Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Options Regulatory Fee, 55128-55130 [2013-21814]
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55128
Federal Register / Vol. 78, No. 174 / Monday, September 9, 2013 / Notices
disclosures, discussed above,14 should
also help LMMs’ customers understand
the Program’s effect on LMMs’
incentives and thus will help investors
to make informed decisions in light of
the additional incentives LMMs may
have in providing quotes for these
securities.
Conclusion
It is therefore ordered, that BrokerDealer APs and Non-AP Broker-Dealers
that participate in the Incentive
Program, may rely on the SIA
Exemption pertaining to Section
11(d)(1) and Rule 11d1–2 thereunder,15
subject to the conditions provided in
that exemption, notwithstanding that
Broker-Dealer APs and Non-AP BrokerDealers may receive LMM Payments for
participating in the Incentive Program
as described in your request.
This exemption will expire when the
Incentive Program terminates, and is
subject to modification or revocation at
any time the Commission determines
that such action is necessary or
appropriate in furtherance of the
purposes of the Exchange Act.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–21816 Filed 9–6–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
tkelley on DSK3SPTVN1PROD with NOTICES
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
Dated: September 5, 2013.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013–22040 Filed 9–5–13; 4:15 pm]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
1. Purpose
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70301; File No. SR–C2–
2013–032]
Self-Regulatory Organizations; C2
Options Exchange, Incorporated;
Notice of Filing and Immediate
Effectiveness of a Proposed Rule
Change Relating to the Options
Regulatory Fee
September 3, 2013.
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold a Closed Meeting
on Thursday, September 12, 2013 at
2:00 p.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the Closed Meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or her designee, has
certified that, in her opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (7), 9(B) and (10)
and 17 CFR 200.402(a)(3), (5), (7), 9(ii)
and (10), permit consideration of the
scheduled matters at the Closed
Meeting.
note 10, supra.
note 4, supra.
16 17 CFR 200.30–3(a)(62).
Commissioner Piwowar, as duty
officer, voted to consider the items
listed for the Closed Meeting in a closed
session.
The subject matter of the Closed
Meeting will be:
Institution and settlement of injunctive
actions;
Institution and settlement of
administrative proceedings; and
Other matters relating to enforcement
proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed, please
contact the Office of the Secretary at
(202) 551–5400.
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 August
21, 2013, C2 Options Exchange,
Incorporated filed with the Securities
and Exchange Commission
(‘‘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 Substance of
the Proposed Rule Change
C2 Options Exchange, Incorporated
(the ‘‘Exchange’’ or ‘‘C2’’) proposes to
amend the Options Regulatory Fee. The
text of the proposed rule change is
available on the Exchange’s Web site
(https://www.c2exchange.com/Legal/), at
14 See
15 See
VerDate Mar<15>2010
15:01 Sep 06, 2013
1 15
2 17
Jkt 229001
PO 00000
U.S.C.78s(b)(1).
CFR 240.19b–4.
Frm 00077
Fmt 4703
Sfmt 4703
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.
The Exchange has reevaluated the
current amount of the Options
Regulatory Fee (‘‘ORF’’) in light of better
than expected trading volume so far in
2013 among other factors. In order to try
to ensure that revenue collected from
the ORF, in combination with other
regulatory fees and fines, does not
exceed the Exchange’s total regulatory
costs, the Exchange proposes to reduce
the ORF from $.002 per contract to zero.
The proposed fee change would be
operative on September 1, 2013. The
Exchange intends to reevaluate the
amount of the ORF again in connection
with its annual budget review.
The ORF is assessed by the Exchange
to each Permit Holder for all options
transactions executed or cleared by the
Permit Holder that are cleared by The
Options Clearing Corporation (‘‘OCC’’)
in the customer range (i.e., transactions
that clear in a customer account at OCC)
regardless of the marketplace of
execution. In other words, the Exchange
imposes the ORF on all customer-range
transactions executed by a Permit
Holder, even if the transactions do not
take place on the Exchange.3 The ORF
also is charged for transactions that are
not executed by a Permit Holder but are
ultimately cleared by a Permit Holder.
3 Exchange rules require each Permit Holder to
record the appropriate account origin code on all
orders at the time of entry in order to allow the
Exchange to properly prioritize and route orders
and assess transaction fees pursuant to the rules of
the Exchange and report resulting transactions to
the OCC. C2 order origin codes are defined in C2
Regulatory Circular RG13–015. The Exchange
represents that it has surveillances in place to verify
that Trading Permit Holders mark orders with the
correct account origin code.
E:\FR\FM\09SEN1.SGM
09SEN1
Federal Register / Vol. 78, No. 174 / Monday, September 9, 2013 / Notices
In the case where a Permit Holder
executes a transaction and a different
Permit Holder clears the transaction, the
ORF is assessed to the Permit Holder
who executed the transaction. In the
case where a non-Permit Holder
executes a transaction and a Permit
Holder clears the transaction, the ORF is
assessed to the Permit Holder who
clears the transaction. The ORF is
collected indirectly from Permit Holders
through their clearing firms by OCC on
behalf of the Exchange.
The ORF is designed to recover a
material portion of the costs to the
Exchange of the supervision and
regulation of Permit Holder customer
options business, including performing
routine surveillances, investigations,
examinations, financial monitoring, as
well as policy, rulemaking, interpretive
and enforcement activities. The
Exchange believes that revenue
generated from the ORF, when
combined with all of the Exchange’s
other regulatory fees and fines, will
cover a material portion, but not all, of
the Exchange’s regulatory costs. The
Exchange notes that its regulatory
responsibilities with respect to Permit
Holder compliance with options sales
practice rules have largely been
allocated to FINRA under a 17d–2
agreement. The ORF is not designed to
cover the cost of that options sales
practice regulation.
The Exchange will continue to
monitor the amount of revenue
collected from regulatory fees and fines
to ensure that it does not exceed the
Exchange’s total regulatory costs and to
ensure the Exchange is meeting its
revenue benchmarks. The Exchange
may make other adjustments to the ORF
in the future as necessary. The Exchange
notifies Permit Holders of adjustments
to the ORF via regulatory circular.
tkelley on DSK3SPTVN1PROD with NOTICES
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.4 Specifically,
the Exchange believes the proposed rule
change is consistent with Section 6(b)(4)
of the Act,5 which provides that
Exchange rules may provide for the
equitable allocation of reasonable dues,
fees, and other charges among its Permit
Holders and other persons using its
facilities. Additionally, the Exchange
believes the proposed rule change is
4 15
5 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
VerDate Mar<15>2010
15:01 Sep 06, 2013
Jkt 229001
consistent with the Section 6(b)(5) 6
requirement that the rules of an
exchange not be designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange believes the proposed
ORF reduction is reasonable in that it
would help the Exchange try to ensure
that revenue collected from the ORF, in
combination with other regulatory fees
and fines, does not exceed the
Exchange’s total regulatory costs in light
of better than expected trading volume
so far in 2013 and other factors.
The Exchange believes the ORF is
equitable and not unfairly
discriminatory in that it is charged to all
Permit Holders on all their transactions
that clear in the customer range at the
OCC. Moreover, the Exchange believes
the ORF ensures fairness by assessing
higher fees to those Permit Holders that
require more Exchange regulatory
services based on the amount of
customer options business they
conduct. Regulating customer trading
activity is much more labor intensive
and requires greater expenditure of
human and technical resources than
regulating non-customer trading
activity, which tends to be more
automated and less labor-intensive. As a
result, the costs associated with
administering the customer component
of the Exchange’s overall regulatory
program are materially higher than the
costs associated with administering the
non-customer component (e.g., Permit
Holder proprietary transactions) of its
regulatory program.7
B. Self-Regulatory Organization’s
Statement on Burden on Competition
C2 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 rule
change is not designed to address any
competitive issues. Rather, the proposed
rule change is designed to help the
Exchange to adequately fund its
regulatory activities while seeking to
ensure that total regulatory revenues do
not exceed total regulatory costs.
6 Id.
[sic]
the Exchange changes its method of funding
regulation or if circumstances otherwise change in
the future, the Exchange may decide to modify the
ORF or assess a separate regulatory fee on Permit
Holder proprietary transactions if the Exchange
deems it advisable.
7 If
PO 00000
Frm 00078
Fmt 4703
Sfmt 4703
55129
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)
of the Act 8 and paragraph (f) of Rule
19b–4 9 thereunder. At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
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:
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–
C2–2013–032 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–C2–2013–032. 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
8 15
9 17
E:\FR\FM\09SEN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
09SEN1
55130
Federal Register / Vol. 78, No. 174 / Monday, September 9, 2013 / Notices
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
publicly available. All submissions
should refer to File Number SR–C2–
2013–032 and should be submitted on
or before September 30, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–21814 Filed 9–6–13; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to the Options
Regulatory Fee
tkelley on DSK3SPTVN1PROD with NOTICES
September 3, 2013.
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 August
21, 2013, the Chicago Board Options
Exchange, Incorporated filed with the
Securities and Exchange Commission
(‘‘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.
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
VerDate Mar<15>2010
15:01 Sep 06, 2013
Jkt 229001
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.
1. Purpose
[Release No. 34–70302; File No. SR–CBOE–
2013–082]
1 15
Chicago Board Options Exchange,
Incorporated (the ‘‘Exchange’’ or
‘‘CBOE’’) proposes to amend the
Options Regulatory Fee. The text of the
proposed rule change is available on the
Exchange’s Web site (https://
www.cboe.com/AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
10 17
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange has reevaluated the
current amount of the Options
Regulatory Fee (‘‘ORF’’) in light of better
than expected trading volume so far in
2013 among other factors. In order to try
to ensure that revenue collected from
the ORF, in combination with other
regulatory fees and fines, does not
exceed the Exchange’s total regulatory
costs, the Exchange proposes to reduce
the ORF from $.0085 per contract to
$.0074 per contract. The proposed fee
change would be operative on
September 1, 2013. The Exchange
intends to reevaluate the amount of the
ORF again in connection with its annual
budget review.
The ORF is assessed by the Exchange
to each Trading Permit Holder for all
options transactions executed or cleared
by the Trading Permit Holder that are
cleared by The Options Clearing
Corporation (‘‘OCC’’) in the customer
range (i.e., transactions that clear in a
customer account at OCC) regardless of
the marketplace of execution. In other
words, the Exchange imposes the ORF
on all customer-range transactions
executed by a Trading Permit Holder,
even if the transactions do not take
PO 00000
Frm 00079
Fmt 4703
Sfmt 4703
place on the Exchange.3 The ORF also
is charged for transactions that are not
executed by a Trading Permit Holder
but are ultimately cleared by a Trading
Permit Holder. In the case where a
Trading Permit Holder executes a
transaction and a different Trading
Permit Holder clears the transaction, the
ORF is assessed to the Trading Permit
Holder who executed the transaction. In
the case where a non-Trading Permit
Holder executes a transaction and a
Trading Permit Holder clears the
transaction, the ORF is assessed to the
Trading Permit Holder who clears the
transaction. The ORF is collected
indirectly from Trading Permit Holders
through their clearing firms by OCC on
behalf of the Exchange.
The ORF is designed to recover a
material portion of the costs to the
Exchange of the supervision and
regulation of Trading Permit Holder
customer options business, including
performing routine surveillances,
investigations, examinations, financial
monitoring, as well as policy,
rulemaking, interpretive and
enforcement activities. The Exchange
believes that revenue generated from the
ORF, when combined with all of the
Exchange’s other regulatory fees and
fines, will cover a material portion, but
not all, of the Exchange’s regulatory
costs. The Exchange notes that its
regulatory responsibilities with respect
to Trading Permit Holder compliance
with options sales practice rules have
largely been allocated to FINRA under
a 17d–2 agreement. The ORF is not
designed to cover the cost of that
options sales practice regulation.
The Exchange will continue to
monitor the amount of revenue
collected from the ORF to ensure that it,
in combination with its other regulatory
fees and fines, does not exceed the
Exchange’s total regulatory costs. If the
Exchange determines regulatory
revenues exceed regulatory costs, the
Exchange will adjust the ORF by
submitting a fee change filing to the
Commission. The Exchange notifies
Trading Permit Holders of adjustments
to the ORF via regulatory circular.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
3 Exchange rules require each Trading Permit
Holder to record the appropriate account origin
code on all orders at the time of entry in order to
allow the Exchange to properly prioritize and route
orders and assess transaction fees pursuant to the
rules of the Exchange and report resulting
transactions to the OCC. CBOE order origin codes
are defined in CBOE Regulatory Circular RG13–038.
The Exchange represents that it has surveillances in
place to verify that Trading Permit Holders mark
orders with the correct account origin code.
E:\FR\FM\09SEN1.SGM
09SEN1
Agencies
[Federal Register Volume 78, Number 174 (Monday, September 9, 2013)]
[Notices]
[Pages 55128-55130]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-21814]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70301; File No. SR-C2-2013-032]
Self-Regulatory Organizations; C2 Options Exchange, Incorporated;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to the Options Regulatory Fee
September 3, 2013.
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 August 21, 2013, C2 Options Exchange, Incorporated filed with
the Securities and Exchange Commission (``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\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
C2 Options Exchange, Incorporated (the ``Exchange'' or ``C2'')
proposes to amend the Options Regulatory Fee. The text of the proposed
rule change is available on the Exchange's Web site (https://www.c2exchange.com/Legal/), at the Exchange's Office of the Secretary,
and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange has reevaluated the current amount of the Options
Regulatory Fee (``ORF'') in light of better than expected trading
volume so far in 2013 among other factors. In order to try to ensure
that revenue collected from the ORF, in combination with other
regulatory fees and fines, does not exceed the Exchange's total
regulatory costs, the Exchange proposes to reduce the ORF from $.002
per contract to zero. The proposed fee change would be operative on
September 1, 2013. The Exchange intends to reevaluate the amount of the
ORF again in connection with its annual budget review.
The ORF is assessed by the Exchange to each Permit Holder for all
options transactions executed or cleared by the Permit Holder that are
cleared by The Options Clearing Corporation (``OCC'') in the customer
range (i.e., transactions that clear in a customer account at OCC)
regardless of the marketplace of execution. In other words, the
Exchange imposes the ORF on all customer-range transactions executed by
a Permit Holder, even if the transactions do not take place on the
Exchange.\3\ The ORF also is charged for transactions that are not
executed by a Permit Holder but are ultimately cleared by a Permit
Holder.
[[Page 55129]]
In the case where a Permit Holder executes a transaction and a
different Permit Holder clears the transaction, the ORF is assessed to
the Permit Holder who executed the transaction. In the case where a
non-Permit Holder executes a transaction and a Permit Holder clears the
transaction, the ORF is assessed to the Permit Holder who clears the
transaction. The ORF is collected indirectly from Permit Holders
through their clearing firms by OCC on behalf of the Exchange.
---------------------------------------------------------------------------
\3\ Exchange rules require each Permit Holder to record the
appropriate account origin code on all orders at the time of entry
in order to allow the Exchange to properly prioritize and route
orders and assess transaction fees pursuant to the rules of the
Exchange and report resulting transactions to the OCC. C2 order
origin codes are defined in C2 Regulatory Circular RG13-015. The
Exchange represents that it has surveillances in place to verify
that Trading Permit Holders mark orders with the correct account
origin code.
---------------------------------------------------------------------------
The ORF is designed to recover a material portion of the costs to
the Exchange of the supervision and regulation of Permit Holder
customer options business, including performing routine surveillances,
investigations, examinations, financial monitoring, as well as policy,
rulemaking, interpretive and enforcement activities. The Exchange
believes that revenue generated from the ORF, when combined with all of
the Exchange's other regulatory fees and fines, will cover a material
portion, but not all, of the Exchange's regulatory costs. The Exchange
notes that its regulatory responsibilities with respect to Permit
Holder compliance with options sales practice rules have largely been
allocated to FINRA under a 17d-2 agreement. The ORF is not designed to
cover the cost of that options sales practice regulation.
The Exchange will continue to monitor the amount of revenue
collected from regulatory fees and fines to ensure that it does not
exceed the Exchange's total regulatory costs and to ensure the Exchange
is meeting its revenue benchmarks. The Exchange may make other
adjustments to the ORF in the future as necessary. The Exchange
notifies Permit Holders of adjustments to the ORF via regulatory
circular.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\4\ Specifically, the
Exchange believes the proposed rule change is consistent with Section
6(b)(4) of the Act,\5\ which provides that Exchange rules may provide
for the equitable allocation of reasonable dues, fees, and other
charges among its Permit Holders and other persons using its
facilities. Additionally, the Exchange believes the proposed rule
change is consistent with the Section 6(b)(5) \6\ requirement that the
rules of an exchange not be designed to permit unfair discrimination
between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(4).
\6\ Id. [sic]
---------------------------------------------------------------------------
The Exchange believes the proposed ORF reduction is reasonable in
that it would help the Exchange try to ensure that revenue collected
from the ORF, in combination with other regulatory fees and fines, does
not exceed the Exchange's total regulatory costs in light of better
than expected trading volume so far in 2013 and other factors.
The Exchange believes the ORF is equitable and not unfairly
discriminatory in that it is charged to all Permit Holders on all their
transactions that clear in the customer range at the OCC. Moreover, the
Exchange believes the ORF ensures fairness by assessing higher fees to
those Permit Holders that require more Exchange regulatory services
based on the amount of customer options business they conduct.
Regulating customer trading activity is much more labor intensive and
requires greater expenditure of human and technical resources than
regulating non-customer trading activity, which tends to be more
automated and less labor-intensive. As a result, the costs associated
with administering the customer component of the Exchange's overall
regulatory program are materially higher than the costs associated with
administering the non-customer component (e.g., Permit Holder
proprietary transactions) of its regulatory program.\7\
---------------------------------------------------------------------------
\7\ If the Exchange changes its method of funding regulation or
if circumstances otherwise change in the future, the Exchange may
decide to modify the ORF or assess a separate regulatory fee on
Permit Holder proprietary transactions if the Exchange deems it
advisable.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
C2 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 rule change is not
designed to address any competitive issues. Rather, the proposed rule
change is designed to help the Exchange to adequately fund its
regulatory activities while seeking to ensure that total regulatory
revenues do not exceed total regulatory costs.
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) of the Act \8\ and paragraph (f) of Rule 19b-4 \9\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f).
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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-C2-2013-032 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-C2-2013-032. 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
[[Page 55130]]
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 publicly available. All
submissions should refer to File Number SR-C2-2013-032 and should be
submitted on or before September 30, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-21814 Filed 9-6-13; 8:45 am]
BILLING CODE 8011-01-P