Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Revise the Sales Value Fee, 73940-73942 [2014-29180]
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73940
Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Notices
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 (https://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 NSCC and on NSCC’s Web site
at https://dtcc.com/legal/sec-rulefilings.aspx. 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–NSCC–
2014–12 and should be submitted on or
before January 2, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–29105 Filed 12–11–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73788; File No. SR–CBOE–
2014–089]
mstockstill on DSK4VPTVN1PROD with NOTICES
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Revise the Sales
Value Fee
December 8, 2014.
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 November
7 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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25, 2014, 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, 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.
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 (https://
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 November 28,
2014. Specifically, the Exchange
proposes to enable the Exchange to
collect the Sales Value Fee 3 (the ‘‘Fee’’)
directly from Trading Permit Holders
(‘‘TPHs’’) when the Fee is due pursuant
to an on-floor position transfer between
unaffiliated TPHs. In addition, the
Exchange proposes to remove obsolete
language related to the CBOE Stock
Exchange, LLC (‘‘CBSX’’).4 Finally, the
Exchange proposes to remove the
3 Pursuant to Section 31 of the Securities
Exchange Act of 1934, CBOE pays transaction fees
to the SEC based on the volume of securities that
are executed on the Exchange. The Sales Value Fee
is the mechanism by which CBOE assesses the
transaction fees to each TPH.
4 Trading ended on CBSX on April 30, 2014. See
Securities Exchange Act Release No. 34–71880
(April 4, 2014) (Notice) (SR–CBOE–2014–036).
PO 00000
Frm 00062
Fmt 4703
Sfmt 4703
regulatory review process related to the
Position Transfer Fee.
Currently, the Sales Value Fee is
collected indirectly from TPHs through
their clearing firms by OCC on behalf of
CBOE. The OCC does not collect the Fee
when an on-floor position transfer 5
takes place. The Exchange is proposing
to collect the Fee directly from TPHs
when there is an on-floor position
transfer between unaffiliated TPHs.
TPHs will be considered affiliated if one
of the TPHs has ‘‘control’’ under Rule
1.1(k) over another TPH.6
In addition, the Fees Schedule
currently indicates that the Fee is
assessed by CBOE to each TPH for the
sale of securities when a sale in nonoption securities occurs on CBSX with
respect to which CBOE is obligated to
pay a fee to the SEC under Section 31
of the Exchange Act or a sell order in
non-option securities that is routed for
execution at a market other than on
CBSX, resulting in a covered sale on
that market and an obligation of the
routing broker providing Routing
Services for CBSX to pay the related
sales fee of that market. As noted above,
CBSX is no longer active; therefore, the
Exchange proposes to clarify that the
Fee will be assessed by CBOE to TPHs
for sales of securities when a sale in
option securities occurs with respect to
which CBOE is obligated to pay a fee to
the SEC under Section 31 of the
Exchange Act or when a sell order in
option securities is routed for execution
at a market other than CBOE, resulting
in a covered sale on that market and an
obligation of the routing broker
providing Routing Services for CBOE, as
described in CBOE Rule 6.14B, to pay
the related sales fee of that market.
Finally, the Exchange currently
provides a service to TPHs seeking to
make an off-floor position transfer
pursuant to Rule 6.49A whereby a TPH
can solicit CBOE to perform a
‘‘regulatory review’’ of the potential
transfer to determine whether the
proposed transfer meets the off-floor
5 See
Rule 6.49A.
term ‘‘affiliate’’ of or a person ‘‘affiliated
with’’ another person means a person who, directly
or indirectly, controls, is controlled by, or is under
common control with, such other person. See Rule
1.1(j).
The term ‘‘control’’ means the power to exercise
a controlling influence over the management or
policies of a person, unless such power is solely the
result of an official position with such person. Any
person who owns beneficially, directly or
indirectly, more than 20% of the voting power in
the election of directors of a corporation, or more
than 25% of the voting power in the election of
directors of any other corporation which directly or
through one or more affiliates owns beneficially
more than 25% of the voting power in the election
of directors of such corporation, shall be presumed
to control such corporation. See Rule 1.1(k).
6 The
E:\FR\FM\12DEN1.SGM
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Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Notices
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position transfer provisions of Rule
6.49A. The Exchange currently charges
the initiating TPH a fee of $.02 per
contract for the ‘‘regulatory review’’
with a cap of $25,000. The Exchange is
proposing to eliminate the ‘‘regulatory
review’’ program, as well as the
associated fee.
The Exchange is seeking an effective
date of November 28, 2014 in order to
sync the fee change with the CBOE
billing cycle. For example, position
transfers that occur on Friday,
November 28, 2014 will settle on
Monday, December 1, 2014. CBOE
billing is applied upon settlement;
therefore, on-floor position transfers that
are subject to a Sales Value Fee that
trade on November 28th will settle on
December 1st and be assessed the Sales
Value Fee during the December billing
cycle.
Schedule easier to read and alleviate
potential confusion. The alleviation of
potential confusion will remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, protect investors and the public
interest. The Fee allows the Exchange to
recoup transaction fees that the
Exchange pays to the SEC pursuant to
Section 31 of the Securities Exchange
Act, and the Exchange incurs the
Section 31 fees because of the trading
activity of TPHs. Therefore, the
Exchange believes that it is reasonable
and equitable to assess the Fee to TPHs.
Additionally, the Exchange does not
believe the proposed change is unfairly
discriminatory as it applies equally to
all TPHs that are performing on-floor
position transfers between unaffiliated
entities.
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.7 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 8 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) 9 requirement that
the rules of an exchange not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange also believes the
proposed rule change is consistent with
Section 6(b)(4) of the Act,10 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.
In particular, the Exchange believes
that the proposed clarifications to the
Fees Schedule will make the Fees
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. CBOE 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 changes apply to all TPHs.
The Exchange does not believe the
proposed rule change will impose any
burden on intermarket competition
because it only applies to position
transfers occurring on CBOE.
7 15
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
9 Id.
10 15
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 11 and paragraph (f) of Rule
19b–4 12 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
11 15
U.S.C. 78f(b)(4).
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12 17
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PO 00000
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
Frm 00063
Fmt 4703
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73941
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2014–089 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.
All submissions should refer to File
Number SR–CBOE–2014–089. 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 (https://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 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–CBOE–
2014–089 and should be submitted on
or before January 2, 2015.
E:\FR\FM\12DEN1.SGM
12DEN1
73942
Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–29180 Filed 12–11–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73780; File No. SR–EDGX–
2014–28]
Self-Regulatory Organizations; EDGX
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change to Rule 13.9 of EDGX
Exchange, Inc. Related to
Communication and Routing Service
Known as ConnectEdge
December 8, 2014.
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 November
25, 2014, EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange has
designated this proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6)(iii)
thereunder,4 which renders it effective
upon filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
mstockstill on DSK4VPTVN1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange filed a proposal to
amend Rule 13.9 related to a
communication and routing service
known as ConnectEdge. The Exchange
also proposes to add fees related to
ConnectEdge to its fee schedule.
The text of the proposed rule change
is available at the Exchange’s Web site
at https://www.directedge.com/, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6)(iii).
1 15
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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 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
Rule 13.9 related to a communication
and routing service known as
ConnectEdge. The Exchange also
proposes to add fees related to
ConnectEdge to its fee schedule. The
Exchange currently offers and proposes
to continue offering ConnectEdge on a
voluntary basis in a capacity similar to
a vendor. ConnectEdge is a
communication service that provides
Members 5 an additional means to
receive market data from and route
orders to any destination connected to
Exchange’s network. ConnectEdge does
not provide any advantage to
subscribers for connecting to the
Exchange’s affiliates 6 as compared to
other method of connectivity available
to subscribers. The servers of the
Member need not be located in the same
facilities as the Exchange in order to
subscribe to ConnectEdge. Members
may also seek to utilize ConnectEdge in
the event of a market disruption where
other alternative connection methods
become unavailable.
Specifically, this service allows
Members to route orders to other
exchanges and market centers that are
connected to the Exchange’s network.
This communications or routing service
would not effect trade executions and
would not report trades to the relevant
Securities Information Processor. An
order sent via the service does not pass
through the Exchange’s matching engine
5 The term ‘‘Member’’ is defined as ‘‘any
registered broker or dealer, or any person associated
with a registered broker or dealer, that has been
admitted to membership in the Exchange. A
Member will have the status of a ‘‘member’’ of the
Exchange as that term is defined in Section 3(a)(3)
of the Act.’’ See Exchange Rule 1.5(n).
6 The Exchange’s affiliated exchanges are EDGA
Exchange, Inc. (‘‘EDGA’’), BATS Exchange, Inc.
(‘‘BATS’’), and BATS Y-Exchange, Inc. (‘‘BYX’’).
PO 00000
Frm 00064
Fmt 4703
Sfmt 4703
before going to a market center outside
of the Exchange (i.e., a participant could
choose to route an order directly to any
market center on the Exchange’s
network). A participant would be
responsible for identifying the
appropriate destination for any orders
sent through the service and for
ensuring that it had authority to access
the selected destination; the Exchange
would merely provide the connectivity
by which orders (and associated
messages) could be routed by a
participant to a destination and from the
destination back to the participant.7
The Exchange will charge a monthly
connectivity fee to Members utilizing
ConnectEdge to route orders to other
exchanges and broker-dealers that are
connected to the Exchange’s network.
The amount of the connectivity fee
varies based solely on the bandwidth
selected by the Member. Specifically,
the Exchange proposes to charge $350
for 1 Mb, $700 for 5 Mb, $950 for 10 Mb,
$1,500 for 25 Mb, $2,500 for 50 Mb, and
$3,500 for 100 Mb.
ConnectEdge would also allow
participants to receive market data feeds
from the exchanges connected to the
Exchange’s network. In such case, the
Member would pay the Exchange a
connectivity fee, which varies and is
based solely on the amount of
bandwidth required to transmit the
selected data product to the Member.
The proposed connectivity fees are set
forth in the Exhibit 5 attached hereto
and range from $100 to $3,500 based on
the market data product the vendor
selects. The Members would pay any
fees charged by the exchange providing
the market data feed directly to that
exchange.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with the
requirements of Section 6(b) of the Act,8
in general, and Section 6(b)(5) of the
Act,9 in particular, in that it promotes
just and equitable principles of trade,
removes impediments to, and perfect
the mechanism of, a free and open
market and a national market system,
and, in general, protects investors and
the public interest. Specifically, the
7 This service is an alternative to a service that the
Exchange already provides to its Members—current
order-sending Members route orders through access
provided by the Exchange to the Exchange that
either check the Exchange for available liquidity
and then route to other destinations or, in certain
circumstances, bypass the Exchange and route to
other destinations. See Exchange Rule 11.9(b)(2)
(setting forth routing options whereby Members
may select their orders be routed to other market
centers).
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
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Agencies
[Federal Register Volume 79, Number 239 (Friday, December 12, 2014)]
[Notices]
[Pages 73940-73942]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-29180]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73788; File No. SR-CBOE-2014-089]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Revise the Sales Value Fee
December 8, 2014.
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 November 25, 2014, 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, 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
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 (https://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
November 28, 2014. Specifically, the Exchange proposes to enable the
Exchange to collect the Sales Value Fee \3\ (the ``Fee'') directly from
Trading Permit Holders (``TPHs'') when the Fee is due pursuant to an
on-floor position transfer between unaffiliated TPHs. In addition, the
Exchange proposes to remove obsolete language related to the CBOE Stock
Exchange, LLC (``CBSX'').\4\ Finally, the Exchange proposes to remove
the regulatory review process related to the Position Transfer Fee.
---------------------------------------------------------------------------
\3\ Pursuant to Section 31 of the Securities Exchange Act of
1934, CBOE pays transaction fees to the SEC based on the volume of
securities that are executed on the Exchange. The Sales Value Fee is
the mechanism by which CBOE assesses the transaction fees to each
TPH.
\4\ Trading ended on CBSX on April 30, 2014. See Securities
Exchange Act Release No. 34-71880 (April 4, 2014) (Notice) (SR-CBOE-
2014-036).
---------------------------------------------------------------------------
Currently, the Sales Value Fee is collected indirectly from TPHs
through their clearing firms by OCC on behalf of CBOE. The OCC does not
collect the Fee when an on-floor position transfer \5\ takes place. The
Exchange is proposing to collect the Fee directly from TPHs when there
is an on-floor position transfer between unaffiliated TPHs. TPHs will
be considered affiliated if one of the TPHs has ``control'' under Rule
1.1(k) over another TPH.\6\
---------------------------------------------------------------------------
\5\ See Rule 6.49A.
\6\ The term ``affiliate'' of or a person ``affiliated with''
another person means a person who, directly or indirectly, controls,
is controlled by, or is under common control with, such other
person. See Rule 1.1(j).
The term ``control'' means the power to exercise a controlling
influence over the management or policies of a person, unless such
power is solely the result of an official position with such person.
Any person who owns beneficially, directly or indirectly, more than
20% of the voting power in the election of directors of a
corporation, or more than 25% of the voting power in the election of
directors of any other corporation which directly or through one or
more affiliates owns beneficially more than 25% of the voting power
in the election of directors of such corporation, shall be presumed
to control such corporation. See Rule 1.1(k).
---------------------------------------------------------------------------
In addition, the Fees Schedule currently indicates that the Fee is
assessed by CBOE to each TPH for the sale of securities when a sale in
non-option securities occurs on CBSX with respect to which CBOE is
obligated to pay a fee to the SEC under Section 31 of the Exchange Act
or a sell order in non-option securities that is routed for execution
at a market other than on CBSX, resulting in a covered sale on that
market and an obligation of the routing broker providing Routing
Services for CBSX to pay the related sales fee of that market. As noted
above, CBSX is no longer active; therefore, the Exchange proposes to
clarify that the Fee will be assessed by CBOE to TPHs for sales of
securities when a sale in option securities occurs with respect to
which CBOE is obligated to pay a fee to the SEC under Section 31 of the
Exchange Act or when a sell order in option securities is routed for
execution at a market other than CBOE, resulting in a covered sale on
that market and an obligation of the routing broker providing Routing
Services for CBOE, as described in CBOE Rule 6.14B, to pay the related
sales fee of that market.
Finally, the Exchange currently provides a service to TPHs seeking
to make an off-floor position transfer pursuant to Rule 6.49A whereby a
TPH can solicit CBOE to perform a ``regulatory review'' of the
potential transfer to determine whether the proposed transfer meets the
off-floor
[[Page 73941]]
position transfer provisions of Rule 6.49A. The Exchange currently
charges the initiating TPH a fee of $.02 per contract for the
``regulatory review'' with a cap of $25,000. The Exchange is proposing
to eliminate the ``regulatory review'' program, as well as the
associated fee.
The Exchange is seeking an effective date of November 28, 2014 in
order to sync the fee change with the CBOE billing cycle. For example,
position transfers that occur on Friday, November 28, 2014 will settle
on Monday, December 1, 2014. CBOE billing is applied upon settlement;
therefore, on-floor position transfers that are subject to a Sales
Value Fee that trade on November 28th will settle on December 1st and
be assessed the Sales Value Fee during the December billing cycle.
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.\7\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \8\ 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) \9\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. The Exchange also believes the proposed rule
change is consistent with Section 6(b)(4) of the Act,\10\ 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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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ Id.
\10\ 15 U.S.C. 78f(b)(4).
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In particular, the Exchange believes that the proposed
clarifications to the Fees Schedule will make the Fees Schedule easier
to read and alleviate potential confusion. The alleviation of potential
confusion will remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general,
protect investors and the public interest. The Fee allows the Exchange
to recoup transaction fees that the Exchange pays to the SEC pursuant
to Section 31 of the Securities Exchange Act, and the Exchange incurs
the Section 31 fees because of the trading activity of TPHs. Therefore,
the Exchange believes that it is reasonable and equitable to assess the
Fee to TPHs. Additionally, the Exchange does not believe the proposed
change is unfairly discriminatory as it applies equally to all TPHs
that are performing on-floor position transfers between unaffiliated
entities.
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. CBOE 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 changes apply to all TPHs. The Exchange
does not believe the proposed rule change will impose any burden on
intermarket competition because it only applies to position transfers
occurring on CBOE.
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 \11\ and paragraph (f) of Rule 19b-4 \12\
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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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-CBOE-2014-089 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.
All submissions should refer to File Number SR-CBOE-2014-089. 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 (https://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 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-CBOE-2014-089 and should be
submitted on or before January 2, 2015.
[[Page 73942]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-29180 Filed 12-11-14; 8:45 am]
BILLING CODE 8011-01-P