[Federal Register Volume 78, Number 161 (Tuesday, August 20, 2013)]
[Notices]
[Pages 51259-51261]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-20195]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70194; File No. SR-C2-2013-030]
Self-Regulatory Organizations; C2 Options Exchange, Incorporated;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Amend the Fees Schedule
August 14, 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 August 1, 2013, 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 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.c2exchange.com/Legal/), 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.\4\ 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 2.21 [sic], which states, ``fee [sic]
payable by Participants shall be fixed form [sic] time to time by
the Exchange.''
\4\ See Exchange Rules Chapter 9 which states, ``The rules
contained in CBOE Chapter IX, as such rules may be in effect from
time to time, shall apply to C2 and are hereby incorporated into
this Chapter.'' See also, Securities Exchange Act Release No. 61152
(December 10, 2009), 74 FR 66699, 66709-10 (December 16, 2009) (In
the Matter of the Application of C2 Options Exchange, Incorporated
for Registration as a National Securities Exchange Findings,
Opinion, and Order of the Commission (File No. 10-191). In the
Order, the Commission granted C2's request for exemption, pursuant
to Section 36 of the Securities Exchange Act of 1934 (the ``Act''),
from the rule filing requirements of Section 19(b) of the Act with
respect to the rules that C2 proposed to incorporate by reference.
The exemption was conditioned upon C2 providing written notice to
its members whenever CBOE proposes to change a rule that C2 has
incorporated by reference. In the Order, the Commission stated its
belief that ``this exemption is appropriate in the public interest
and consistent with the protection of investors because it will
promote more efficient use of Commission and SRO resources by
avoiding duplicative rule flings based on simultaneous changes to
identical rules sought by more than one SRO.'' C2 satisfied this
requirement with respect to the recently amended 9.3A by posting a
copy of the CBOE rule filing (SR-CBOE-2013-076) on C2's rule filing
Web site at the same time the CBOE rule filing was posted to the
CBOE rule filing Web site. The C2 rule filing Web site is located
at: http://www.c2exchange.com/Legal/RuleFilings.aspx. By posting
CBOE rule filings to C2's rule filing Web site that amend C2's rule
by reference, the Exchange provides its members with notice of the
proposed rule change so that they have an opportunity to comment on
it.
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Exchange Rule 3.4 requires Permit Holders that are individuals
(``PHIs'') and associated persons of Permit Holders to take a
qualification examination to register with the Exchange.\5\ In
addition, Exchange Rule 3.4.03 requires each person in an associated
person status to satisfy the CE requirements set forth in Rule 9.3A.
Exchange Rule 9.3A requires all PHIs 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.'' \6\ 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'').\7\ The Exchange is now proposing to
outline the necessary fees associated with the Regulatory Element of
the S501.
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\5\ See Exchange Rule 3.4(a)(1).
\6\ See Exchange Rule 9.3A(a).
\7\ 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 PHIs that have a
Series 56 registration \8\ 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
[[Page 51260]]
the S101 which utilizes the $100 fee for both development and
administration. The costs associated with the development costs of the
S501 are included in the examination fee.
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\8\ 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 S501 CE element is separate and different from the CE
already administered, the proposed change would put PHIs and associated
persons of Permit Holders 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.
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.\9\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \10\ 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
[sic] 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) \11\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
\11\ 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 3.4(a)(1).
In addition, the fee is reasonable as it [sic] 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 PHIs 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,\12\ 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 Permit
Holders with the Act and Exchange rules.
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\12\ 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 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 PHIs and associated persons of Permit
Holders are required to pass a qualification exam as outline [sic] in
Rule 3.4(a)(1) 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, thereby
qualifying for effectiveness on filing pursuant to Section
19(b)(3)(A)(ii) of the Act\13\ and subparagraph (f)(2) of Rule 19b-
4\14\ thereunder.
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\13\ 15 U.S.C. 78s(b)(3)(A)(ii).
\14\ 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-C2-2013-030 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-C2-2013-030. 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
[[Page 51261]]
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
such 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-C2-2013-030 and should be submitted on or before
September 10, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-20195 Filed 8-19-13; 8:45 am]
BILLING CODE 8011-01-P