[Federal Register Volume 81, Number 73 (Friday, April 15, 2016)]
[Notices]
[Pages 22334-22335]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-08640]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77575; File No. SR-CBOE-2016-030]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule To Amend the Fees Schedule
April 11, 2016.
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 April 1, 2016, 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, effective April
1, 2016. Specifically, the Exchange proposes to extend the current
waiver of the VIX Index License Surcharge of $0.10 per contract for
Clearing Trading Permit Holder Proprietary (``Firm'') (origin codes
``F'' or ``L'') VIX orders that have a premium of $0.10 or lower and
have series with an expiration of seven (7) calendar days or less. The
Exchange adopted the current waiver to reduce transaction costs on
expiring, low-priced VIX options, which the Exchange believed would
encourage Firms to seek to close and/or roll over such positions close
to expiration at low premium levels, including facilitating customers
to do so, in order to free up capital and encourage additional trading.
The Exchange initially proposed to waive the surcharge through March
31, 2016, at which time the Exchange stated that it would evaluate
whether the wavier [sic] has in fact prompted Firms to close and roll
over these positions close to expiration as intended. The Exchange
believes the proposed change has in fact encouraged Firms to do so and
as such, proposes to extend the waiver of the surcharge through
December 2016, at which time the Exchange will reevaluate whether the
wavier [sic] has continued to prompt Firms to close and roll over
positions close to expiration at low premium levels. Accordingly, the
Exchange proposes to delete the reference to the current waiver period
of March 31, 2016 from the Fees Schedule and replace it with December
31, 2016.
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.\3\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \4\ 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
[[Page 22335]]
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 Section 6(b)(4) of
the Act,\5\ 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.
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\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(5).
\5\ 15 U.S.C. 78f(b)(4).
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The Exchange believes it's reasonable to continue to waive the VIX
Index License Surcharge for Clearing Trading Permit Holder Proprietary
VIX orders that have a premium of $0.10 or lower and have series with
an expiration of 7 calendar days or less because the Exchange wants to
continue encouraging Firms to roll and close over positions close to
expiration at low premium levels. The Exchange notes that without the
waiver, firms are less likely to engage in these transactions, as
opposed to other VIX transactions, due to the associated transaction
costs. The Exchange believes it's equitable and not unfairly
discriminatory to limit the waiver to Clearing Trading Permit Holder
Proprietary orders because they contribute capital to facilitate the
execution of VIX customer orders with a premium of $0.10 or lower and
series with an expiration of 7 calendar days or less. Finally, the
Exchange believes it's reasonable, equitable and not unfairly
discriminatory to provide that the surcharge will be waived through
December 2016, as it gives the Exchange additional time to evaluate if
the wavier [sic] is continuing to have the desired effect of
encouraging these transactions.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule changes will
impose any burden on competition that are not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange does not
believe that the proposed rule change will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because the proposed change
applies to all Firms, and while the waiver only applies to Firm orders,
Firms contribute capital to facilitate the execution of VIX customer
orders with a premium of $0.10 or lower and series with an expiration
of 7 days or less.
The Exchange does not believe that the proposed rule changes will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed change only affects trading on CBOE. To the extent that the
proposed changes make CBOE a more attractive marketplace for market
participants at other exchanges, such market 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 \6\ and paragraph (f) of Rule 19b-4 \7\
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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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 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-2016-030 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2016-030. 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 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-2016-030 and should be
submitted on or before May 6, 2016.
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\8\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-08640 Filed 4-14-16; 8:45 am]
BILLING CODE 8011-01-P