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, 55130-55131 [2013-21815]
Download as PDF
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
Federal Register / Vol. 78, No. 174 / Monday, September 9, 2013 / Notices
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
Trading 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.
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
Trading 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
Trading 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 noncustomer trading activity, which tends
to be more automated and less laborintensive. 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 noncustomer component (e.g., Trading
Permit Holder proprietary transactions)
of its regulatory program.7
tkelley on DSK3SPTVN1PROD with NOTICES
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CBOE does not believe that the
proposed rule change will impose any
4 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
6 Id. [sic].
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 Trading
Permit Holder proprietary transactions if the
Exchange deems it advisable.
5 15
VerDate Mar<15>2010
15:01 Sep 06, 2013
Jkt 229001
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.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2013–082 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–CBOE–2013–082. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
publicly available. All submissions
should refer to File Number SR–CBOE–
2013–082 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. 2013–21815 Filed 9–6–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70299; File No. SR–MIAX–
2013–40]
Self-Regulatory Organizations: Notice
of Filing and Immediate Effectiveness
of a Proposed Rule Change by Miami
International Securities Exchange LLC
To Amend MIAX Rule 1322, Options
Communications
September 3, 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 August
19, 2013, Miami International Securities
Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
8 15
U.S.C. 78s(b)(3)(A).
9 17 CFR 240.19b–4(f).
PO 00000
Frm 00080
Fmt 4703
1 15
Sfmt 4703
55131
E:\FR\FM\09SEN1.SGM
09SEN1
Agencies
[Federal Register Volume 78, Number 174 (Monday, September 9, 2013)]
[Notices]
[Pages 55130-55131]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-21815]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70302; File No. SR-CBOE-2013-082]
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
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.
---------------------------------------------------------------------------
\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
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.
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 $.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 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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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
[[Page 55131]]
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 Trading 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 Trading 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 Trading 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., Trading
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
Trading Permit Holder proprietary transactions if the Exchange deems
it advisable.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
CBOE does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. 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.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-CBOE-2013-082 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2013-082. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make publicly available. All
submissions should refer to File Number SR-CBOE-2013-082 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\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-21815 Filed 9-6-13; 8:45 am]
BILLING CODE 8011-01-P