Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule, 60738-60741 [2012-24493]

Download as PDF 60738 Federal Register / Vol. 77, No. 193 / Thursday, October 4, 2012 / Notices Commission believes that it is consistent with the Act to allow the listing of the proposed mini options for all expirations applicable to full-sized options in each class. The Commission believes that other aspects of the proposals are also consistent with the Act. Specifically, the Commission believes that, because each mini option would represent a deliverable of 10 shares of an underlying security, as opposed to 100 shares (i.e., the deliverable for a standard-sized option is ten times the deliverable of a mini option), the proposed position limit rules for mini options, which state that ten mini options contracts shall equal one standard contract, are appropriate and consistent with the Act.52 Further, the Commission believes that the proposed use of different trading symbols for mini options is consistent with the Act because it should help investors and other market participants distinguish mini options from the corresponding standard options.53 In addition, the Commission believes that the proposed treatment of strike prices 54 and bids and offers 55 for mini options is consistent with the Act, as these amendments should make clear how mini options would be quoted and traded. As national securities exchanges, each of the Exchanges is required, under Section 6(b)(1) of the Act,56 to enforce compliance by its members and persons associated with its members with the provisions of the Act, Commission rules and regulations thereunder, and its own rules. In this regard, the Commission notes that the Exchanges’ rules that apply to the trading of standard options would apply to mini options. The Commission also notes that the Exchanges’ existing market maker emcdonald on DSK67QTVN1PROD with NOTICES 52 See NYSE Arca Rule 6.8, Commentary .08 and ISE Rule 412, Supplementary Material .03. The Commission notes that, according to ISE Rule 412, Supplementary Material .03, positions in mini options are aggregated with positions in regularsized options overlying the same security. Further, according to NYSE Arca Rule 6.8, in determining compliance with relevant position limits, NYSE Arca considers: (1) An aggregate long position in any class of options; (2) an aggregate short position in any class of options; (3) an aggregate position on the same side of the market in the same underlying stock, which position shall be ascertained by combining long call options with short put options and short call options with long put options; or (4) an aggregate uncovered short position in any class of options. 53 See supra note 15 and accompanying text. 54 See NYSE Arca Rule 6.4, Commentary .14(b) and ISE Rule 504, Supplementary Material .12(b). 55 See NYSE Arca Rule 6.71(c) and ISE Rule 709(c). The Commission also believes that NYSE Arca’s proposal to delete references to ‘‘ExchangeTraded Fund Share’’ in NYSE Arca Rule 6.71 is consistent with the Act. 56 15 U.S.C. 78f(b)(1). VerDate Mar<15>2010 15:21 Oct 03, 2012 Jkt 229001 quoting obligations would apply to mini options.57 In addition, the Commission notes that intermarket trade-through protection would apply to mini options to the extent that they are traded on more than one market. Accordingly, for the reasons stated above, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act,58 for approving the Exchanges’ proposals, as modified by Amendments No. 1, prior to the 30th day after the date of publication of the notices in the Federal Register. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule changes are 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 rulecomments@sec.gov. Please include File Numbers SR–NYSEArca–2012–64 and SR–ISE–2012–58 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 Numbers SR–NYSEArca–2012–64 and SR–ISE–2012–58. These file numbers 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 submissions, all subsequent amendments, all written statements with respect to the proposed rule changes that are filed with the Commission, and all written communications relating to the proposed rule changes 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 the filings also will be available for inspection and copying at the principal offices of the Exchanges. 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 Numbers SR– NYSEArca–2012–64 and SR–ISE–2012– 58 and should be submitted on or before October 25, 2012. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,59 that the proposed rule changes (SR–NYSEArca– 2012–64; SR–ISE–2012–58), as modified by Amendments No. 1, be, and hereby are, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.60 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–24457 Filed 10–3–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–67946; File No. SR–CBOE– 2012–080] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule September 28, 2012. 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 September 18, 2012, 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. 59 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 60 17 57 See 58 15 PO 00000 NYSE Arca Rule 6.37B and ISE Rule 804. U.S.C. 78s(b)(2). Frm 00068 Fmt 4703 Sfmt 4703 E:\FR\FM\04OCN1.SGM 04OCN1 Federal Register / Vol. 77, No. 193 / Thursday, October 4, 2012 / Notices I. Self-Regulatory Organization’s Statement of the Terms of the 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. emcdonald on DSK67QTVN1PROD with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to revamp the appearance of its Fees Schedule in order to make it easier for investors to read and determine which fees are applicable to the variety of transactions available on CBOE. No substantive changes to the Fees Schedule, or any Exchange fees, are being made. All information that is proposed to appear in the new version of the Fees Schedule (the ‘‘New Fees Schedule’’) already appears in one form or another on the Exchange’s previous version of the Fees Schedule (the ‘‘Old Fees Schedule’’). In conjunction with this proposed reorganization of the Fees Schedule, some items are being moved within the Fees Schedule and clarifications are being given. Currently, broker-dealer transaction fees apply to, among others, the orders of non-Trading Permit Holder market-makers.3 However, this is currently only explained in Footnote (16), and therefore in Section 1 of the Old Fees Schedule, which lists the actual transaction fees, there is no separate listing of fees for non-Trading Permit Holder market-makers (only broker dealers). The proposed new transaction fees chart lists out nonTrading Permit Holder market-maker 3 See CBOE Fees Schedule, Footnote (16). VerDate Mar<15>2010 15:21 Oct 03, 2012 Jkt 229001 transaction fees separate from brokerdealer transaction fees (the amounts of the fees will remain the same) in order to make it easier for non-Trading Permit Holder market-makers to know which transaction fees apply to them. Because non-Trading Permit Holder marketmaker fees will now be listed separately from broker-dealer fees (even though the amounts of the fees are the same), Footnotes (13), (19), and (20), which all state that they apply to broker-dealers, are now being amended to clarify that they apply to non-Trading Permit Holder market-makers as well (just as they did prior to this proposed change). The statement in Footnote (16) that ‘‘Broker-Dealer transaction fees apply to * * * non-Trading Permit Holder market-maker orders’’ is not being changed, as while the fees for nonTrading Permit Holder market-maker orders are now listed separately, the amounts of such fees are not changing. The Exchange also proposes adding origin codes into the New Fees Schedule. Origin codes are used on each order sent to the Exchange to denote the type of market participant sending the order.4 Because these origin codes are affixed to orders sent to the Exchange by market participants, the Exchange proposes adding them to the New Fees Schedule in order to more easily determine which fees correspond to orders originating from these different market participants. In SR–CBOE–2012–075, the Exchange proposed to change references in its Fees Schedule to options on the PowerShares QQQ Trust, whose ticker symbol changed from QQQQ to QQQ.5 However, in that rule filing, the Exchange failed to change a reference to QQQQ in the Fees Schedule’s section entitled Trading Permit Holder Transaction Fee Policies and Rebate Programs—Trading Permit Holder Transaction Fees—Equity and Index Options. The Exchange hereby proposes to change that reference from QQQQ to QQQ. In re-organizing the Fees Schedule, the Exchange added Footnotes (21)–(27) to the New Fees Schedule. The text of these Footnotes was transferred from various sections within the Old Fees Schedule. Footnote (21) of the New Fees Schedule is composed of text from Section 7 of the Old Fees Schedule. Footnote (22) of the New Fees Schedule is composed of text from the Clearing Trading Permit Holder Fee Cap in All 4 See CBOE Regulatory Circular RG12–057 (April 26, 2012) for a list of all CBOE origin codes. 5 See Securities Exchange Act Release No. 67557 (August 1, 2012), 77 FR 47148 (August 7, 2012) (SR–CBOE–2012–075). PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 60739 Products Except SPX, VIX or Other Volatility Indexes, OEX or XEO portion of Section 1 of the Old Fees Schedule. Footnote (23) of the New Fees Schedule is composed of text from the CBOE Proprietary Products Sliding Scale portion of Section 1 of the Old Fees Schedule. Footnote (24) of the New Fees Schedule is composed of text from Section 10(A)(i) of the Old Fees Schedule. Footnote (25) of the New Fees Schedule is composed of text from Section 10(A)(iv) of the Old Fees Schedule. Footnote (26) of the New Fees Schedule is composed of text from the portion of Section 10(A) entitled ‘‘Assessment of Trading Permit and Tier Appointment Fees’’ of the Old Fees Schedule. Footnote (27) of the New Fees Schedule is composed of text from Section 18 of the Old Fees Schedule. Other changes were made to references within the Footnotes. Footnote (2) previously said ‘‘Please see item 18 for details of Customer Large Trade Discounts.’’ However, there is no longer an ‘‘item 18’’ but instead just a separate table regarding Customer Large Trade Discounts, and a new Footnote (27) with details of Customer Large Trade Discounts, so Footnote (2) now says ‘‘Please see Customer Large Trade Discounts table and footnote 27 for details of Customer Large Trade Discounts’’ instead. Footnote (3) previously stated that ‘‘Trading Permit Holder transaction fee policies and rebate programs are described in the last section.’’ However, this is no longer true, as the sections have been moved around, and there is now a table regarding Trading Permit Holder transaction fee policies and rebate programs. Instead, Footnote (3) now says ‘‘Trading Permit Holder transaction fee policies and rebate programs are described in the Trading Permit Holder Transaction Fee Policies and Rebate Programs Table.’’ In both of the Index Options Rate Tables in the New Fees Schedule, the ‘‘QCC’’ field is blacked out. This is because a QCC (qualified contingent cross) trade cannot be made on a cashsettled index (for QCCs, options must be tied to a physically deliverable Regulation NMS security). The Old Fees Schedule listed possible fees for QCCs because the section on index options fees also included fees for exchangetraded funds (‘‘ETFs’’), on which QCCs can be executed. Because the New Fees Schedule has separate tables for index options and ETFs, the Index Options Rate Tables in the New Fees Schedule has the ‘‘QCC’’ field blacked out. The Old Fees Schedule lists the AIM Agency/Primary fee and the AIM Contra Execution fee in the section that lists E:\FR\FM\04OCN1.SGM 04OCN1 emcdonald on DSK67QTVN1PROD with NOTICES 60740 Federal Register / Vol. 77, No. 193 / Thursday, October 4, 2012 / Notices index options because that section includes fees for proprietary and nonproprietary index options (as well as other products, including ETFs). The only proprietary index option class on which AIM (the Exchange’s Automated Improvement Mechanism) is available is VIX options. Therefore, since the New Fees Schedule has a separate table for proprietary index options (the Proprietary Index Options Rate Table), the listing in that table for the AIM Agency/Primary fee and the AIM Contra Execution fee clarifies that it only applies to VIX options. Professionals and Voluntary Professionals are billed in SPX as Customers because SPX is the only class that trades on the Exchange’s Hybrid 3.0 platform, and the classifications as a Professional and Voluntary Professional do not have applicability in Hybrid 3.0 classes. As such, in the Old Fees Schedule, there were no fees listed for Professional and Voluntary Professional SPX trades. The New Fees Schedule, however, lists the SPX fees for Professional and Voluntary Professional (with such fees being the same as Customer SPX fees, both for trades above and below $1) in order to clarify the fees for Professional and Voluntary Professional SPX trades. There is no change occurring in the amounts of the fees for Professional and Voluntary Professional SPX trades (or anywhere else in this proposed rule change). In the Old Fees Schedule, there are no separate listings for VIX options transactions; as a Volatility Index, VIX is simply included by implication in the listings of fees for Volatility Indexes. The Proprietary Index Options Rate Table in the New Fees Schedule lists VIX options fees separately to make VIX options fees more clearly apparent; the amounts of the fees for VIX options transactions are not changing and will still be the same as those for Volatility Indexes. In the Old Fees Schedule, Customer fees for transactions in SPX Weeklys (‘‘SPXW’’) are not separately spelled out, as SPXW falls within the universe of SPX transactions. However, because SPXW is a product that has experienced a growth in trading volume, the Exchange proposes to separately list the fees for SPXW Customer transactions as well as the Surcharge Fee. The amount of the fees for SPXW Customer transactions and the Surcharge Fee is not changing. The Exchange has made a universal change to the New Fees Schedule to remove any references in the Old Fees Schedule to fees being listed in a ‘‘table below’’ or similar language when such VerDate Mar<15>2010 15:21 Oct 03, 2012 Jkt 229001 language no longer applies (i.e. the table is no longer below). or otherwise in furtherance of the purposes of the Act. 2. Statutory Basis IV. Solicitation of Comments The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.6 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 7 requirements that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, to remove impediments to and to perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. In organizing the Fees Schedule in charts that are easy for investors to read and grouping together fees that apply to certain market participants into the same subsections and charts, the Exchange eliminates confusion regarding fees, thereby removing impediments to and to perfecting the mechanism for a free and open market, and, in general, protecting investors and the public interest. 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: 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. 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) 8 of the Act and paragraph (f) of Rule 19b–4 9 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, 6 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 8 15 U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b–4(f). 7 15 PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–CBOE–2012–080 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–CBOE–2012–080. 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 a.m. and 3 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– 2012–080, and should be submitted on or before October 25, 2012. E:\FR\FM\04OCN1.SGM 04OCN1 Federal Register / Vol. 77, No. 193 / Thursday, October 4, 2012 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–24493 Filed 10–3–12; 8:45 am] Dated: October 1, 2012. Patrick F. Kennedy, Under Secretary of State for Management, Department of State. [FR Doc. 2012–24504 Filed 10–3–12; 8:45 am] BILLING CODE 4710–35–P BILLING CODE 8011–01–P DEPARTMENT OF STATE DEPARTMENT OF STATE [Public Notice 8052] [Public Notice 8049] Convening of an Accountability Review Board To Examine the Circumstances Surrounding the Deaths of Personnel Assigned in Support of the U.S. Government Mission to Libya in Benghazi, Libya on September 11, 2012 In the Matter of the Designation of the Mujahadin-e Khalq, Also Known as MEK, Also Known as Mujahadin-e Khalq Organization, Also Known as MKO, Also Known as Muslim Iranian Students’ Society, Also Known as National Council of Resistance, Also Known as NCR, Also Known as Organization of the People’s Holy Warriors of Iran, Also Known as the National Liberation Army of Iran, Also Known as NLA, Also Known as People’s Mujahadin Organization of Iran, Also Known as PMOI, Also Known as National Council of Resistance of Iran, Also Known as NCRI, Also Known as Sazeman-e Mujahadin-e Khalq-e Iran, as a Foreign Terrorist Organization Pursuant to Section 219 of the Immigration and Nationality Act, as Amended Pursuant to Section 301 of the Omnibus Diplomatic Security and Antiterrorism Act of 1986, as amended (22 U.S.C. 4831 et seq.), Secretary of State Hillary Rodham Clinton has determined that the recent deaths of Ambassador J. Christopher Stevens, Information Management Officer Sean Smith, and security personnel Glen Doherty and Tyrone Woods in Benghazi, Libya involved loss of life at or related to a U.S. mission abroad. Therefore, Secretary Clinton has convened an Accountability Review Board, as required by that statute, to examine the facts and circumstances of the attacks and to report findings and recommendations as it deems appropriate, in keeping with its mandate. The Secretary has appointed Thomas Pickering, a retired U.S. ambassador, as Chair of the Board. He will be assisted by Admiral Michael G. Mullen, Ms. Catherine Bertini, Mr. Richard J. Shinnick, and Mr. Hugh J. Turner III. They bring to their deliberations distinguished backgrounds in government service. If you are contacted for an interview by the Board, please give them your full and prompt cooperation. The Board will submit its conclusions and recommendations to Secretary Clinton within 60 days of its first meeting, unless the Chair determines a need for additional time. Within the timeframe required by statute following receipt of the report, the Department will report to Congress on all recommendations made by the Board and any actions undertaken in response to those recommendations. Anyone with information relevant to the Board’s examination of these incidents should contact the Board promptly at (202) 647–6246 or send a fax to the Board at (202) 647–6640. emcdonald on DSK67QTVN1PROD with NOTICES SUMMARY: 10 17 In consultation with the Attorney General and the Secretary of the Treasury, I hereby revoke the designation of the Mujahadin-e Khalq, and its aliases, as a Foreign Terrorist Organization pursuant to Section 219 (a)(6)(A) of the Immigration and Nationality Act, as amended (8 U.S.C. 1189(a)(6)(A)). This action takes effect September 28, 2012. This determination shall be published in the Federal Register. 15:21 Oct 03, 2012 Jkt 229001 DEPARTMENT OF STATE [Public Notice 8050] In the Matter of the Designation of Mujahadin-e Khalq, Also Known as MEK, Also Known as Mujahadin-e Khalq Organization, Also Known as MKO, Also Known as Muslim Iranian Students’ Society, Also Known as National Council of Resistance, Also Known as NCR, Also Known as Organization of the People’s Holy Warriors of Iran, Also Known as the National Liberation Army of Iran, Also Known as NLA, Also Known as People’s Mujahadin Organization of Iran, Also Known as PMOI, Also Known as National Council of Resistance of Iran, Also Known as NCRI, Also Known as Sazeman-e Mujahadin-e Khalq-e Iran, as a Specially Designated Global Terrorist Pursuant to Section 1(b) of Executive Order 13224, as Amended Acting under the authority of Section 1(b) of Executive Order 13224 of September 23, 2001, as amended (‘‘the Order’’), I hereby revoke the designation of the entity known as the Mujahadine Khalq, and its aliases, as a Specially Designated Global Terrorist pursuant to Section 1(b) of the Order. This action takes effect September 28, 2012. This notice shall be published in the Federal Register. Dated: September 21, 2012. Hillary Rodham Clinton, Secretary of State. [FR Doc. 2012–24507 Filed 10–3–12; 8:45 am] BILLING CODE 4710–10–P TENNESSEE VALLEY AUTHORITY Meeting of the Regional Resource Stewardship Council Tennessee Valley Authority (TVA). ACTION: Notice of meeting. Dated: September 21, 2012. Hillary Rodham Clinton, Secretary of State. AGENCY: [FR Doc. 2012–24505 Filed 10–3–12; 8:45 am] SUMMARY: BILLING CODE 4710–10–P CFR 200.30–3(a)(12). VerDate Mar<15>2010 60741 PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 The TVA Regional Resource Stewardship Council (RRSC) will hold a meeting on Monday, October 22, and Tuesday, October 23, 2012, to obtain views and advice on the topic of a proposed fee increase for permits issued by TVA pursuant to Section 26a of the TVA Act. The RRSC was established to advise TVA on its natural resource stewardship activities. Notice of this meeting is given under the Federal Advisory Committee Act (FACA), 5 U.S.C. App. 2. The meeting agenda includes the following: 1. Introductions. E:\FR\FM\04OCN1.SGM 04OCN1

Agencies

[Federal Register Volume 77, Number 193 (Thursday, October 4, 2012)]
[Notices]
[Pages 60738-60741]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-24493]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67946; File No. SR-CBOE-2012-080]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend the Fees Schedule

 September 28, 2012.
    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 September 18, 2012, 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.

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[[Page 60739]]

I. Self-Regulatory Organization's Statement of the Terms of the 
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 revamp the appearance of its Fees Schedule 
in order to make it easier for investors to read and determine which 
fees are applicable to the variety of transactions available on CBOE. 
No substantive changes to the Fees Schedule, or any Exchange fees, are 
being made. All information that is proposed to appear in the new 
version of the Fees Schedule (the ``New Fees Schedule'') already 
appears in one form or another on the Exchange's previous version of 
the Fees Schedule (the ``Old Fees Schedule'').
    In conjunction with this proposed re-organization of the Fees 
Schedule, some items are being moved within the Fees Schedule and 
clarifications are being given. Currently, broker-dealer transaction 
fees apply to, among others, the orders of non-Trading Permit Holder 
market-makers.\3\ However, this is currently only explained in Footnote 
(16), and therefore in Section 1 of the Old Fees Schedule, which lists 
the actual transaction fees, there is no separate listing of fees for 
non-Trading Permit Holder market-makers (only broker dealers). The 
proposed new transaction fees chart lists out non-Trading Permit Holder 
market-maker transaction fees separate from broker-dealer transaction 
fees (the amounts of the fees will remain the same) in order to make it 
easier for non-Trading Permit Holder market-makers to know which 
transaction fees apply to them. Because non-Trading Permit Holder 
market-maker fees will now be listed separately from broker-dealer fees 
(even though the amounts of the fees are the same), Footnotes (13), 
(19), and (20), which all state that they apply to broker-dealers, are 
now being amended to clarify that they apply to non-Trading Permit 
Holder market-makers as well (just as they did prior to this proposed 
change). The statement in Footnote (16) that ``Broker-Dealer 
transaction fees apply to * * * non-Trading Permit Holder market-maker 
orders'' is not being changed, as while the fees for non-Trading Permit 
Holder market-maker orders are now listed separately, the amounts of 
such fees are not changing.
---------------------------------------------------------------------------

    \3\ See CBOE Fees Schedule, Footnote (16).
---------------------------------------------------------------------------

    The Exchange also proposes adding origin codes into the New Fees 
Schedule. Origin codes are used on each order sent to the Exchange to 
denote the type of market participant sending the order.\4\ Because 
these origin codes are affixed to orders sent to the Exchange by market 
participants, the Exchange proposes adding them to the New Fees 
Schedule in order to more easily determine which fees correspond to 
orders originating from these different market participants.
---------------------------------------------------------------------------

    \4\ See CBOE Regulatory Circular RG12-057 (April 26, 2012) for a 
list of all CBOE origin codes.
---------------------------------------------------------------------------

    In SR-CBOE-2012-075, the Exchange proposed to change references in 
its Fees Schedule to options on the PowerShares QQQ Trust, whose ticker 
symbol changed from QQQQ to QQQ.\5\ However, in that rule filing, the 
Exchange failed to change a reference to QQQQ in the Fees Schedule's 
section entitled Trading Permit Holder Transaction Fee Policies and 
Rebate Programs--Trading Permit Holder Transaction Fees--Equity and 
Index Options. The Exchange hereby proposes to change that reference 
from QQQQ to QQQ.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 67557 (August 1, 
2012), 77 FR 47148 (August 7, 2012) (SR-CBOE-2012-075).
---------------------------------------------------------------------------

    In re-organizing the Fees Schedule, the Exchange added Footnotes 
(21)-(27) to the New Fees Schedule. The text of these Footnotes was 
transferred from various sections within the Old Fees Schedule. 
Footnote (21) of the New Fees Schedule is composed of text from Section 
7 of the Old Fees Schedule. Footnote (22) of the New Fees Schedule is 
composed of text from the Clearing Trading Permit Holder Fee Cap in All 
Products Except SPX, VIX or Other Volatility Indexes, OEX or XEO 
portion of Section 1 of the Old Fees Schedule. Footnote (23) of the New 
Fees Schedule is composed of text from the CBOE Proprietary Products 
Sliding Scale portion of Section 1 of the Old Fees Schedule. Footnote 
(24) of the New Fees Schedule is composed of text from Section 10(A)(i) 
of the Old Fees Schedule. Footnote (25) of the New Fees Schedule is 
composed of text from Section 10(A)(iv) of the Old Fees Schedule. 
Footnote (26) of the New Fees Schedule is composed of text from the 
portion of Section 10(A) entitled ``Assessment of Trading Permit and 
Tier Appointment Fees'' of the Old Fees Schedule. Footnote (27) of the 
New Fees Schedule is composed of text from Section 18 of the Old Fees 
Schedule.
    Other changes were made to references within the Footnotes. 
Footnote (2) previously said ``Please see item 18 for details of 
Customer Large Trade Discounts.'' However, there is no longer an ``item 
18'' but instead just a separate table regarding Customer Large Trade 
Discounts, and a new Footnote (27) with details of Customer Large Trade 
Discounts, so Footnote (2) now says ``Please see Customer Large Trade 
Discounts table and footnote 27 for details of Customer Large Trade 
Discounts'' instead. Footnote (3) previously stated that ``Trading 
Permit Holder transaction fee policies and rebate programs are 
described in the last section.'' However, this is no longer true, as 
the sections have been moved around, and there is now a table regarding 
Trading Permit Holder transaction fee policies and rebate programs. 
Instead, Footnote (3) now says ``Trading Permit Holder transaction fee 
policies and rebate programs are described in the Trading Permit Holder 
Transaction Fee Policies and Rebate Programs Table.''
    In both of the Index Options Rate Tables in the New Fees Schedule, 
the ``QCC'' field is blacked out. This is because a QCC (qualified 
contingent cross) trade cannot be made on a cash-settled index (for 
QCCs, options must be tied to a physically deliverable Regulation NMS 
security). The Old Fees Schedule listed possible fees for QCCs because 
the section on index options fees also included fees for exchange-
traded funds (``ETFs''), on which QCCs can be executed. Because the New 
Fees Schedule has separate tables for index options and ETFs, the Index 
Options Rate Tables in the New Fees Schedule has the ``QCC'' field 
blacked out.
    The Old Fees Schedule lists the AIM Agency/Primary fee and the AIM 
Contra Execution fee in the section that lists

[[Page 60740]]

index options because that section includes fees for proprietary and 
non-proprietary index options (as well as other products, including 
ETFs). The only proprietary index option class on which AIM (the 
Exchange's Automated Improvement Mechanism) is available is VIX 
options. Therefore, since the New Fees Schedule has a separate table 
for proprietary index options (the Proprietary Index Options Rate 
Table), the listing in that table for the AIM Agency/Primary fee and 
the AIM Contra Execution fee clarifies that it only applies to VIX 
options.
    Professionals and Voluntary Professionals are billed in SPX as 
Customers because SPX is the only class that trades on the Exchange's 
Hybrid 3.0 platform, and the classifications as a Professional and 
Voluntary Professional do not have applicability in Hybrid 3.0 classes. 
As such, in the Old Fees Schedule, there were no fees listed for 
Professional and Voluntary Professional SPX trades. The New Fees 
Schedule, however, lists the SPX fees for Professional and Voluntary 
Professional (with such fees being the same as Customer SPX fees, both 
for trades above and below $1) in order to clarify the fees for 
Professional and Voluntary Professional SPX trades. There is no change 
occurring in the amounts of the fees for Professional and Voluntary 
Professional SPX trades (or anywhere else in this proposed rule 
change).
    In the Old Fees Schedule, there are no separate listings for VIX 
options transactions; as a Volatility Index, VIX is simply included by 
implication in the listings of fees for Volatility Indexes. The 
Proprietary Index Options Rate Table in the New Fees Schedule lists VIX 
options fees separately to make VIX options fees more clearly apparent; 
the amounts of the fees for VIX options transactions are not changing 
and will still be the same as those for Volatility Indexes.
    In the Old Fees Schedule, Customer fees for transactions in SPX 
Weeklys (``SPXW'') are not separately spelled out, as SPXW falls within 
the universe of SPX transactions. However, because SPXW is a product 
that has experienced a growth in trading volume, the Exchange proposes 
to separately list the fees for SPXW Customer transactions as well as 
the Surcharge Fee. The amount of the fees for SPXW Customer 
transactions and the Surcharge Fee is not changing.
    The Exchange has made a universal change to the New Fees Schedule 
to remove any references in the Old Fees Schedule to fees being listed 
in a ``table below'' or similar language when such language no longer 
applies (i.e. the table is no longer below).
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\6\ Specifically, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \7\ requirements that the rules of 
an exchange be designed to promote just and equitable principles of 
trade, to prevent fraudulent and manipulative acts, to remove 
impediments to and to perfect the mechanism for a free and open market 
and a national market system, and, in general, to protect investors and 
the public interest. In organizing the Fees Schedule in charts that are 
easy for investors to read and grouping together fees that apply to 
certain market participants into the same subsections and charts, the 
Exchange eliminates confusion regarding fees, thereby removing 
impediments to and to perfecting the mechanism for a free and open 
market, and, in general, protecting investors and the public interest.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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.

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) \8\ of the Act and paragraph (f) of Rule 19b-4 \9\ 
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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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-2012-080 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-CBOE-2012-080. 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 
a.m. and 3 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-2012-080, and should be 
submitted on or before October 25, 2012.


[[Page 60741]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-24493 Filed 10-3-12; 8:45 am]
BILLING CODE 8011-01-P
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