[Federal Register Volume 78, Number 248 (Thursday, December 26, 2013)]
[Notices]
[Pages 78424-78426]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-30758]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71137; File No. SR-CHX-2013-22]
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to
Amend the Single-Sided Order Fees and Credits
December 19, 2013.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on December 18, 2013, the Chicago Stock Exchange, Inc. (``CHX'' or
``Exchange'') filed with
[[Page 78425]]
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 self-regulatory organization. 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\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
CHX proposes to amend its Schedule of Participant Fees and
Assessments (the ``Fee Schedule'') to amend the Single-Sided Order Fees
and Credits and the Order Cancellation Fee. The Exchange proposes to
implement the fee changes on January 2, 2014. The text of this proposed
rule change is available on the Exchange's Web site at http://www.chx.com/rules/proposed_rules.htm, at the principal office of the
Exchange, 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 self-regulatory organization
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 those 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 parts 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 Section E.1 of the Fee Schedule,
effective January 2, 2014. Specifically, the Exchange proposes to amend
Section E.1 to set the Liquidity Providing Credit for all single-sided
orders of 100 or more shares executed in the Matching System in Tape A,
B, and C securities priced greater than or equal to $1.00/share at
$0.0020/share. The Exchange does not propose to make any other
amendments to the Fee Schedule.
Current Section E.1
On July 1, 2013, the Exchange adopted current Section E.1 of the
Fee Schedule,\4\ which applies to all single-sided orders of 100 or
more shares executed in the CHX Matching System. Specifically, the
Exchange set the Liquidity Providing Credit for all Tape A, B, and C
securities priced greater than or equal to $1.00/share at $0.00250/
share and set the corresponding Liquidity Removing Fee at $0.0030/
share. In doing so, the Exchange unified pricing across all Tapes,
eliminated the distinction between Derivative Securities Products and
Non-Derivative Securities Products throughout the Fee Schedule and
eliminated the distinction between ``Regular Trading Session'' and
``Early or Late Trading Session'' in Section E.1 of the Fee
Schedule.\5\
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\4\ See Securities Exchange Act Release No. 69903 (July 1,
2013), 78 FR 40788 (July 8, 2013) (SR-CHX-2013-12) (``Notice of
Filing and Immediate Effectiveness of Proposed Rule Change to Amend
the Single-Sided Order Fees and Credits and the Order Cancellation
Fee''); see also Securities Exchange Act Release No. 69903A (August
13, 2013), 78 FR 49308 (August 13, 2013).
\5\ Id.
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Proposed Section E.1
The Exchange now proposes to reduce the Liquidity Providing Credit
for all single-sided orders of 100 shares or more executed in the
Matching System in Tape A, B, and C securities priced greater than or
equal to $1.00/share from $0.00250/share to $0.0020/share. As such, the
Exchange proposes to amend paragraph (b) under Section E.1 to replace
``$0.00250/share'' with ``$0.0020/share.''
However, the Exchange does not propose to change the corresponding
Liquidity Removing Fee, which is currently $0.0030/share. In addition,
for all single-sided orders of 100 or more shares executed in the CHX
Matching System in securities priced less than $1.00/share, the
Exchange will maintain the current Liquidity Providing Credit of
$0.00009/share and the Liquidity Removing Fee of 0.30% of the trade
value.
Despite the proposed decrease in the Liquidity Providing Credit,
the Exchange believes that a combination of the proposed Liquidity
Providing Credit and the Exchange's recently-adopted Market Data
Revenue Rebates program \6\ will continue to incentivize activity by
Participants on the Exchange's trading facilities, encourage order
flow, and allow the Exchange to remain competitive in today's orders
marketplace.
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\6\ See Section P of the Fee Schedule; see also Securities
Exchange Act Release No. 70546 (October 3, 2013), 78 FR 61413
(September 27, 2013) (``Notice of Filing and Immediate Effectiveness
of Proposed Rule Change to Adopt a Market Data Revenue Rebates
Program'').
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \7\ in general, and furthers the
objectives of Section 6(b)(4) of the Act \8\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and other persons using any facility or
system which the Exchange operates or controls, and does not unfairly
discriminate between customers, issuers, or broker dealers.
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\7\ 15 U.S.C. 78f.
\8\ 15 U.S.C. 78f(b)(4).
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Specifically, since the proposed Liquidity Providing Credit will
continue to apply to all single-sided orders of 100 or more shares
executed in the CHX Matching System and the corresponding Liquidity
Removing Fee will remain unchanged, the Exchange believes that the
proposed Section E.1 will equitably allocate credits and fees among
Participants in a non-discriminatory nature. Furthermore, the proposed
Liquidity Providing Credit of $0.0020/share is reasonable, where the
proposed value is similar to liquidity credits offered by other
exchanges, such as NASDAQ.\9\
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\9\ NASDAQ ``Rebate to Add Displayed Liquidity, Shares Executed
at or Above $1.00'' ranges from $0.0020/share to $0.00305/share.
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The Exchange notes that it operates in a highly competitive market
in which market participants can readily favor competing venues. In
such an environment, the Exchange must continually review, and consider
adjusting, its fees and credits to remain competitive with other
exchanges. For the reasons described above, the Exchange believes that
the proposed rule change reflects this competitive environment.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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. Specifically, the proposed
Liquidity Providing Credit will contribute to the protection of
investors and the public interest by maintaining the simplified
schedule of credits paid and fees assessed by the Exchange, as it will
be applied to all single-sided orders of 100 shares or more executed in
the Matching System in Tape A, B, and C securities priced greater than
or equal to $1.00/share. Moreover, the combination of the proposed
Liquidity Providing Credit
[[Page 78426]]
and Market Data Revenue Rebates will continue to incentivize order
senders to submit orders to the Exchange, which will, in turn, enhance
competition amongst competing trading centers and contribute to the
production of investors and the public interest.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A)(ii) of the Act \10\ and subparagraph (f)(2) of Rule
19b-4 thereunder \11\ because it establishes or changes a due, fee, or
other charge imposed by the Exchange.
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\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 17 CFR 240.19b-4(f)(2).
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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 Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
As fully discussed above, the Exchange believes that the proposed
Fee Schedule will create equable credit and fee amounts to incent
activity among all Participants within the Exchange's trading
facilities.
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-CHX-2013-22 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-CHX-2013-22. 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 20549-1090, 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 offices of CHX.
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-CHX-2013-22,
and should be submitted on or before January 16, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-30758 Filed 12-24-13; 8:45 am]
BILLING CODE 8011-01-P