[Federal Register Volume 80, Number 21 (Monday, February 2, 2015)]
[Notices]
[Pages 5608-5609]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-01861]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74143; File No. SR-CBOE-2015-006]
Self-Regulatory Organizations: Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend the Fees Schedule
January 27, 2015.
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 January 14, 2015, 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 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\ The Exchange
currently assesses a Customer Priority Surcharge for VIX and VXST
options that are executed electronically.\4\ More specifically, the
Customer Priority Surcharge for VIX and VXST is assessed on all
Customer (C) VIX and VXST contracts executed electronically that are
Maker and not Market Turner. Additionally, the Surcharge is only
assessed on such contracts that have a premium of $0.11 or greater. The
Exchange has learned of a technical and billing issue that prevents the
effective assessment of the Surcharge to complex orders. As such, the
Exchange proposes to waive the Surcharge for VIX and VXST complex
orders pending resolution \5\ of the abovementioned billing issue.\6\
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\3\ The Exchange initially filed the proposed fee change on
January 2, 2015 (SR-CBOE-2015-003). On January 14, 2015, the
Exchange withdrew that filing and submitted this filing.
\4\ The current Surcharge is $0.10 per contract for VIX and
$0.05 per contract for VXST for contracts that have a premium of
$0.11 or greater (see CBOE Fees Schedule, Customer Priority
Surcharge).
\5\ Upon resolution of the technical and billing issue, the
Exchange will submit a rule filing to reinstate the Surcharge for
complex orders in VIX and VXST.
\6\ The Exchange notes that the technical and billing issue does
not affect SPXW and as such, the proposed waiver does not apply to
SPXW (i.e., the Priority Surcharge will continue to be assessed for
complex orders in SPXW).
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the
[[Page 5609]]
Securities Exchange Act of 1934 (the ``Act'') [sic] and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\7\ Specifically, 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. Additionally, 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. 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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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
\9\ 15 U.S.C. 78f(b)(5).
\10\ Id.
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In particular, the Exchange believes that waiving the Surcharge for
VIX and VXST complex orders is reasonable, equitable and not unfairly
discriminatory because it is waiving a fee that is currently subject to
a billing issue and the waiver applies to all Trading Permit Holders.
The Exchange believes it is equitable and not unfairly discriminatory
to temporarily waive the Surcharge for complex orders and not simple
orders because the electronic complex order book has a different order
flow demographic and market model than that for simple orders. Further,
the Exchange notes that other exchanges currently offer different
pricing for complex orders than for simple orders.\11\ Additionally,
waiving the Surcharge for complex orders pending resolution of the
technical and billing issue eliminates potential misassessment of a fee
and eliminates confusion, thereby removing impediments to and
perfecting the mechanism for a free and open market system, and in
general, protecting investors and the public interest.
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\11\ See e.g., International Securities Exchange, LLC (``ISE'')
Schedule of Fees, Section IV and also C2 Fees Schedule, Section 1C
and 1D.
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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. The Exchange does not believe
that the proposed changes impose any burden on intramarket competition
as the waiver of the Surcharge applies to all Trading Permit Holders.
As such, the proposed changes are equitable among all market
participants and are not unfairly discriminatory. Additionally, the
proposed change merely addresses a technical and billing issue on CBOE.
To the extent that the proposed change makes CBOE a more attractive
marketplace for market participants at other exchanges, such
participants are welcome to become CBOE market participants.
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 \12\ and paragraph (f) of Rule 19b-4 \13\
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 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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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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-2015-006 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2015-006. 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-2015-006 and
should be submitted on or before February 23, 2015.
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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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-01861 Filed 1-30-15; 8:45 am]
BILLING CODE 8011-01-P