprehensive examination, and, thus, the CE is more comprehensive as
well. Thus, the Exchange believes the $60 fee is reasonable and
proportional fee based upon the programming of the CE. In addition, the
$60 fee will only be used for the administration of the CE versus the
S101 which utilizes the $100 fee for both development and
administration. The costs associated with the development costs [sic]
of the S501 are included in the examination fee.
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\7\ Both individuals that have successfully passed the Series 56
examination and individuals that have had the examination waived by
the Exchange are required to take the S501.
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Because the CE element is separate and different from the CE
already administered, the proposed change would put TPHs and TPH
organizations on notice of the associated fees. The proposed fee would
allow the Exchange to fund the S501 which is more tailored to the
Series 56 registration. Also, the Exchange believes other exchanges
will be assessing the same fee for this CE program. The proposed
changes are to take effect on August 19, 2013.
[[Page 47470]]
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.\8\ Specifically, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \9\ 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 the Section 6(b)(5) \10\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ Id.
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In particular, the proposed rule change is equitable and not
unfairly discriminatory as it is allocated to all individuals with a
Series 56 registration which is required under Exchange Rule 3.6A. In
addition, the fee is reasonable as it lower than the previously
assessed CE fee because the S501 is more limited than the S101, and the
fee is only intended to recoup the costs of the administration of the
program. Also, the Exchange believes other exchanges will be assessing
the same fee for this CE program. The Exchange believes the proposed
rule change will protect investors and the public interest by covering
the administration of the program and allow the Exchange to tailor a CE
fee for the Series 56. This allows the Exchange to better prevent
fraudulent and manipulative acts and practices because the CE will
properly educate Proprietary Traders in the topics of securities laws
and other rules and help them to comply with those laws and rules.
Finally, the Exchange also believes the proposed rule change is
consistent with Section 6(b)(1) of the Act,\11\ 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 individuals with a
series 56 registration with the Act, the rules and regulations
thereunder, and the rules of the Exchange. The proposed rule change is
designed to fund the administration of the S501, and, more
specifically, to help more closely cover the costs of educating
individuals that hold a Series 56 registration. Thus, the proposed
changes will help the Exchange to enforce compliance of its TPHs with
the Act and Exchange rules.
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\11\ 15 U.S.C. 78f(b)(1).
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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. In particular, the proposed
rule change will not impose any burden on intermarket competition as it
will merely serve to aid the Exchange in fulfilling its obligations as
a Self-Regulatory Organization by further funding the administration of
the new CE. The proposed rule change will not impose any burden on
intramarket competition as all TPHs and TPH organizations are required
to pass a qualification exam as outline in Rule 3.6A and fulfill a CE
requirement as outlined in Rule 9.3A. In addition, the Exchange
believes other exchanges will be assessing the same fee for this CE
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 proposed rule change is designated by the Exchange as
establishing or changing a due, fee, or other charge, applicable only
to a member, thereby qualifying for effectiveness on filing pursuant to
Section 19(b)(3)(A)(ii) of the Act \12\ and subparagraph (f)(2) of Rule
19b-4 \13\ thereunder.
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\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
\13\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of this 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 Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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-2013-078 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-2013-078. 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-2013-078 and should be
submitted on or before August 26, 2013.
[[Page 47471]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-18752 Filed 8-2-13; 8:45 am]
BILLING CODE 8011-01-P