Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Alter Cancellation Fee, 56246-56248 [2011-23171]
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56246
Federal Register / Vol. 76, No. 176 / Monday, September 12, 2011 / Notices
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),15 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. NYSE has requested that the
Commission waive the 30-day delayed
operative date so that the proposed rule
change may take effect upon filing with
the Commission pursuant to Section
19(b)(3)(A) and Rule 19b–4(f)(6)
thereunder and also become operative
on the same date. NYSE believes that
the waiver of the 30-day operative delay
is consistent with the protection of
investors and the public interest
because the proposed change is of a
limited scope consistent with relief
currently applicable to foreign private
issuers and because it would facilitate a
prompt listing of securities on NYSE
that may otherwise be subject to
conflicts based on the listing company’s
home country law or regulation.16
The Commission has determined that
waiving the 30-day operative delay of
NYSE’s proposal is consistent with the
protection of investors and the public
interest because we concur with NYSE’s
assessment that the amendment is of a
limited scope consistent with relief
currently applicable to foreign private
issuers and that it would facilitate a
prompt listing of securities on NYSE
that may otherwise be subject to
conflicts based on the listing company’s
home country law or regulation.17
Accordingly, the Commission waives
the 30-day operative delay requirement
and designates the proposed rule change
to be operative upon filing with the
Commission.
At any time within sixty days of the
filing of such 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.
IV. Solicitation of Comments
mstockstill on DSK4VPTVN1PROD with NOTICES
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.
15 17
CFR 240.19b–4(f)(6)(iii).
16 NYSE’s justification for the waiver of the 30day operative delay was modified in part based on
a telephone call with John Carey, Chief Counsel,
NYSE, and Susan Petersen, Special Counsel,
Commission (September 2, 2011).
17 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
[Release No. 34–65268; File No. SR–CHX–
2011–25]
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml) or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2011–44 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–NYSE–2011–44. This file
number should be included on the
subject line if e-mail 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 Section, 100 F Street, NE.,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of such filings
also will be available for inspection and
copying at the principal office of NYSE
and on NYSE’s Web site, https://
www.nyse.com. 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–NYSE–
2011–44 and should be submitted on or
before October 3, 2011.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.18
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–23169 Filed 9–9–11; 8:45 am]
BILLING CODE 8011–01–P
18 17
PO 00000
Fmt 4703
September 6, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on August
25, 2011, the Chicago Stock Exchange,
Inc. (‘‘CHX’’ or ‘‘Exchange’’) 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.
CHX has filed the proposal pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(2) thereunder,4 which renders
the proposal effective upon filing with
the Commission. 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 CHX proposes to amend its
Schedule of Fees and Assessments (the
‘‘Fee Schedule’’), effective September 1,
2011, relating to its order cancellation
fee for Participants entering and
subsequently cancelling orders under
certain circumstances. The text of this
proposed rule change is available on the
Exchange’s Web site at https://
www.chx.com/rules/proposed_rules.htm
and in the Commission’s Public
Reference Room, 100 F Street, NE.,
Washington, DC 20549.
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
CHX included statements concerning
the purpose of and basis for the
proposed rule changes and discussed
any comments it received regarding the
proposal. The text of these statements
may be examined at the places specified
in Item IV below. The CHX has prepared
summaries, set forth in sections A, B
and C below, of the most significant
aspects of such statements.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(2).
2 17
CFR 200.30–3(a)(12).
Frm 00106
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Alter
Cancellation Fee
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Federal Register / Vol. 76, No. 176 / Monday, September 12, 2011 / Notices
mstockstill on DSK4VPTVN1PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Through this filing, the Exchange
proposes to amend its Fee Schedule,
effective September 1, 2011, to make
changes to its existing order
cancellation fee. This fee change is
being proposed to recoup some of the
costs of administering and processing
large numbers of cancelled orders while
fairly allocating costs among
Participants according to system use.
Beginning in January 2010, the
Exchange’s Fee Schedule imposed a
charge for order cancellations submitted
by Participants whose orders rarely are
at or near the National Best Bid or
Offering (‘‘NBBO’’).5 The purpose of the
order cancellation fee was to incent
Participants to submit orders which are
close to the NBBO (and are therefore
more likely to be executed) or
compensate the Exchange for the
systems and operational costs and
burdens associated with handling and
recording orders which rarely execute.
After the imposition of the order
cancellation fee, however, the Exchange
observed that the number of unexecuted
and displayed orders had actually
increased for certain Participants. In
order to avoid application of the
cancellation fee, certain Participants
were submitting Quotable orders (i.e.,
those within 2 cents of the NBBO) to the
CHX’s Matching System, but for an
extremely short duration (e.g., 20
milliseconds). The Exchange observed
that those firms entering the limited
durational orders conducted much of
their business on our trading facilities in
Exchange Traded Funds (‘‘ETFs’’),
Exchange Traded Notes (‘‘ETNs’’) or
Exchange Traded Vehicles (‘‘ETVs’’),
collectively referred to as Exchange
Traded Products (‘‘ETPs’’). Therefore, in
August, 2010 the Exchange amended its
order cancellation fee to exempt ETPs.6
Since the imposition of the order
cancellation fee, and subsequent
exemption of ETPs, the Exchange has
observed that certain Participants have
found a number of methods for avoiding
the application of the order cancellation
fee. For example, certain Participants
submit Quotable orders to the CHX’s
Matching System in non-ETPs, but for
an extremely short duration. In other
cases, Participants submit a large
5 See, SR–CHX–2010–02, Exchange Act. Rel. No.
34–61392 (January 21, 2010), 75 FR 4436 (Jan. 27,
2010).
6 See, SR–CHX–2010–19, Exchange Act. Rel. No.
34–62642 (August 4, 2010), 75 FR 48404 (August
10, 2010).
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16:36 Sep 09, 2011
Jkt 223001
number of Quotable orders in very
thinly traded securities prior to the end
of the month. These and other methods
utilized affect the calculated ratio for a
given Participant and therefore the
applicability of the order cancellation
fee but rarely result in executions.
In order to recoup some of the costs
of administering and processing large
numbers of cancelled orders, the
Exchange is proposing to alter the
methodology it uses in determining
whether the order cancellation fee
would be imposed upon a given
Participant.
In determining whether the order
cancellation fee would be imposed upon
a given Participant, the Exchange would
utilize a formula, calculated on a daily
basis, that divides the Participant’s total
cancelled volume in a given issue
(‘‘cvissue’’) by the Participant’s total
executed volume in that issue
(‘‘exvissue’’). In those instances where a
Participant’s daily statistic in a given
issue exceeds 30, the Exchange would
impose an order cancellation fee of $.30
on each cancellation in that issue for
that day. The Exchange proposes to
calculate and impose order cancellation
fees by Participant, by issue, by day, and
bill such fees on a monthly basis. The
Exchange believes that this
methodology is less subject to
manipulation and will allow the
Exchange to recoup some of the costs of
administering and processing large
numbers of cancelled orders while fairly
allocating costs among Participants
according to system use.
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. The
Exchange believes that amendments to
the order cancellation fee described
herein should help to recoup some of
the costs of administering and
processing large numbers of cancelled
orders while fairly allocating costs
among Participants according to system
use. Furthermore, these changes to the
Fee Schedule would equitably allocate
reasonable fees among Participants in a
non-discriminatory manner by properly
imposing fees on those Participants
which excessively enter and
subsequently cancel orders while not
7 15
8 15
PO 00000
U.S.C. 78f.
U.S.C. 78f(b)(4).
Frm 00107
Fmt 4703
imposing fees on Participants that do
not engage in this resource draining
behavior.
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.
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.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The proposed rule change is to take
effect pursuant to Section 19(b)(3)(A)(ii)
of the Act 9 and subparagraph (f)(2) of
Rule 19b–4 thereunder 10 because it
establishes or changes a due, fee or
other charge applicable to the
Exchange’s members and non-members,
which renders the proposed rule change
effective upon filing.
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.
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 e-mail to rulecomments@sec.gov. Please include File
Number SR–CHX–2011–25 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–2011–25. This file
9 15
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
10 17
Sfmt 4703
56247
E:\FR\FM\12SEN1.SGM
12SEN1
56248
Federal Register / Vol. 76, No. 176 / Monday, September 12, 2011 / Notices
number should be included on the
subject line if e-mail 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
a.m. and 3 p.m. Copies of such filing
will also 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 No. SR–CHX–2011–
25 and should be submitted on or before
October 3, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–23171 Filed 9–9–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65269; File No. SR–CHX–
2011–26]
mstockstill on DSK4VPTVN1PROD with NOTICES
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Remove
its Tiered Schedule of Fees and
Rebates and To Lower or Remove
Certain Rebates
September 6, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on August
25, 2011, the Chicago Stock Exchange,
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
Inc. (‘‘CHX’’ or ‘‘Exchange’’) 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.
CHX has filed the proposal pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(2) thereunder,4 which renders
the proposal effective upon filing with
the Commission. 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 CHX proposes to amend its
Schedule of Fees and Assessments (the
‘‘Fee Schedule’’), effective September 1,
2011, to remove its tiered schedule of
fees and rebates and lower or remove
certain rebates. The text of this
proposed rule change is available on the
Exchange’s website at https://
www.chx.com/rules/proposed_rules.htm
and in the Commission’s Public
Reference Room, 100 F Street, NE.,
Washington, DC 20549.
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
CHX included statements concerning
the purpose of and basis for the
proposed rule changes and discussed
any comments it received regarding the
proposal. The text of these statements
may be examined at the places specified
in Item IV below. The CHX 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
Through this filing, the Exchange
proposes to amend its Schedule of Fees
and Assessments (the ‘‘Fee Schedule’’),
effective September 1, 2011, to remove
its tiered fee and rebate structure for
Participants for trade executions of
single-sided orders in securities priced
over one dollar during the regular
trading session and to lower or remove
certain rebates. These fee changes are
being proposed to simplify the
Exchange’s Fee Schedule and increase
revenue to the Exchange.
11 17
1 15
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3 15
4 17
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PO 00000
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
Frm 00108
Fmt 4703
Sfmt 4703
In January, 2010, the Exchange
introduced a tiered schedule of fees and
rebates according to which the fee
imposed on Participants for removing
liquidity from the Matching System (the
‘‘take fee’’) or credit given to
Participants which display orders in the
Matching System which result in trade
executions (the ‘‘provide credit’’) varied
depending on the executing
Participant’s Average Daily Volume
(‘‘ADV’’).5 A Participant’s ADV is
determined by the number of shares it
has executed as a liquidity provider in
any and all trading sessions on average
per trading day (excluding partial
trading days) across all tapes on the
trading facilities of the CHX (excluding
all cross transactions) for the calendar
month in which the executions
occurred. Under this tiered schedule,
there were three volume-based Tiers
and the rate of applicable take fees and
provide credits varied based upon the
Tier into which a Participant falls.
In August, 2010, the Exchange altered
its tiered Fee Schedule to delete those
provisions which varied the take fee
based upon the Participant’s ADV and
imposed a flat take fee of $0.003/share
across all Tapes.6 The Exchange also
reduced the provide credit for
executions in Tape A & C securities
from $0.0026/share to $0.0025/share for
the lowest Tier of activity, from
$0.0028/share to $0.0027/share in the
middle Tier and from $0.003/share to
$0.0029/share in the highest Tier. For
Tape B securities, the provide credit
was reduced from $0.0028/share to
$0.0026/share in the lowest Tier, from
$0.003/share to $0.0028/share in the
middle Tier and from $0.0032/share to
$0.0031/share in the highest Tier. The
flat provide credit paid to CHXregistered Institutional Brokers when
they represent agency orders which
execute in the CHX Matching System in
Tape B securities was also reduced from
$0.0032 to $0.0031/share.
According to this proposal, the
Exchange would delete those provisions
of the Fee Schedule which vary the
provide credit based upon the
Participant’s ADV. In its place, the
Exchange proposes to remove the
provide credit for executions in Tape A
& C securities during the regular trading
session and, for Tape B securities, the
provide credit would be reduced to
$0.0022/share. The flat provide credit
5 Through its filing on January 4, 2010, the
Exchange instituted a tiered fee and rebate structure
based on a Participant’s ADV. See, SR–CHX–2010–
01, Exchange Act. Rel. No. 34–61322 (January 11,
2010), 75 FR 2914 (Jan. 19, 2010).
6 See, SR–CHX–2010–18, Exchange Act. Rel. No.
34–62650 (August 4, 2010), 75 FR 48397 (August
10, 2010).
E:\FR\FM\12SEN1.SGM
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]]>Agencies
[Federal Register Volume 76, Number 176 (Monday, September 12, 2011)]
[Notices]
[Pages 56246-56248]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-23171]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65268; File No. SR-CHX-2011-25]
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Alter Cancellation Fee
September 6, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 25, 2011, the Chicago Stock Exchange, Inc. (``CHX'' or
``Exchange'') 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. CHX has
filed the proposal pursuant to Section 19(b)(3)(A) of the Act \3\ and
Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal effective
upon filing with the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The CHX proposes to amend its Schedule of Fees and Assessments (the
``Fee Schedule''), effective September 1, 2011, relating to its order
cancellation fee for Participants entering and subsequently cancelling
orders under certain circumstances. The text of this proposed rule
change is available on the Exchange's Web site at https://www.chx.com/rules/proposed_rules.htm and in the Commission's Public Reference
Room, 100 F Street, NE., Washington, DC 20549.
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 CHX included statements
concerning the purpose of and basis for the proposed rule changes and
discussed any comments it received regarding the proposal. The text of
these statements may be examined at the places specified in Item IV
below. The CHX has prepared summaries, set forth in sections A, B and C
below, of the most significant aspects of such statements.
[[Page 56247]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Through this filing, the Exchange proposes to amend its Fee
Schedule, effective September 1, 2011, to make changes to its existing
order cancellation fee. This fee change is being proposed to recoup
some of the costs of administering and processing large numbers of
cancelled orders while fairly allocating costs among Participants
according to system use.
Beginning in January 2010, the Exchange's Fee Schedule imposed a
charge for order cancellations submitted by Participants whose orders
rarely are at or near the National Best Bid or Offering (``NBBO'').\5\
The purpose of the order cancellation fee was to incent Participants to
submit orders which are close to the NBBO (and are therefore more
likely to be executed) or compensate the Exchange for the systems and
operational costs and burdens associated with handling and recording
orders which rarely execute. After the imposition of the order
cancellation fee, however, the Exchange observed that the number of
unexecuted and displayed orders had actually increased for certain
Participants. In order to avoid application of the cancellation fee,
certain Participants were submitting Quotable orders (i.e., those
within 2 cents of the NBBO) to the CHX's Matching System, but for an
extremely short duration (e.g., 20 milliseconds). The Exchange observed
that those firms entering the limited durational orders conducted much
of their business on our trading facilities in Exchange Traded Funds
(``ETFs''), Exchange Traded Notes (``ETNs'') or Exchange Traded
Vehicles (``ETVs''), collectively referred to as Exchange Traded
Products (``ETPs''). Therefore, in August, 2010 the Exchange amended
its order cancellation fee to exempt ETPs.\6\
---------------------------------------------------------------------------
\5\ See, SR-CHX-2010-02, Exchange Act. Rel. No. 34-61392
(January 21, 2010), 75 FR 4436 (Jan. 27, 2010).
\6\ See, SR-CHX-2010-19, Exchange Act. Rel. No. 34-62642 (August
4, 2010), 75 FR 48404 (August 10, 2010).
---------------------------------------------------------------------------
Since the imposition of the order cancellation fee, and subsequent
exemption of ETPs, the Exchange has observed that certain Participants
have found a number of methods for avoiding the application of the
order cancellation fee. For example, certain Participants submit
Quotable orders to the CHX's Matching System in non-ETPs, but for an
extremely short duration. In other cases, Participants submit a large
number of Quotable orders in very thinly traded securities prior to the
end of the month. These and other methods utilized affect the
calculated ratio for a given Participant and therefore the
applicability of the order cancellation fee but rarely result in
executions.
In order to recoup some of the costs of administering and
processing large numbers of cancelled orders, the Exchange is proposing
to alter the methodology it uses in determining whether the order
cancellation fee would be imposed upon a given Participant.
In determining whether the order cancellation fee would be imposed
upon a given Participant, the Exchange would utilize a formula,
calculated on a daily basis, that divides the Participant's total
cancelled volume in a given issue (``cvissue'') by the Participant's
total executed volume in that issue (``exvissue''). In those instances
where a Participant's daily statistic in a given issue exceeds 30, the
Exchange would impose an order cancellation fee of $.30 on each
cancellation in that issue for that day. The Exchange proposes to
calculate and impose order cancellation fees by Participant, by issue,
by day, and bill such fees on a monthly basis. The Exchange believes
that this methodology is less subject to manipulation and will allow
the Exchange to recoup some of the costs of administering and
processing large numbers of cancelled orders while fairly allocating
costs among Participants according to system use.
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. The Exchange believes
that amendments to the order cancellation fee described herein should
help to recoup some of the costs of administering and processing large
numbers of cancelled orders while fairly allocating costs among
Participants according to system use. Furthermore, these changes to the
Fee Schedule would equitably allocate reasonable fees among
Participants in a non-discriminatory manner by properly imposing fees
on those Participants which excessively enter and subsequently cancel
orders while not imposing fees on Participants that do not engage in
this resource draining behavior.
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\7\ 15 U.S.C. 78f.
\8\ 15 U.S.C. 78f(b)(4).
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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.
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.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change is to take effect pursuant to Section
19(b)(3)(A)(ii) of the Act \9\ and subparagraph (f)(2) of Rule 19b-4
thereunder \10\ because it establishes or changes a due, fee or other
charge applicable to the Exchange's members and non-members, which
renders the proposed rule change effective upon filing.
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
\10\ 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.
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 e-mail to rule-comments@sec.gov. Please include
File Number SR-CHX-2011-25 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-2011-25. This file
[[Page 56248]]
number should be included on the subject line if e-mail 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
a.m. and 3 p.m. Copies of such filing will also 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 No. SR-CHX-2011-25 and should be
submitted on or before October 3, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-23171 Filed 9-9-11; 8:45 am]
BILLING CODE 8011-01-P
