Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule, 67703-67704 [2012-27511]

Download as PDF Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–27509 Filed 11–9–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–68169; File No. SR–CBOE– 2012–105] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule November 6, 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 October 26, 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. srobinson on DSK4SPTVN1PROD with 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. 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. 9 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Mar<15>2010 19:05 Nov 09, 2012 Jkt 229001 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange intends to introduce its Automated Improvement Mechanism (‘‘AIM’’) for FLexible EXchange Options (‘‘FLEX Options’’) transactions beginning November 1, 2012. In conjunction with that introduction, the Exchange proposes to amend its CFLEX fees in order to encourage greater FLEX Options trading activity. Specifically, the Exchange proposes to eliminate the CFLEX Surcharge Fee as it applies to equity, ETF, ETN, HOLDRs and index (excluding SPX, SPXW, SPX Range Options, OEX, XEO, VIX and Volatility Indexes, XSP and DJX (the ‘‘Excluded Classes’’)) FLEX Options transactions (the ‘‘Fee Elimination’’). The Exchange also proposes to provide a $0.10-per-contract credit for all equity, ETF, ETN, HOLDRs and index (excluding the Excluded Classes) FLEX Options orders executed via a CFLEX AIM auction from November 1, 2012 through December 31, 2012 (the ‘‘CFLEX AIM Credit’’). The CFLEX AIM Credit would apply to transactions executed via AIM because the Exchange wants to encourage the distribution of the newly-developed CFLEX AIM technology among Trading Permit Holders (‘‘TPHs’’) in order to attract greater FLEX Options order flow. AIM is a facilitation mechanism, and facilitation trades are the manner in which most FLEX Options trades are currently executed, and so the Exchange correspondingly wants to attract more FLEX Options facilitation trades to the Exchange via this CFLEX AIM technology. The CFLEX AIM Credit is limited to the Agency/Primary side of a FLEX Options AIM transaction because this will encourage the entry of FLEX Options AIM orders, as well as the adoption of the FLEX Options AIM technology by any party wishing to execute a FLEX Options AIM order. The CFLEX AIM Credit would be capped at $250 (2,500 contracts) per trade in order to limit the Exchange’s potential exposure for providing the CFLEX AIM Credit and ensure that the provision of the CFLEX AIM Credit is economically viable to the Exchange. In addition, $250 per trade is the current maximum fee for the CFLEX Surcharge Fee. Each TPH may only receive the CFLEX AIM Credit on one order per underlying product per day, and the CFLEX AIM Credit will be applied to the smallest-sized order in each underlying product sent to the Exchange by that TPH on each day. The purpose of this limitation is to limit the PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 67703 Exchange’s potential exposure for providing rebates and ensure that the provision of the CFLEX AIM Credit is economically viable to the Exchange. For purposes of the CFLEX AIM Credit, multiple legs of a complex order will be considered separate simple orders in order to prevent parties from being able to receive the CFLEX AIM Credit on multiple orders in the same underlying product in the same day. These details of the CFLEX AIM Credit will be explained in new Footnote 28 to the Exchange Fees Schedule. The purpose of this is to encourage greater FLEX Options trading via the newly-introduced AIM (which encourages facilitation) and the distribution of the FLEX Options AIM technology among the Exchange’s TPHs. The proposed changes are to take effect on November 1, 2012. 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.3 Specifically, the Exchange believes the proposed rule change is consistent with Section 6(b)(4) of the Act,4 which provides that Exchange rules may provide for the equitable allocation of reasonable dues, fees, and other charges among its Trading Permit Holders and other persons using its facilities. The Fee Elimination is reasonable because it will allow market participants who are currently engaging in FLEX Options trades in equity, ETF, ETN, HOLDRs and index options (excluding the Excluded Classes) to avoid having to pay the CFLEX Surcharge Fee in the future. Eliminating the CFLEX Surcharge Fee for equity, ETF, ETN, HOLDRs and most index options while not eliminating the CFLEX Surcharge Fee for the Excluded Classes is equitable and not unfairly discriminatory because the Exchange expended significant resources developing the products listed in the Excluded Classes and must receive fees in order to recoup such expenditures. The CFLEX AIM Credit is reasonable because it will allow market participants who engage in FLEX Options trades in equity, ETF, ETN, HOLDRs and index options (excluding the Excluded Classes) to receive a rebate for such transactions. Excluding the 3 15 4 15 E:\FR\FM\13NON1.SGM U.S.C. 78f(b). U.S.C. 78f(b)(4). 13NON1 67704 Federal Register / Vol. 77, No. 219 / Tuesday, November 13, 2012 / Notices Excluded Classes from the CFLEX AIM Credit is equitable and not unfairly discriminatory because the Exchange expended significant resources developing the products listed in the Excluded Classes and must receive fees in order to recoup such expenditures. Limiting the CFLEX AIM Credit to FLEX Options AIM transactions is equitable and not unfairly discriminatory because the Exchange expended considerable resources to develop the new FLEX Options AIM technology and therefore desires to encourage the adoption of such technology. Further, AIM is a facilitation mechanism and greater facilitation of FLEX Options trading will encourage greater trading of FLEX Options. Limiting the CFLEX AIM Credit to the Agency/Primary side of FLEX Options AIM transactions is equitable and not unfairly discriminatory because the Agency/ Primary side of an AIM transaction is the side on which an order is entered. Providing the CFLEX AIM Credit for the Primary side of FLEX Options AIM orders will encourage the entry of more FLEX Options orders, which will benefit parties wishing to take the Contra side of FLEX Options AIM orders by providing them with more FLEX Options AIM orders on which to take the Contra side. Capping the CFLEX AIM Credit at $250 per transaction and limiting the CFLEX AIM Credit to one order per underlying product per TPH (per day and only the smallest order from that TPH) is equitable and not unfairly discriminatory because such limitations are necessary to ensure the financial viability of the CFLEX AIM Credit, and without such limitations the Exchange would not be able to offer the CFLEX AIM Credit at all. Further, these limitations will apply to all market participants equally. 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. srobinson on DSK4SPTVN1PROD with 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 VerDate Mar<15>2010 17:08 Nov 09, 2012 Jkt 229001 19(b)(3)(A) 5 of the Act and paragraph (f) of Rule 19b–4 6 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. 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 rulecomments@sec.gov. Please include File Number SR–CBOE–2012–105 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–2012–105. 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– 2012–105, and should be submitted on or before December 4, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–27511 Filed 11–9–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–68161; File No. SR–NYSE– 2012–61] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Temporary Suspension of Those Aspects of Rules 36.20, 36.21, and 36.30 That Would Not Permit Designated Market Makers and Floor Brokers To Use Personal Portable Phone Devices on the Trading Floor Following the Aftermath of Hurricane Sandy From November 5, 2012 Until the Earlier of When Phone Service Is Fully Restored or Friday, November 9, 2012 November 5, 2012. 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 November 5, 2012, New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) 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 self-regulatory organization. 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 extend the temporary suspension of those aspects of Rules 36.20, 36.21, and 36.30 that would not permit Designated Market Makers (‘‘DMMs’’) and Floor brokers to use personal portable phone devices on the Trading Floor following the 7 17 5 15 U.S.C. 78s(b)(3)(A). 6 17 CFR [sic] 240.19b–4(f). PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\13NON1.SGM 13NON1

Agencies

[Federal Register Volume 77, Number 219 (Tuesday, November 13, 2012)]
[Notices]
[Pages 67703-67704]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-27511]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68169; File No. SR-CBOE-2012-105]


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

November 6, 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 October 26, 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.
---------------------------------------------------------------------------

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.

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 intends to introduce its Automated Improvement 
Mechanism (``AIM'') for FLexible EXchange Options (``FLEX Options'') 
transactions beginning November 1, 2012. In conjunction with that 
introduction, the Exchange proposes to amend its CFLEX fees in order to 
encourage greater FLEX Options trading activity. Specifically, the 
Exchange proposes to eliminate the CFLEX Surcharge Fee as it applies to 
equity, ETF, ETN, HOLDRs and index (excluding SPX, SPXW, SPX Range 
Options, OEX, XEO, VIX and Volatility Indexes, XSP and DJX (the 
``Excluded Classes'')) FLEX Options transactions (the ``Fee 
Elimination'').
    The Exchange also proposes to provide a $0.10-per-contract credit 
for all equity, ETF, ETN, HOLDRs and index (excluding the Excluded 
Classes) FLEX Options orders executed via a CFLEX AIM auction from 
November 1, 2012 through December 31, 2012 (the ``CFLEX AIM Credit''). 
The CFLEX AIM Credit would apply to transactions executed via AIM 
because the Exchange wants to encourage the distribution of the newly-
developed CFLEX AIM technology among Trading Permit Holders (``TPHs'') 
in order to attract greater FLEX Options order flow. AIM is a 
facilitation mechanism, and facilitation trades are the manner in which 
most FLEX Options trades are currently executed, and so the Exchange 
correspondingly wants to attract more FLEX Options facilitation trades 
to the Exchange via this CFLEX AIM technology. The CFLEX AIM Credit is 
limited to the Agency/Primary side of a FLEX Options AIM transaction 
because this will encourage the entry of FLEX Options AIM orders, as 
well as the adoption of the FLEX Options AIM technology by any party 
wishing to execute a FLEX Options AIM order. The CFLEX AIM Credit would 
be capped at $250 (2,500 contracts) per trade in order to limit the 
Exchange's potential exposure for providing the CFLEX AIM Credit and 
ensure that the provision of the CFLEX AIM Credit is economically 
viable to the Exchange. In addition, $250 per trade is the current 
maximum fee for the CFLEX Surcharge Fee.
    Each TPH may only receive the CFLEX AIM Credit on one order per 
underlying product per day, and the CFLEX AIM Credit will be applied to 
the smallest-sized order in each underlying product sent to the 
Exchange by that TPH on each day. The purpose of this limitation is to 
limit the Exchange's potential exposure for providing rebates and 
ensure that the provision of the CFLEX AIM Credit is economically 
viable to the Exchange. For purposes of the CFLEX AIM Credit, multiple 
legs of a complex order will be considered separate simple orders in 
order to prevent parties from being able to receive the CFLEX AIM 
Credit on multiple orders in the same underlying product in the same 
day. These details of the CFLEX AIM Credit will be explained in new 
Footnote 28 to the Exchange Fees Schedule.
    The purpose of this is to encourage greater FLEX Options trading 
via the newly-introduced AIM (which encourages facilitation) and the 
distribution of the FLEX Options AIM technology among the Exchange's 
TPHs. The proposed changes are to take effect on November 1, 2012.
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.\3\ Specifically, the Exchange believes the proposed rule change is 
consistent with Section 6(b)(4) of the Act,\4\ which provides that 
Exchange rules may provide for the equitable allocation of reasonable 
dues, fees, and other charges among its Trading Permit Holders and 
other persons using its facilities. The Fee Elimination is reasonable 
because it will allow market participants who are currently engaging in 
FLEX Options trades in equity, ETF, ETN, HOLDRs and index options 
(excluding the Excluded Classes) to avoid having to pay the CFLEX 
Surcharge Fee in the future. Eliminating the CFLEX Surcharge Fee for 
equity, ETF, ETN, HOLDRs and most index options while not eliminating 
the CFLEX Surcharge Fee for the Excluded Classes is equitable and not 
unfairly discriminatory because the Exchange expended significant 
resources developing the products listed in the Excluded Classes and 
must receive fees in order to recoup such expenditures.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The CFLEX AIM Credit is reasonable because it will allow market 
participants who engage in FLEX Options trades in equity, ETF, ETN, 
HOLDRs and index options (excluding the Excluded Classes) to receive a 
rebate for such transactions. Excluding the

[[Page 67704]]

Excluded Classes from the CFLEX AIM Credit is equitable and not 
unfairly discriminatory because the Exchange expended significant 
resources developing the products listed in the Excluded Classes and 
must receive fees in order to recoup such expenditures. Limiting the 
CFLEX AIM Credit to FLEX Options AIM transactions is equitable and not 
unfairly discriminatory because the Exchange expended considerable 
resources to develop the new FLEX Options AIM technology and therefore 
desires to encourage the adoption of such technology. Further, AIM is a 
facilitation mechanism and greater facilitation of FLEX Options trading 
will encourage greater trading of FLEX Options. Limiting the CFLEX AIM 
Credit to the Agency/Primary side of FLEX Options AIM transactions is 
equitable and not unfairly discriminatory because the Agency/Primary 
side of an AIM transaction is the side on which an order is entered. 
Providing the CFLEX AIM Credit for the Primary side of FLEX Options AIM 
orders will encourage the entry of more FLEX Options orders, which will 
benefit parties wishing to take the Contra side of FLEX Options AIM 
orders by providing them with more FLEX Options AIM orders on which to 
take the Contra side. Capping the CFLEX AIM Credit at $250 per 
transaction and limiting the CFLEX AIM Credit to one order per 
underlying product per TPH (per day and only the smallest order from 
that TPH) is equitable and not unfairly discriminatory because such 
limitations are necessary to ensure the financial viability of the 
CFLEX AIM Credit, and without such limitations the Exchange would not 
be able to offer the CFLEX AIM Credit at all. Further, these 
limitations will apply to all market participants equally.

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) \5\ of the Act and paragraph (f) of Rule 19b-4 \6\ 
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.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR [sic] 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-2012-105 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-2012-105. 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-2012-105, and should be 
submitted on or before December 4, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-27511 Filed 11-9-12; 8:45 am]
BILLING CODE 8011-01-P
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