Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Single-Sided Order Fees and Credits and the Order Cancellation Fee, 40788-40790 [2013-16232]

Download as PDF 40788 Federal Register / Vol. 78, No. 130 / Monday, July 8, 2013 / Notices the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) 18 of the Act to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: emcdonald on DSK67QTVN1PROD with NOTICES 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–NYSEArca–2013–64 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–NYSEArca–2013–64. 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 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 NYSE. 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 18 15 Number SR–NYSEArca–2013–64, and should be submitted on or before July 29, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Elizabeth M. Murphy, Secretary. [FR Doc. 2013–16233 Filed 7–5–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69903; File No. SR–CHX– 2013–12] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Single-Sided Order Fees and Credits and the Order Cancellation Fee July 1, 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 June 26, 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 Single-Sided Order Fees and Credits and the Order Cancellation Fee. The Exchange proposes to implement the fee changes on July 1, 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, U.S.C. 78s(b)(2)(B). VerDate Mar<15>2010 16:27 Jul 05, 2013 Jkt 229001 PO 00000 19 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. Frm 00101 Fmt 4703 Sfmt 4703 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 of the Fee Schedule, effective July 1, 2013. Specifically, the Exchange proposes to eliminate references in Sections E.1 and E.8 to ‘‘Derivative Securities Products’’ (‘‘DSPs’’) and ‘‘Non-Derivative Securities Products’’ (‘‘Non-DSPs’’) and to eliminate references in Section E.1 to ‘‘Regular’’ Trading Session and ‘‘Early and Late’’ Trading Sessions. Moreover, the Exchange proposes to amend Section E.1 to set the liquidity providing fee for all Tape A, B, and C securities priced greater than or equal to $1.00/share at $0.00250/share and the Liquidity Removing Fee for all Tape A, B, and C securities priced greater than or equal to $1.00/share at $0.0030/share. Current Section E.1 On November 2, 2012, the Exchange adopted current Section E.1 of the Fee Schedule,4 amended in February 2013,5 which permits twenty-four (24) distinct sets of credits and fees. Specifically, the Section E.1 fee table distinguishes between ‘‘Regular’’ Trading Session and ‘‘Early and Late’’ Trading Sessions and divides each trading session into Tape A, B, and C securities. Moreover, each Tape is divided into DSPs and NonDSPs and each set of DSPs and NonDSPs are further divided into securities priced greater than or equal to $1.00/ share or those that are priced less than $1.00/share. With respect to the current values of the credits and fees of Section E.1, for transactions in Tape A and Tape B NonDSPs priced greater than or equal to $1.00/share that are executed in the Regular Trading Session, the current Fee Schedule gives no credit for providing liquidity, and charges a $0.0030/share Liquidity Removing Fee. For transactions in Tape A and Tape B DSPs 4 See Securities Exchange Act Release No. 68182 (November 8, 2012), 77 FR 68167 (November 15, 2012) (SR–CHX–2012–16). 5 See Securities Exchange Act Release No. 68894 (February 15, 2013), 78 FR 11258 (February 15, 2013) (SR–CHX–2013–06). E:\FR\FM\08JYN1.SGM 08JYN1 Federal Register / Vol. 78, No. 130 / Monday, July 8, 2013 / Notices emcdonald on DSK67QTVN1PROD with NOTICES priced greater than or equal to $1.00/ share that are executed in the Regular Trading Session, the current Fee Schedule gives a credit of $0.0022/share for providing liquidity, and charges a $0.0030/share Liquidity Removing Fee. For transactions in Tape C DSPs and Non-DSPs priced greater than or equal to $1.00/share that are executed in the Regular Trading Session, the current Fee Schedule gives a credit of $0.0001/share for providing liquidity, and charges a $0.0006/share Liquidity Removing Fee. Additionally, for transactions in all securities priced greater than or equal to $1.00/share that are executed in the Early and Late Trading Session, the current Fee Schedule gives a credit of $0.0022/share for providing liquidity, and charges a $0.0030/share Liquidity Removing Fee. Finally, for transactions in all securities priced less than $1.00/ share that are executed in the Regular Trading Session, or the Early and Late Trading Session, the current Fee Schedule gives a credit of $0.00009/ share for providing liquidity, and charges a fee of 0.30% of trade value for removing liquidity. Proposed Section E.1 The Exchange now proposes to amend the Section E.1 fee table to reduce the number of distinct sets of credits and fees, to set the Liquidity Providing Credit for all Tape A, B, and C securities priced greater than or equal to $1.00/ share at $0.00250/share, and to set the Liquidity Removing Fee for all Tape A, B, and C securities priced greater than or equal to $1.00/share at $0.0030/share. With respect to the Section E.1 fee table, the Exchange proposes to remove all references to DSPs and Non-DSPs, while preserving the distinction between Tape A, B, and C security types that are priced greater than or equal to $1.00/share and those priced less than $1.00/share. In addition, the Exchange proposes to eliminate the current distinction between ‘‘Regular’’ Trading Session and ‘‘Early and Late’’ Trading Sessions, and adopt a set of credit and fee values, irrespective of the trading session in which the transaction occurred. With respect to the Liquidity Providing Credit, the Exchange proposes to set the credit at $0.00250/share for all Tape A, B, and C securities priced greater than or equal to $1.00/share. Specifically, the credit for Tapes A and B DSP securities will increase from $0.00220/share to $0.00250/share, Tapes A and B Non-DSP securities will increase from $0.00/share to $0.00250/ share, and all Tape C securities will increase from $0.00010/share to $0.00250/share. For transactions in all VerDate Mar<15>2010 16:27 Jul 05, 2013 Jkt 229001 security types priced less than $1.00/ share, the Exchange will maintain the current Liquidity Providing Credit of $0.00009/share. With respect to the Liquidity Removing Fee, the Exchange proposes to set the fee at $0.0030/share for all Tape A, B, and C securities priced greater than or equal to $1.00/share. Specifically, the fee for Tapes A and B will remain the same, but the fee for Tape C will increase from $0.0006/share to $0.0030/share. For transactions in all security types priced less than $1.00/ share, the Exchange will maintain the current Liquidity Removing Fee of 0.30% of trade value. Moreover, the Exchange proposes to make non-substantive changes to the ‘‘Security Price’’ column to amend the security prices for Tapes A, B, and C securities to reflect a ‘‘$’’ sign in front of ‘‘1.00.’’ Thus, the proposed security prices for each Tape A, B, and C securities will indicate ‘‘≥$1.00/share’’ for securities priced greater than or equal to $1.00/share and ‘‘< $1.00/ share’’ for securities priced less than $1.00/share. Given these changes, the Exchange proposes to amend paragraph (b) to replace ‘‘$0.0022/share’’ with ‘‘$0.0025/ share’’ and eliminate references to ‘‘Derivative Securities Products’’ and the ‘‘Regular’’ Trading Session. Also, the Exchange proposes to delete current paragraph (c) as it relates to the current Liquidity Providing Credit in all securities paid for orders executed in the ‘‘Early or Late Trading Sessions,’’ which is now obsolete. Finally, the Exchange proposes to change current paragraph (d) to proposed paragraph (c). Since its last amendment to the Fee Schedule, the Exchange has found that the distinction between Tape A, B, and C security types provides sufficient granularity. Thus, the Exchange has determined that differentiating between DSPs and Non-DSPs, as well as the ‘‘Regular’’ Trading Session and ‘‘Early and Late’’ Trading Sessions, is unnecessary and overly particularized. Additionally, the Exchange believes that this new credit and fee structure will incentivize activity by Participants on the Exchange’s trading facilities, encourage order flow, and allow the Exchange to remain competitive in today’s orders marketplace. Moreover, the Exchange submits that increasing the Liquidity Providing Credit from $0.00220/share to $0.00250/share will further promote displayed liquidity on the Exchange. Current Section E.8 On November 2, 2012, the Exchange adopted the current ‘‘Order Cancelation PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 40789 Fee (Regular Trading Session only)’’ section of its Fee Schedule,6 amended in June 2013,7 that incorporated, inter alia, references to Derivative and NonDerivative Securities Products within Tape A, B, and C. Specifically, current Section E.8(b) provides for six different sets of Order Cancellation Fee values, for DSP and Non-DSPs in Tape A, B, and C securities. Proposed Section E.8 The Exchange proposes to eliminate references to ‘‘Derivative Securities Products’’ and ‘‘Non-Derivative Securities Products’’ within Section E.8.8 Specifically, the Exchange proposes to remove paragraphs titled ‘‘Tape A Non-Derivative Securities Products,’’ ‘‘Tape B Non-Derivative Securities Products,’’ and ‘‘Tape C NonDerivative Securities Products’’ from Section E.8(b) of the Fee Schedule. Additionally, the Exchange proposes to delete the words ‘‘Derivative’’ and ‘‘Products’’ from the remaining three (3) paragraphs of Section E.8(b). As a result, the proposed Section E.8(b) will only make references to Tape A, B, and C securities, omitting any mention of DSPs and Non-DSPs. Similar to the Section E.1, the Exchange has determined that differentiating between DSPs and NonDSPs in the context of the Order Cancellation Fee is unnecessary and overly particularized. The Exchange submits that the proposed distinction between Tapes A, B, and C securities provides adequate granularity for the purposes of establishing the Order Cancellation Fee values. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act 9 in general, and furthers the objectives of Section 6(b)(4) of the Act 10 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, and does not unfairly discriminate between customers, issuers, or broker dealers. Specifically, with respect to Section E.1, since the proposed credit and fee 6 See Securities Exchange Act Release No. 68219 (November 13, 2012), 77 FR 69673 (November 20, 2012) (SR–CHX–2012–15). 7 See Securities Exchange Act Release No. 69701 (June 5, 2013), 78 FR 35082 (June 11, 2013) (SR– CHX–2013–11). 8 Unlike proposed Section E.1, the Exchange proposes to maintain the applicability of the Order Cancellation Fee to the Regular Trading Session only. 9 15 U.S.C. 78f. 10 15 U.S.C. 78f(b)(4). E:\FR\FM\08JYN1.SGM 08JYN1 40790 Federal Register / Vol. 78, No. 130 / Monday, July 8, 2013 / Notices emcdonald on DSK67QTVN1PROD with NOTICES structure will continue to apply to all single-sided orders of 100 or more shares executed in the CHX Matching System, the Exchange believes that it will equitably allocate the credits and fees among Participants in a nondiscriminatory nature, notwithstanding the omission of references to ‘‘DSP’’ and ‘‘Non-DSPs,’’ as well as ‘‘Regular’’ and ‘‘Early and Late’’ Trading Sessions. Furthermore, the proposed values for the Liquidity Providing Credit of $0.00250/share and Liquidity Removing Fees of $0.0030/share for each of the security types priced greater than or equal to $1.00/share are reasonable, where the proposed Liquidity Providing Credit will be increased to the benefit of liquidity providers and the proposed Liquidity Removing Fee will not exceed the current value for Tape A and Tape B securities priced at or greater than $1.00/share. Moreover, the proposed fee values are generally similar to the fees of other exchanges, such as NASDAQ.11 With respect to Section E.8, the Exchange submits that removing references to ‘‘Derivative Securities Products’’ and ‘‘Non-Derivative Securities Products’’ will allow the Order Cancellation Fee to continue to be equitable and reasonable, as it does not impact the Order Cancellation Fee values nor does it impact to whom the fee is applicable. Finally, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues. In such an environment, the Exchange must continually review, and consider adjusting, its fees and credits to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed rule change reflects this competitive environment. 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. Specifically, the proposed changes to eliminate the distinction in Section E of the Fee Schedule between DSPs and Non-DSPs, the different trading sessions, and to set an across the board Liquidity Providing Credit of $0.00250/share and Liquidity Removing Fees of $0.0030/share for Tapes A, B, and C securities priced 11 NASDAQ ‘‘Fees to Remove Liquidity, Shares Executed at or above $1.00’’ ranges from $0.0029/ share to $0.0030/share and ‘‘Rebate to Add Displayed Liquidity, Shares Executed at or Above $1.00’’ ranges from $0.0020/share to $0.00305/ share. VerDate Mar<15>2010 16:27 Jul 05, 2013 Jkt 229001 greater than or equal to $1.00/share contributes to the protection of investors and the public interest by simplifying the schedule of credits paid and fees assessed by the Exchange. Consequently, the proposed rule change is necessary and appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received 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 12 and subparagraph (f)(2) of Rule 19b–4 thereunder 13 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. As fully discussed above, the Exchange believes that the proposed changes represent a fair and reasonable structure designed to create equable credit and fee amounts to incent activity among all Participants within the Exchange’s trading facilities. 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: 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–2013–12. 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– 2013–12, and should be submitted on or before July 29, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Elizabeth M. Murphy, Secretary. [FR Doc. 2013–16232 Filed 7–5–13; 8:45 am] BILLING CODE 8011–01–P 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–CHX–2013–12 on the subject line. PO 00000 12 15 13 17 U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). Frm 00103 Fmt 4703 Sfmt 9990 14 17 E:\FR\FM\08JYN1.SGM CFR 200.30–3(a)(12). 08JYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 78, Number 130 (Monday, July 8, 2013)]
[Notices]
[Pages 40788-40790]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-16232]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69903; File No. SR-CHX-2013-12]

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

July 1, 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 June 26, 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 Single-Sided Order Fees
and Credits and the Order Cancellation Fee. The Exchange proposes to
implement the fee changes on July 1, 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 of the Fee Schedule,
effective July 1, 2013. Specifically, the Exchange proposes to
eliminate references in Sections E.1 and E.8 to ``Derivative Securities
Products'' (``DSPs'') and ``Non-Derivative Securities Products''
(``Non-DSPs'') and to eliminate references in Section E.1 to
``Regular'' Trading Session and ``Early and Late'' Trading Sessions.
Moreover, the Exchange proposes to amend Section E.1 to set the
liquidity providing fee for all Tape A, B, and C securities priced
greater than or equal to $1.00/share at $0.00250/share and the
Liquidity Removing Fee for all Tape A, B, and C securities priced
greater than or equal to $1.00/share at $0.0030/share.
Current Section E.1
On November 2, 2012, the Exchange adopted current Section E.1 of
the Fee Schedule,\4\ amended in February 2013,\5\ which permits twenty-
four (24) distinct sets of credits and fees. Specifically, the Section
E.1 fee table distinguishes between ``Regular'' Trading Session and
``Early and Late'' Trading Sessions and divides each trading session
into Tape A, B, and C securities. Moreover, each Tape is divided into
DSPs and Non-DSPs and each set of DSPs and Non-DSPs are further divided
into securities priced greater than or equal to $1.00/share or those
that are priced less than $1.00/share.
---------------------------------------------------------------------------

\4\ See Securities Exchange Act Release No. 68182 (November 8,
2012), 77 FR 68167 (November 15, 2012) (SR-CHX-2012-16).
\5\ See Securities Exchange Act Release No. 68894 (February 15,
2013), 78 FR 11258 (February 15, 2013) (SR-CHX-2013-06).
---------------------------------------------------------------------------

With respect to the current values of the credits and fees of
Section E.1, for transactions in Tape A and Tape B Non-DSPs priced
greater than or equal to $1.00/share that are executed in the Regular
Trading Session, the current Fee Schedule gives no credit for providing
liquidity, and charges a $0.0030/share Liquidity Removing Fee. For
transactions in Tape A and Tape B DSPs

[[Page 40789]]

priced greater than or equal to $1.00/share that are executed in the
Regular Trading Session, the current Fee Schedule gives a credit of
$0.0022/share for providing liquidity, and charges a $0.0030/share
Liquidity Removing Fee. For transactions in Tape C DSPs and Non-DSPs
priced greater than or equal to $1.00/share that are executed in the
Regular Trading Session, the current Fee Schedule gives a credit of
$0.0001/share for providing liquidity, and charges a $0.0006/share
Liquidity Removing Fee. Additionally, for transactions in all
securities priced greater than or equal to $1.00/share that are
executed in the Early and Late Trading Session, the current Fee
Schedule gives a credit of $0.0022/share for providing liquidity, and
charges a $0.0030/share Liquidity Removing Fee. Finally, for
transactions in all securities priced less than $1.00/share that are
executed in the Regular Trading Session, or the Early and Late Trading
Session, the current Fee Schedule gives a credit of $0.00009/share for
providing liquidity, and charges a fee of 0.30% of trade value for
removing liquidity.
Proposed Section E.1
The Exchange now proposes to amend the Section E.1 fee table to
reduce the number of distinct sets of credits and fees, to set the
Liquidity Providing Credit for all Tape A, B, and C securities priced
greater than or equal to $1.00/share at $0.00250/share, and to set the
Liquidity Removing Fee for all Tape A, B, and C securities priced
greater than or equal to $1.00/share at $0.0030/share.
With respect to the Section E.1 fee table, the Exchange proposes to
remove all references to DSPs and Non-DSPs, while preserving the
distinction between Tape A, B, and C security types that are priced
greater than or equal to $1.00/share and those priced less than $1.00/
share. In addition, the Exchange proposes to eliminate the current
distinction between ``Regular'' Trading Session and ``Early and Late''
Trading Sessions, and adopt a set of credit and fee values,
irrespective of the trading session in which the transaction occurred.
With respect to the Liquidity Providing Credit, the Exchange
proposes to set the credit at $0.00250/share for all Tape A, B, and C
securities priced greater than or equal to $1.00/share. Specifically,
the credit for Tapes A and B DSP securities will increase from
$0.00220/share to $0.00250/share, Tapes A and B Non-DSP securities will
increase from $0.00/share to $0.00250/share, and all Tape C securities
will increase from $0.00010/share to $0.00250/share. For transactions
in all security types priced less than $1.00/share, the Exchange will
maintain the current Liquidity Providing Credit of $0.00009/share.
With respect to the Liquidity Removing Fee, the Exchange proposes
to set the fee at $0.0030/share for all Tape A, B, and C securities
priced greater than or equal to $1.00/share. Specifically, the fee for
Tapes A and B will remain the same, but the fee for Tape C will
increase from $0.0006/share to $0.0030/share. For transactions in all
security types priced less than $1.00/share, the Exchange will maintain
the current Liquidity Removing Fee of 0.30% of trade value.
Moreover, the Exchange proposes to make non-substantive changes to
the ``Security Price'' column to amend the security prices for Tapes A,
B, and C securities to reflect a ``$'' sign in front of ``1.00.'' Thus,
the proposed security prices for each Tape A, B, and C securities will
indicate ``>=$1.00/share'' for securities priced greater than or equal
to $1.00/share and ``< $1.00/share'' for securities priced less than
$1.00/share.
Given these changes, the Exchange proposes to amend paragraph (b)
to replace ``$0.0022/share'' with ``$0.0025/share'' and eliminate
references to ``Derivative Securities Products'' and the ``Regular''
Trading Session. Also, the Exchange proposes to delete current
paragraph (c) as it relates to the current Liquidity Providing Credit
in all securities paid for orders executed in the ``Early or Late
Trading Sessions,'' which is now obsolete. Finally, the Exchange
proposes to change current paragraph (d) to proposed paragraph (c).
Since its last amendment to the Fee Schedule, the Exchange has
found that the distinction between Tape A, B, and C security types
provides sufficient granularity. Thus, the Exchange has determined that
differentiating between DSPs and Non-DSPs, as well as the ``Regular''
Trading Session and ``Early and Late'' Trading Sessions, is unnecessary
and overly particularized. Additionally, the Exchange believes that
this new credit and fee structure will incentivize activity by
Participants on the Exchange's trading facilities, encourage order
flow, and allow the Exchange to remain competitive in today's orders
marketplace. Moreover, the Exchange submits that increasing the
Liquidity Providing Credit from $0.00220/share to $0.00250/share will
further promote displayed liquidity on the Exchange.
Current Section E.8
On November 2, 2012, the Exchange adopted the current ``Order
Cancelation Fee (Regular Trading Session only)'' section of its Fee
Schedule,\6\ amended in June 2013,\7\ that incorporated, inter alia,
references to Derivative and Non-Derivative Securities Products within
Tape A, B, and C. Specifically, current Section E.8(b) provides for six
different sets of Order Cancellation Fee values, for DSP and Non-DSPs
in Tape A, B, and C securities.
---------------------------------------------------------------------------

\6\ See Securities Exchange Act Release No. 68219 (November 13,
2012), 77 FR 69673 (November 20, 2012) (SR-CHX-2012-15).
\7\ See Securities Exchange Act Release No. 69701 (June 5,
2013), 78 FR 35082 (June 11, 2013) (SR-CHX-2013-11).
---------------------------------------------------------------------------

Proposed Section E.8
The Exchange proposes to eliminate references to ``Derivative
Securities Products'' and ``Non-Derivative Securities Products'' within
Section E.8.\8\ Specifically, the Exchange proposes to remove
paragraphs titled ``Tape A Non-Derivative Securities Products,'' ``Tape
B Non-Derivative Securities Products,'' and ``Tape C Non-Derivative
Securities Products'' from Section E.8(b) of the Fee Schedule.
Additionally, the Exchange proposes to delete the words ``Derivative''
and ``Products'' from the remaining three (3) paragraphs of Section
E.8(b). As a result, the proposed Section E.8(b) will only make
references to Tape A, B, and C securities, omitting any mention of DSPs
and Non-DSPs.
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\8\ Unlike proposed Section E.1, the Exchange proposes to
maintain the applicability of the Order Cancellation Fee to the
Regular Trading Session only.
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Similar to the Section E.1, the Exchange has determined that
differentiating between DSPs and Non-DSPs in the context of the Order
Cancellation Fee is unnecessary and overly particularized. The Exchange
submits that the proposed distinction between Tapes A, B, and C
securities provides adequate granularity for the purposes of
establishing the Order Cancellation Fee values.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \9\ in general, and furthers the
objectives of Section 6(b)(4) of the Act \10\ 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, and does not unfairly
discriminate between customers, issuers, or broker dealers.
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\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(4).
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Specifically, with respect to Section E.1, since the proposed
credit and fee

[[Page 40790]]

structure will continue to apply to all single-sided orders of 100 or
more shares executed in the CHX Matching System, the Exchange believes
that it will equitably allocate the credits and fees among Participants
in a non-discriminatory nature, notwithstanding the omission of
references to ``DSP'' and ``Non-DSPs,'' as well as ``Regular'' and
``Early and Late'' Trading Sessions. Furthermore, the proposed values
for the Liquidity Providing Credit of $0.00250/share and Liquidity
Removing Fees of $0.0030/share for each of the security types priced
greater than or equal to $1.00/share are reasonable, where the proposed
Liquidity Providing Credit will be increased to the benefit of
liquidity providers and the proposed Liquidity Removing Fee will not
exceed the current value for Tape A and Tape B securities priced at or
greater than $1.00/share. Moreover, the proposed fee values are
generally similar to the fees of other exchanges, such as NASDAQ.\11\
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\11\ NASDAQ ``Fees to Remove Liquidity, Shares Executed at or
above $1.00'' ranges from $0.0029/share to $0.0030/share and
``Rebate to Add Displayed Liquidity, Shares Executed at or Above
$1.00'' ranges from $0.0020/share to $0.00305/share.
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With respect to Section E.8, the Exchange submits that removing
references to ``Derivative Securities Products'' and ``Non-Derivative
Securities Products'' will allow the Order Cancellation Fee to continue
to be equitable and reasonable, as it does not impact the Order
Cancellation Fee values nor does it impact to whom the fee is
applicable.
Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues. In such an environment, the Exchange must continually
review, and consider adjusting, its fees and credits to remain
competitive with other exchanges. For the reasons described above, the
Exchange believes that the proposed rule change reflects this
competitive environment.

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. Specifically, the proposed
changes to eliminate the distinction in Section E of the Fee Schedule
between DSPs and Non-DSPs, the different trading sessions, and to set
an across the board Liquidity Providing Credit of $0.00250/share and
Liquidity Removing Fees of $0.0030/share for Tapes A, B, and C
securities priced greater than or equal to $1.00/share contributes to
the protection of investors and the public interest by simplifying the
schedule of credits paid and fees assessed by the Exchange.
Consequently, the proposed rule change is necessary and appropriate in
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

No written comments were solicited or received 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 \12\ and subparagraph (f)(2) of Rule
19b-4 thereunder \13\ because it establishes or changes a due, fee, or
other charge imposed by the Exchange.
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\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
\13\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
As fully discussed above, the Exchange believes that the proposed
changes represent a fair and reasonable structure designed to create
equable credit and fee amounts to incent activity among all
Participants within the Exchange's trading facilities.

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-2013-12 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-2013-12. 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-2013-12,
and should be submitted on or before July 29, 2013.

For the Commission, by the Division of Trading and Markets, pursuant
to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-16232 Filed 7-5-13; 8:45 am]
BILLING CODE 8011-01-P

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