Self-Regulatory Organizations; Topaz Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees, 62764-62765 [2013-24644]

Download as PDF 62764 Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70643; File No. SR–Topaz– 2013–07] Self-Regulatory Organizations; Topaz Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees October 9, 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 September 30, 2013, the Topaz Exchange, LLC (d/b/a ISE Gemini) (the ‘‘Exchange’’ or ‘‘Topaz’’) 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 the Substance of the Proposed Rule Change Topaz is proposing to amend its Schedule of Fees to establish a surcharge fee for non-Priority Customer orders in options on 1/10 the value of the Nasdaq-100 Stock Index. The text of the proposed rule change is available on the Exchange’s Internet Web site at https://www.ise.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. sroberts on DSK5SPTVN1PROD with FRONT MATTER II. Self-Regulatory Organization’s Statement of the Purpose of, and the 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 self-regulatory organization 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose On August 26, 2013 the Exchange filed a proposed rule change to adopt a 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Mar<15>2010 21:08 Oct 21, 2013 Jkt 232001 surcharge fee for options on the full value of the Nasdaq-100 Stock Index (‘‘NDX’’),3 in connection with the listing of NDX options on the Exchange. As the Exchange now intends to list options on the Mini-NDX (‘‘MNX’’), which represents 1/10 the value of the NDX index, the Exchange is proposing to adopt the same $0.22 per contract surcharge fee for MNX options. The Exchange has entered into a license agreement with The NASDAQ OMX Group, Inc. in connection with the listing and trading of MNX options, and is proposing to adopt a surcharge fee applicable to non-Priority Customer orders in these options to defray the licensing costs. Absent this license agreement, market participants would be unable to trade MNX options on the Exchange. This surcharge fee reflects the pass-through charges associated with the licensing of this product, and the Exchange believes that charging the participants that trade these instruments is the most equitable means of recovering the costs of the license. The Exchange notes that the proposed surcharge fee does not apply to Priority Customer orders in this product. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,4 in general, and Section 6(b)(4) of the Act,5 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. The proposed surcharge fee is reasonable because it is a direct result of the licensing fees charged to the Exchange by the index provider that owns the intellectual property associated with the index, and reflect the pass-through charges associated with obtaining the license to trade MNX options, which the Exchange believes is the most equitable means of recovering the costs of the license. The proposed fee is equitable and not unfairly discriminatory in that it applies uniformly to all similarly situated Exchange participants, and is assessed only on those non-Priority Customer participants who choose to transact in MNX options. The Exchange believes it is equitable and not unfairly discriminatory to assess this surcharge fee on all participants except Priority Customers because the Exchange seeks 3 See Securities Exchange Act Release No. 34– 70296 (Aug. 30, 2013), 78 FR 54942 (Sept. 6, 2013) (SR–Topaz–2013–03). 4 15 U.S.C. 78f. 5 15 U.S.C. 78f(b)(4). PO 00000 Frm 00182 Fmt 4703 Sfmt 4703 to encourage Priority Customer order flow and the liquidity such order flow brings to the marketplace, which in turn benefits all market participants. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,6 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. By providing all participants on the Exchange with the ability to hedge via MNX options, the Exchange is not placing any burden on competition among its various participants. The Exchange further notes that the licensing agreement it has secured is not an exclusive agreement as many other option exchanges currently trade MNX options and charge fees related to such license.7 As such, there is no burden on competition among exchanges for the trading of these products. Finally, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive. 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. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. 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)(ii) of the Act,8 and subparagraph (f)(2) of Rule 19b–4 6 15 U.S.C. 78f(b)(8). example, NYSE Amex Options (‘‘Amex’’), NYSE Arca Options (‘‘Arca’’), and the International Securities Exchange, LLC (‘‘ISE’’) each charge a surcharge fee of $0.22 for trades in MNX options. See Amex Fee Schedule, Royalty Fees; Arca Fees and Charges, Royalty Fees; and ISE Schedule of Fees, Section VI, Other Options Fees and Rebates, Non-Priority Customer License Surcharge for Index Options. 8 15 U.S.C. 78s(b)(3)(A)(ii). 7 For E:\FR\FM\22OCN1.SGM 22OCN1 Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices thereunder,9 because it establishes a due, fee, or other charge imposed by Topaz. At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: sroberts on DSK5SPTVN1PROD with FRONT MATTER 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 No. SR– Topaz–2013–07 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 No. SR–Topaz–2013–07. 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 9 17 CFR 240.19b–4(f)(2). VerDate Mar<15>2010 21:08 Oct 21, 2013 Jkt 232001 filing also will be available for inspection and copying at the principal offices of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR–Topaz– 2013–07, and should be submitted on or before November 12, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–24644 Filed 10–21–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70671; File No. SR–BOX– 2013–46] Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend BOX Rule 3130 (Exemptions From Position Limits) October 11, 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 October 2, 2013, BOX Options Exchange LLC (the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend BOX Rule 3130 (Exemptions from Position Limits) to simplify the position limit exemptions available to Options Participants. The text of the proposed rule change is available from the principal office of the Exchange, at the Commission’s Public Reference Room and also on the Exchange’s Internet Web site at https://boxexchange.com. 10 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. PO 00000 Frm 00183 Fmt 4703 Sfmt 4703 62765 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 these statements may be examined at the places specified in Item IV below. The self-regulatory organization 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 proposes to amend BOX Rule 3130 (Exemptions from Position Limits) to simplify the position limit exemptions available to Options Participants. This is a competitive filing based on the rules of BX and BATS.3 Specifically, the Exchange proposes to remove sections (b) through (e) of BOX Rule 3130. Once removed, section (a), ‘‘Exemption Granted by Other Exchanges,’’ will be the sole position limit exemption remaining. The Exchange believes that this exemption, which allows Participants to rely on applicable position limit exemptions granted by other exchanges, will result in increased uniformity among the exchanges and cause less confusion among all market participants. Furthermore the proposed change will have no impact on the position limit exemptions currently used by Participants on BOX. The Exchange has reviewed the position limit exemptions available at the other option exchanges and believes these represent all position limit exemptions that the Exchange is seeking to remove. The Exchange notes that this proposed change mimics the position limit exemption language used by BX and BATS.4 In addition, the Exchange believes that the proposed rule change will help ensure that the Exchange’s rules regarding Exemptions from Position Limits will always be in alignment with FINRA’s exemption rules,5 even if these change from time to time. 2. Statutory Basis The Exchange believes that the proposal is consistent with the 3 See BX Chapter XIV, Section 8 and BATS Rule 18.8. 4 Id. 5 See FINRA Rule 2360(b)(3)(A)(vii). E:\FR\FM\22OCN1.SGM 22OCN1

Agencies

[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62764-62765]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24644]



[[Page 62764]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70643; File No. SR-Topaz-2013-07]


Self-Regulatory Organizations; Topaz Exchange, LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the 
Schedule of Fees

October 9, 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 September 30, 2013, the Topaz Exchange, LLC (d/b/a ISE Gemini) 
(the ``Exchange'' or ``Topaz'') 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.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    Topaz is proposing to amend its Schedule of Fees to establish a 
surcharge fee for non-Priority Customer orders in options on 1/10 the 
value of the Nasdaq-100 Stock Index. The text of the proposed rule 
change is available on the Exchange's Internet Web site at https://www.ise.com, at the principal office of the Exchange, and at the 
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and the 
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 self-regulatory organization 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On August 26, 2013 the Exchange filed a proposed rule change to 
adopt a surcharge fee for options on the full value of the Nasdaq-100 
Stock Index (``NDX''),\3\ in connection with the listing of NDX options 
on the Exchange. As the Exchange now intends to list options on the 
Mini-NDX (``MNX''), which represents 1/10 the value of the NDX index, 
the Exchange is proposing to adopt the same $0.22 per contract 
surcharge fee for MNX options.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 34-70296 (Aug. 30, 
2013), 78 FR 54942 (Sept. 6, 2013) (SR-Topaz-2013-03).
---------------------------------------------------------------------------

    The Exchange has entered into a license agreement with The NASDAQ 
OMX Group, Inc. in connection with the listing and trading of MNX 
options, and is proposing to adopt a surcharge fee applicable to non-
Priority Customer orders in these options to defray the licensing 
costs. Absent this license agreement, market participants would be 
unable to trade MNX options on the Exchange. This surcharge fee 
reflects the pass-through charges associated with the licensing of this 
product, and the Exchange believes that charging the participants that 
trade these instruments is the most equitable means of recovering the 
costs of the license. The Exchange notes that the proposed surcharge 
fee does not apply to Priority Customer orders in this product.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\4\ in general, and Section 
6(b)(4) of the Act,\5\ in particular, in that it is designed to provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and other persons using its facilities.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The proposed surcharge fee is reasonable because it is a direct 
result of the licensing fees charged to the Exchange by the index 
provider that owns the intellectual property associated with the index, 
and reflect the pass-through charges associated with obtaining the 
license to trade MNX options, which the Exchange believes is the most 
equitable means of recovering the costs of the license. The proposed 
fee is equitable and not unfairly discriminatory in that it applies 
uniformly to all similarly situated Exchange participants, and is 
assessed only on those non-Priority Customer participants who choose to 
transact in MNX options. The Exchange believes it is equitable and not 
unfairly discriminatory to assess this surcharge fee on all 
participants except Priority Customers because the Exchange seeks to 
encourage Priority Customer order flow and the liquidity such order 
flow brings to the marketplace, which in turn benefits all market 
participants.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\6\ 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. By providing all participants on the Exchange with 
the ability to hedge via MNX options, the Exchange is not placing any 
burden on competition among its various participants. The Exchange 
further notes that the licensing agreement it has secured is not an 
exclusive agreement as many other option exchanges currently trade MNX 
options and charge fees related to such license.\7\ As such, there is 
no burden on competition among exchanges for the trading of these 
products.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b)(8).
    \7\ For example, NYSE Amex Options (``Amex''), NYSE Arca Options 
(``Arca''), and the International Securities Exchange, LLC (``ISE'') 
each charge a surcharge fee of $0.22 for trades in MNX options. See 
Amex Fee Schedule, Royalty Fees; Arca Fees and Charges, Royalty 
Fees; and ISE Schedule of Fees, Section VI, Other Options Fees and 
Rebates, Non-Priority Customer License Surcharge for Index Options.
---------------------------------------------------------------------------

    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if they deem fee levels at a particular venue to be 
excessive. 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.

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

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from members or other interested 
parties.

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)(ii) of the Act,\8\ and subparagraph (f)(2) of Rule 19b-4

[[Page 62765]]

thereunder,\9\ because it establishes a due, fee, or other charge 
imposed by Topaz.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File No. SR-Topaz-2013-07 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 No. SR-Topaz-2013-07. 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 offices of the Exchange. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File No. SR-Topaz-2013-07, and should be 
submitted on or before November 12, 2013.
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24644 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P
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