Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Order Cancellation Fee, 35082-35083 [2013-13772]

Download as PDF 35082 Federal Register / Vol. 78, No. 112 / Tuesday, June 11, 2013 / Notices provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of FINRA. 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–FINRA– 2013–022 and should be submitted on or before July 2, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.23 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–13774 Filed 6–10–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69701; File No. SR–CHX– 2013–11] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Order Cancellation Fee June 5, 2012. wreier-aviles on DSK5TPTVN1PROD with NOTICES Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on May 31, 2013, 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 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 the Substance of the Proposed Rule Change CHX proposes to amend its Schedule of Participant Fees and Assessments (the ‘‘Fee Schedule’’) to amend the Order Cancellation Fee. The Exchange proposes to implement the fee change on June 3, 2013. The text of this 23 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 VerDate Mar<15>2010 15:13 Jun 10, 2013 Jkt 229001 proposed rule change is available on the Exchange’s Web site at https:// www.chx.com/rules/ proposed_rules.htm, at the principal office of the Exchange, 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 self-regulatory organization 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 those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Section E.8 of the Fee Schedule to change the value of the Near order multiplier (‘‘Nmult’’) from two (2) to four (4) for all security-types and to replace an obsolete citation. Under SR–CHX– 2012–15, the Exchange adopted the current formula-based Order Cancellation Fee, which assesses a daily cancellation fee per Account Symbol,4 if the order cancellation ratio exceeds a designated threshold.5 In addition, the Exchange adopted security-type specific parameter values, such as the Nmult, in order to permit the Exchange to make adjustments to ensure equitable application of the Order Cancellation Fee.6 To this end, the Exchange noted in footnote 10 of SR–CHX–2012–15 that ‘‘changes to any of the proposed parameter values, including Order Cancellation Fee, Cancellation Ratio, Threshold Away Amount, Minimum Duration and Nmult, will be made through proposed fee filings pursuant to Rule 19b–4.’’ 7 The Nmult, was adopted because the Exchange recognized that, inter alia, Wide orders (i.e. orders that are less marketable), as well as Near orders (i.e. orders that are more marketable), can be 4 A CHX ‘‘Account Symbol’’ is similar to the Market Participant Identifiers (‘‘MPID’’) issued by the Financial Industry Regulatory Authority. 5 See Securities Exchange Act Release No. 68219 (November 13, 2012), 77 FR 69673 (November 20, 2012) (SR–CHX–2012–15); see also Section E.8 of the Fee Schedule. 6 Id. 7 Id. PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 utilized to promote display liquidity. Thus, the purpose of the Nmult is to allow the Exchange to multiply the mitigating affect of Near orders on Wide orders and by extension, the overall order cancellation ratio. Practically speaking, a higher Nmult, will result in a lower order cancellation ratio and thereby allow more Wide orders to be placed before an order cancellation fee is assessed. Based on an analysis of nearly seven months of data, the Exchange has determined that the Nmult of two (2) is overly restrictive. For instance, the Exchange observed that a Participant was submitting and cancelling a significant number of Wide orders as part of a trading strategy designed to follow rapid changes to the National Best Bid and Offer (‘‘NBBO’’). When these cancellations were viewed within the totality of the trading strategy, the Exchange discovered that the Wide order cancellations were necessary to provide valuable display liquidity to the Exchange. After analyzing the trading activity of this Participant and other Participants, the Exchange determined that by increasing the Nmult value to four (4) for all security-types, the application of the Order Cancellation Fee will be adequately relaxed to better promote display liquidity. Consequently, the Exchange has decided to forego some Order Cancellation Fees that would be lost by increasing the Nmult in favor of promoting display liquidity. Moreover, the Exchange proposes to replace an obsolete citation to the ‘‘Do Not Display’’ order display modifier with the correct citation to Article 1, Rule 2(c)(2). The Exchange proposes to make these amendments to Section E.8 effective June 3, 2013. The formula by which the cancellation fee is derived shall continue to be calculated and made available to Participants daily, but billed after the end of the month. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act 8 in general, and furthers the objectives of Section 6(b)(4) of the Act 9 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 the amendment to the Nmult described herein should help to recoup some of the costs of administering and processing large 8 15 9 15 E:\FR\FM\11JNN1.SGM U.S.C. 78f. U.S.C. 78f(b)(4). 11JNN1 Federal Register / Vol. 78, No. 112 / Tuesday, June 11, 2013 / Notices numbers of cancelled orders while fairly allocating costs among Participants according to system use. In addition, these changes to the Fee Schedule would equitably allocate reasonable fees among Participants in a nondiscriminatory manner by properly imposing fees on those Participants which enter and subsequently cancel orders above a fixed threshold while not imposing fees on Participants that do not exceed this threshold. 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. The proposed change to increase the Nmult value from two (2) to four (4) for all security-types contributes to the protection of investors and the public interest by promoting display liquidity on the Exchange. Since the Exchange does not propose to otherwise substantively modify the Order Cancellation Fee, the proposed change will not impose any burden on competition. 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 with respect to the proposed rule change. wreier-aviles on DSK5TPTVN1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act 10 and subparagraph(f)(2) of Rule 19b–4 thereunder 11 because it establishes or changes a due, fee or other charge imposed by the Exchange. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. 10 15 U.S.C. 78s(b)(3)(A)(ii). 11 17 CFR 240.19b–4(f)(2). VerDate Mar<15>2010 15:13 Jun 10, 2013 Jkt 229001 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: • 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–CHX–2013–11 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–2013–11. 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 20549–1090, 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 offices of CHX. 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–CHX– 2013–11, and should be submitted on or before July 2, 2013. Frm 00110 Fmt 4703 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–13772 Filed 6–10–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments PO 00000 35083 Sfmt 4703 [Release No. 34–69700; File No. SR– NASDAQ–2013–080] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt Fees for the MOPB Routing Option under Rule 7018(a) June 5, 2013. 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 May 24, 2013 The NASDAQ Stock Market LLC (‘‘NASDAQ’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change as described in Items I, II and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change NASDAQ proposes to adopt fees for the new MOPB routing option under Rule 7018(a). The Exchange has designated the proposed changes as immediately effective, and proposes to implement the changes effective with the implementation of the MOPB order on June 14, 2013. The text of the proposed rule change is available on the Exchange’s Web site at https:// www.nasdaq.cchwallstreet.com, at the principal office of the Exchange, 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, NASDAQ included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\11JNN1.SGM 11JNN1

Agencies

[Federal Register Volume 78, Number 112 (Tuesday, June 11, 2013)]
[Notices]
[Pages 35082-35083]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-13772]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69701; File No. SR-CHX-2013-11]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the Order Cancellation Fee

June 5, 2012.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on May 31, 2013, 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 self-regulatory 
organization. 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\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    CHX proposes to amend its Schedule of Participant Fees and 
Assessments (the ``Fee Schedule'') to amend the Order Cancellation Fee. 
The Exchange proposes to implement the fee change on June 3, 2013. The 
text of this proposed rule change is available on the Exchange's Web 
site at https://www.chx.com/rules/proposed_rules.htm, at the principal 
office of the Exchange, 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 self-regulatory organization 
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 those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Section E.8 of the Fee Schedule to 
change the value of the Near order multiplier (``Nmult'') 
from two (2) to four (4) for all security-types and to replace an 
obsolete citation. Under SR-CHX-2012-15, the Exchange adopted the 
current formula-based Order Cancellation Fee, which assesses a daily 
cancellation fee per Account Symbol,\4\ if the order cancellation ratio 
exceeds a designated threshold.\5\ In addition, the Exchange adopted 
security-type specific parameter values, such as the Nmult, 
in order to permit the Exchange to make adjustments to ensure equitable 
application of the Order Cancellation Fee.\6\ To this end, the Exchange 
noted in footnote 10 of SR-CHX-2012-15 that ``changes to any of the 
proposed parameter values, including Order Cancellation Fee, 
Cancellation Ratio, Threshold Away Amount, Minimum Duration and 
Nmult, will be made through proposed fee filings pursuant to 
Rule 19b-4.'' \7\
---------------------------------------------------------------------------

    \4\ A CHX ``Account Symbol'' is similar to the Market 
Participant Identifiers (``MPID'') issued by the Financial Industry 
Regulatory Authority.
    \5\ See Securities Exchange Act Release No. 68219 (November 13, 
2012), 77 FR 69673 (November 20, 2012) (SR-CHX-2012-15); see also 
Section E.8 of the Fee Schedule.
    \6\ Id.
    \7\ Id.
---------------------------------------------------------------------------

    The Nmult, was adopted because the Exchange recognized 
that, inter alia, Wide orders (i.e. orders that are less marketable), 
as well as Near orders (i.e. orders that are more marketable), can be 
utilized to promote display liquidity. Thus, the purpose of the 
Nmult is to allow the Exchange to multiply the mitigating 
affect of Near orders on Wide orders and by extension, the overall 
order cancellation ratio. Practically speaking, a higher 
Nmult, will result in a lower order cancellation ratio and 
thereby allow more Wide orders to be placed before an order 
cancellation fee is assessed.
    Based on an analysis of nearly seven months of data, the Exchange 
has determined that the Nmult of two (2) is overly 
restrictive. For instance, the Exchange observed that a Participant was 
submitting and cancelling a significant number of Wide orders as part 
of a trading strategy designed to follow rapid changes to the National 
Best Bid and Offer (``NBBO''). When these cancellations were viewed 
within the totality of the trading strategy, the Exchange discovered 
that the Wide order cancellations were necessary to provide valuable 
display liquidity to the Exchange. After analyzing the trading activity 
of this Participant and other Participants, the Exchange determined 
that by increasing the Nmult value to four (4) for all 
security-types, the application of the Order Cancellation Fee will be 
adequately relaxed to better promote display liquidity. Consequently, 
the Exchange has decided to forego some Order Cancellation Fees that 
would be lost by increasing the Nmult in favor of promoting 
display liquidity.
    Moreover, the Exchange proposes to replace an obsolete citation to 
the ``Do Not Display'' order display modifier with the correct citation 
to Article 1, Rule 2(c)(2).
    The Exchange proposes to make these amendments to Section E.8 
effective June 3, 2013. The formula by which the cancellation fee is 
derived shall continue to be calculated and made available to 
Participants daily, but billed after the end of the month.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \8\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act \9\ 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 the amendment to the Nmult described herein should help 
to recoup some of the costs of administering and processing large

[[Page 35083]]

numbers of cancelled orders while fairly allocating costs among 
Participants according to system use. In addition, 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 enter and subsequently cancel orders above 
a fixed threshold while not imposing fees on Participants that do not 
exceed this threshold.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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. The proposed change to 
increase the Nmult value from two (2) to four (4) for all 
security-types contributes to the protection of investors and the 
public interest by promoting display liquidity on the Exchange. Since 
the Exchange does not propose to otherwise substantively modify the 
Order Cancellation Fee, the proposed change will not impose any burden 
on competition.

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 with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A)(ii) of the Act \10\ and subparagraph(f)(2) of Rule 
19b-4 thereunder \11\ because it establishes or changes a due, fee or 
other charge imposed by the Exchange.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-CHX-2013-11 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-2013-11. 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 20549-1090, 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 
offices of CHX. 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-CHX-
2013-11, and should be submitted on or before July 2, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-13772 Filed 6-10-13; 8:45 am]
BILLING CODE 8011-01-P
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