Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Fees for the Complex Order Book Data Feed for CBOE Listed Options, 62798-62802 [2013-24674]
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Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
and additional data relating to NAV and
other applicable quantitative
information. Trading in Shares of the
Fund will be halted under the
conditions specified in BATS Rule
11.18. Trading may also be halted
because of market conditions or for
reasons that, in the view of the
Exchange, make trading in the Shares
inadvisable. Finally, trading in the
Shares will be subject to BATS Rule
14.11(i)(4)(B)(iv), which sets forth
circumstances under which Shares of
the Fund may be halted. In addition, as
noted above, investors will have ready
access to information regarding the
Fund’s holdings, the Intraday Indicative
Value, the Disclosed Portfolio, and
quotation and last-sale information for
the Shares.
Intraday, executable price quotations
on Fixed Income Securities and other
assets are available from major brokerdealer firms and for exchange-traded
assets, including investment companies,
futures, and options, such intraday
information is available directly from
the applicable listing exchange. Such
intraday price information is available
through subscription services, such as
Bloomberg, Thomson Reuters, and
International Data Corporation, which
can be accessed by authorized
participants and other investors.
The proposed rule change is designed
to perfect the mechanism of a free and
open market and, in general, to protect
investors and the public interest in that
it will facilitate the listing and trading
of an additional type of activelymanaged exchange-traded product that
will enhance competition among market
participants, to the benefit of investors
and the marketplace. As noted above,
the Exchange has in place surveillance
procedures relating to trading in the
Shares and may obtain information via
ISG from other exchanges that are
members of ISG or with which the
Exchange has entered into a
comprehensive surveillance sharing
agreement. In addition, as noted above,
investors will have ready access to
information regarding the Fund’s
holdings, the Intraday Indicative Value,
the Disclosed Portfolio, and quotation
and last-sale information for the Shares.
For the above reasons, the Exchange
believes that the proposed rule change
is consistent with the requirements of
Section 6(b)(5) of the Act.
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 purpose of the Act. The Exchange
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notes that the proposed rule change will
facilitate the listing and trading of an
additional actively-managed exchangetraded product that will enhance
competition among market participants,
to the benefit of investors and the
marketplace.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has neither solicited
nor received written comments on the
proposed rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days of publication (i) as the
Commission may designate if it finds
such longer period to be appropriate
and publishes its reasons for so finding
or (ii) as to which the Exchange
consents, the Commission will:
A. By order approve or disapprove
such proposed rule change; or
B. institute proceedings to determine
whether the proposed rule change
should be 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:
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 Section, 100 F Street NE.,
Washington, DC 20549, on official
business days between 10:00 a.m. and
3:00 p.m. Copies of the filing will also
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 available publicly. All
submissions should refer to File
Number SR–BATS–2013–051 and
should be submitted on or before
November 12, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.39
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–24559 Filed 10–21–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70683; File No. SR–CBOE–
2013–087]
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–
BATS–2013–051 on the subject line.
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to Fees for the
Complex Order Book Data Feed for
CBOE Listed Options
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–BATS–2013–051. 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
October 15, 2013.
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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, Chicago Board
Options Exchange, Incorporated (the
‘‘Exchange’’ or ‘‘CBOE’’) 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 Exchange. The
Commission is publishing this notice to
39 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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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
Chicago Board Options Exchange,
Incorporated (the ‘‘Exchange’’ or
‘‘CBOE’’) proposes to amend the fee
schedule of Market Data Express, LLC
(‘‘MDX’’), an affiliate of CBOE, to
establish fees for the Complex Order
Book (‘‘COB’’) Data Feed for CBOE
listed options (‘‘COB Data Feed’’ or
‘‘Data’’). 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.
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The COB Data Feed is a real-time feed
that consists of data regarding the
Exchange’s Complex Order Book and
related complex order information. The
COB Data Feed includes ‘‘best bid and
offer’’ or ‘‘BBO’’ quotes and identifying
information for all CBOE-traded
complex order strategies, as well as all
executed CBOE complex order trades
(and identifies whether the trade was a
customer trade or whether a complex
order in the COB is a customer order).
The COB Data Feed is currently made
available by MDX to all market
participants free of charge.3
The Exchange proposes to establish
fees for the COB Data Feed. MDX would
charge Customers of the COB Data Feed
$3,000 per month (‘‘Data Fee’’). A COB
Data Feed ‘‘Customer’’ is any entity that
receives the COB Data Feed, either
3 See Securities Exchange Act Release No. 70118
(August 5, 2013) (SR–CBOE–2013–070).
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directly from MDX’s system or through
a connection to MDX provided by an
approved redistributor (i.e., a market
data vendor or an extranet service
provider), and distributes it externally
or uses it internally, except that an
entity or person that receives the COB
Data Feed from a Customer and only
uses it internally is not a ‘‘Customer’’ if
it receives the COB Data Feed from a
Customer subject to a form of
‘‘Subscriber Agreement’’ that has been
approved by MDX. The Data Fee for the
COB Data Feed would be waived for
Customers of the COB Data Feed who
are also Customers of the BBO Data
Feed.4 Customers of the BBO Data Feed
are currently charged $5,000 per month
by MDX.5 The proposed waiver of the
Data Fee for the COB Data Feed would
allow a Customer of the COB Data Feed
who is also a Customer of the BBO Data
Feed to redistribute the COB Data Feed
for no additional charge.6
In addition, MDX would charge a
Customer ‘‘User Fees’’ of $25 per month
per Device 7 or user ID for receipt of the
data by ‘‘Professional Users’’ 8 and $1
per month for receipt of the data by
‘‘Non-Professional Users’’.9 User Fees
4 The BBO Data Feed is a real-time, low latency
data feed that includes CBOE BBO data, consisting
of all outstanding quotes and standing orders at the
best available price level on each side of the market,
with aggregate size and last sale data. The BBO Data
Feed includes the data included in the COB Data
Feed, among other data. See Securities Exchange
Act Release No. 69438 (April 23, 2013), 78 FR
25334 (April 30, 2013).
5 Id.
6 Such Customers would still be subject to User
Fees as described below.
7 A ‘‘Device’’ means any computer, workstation or
other item of equipment, fixed or portable, that
receives, accesses and/or displays data in visual,
audible or other form.
8 A ‘‘Professional User’’ is any natural person
recipient of the COB Data Feed who is not a NonProfessional User. User Fees for Professional Users
are payable for both ‘‘internal’’ Professional Users
(Devices or user IDs of employees of a Customer)
and ‘‘external’’ Professional Users (Devices or user
IDs of Professional Users who receive the Data from
a Customer and are not employed by the Customer).
(Non-Professional Users must be external since a
person who uses the COB Data Feed for a
commercial purpose cannot be a Non-Professional
User.)
9 A ‘‘Non-Professional User’’ is a natural person
who uses the COB Data Feed only for personal
purposes and not for any commercial purpose and
who, if he or she works in the United States, is not:
(i) Registered or qualified in any capacity with the
Securities and Exchange Commission, the
Commodities Futures Trading Commission, any
state securities agency, any securities exchange or
association, or any commodities or futures contract
market or association; (ii) engaged as an
‘‘investment adviser’’ as that term is defined in
Section 201(11) of the Investment Advisors Act of
1940 (whether or not registered or qualified under
that Act); or (iii) employed by a bank or other
organization exempt from registration under federal
or state securities laws to perform functions that
would require registration or qualification if such
functions were performed for an organization not so
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would be subject to a cap of $2,000 per
month, i.e., a Customer would pay no
more than $2,000 in User Fees in a
month.
The Exchange also proposes to make
several formatting and clean up changes
to the MDX fee schedule. The Exchange
proposes to create three separate
sections on the MDX fee schedule for
the BBO Data Feed, COB Data Feed and
FLEX Options Data Feed10 and include
the definitions applicable to each data
feed within its respective section. The
Exchange proposes to renumber the
section on Systems Fees and move the
definition of Port Fee within that
section. Finally, the Exchange proposes
to delete the Definitions section of the
MDX fee schedule, including the
provisions on invoicing and late
payments which are included within
MDX’s written agreement for the data.
The proposed fees would be effective
on October 1, 2013.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
requirements of Section 6(b) of the
Securities Exchange Act of 1934
(‘‘Act’’) 11 in general, and, in particular,
with Section 6(b)(4) of the Act 12 in that
it provides for the equitable allocation
of reasonable dues, fees and other
charges among users and recipients of
the Data, and with Section 6(b)(5) 13 of
the Act in that it is not designed to
permit unfair discrimination between
them. The Exchange believes the
proposed Data Fee and User Fees are
equitable and not unfairly
discriminatory because they would
apply equally to all Customers of the
COB Data Feed except the Data Fee
would be waived for Customers of the
COB Data Feed who are also Customers
of the BBO Data Feed. The Exchange
notes that the fee structure of
differentiated professional and
nonprofessional fees has long been used
by other exchanges for their products
and by the Options Price Reporting
Authority (‘‘OPRA’’) Plan in order to
reduce the price of data to retail
investors and make it more broadly
available.14
exempt; or, if he or she works outside of the United
States, does not perform the same functions as
someone who would qualify as a Non-Professional
User if he or she worked in the United States.
10 The FLEX Options Data Feed is currently made
available to all market participants free of charge.
See Securities Exchange Act Release No. 68696
(January 18, 2013), 78 FR 5527 (January 25, 2013).
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(4).
13 15 U.S.C. 78f(b)(5).
14 See, e.g., Securities Exchange Act Release No.
67589 (August 2, 2012), 77 FR 47459 (August 8,
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The Exchange believes the proposed
waiver of the Data Fee is equitable and
not unfairly discriminatory because it
would apply equally to all Customers of
the COB Data Feed who are also
Customers of the BBO Data Feed.
Customers of the BBO Data Feed already
pay MDX $5,000 for the right to use and
redistribute the data in the BBO Data
Feed. The BBO Data Feed includes the
data in the COB Data Feed. The
proposed waiver of the Data Fee would
allow a Customer of the COB Data Feed
who is also a Customer of the BBO Data
Feed to redistribute the COB Data Feed
for no additional charge, thereby
incentivizing further redistribution of
the data in the COB Data Feed. The
Exchange notes other exchanges offer
similar fee waivers.15
The Exchange also believes the
proposed fees are equitable because the
COB Data Feed is purely optional. Only
those Customers that deem the product
to be of sufficient overall value and
usefulness would purchase it.
The Exchange believes the proposed
fees are reasonable because they
compare favorably to fees that other
markets charge for similar products. For
example, the Exchange believes The
International Securities Exchange
(‘‘ISE’’) offers a ‘‘Spread Feed’’, which
like the COB Data Feed includes order
and quote data for complex strategies.
The Exchange believes ISE charges
distributors of its Spread Feed $3,000
per month and a monthly controlled
device fee of $25 per controlled device
for Professionals.
The Exchange notes that the COB Data
Feed also competes with products
offered by NASDAQ OMX PHLX and
NYSE. NASDAQ OMX PHLX offers a
market data product entitled ‘‘TOPO
Plus Orders’’, which like the COB Data
Feed includes order and last sale
information for complex strategies and
other market data. NYSE offers market
data products entitled ‘‘NYSE ArcaBook
for Amex Options’’ and ‘‘NYSE
ArcaBook for Arca Options’’ that
include top-of-book and last sale data
for complex strategies similar to the data
in the COB Data Feed.
The Exchange believes that the
proposed cap on User Fees is reasonable
because it may encourage more vendors
to choose to offer the COB Data Feed,
2012) (revising OPRA’s definition of the term
‘‘Nonprofessional’’).
15 The Exchange believes the NASDAQ Options
Market charges only one distributor fee to allow a
subscriber access to its ‘‘NASDAQ ITCH-to-Trade
Options’’ (ITTO) and ‘‘Best of NASDAQ Options’’
(BONO) products. The Exchange believes NASDAQ
OMX BX charges only one distributor fee to allow
a subscriber access to its ‘‘BX Options Depth of
Market’’ (BX Depth) and ‘‘BX Options Top of
Market’’ (BX Top) products.
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thereby expanding the distribution of
this market data for the benefit of
investors.
The proposed formatting and clean-up
changes to the MDX fee schedule will
benefit Customers and users by making
the fee schedule clearer and easier to
understand.
For the reasons cited above, the
Exchange believes the proposed fees for
the COB Data Feed are equitable,
reasonable and not unfairly
discriminatory. In addition, the
Exchange believes that no substantial
countervailing basis exists to support a
finding that the proposed fees for the
COB Data Feed fails to meet the
requirements of the Act.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act,16 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. An
exchange’s ability to price its
proprietary data feed products is
constrained by (1) the existence of
actual competition for the sale of such
data, (2) the joint product nature of
exchange platforms, and (3) the
existence of alternatives to proprietary
data.
The Existence of Actual Competition.
The Exchange believes competition
provides an effective constraint on the
market data fees that the Exchange,
through MDX, has the ability and the
incentive to charge. CBOE has a
compelling need to attract order flow
from market participants in order to
maintain its share of trading volume.
This compelling need to attract order
flow imposes significant pressure on
CBOE to act reasonably in setting its
fees for market data, particularly given
that the market participants that will
pay such fees often will be the same
market participants from whom CBOE
must attract order flow. These market
participants include broker-dealers that
control the handling of a large volume
of customer and proprietary order flow.
Given the portability of order flow from
one exchange to another, any exchange
that sought to charge unreasonably high
data fees would risk alienating many of
the same customers on whose orders it
depends for competitive survival. CBOE
currently competes with eleven options
exchanges (including CBOE’s affiliate,
C2 Options Exchange) for order flow.17
16 15
U.S.C. 78f(b)(8).
Commission has previously made a finding
that the options industry is subject to significant
competitive forces. See, e.g., Securities Exchange
17 The
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In addition, in the case of products
that are distributed through market data
vendors, the market data vendors
themselves provide additional price
discipline for proprietary data products
because they control the primary means
of access to certain end users. These
vendors impose price discipline based
upon their business models. For
example, vendors that assess a
surcharge on data they sell are able to
refuse to offer proprietary products that
their end users do not or will not
purchase in sufficient numbers. Internet
portals, such as Google, impose price
discipline by providing only data that
they believe will enable them to attract
‘‘eyeballs’’ that contribute to their
advertising revenue. Similarly,
Customers will not offer the COB Data
Feed unless this product will help them
maintain current users or attract new
ones. For example, a broker-dealer will
not choose to offer the COB Data Feed
to its retail customers unless the brokerdealer believes that the retail customers
will use and value the data and the
provision of such data will help the
broker-dealer maintain the customer
relationship, which allows the brokerdealer to generate profits for itself.
Professional Users will not request the
COB Data Feed from Customers unless
they can use the data for profitgenerating purposes in their businesses.
All of these operate as constraints on
pricing proprietary data products.
Joint Product Nature of Exchange
Platform. Transaction execution and
proprietary data products are
complementary in that market data is
both an input and a byproduct of the
execution service. In fact, market data
and trade executions are a paradigmatic
example of joint products with joint
costs. The decision whether and on
which platform to post an order will
depend on the attributes of the
platforms where the order can be
posted, including the execution fees,
data quality, and price and distribution
of their data products. The more trade
executions a platform does, the more
valuable its market data products
become. The costs of producing market
data include not only the costs of the
data distribution infrastructure, but also
the costs of designing, maintaining, and
operating the exchange’s transaction
execution platform and the cost of
regulating the exchange to ensure its fair
operation and maintain investor
confidence. The total return that a
trading platform earns reflects the
Act Release No. 59949 (May 20, 2009), 74 FR 25593
(May 28, 2009) (SR–ISE–2009–97) (order approving
ISE’s proposal to establish fees for a real-time depth
of market data offering).
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revenues it receives from both products
and the joint costs it incurs. Moreover,
an exchange’s broker-dealer customers
view the costs of transaction executions
and market data as a unified cost of
doing business with the exchange.
Analyzing the cost of market data
product production and distribution in
isolation from the cost of all of the
inputs supporting the creation of market
data and market data products will
inevitably underestimate the cost of the
data and data products. Thus, because it
is impossible to obtain the data inputs
to create market data products without
a fast, technologically robust, and wellregulated execution system, system
costs and regulatory costs affect the
price of both obtaining the market data
itself and creating and distributing
market data products. It would be
equally misleading, however, to
attribute all of an exchange’s costs to the
market data portion of an exchange’s
joint products. Rather, all of an
exchange’s costs are incurred for the
unified purposes of attracting order
flow, executing and/or routing orders,
and generating and selling data about
market activity. The total return that an
exchange earns reflects the revenues it
receives from the joint products and the
total costs of the joint products.
The level of competition and
contestability in the market is evident in
the numerous alternative venues that
compete for order flow, including 12
options self-regulatory organization
(‘‘SRO’’) markets, as well as
internalizing broker-dealers (‘‘BDs’’) and
various forms of alternative trading
systems (‘‘ATSs’’), including dark pools
and electronic communication networks
(‘‘ECNs’’). Competition among trading
platforms can be expected to constrain
the aggregate return that each platform
earns from the sale of its joint products,
but different platforms may choose from
a range of possible, and equally
reasonable, pricing strategies as the
means of recovering total costs. For
example, some platforms may choose to
pay rebates to attract orders, charge
relatively low prices for market data
products (or provide market data
products free of charge), and charge
relatively high prices for accessing
posted liquidity. Other platforms may
choose a strategy of paying lower
rebates (or no rebates) to attract orders,
setting relatively high prices for market
data products, and setting relatively low
prices for accessing posted liquidity. In
this environment, there is no economic
basis for regulating maximum prices for
one of the joint products in an industry
in which suppliers face competitive
constraints with regard to the joint
offering.
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The Existence of Alternatives. CBOE
is constrained in pricing the COB Data
Feed by the availability to market
participants of alternatives to
purchasing the COB Data Feed. CBOE
must consider the extent to which
market participants would choose one
or more alternatives instead of
purchasing the exchange’s data. Other
options exchanges can and have
produced their own complex strategies
market data products, and thus are
sources of potential competition for
MDX. As noted above, ISE, NASDAQ
OMX PHLX and NYSE offer market data
products that compete with the COB
Data Feed. The large number of SROs,
BDs, and ATSs that currently produce
proprietary data or are currently capable
of producing it provides further pricing
discipline for proprietary data products.
Each SRO, ATS, and BD is currently
permitted to produce proprietary data
products, and many currently do.
Further, data products are valuable to
professional users only if they can be
used for profit-generating purposes in
their businesses and valuable to nonprofessional users only insofar as they
provide information that such users
expect will assist them in tracking
prices and market trends and making
trading decisions. The Exchange
believes that the proposed waiver of the
Data Fee and the cap on User Fees,
which may permit wider distribution of
the COB Data Feed at a lower cost to
Customers with a large number of
Professional and Non-professional
Users, may encourage more users to
demand and more Customers to choose
to offer the COB Data Feed, thereby
benefitting Professional and Nonprofessional Users, including public
investors.
The existence of numerous
alternatives to the Exchange’s products,
including proprietary data from other
sources, ensures that the Exchange
cannot set unreasonable fees, or fees
that are unreasonably discriminatory,
when vendors and subscribers can elect
these alternatives or choose not to
purchase a specific proprietary data
product if its cost to purchase is not
justified by the returns any particular
vendor or subscriber would achieve
through the purchase.
The COB Data Feed is voluntary on
the part of the Exchange, which is not
required to offer such services, and
voluntary on the part of prospective
Customers that are not required to use
it. The Exchange believes the COB Data
Feed offered by MDX will help attract
new users and new order flow to the
Exchange, thereby improving the
Exchange’s ability to compete in the
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market for options order flow and
executions.
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 18 and paragraph (f) of Rule
19b–4 19 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–2013–087 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–2013–087. 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
18 15
19 17
E:\FR\FM\22OCN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
22OCN1
62802
Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
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 the
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
available publicly. All submissions
should refer to File Number SR–CBOE–
2013–087 and should be submitted on
or before November 12, 2013.
the Securities and Exchange
Commission (the ‘‘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.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Kevin M. O’Neill,
Deputy Secretary.
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.
[FR Doc. 2013–24674 Filed 10–21–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70696; File No. SR–
NYSEMKT–2013–82]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change for a Temporary
Suspension of Those Aspects of Rules
36.20—Equities and 36.21—Equities
That Would Not Permit Floor Brokers
To Use Personal Portable Phone
Devices on the Trading Floor Due to
the Unavailability of ExchangeProvided Cell Phones Beginning on
October 10, 2013 Until the Earlier of
When Cell Phone Service Is Restored
or October 11, 2013
sroberts on DSK5SPTVN1PROD with FRONT MATTER
October 16, 2013.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on October
10, 2013, NYSE MKT LLC (the
‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with
20 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
21:08 Oct 21, 2013
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to temporarily
suspend those aspects of Rules 36.20—
Equities and 36.21—Equities that would
not permit Floor brokers to use personal
portable phone devices on the Trading
Floor.4 As proposed, all other aspects of
Rule 36—Equities remain applicable
and the temporary suspensions of the
applicable Rule 36—Equities
requirements are in effect beginning
October 10, 2013 when the outage
began, and remain in place until the
earlier of when phone service is restored
4 Pursuant
to Rule 6A—Equities, the Trading
Floor is defined as the restricted-access physical
areas designated by the Exchange for the trading of
securities.
1 15
VerDate Mar<15>2010
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes a temporary
suspension of those aspects of Rules
36.20—Equities and 36.21—Equities
that would not permit Floor brokers to
use personal portable phone devices on
the Trading Floor due to the
unavailability of Exchange-provided cell
phones beginning on October 10, 2013
until the earlier of when cell phone
service is restored or October 11, 2013.
The text of the proposed rule change is
available on the Exchange’s Web site at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
Jkt 232001
PO 00000
Frm 00220
Fmt 4703
Sfmt 4703
or close of business Friday, October 11,
2013.5
On October 10, 2013, the third-party
carrier that provides service for the
Exchange-provided cell phones
experienced an issue that affected
Exchange authorized and provided
portable phones for Floor brokers. This
outage only impacted the service for
Exchange authorized and provided
portable phones. As a result, all
Exchange authorized and provided cell
phones were non-operational before the
opening of trading on October 10, 2013.
The Exchange is working closely with
the third-party carrier to restore such
cell phone service.
Rules 36.20—Equities and 36.21—
Equities govern the type of telephone
communications that are approved for
Floor brokers. Pursuant to Rule 36.20—
Equities, Floor brokers may maintain a
telephone line on the Trading Floor and
use Exchange authorized and provided
portable phones while on the Trading
Floor. The use of such Exchange
authorized and provided portable
phones is governed by Rule 36.21—
Equities. Because of the issues with the
third-party carrier, all Exchange
authorized and provided portable
phones are not functional and therefore
Floor brokers cannot use the Exchange
authorized and provided portable
phones. However, the personal cell
phones of Floor brokers are operational
on the Trading Floor. The Exchange
believes that because communications
with customers is a vital part of a Floor
broker’s role as agent and therefore
contributes to maintaining a fair and
orderly market, during the period when
Exchange-provided cell phones are nonoperational, Floor brokers should be
permitted to use personal portable
phone devices in lieu of the nonoperational Exchange authorized and
provided portable phones.
The Exchange therefore proposes to
temporarily suspend the limitations in
Rules 36.20—Equities and 36.21—
Equities that permit Floor brokers to use
only Exchange authorized and provided
portable phones so that Floor brokers
may also use personal portable phones
on the Trading Floor. The Exchange
proposes that pursuant to this
temporary suspension, Floor brokers
must provide the Exchange with the
names of all Floor-based personnel who
used personal portable phones during
this temporary suspension period,
together with the phone number and
applicable carrier for each number.
5 The Exchange provided Floor brokers with
notice of this rule filing, including the applicable
recordkeeping and other requirements related to
using personal cell phones during the temporary
suspension of Rule 36—Equities.
E:\FR\FM\22OCN1.SGM
22OCN1
]]>Agencies
[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62798-62802]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24674]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70683; File No. SR-CBOE-2013-087]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change Relating to Fees for the Complex Order Book Data
Feed for CBOE Listed Options
October 15, 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, Chicago Board Options Exchange,
Incorporated (the ``Exchange'' or ``CBOE'') 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 Exchange. The Commission is publishing this notice to
[[Page 62799]]
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 fee schedule of Market Data Express,
LLC (``MDX''), an affiliate of CBOE, to establish fees for the Complex
Order Book (``COB'') Data Feed for CBOE listed options (``COB Data
Feed'' or ``Data''). 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 COB Data Feed is a real-time feed that consists of data
regarding the Exchange's Complex Order Book and related complex order
information. The COB Data Feed includes ``best bid and offer'' or
``BBO'' quotes and identifying information for all CBOE-traded complex
order strategies, as well as all executed CBOE complex order trades
(and identifies whether the trade was a customer trade or whether a
complex order in the COB is a customer order). The COB Data Feed is
currently made available by MDX to all market participants free of
charge.\3\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 70118 (August 5,
2013) (SR-CBOE-2013-070).
---------------------------------------------------------------------------
The Exchange proposes to establish fees for the COB Data Feed. MDX
would charge Customers of the COB Data Feed $3,000 per month (``Data
Fee''). A COB Data Feed ``Customer'' is any entity that receives the
COB Data Feed, either directly from MDX's system or through a
connection to MDX provided by an approved redistributor (i.e., a market
data vendor or an extranet service provider), and distributes it
externally or uses it internally, except that an entity or person that
receives the COB Data Feed from a Customer and only uses it internally
is not a ``Customer'' if it receives the COB Data Feed from a Customer
subject to a form of ``Subscriber Agreement'' that has been approved by
MDX. The Data Fee for the COB Data Feed would be waived for Customers
of the COB Data Feed who are also Customers of the BBO Data Feed.\4\
Customers of the BBO Data Feed are currently charged $5,000 per month
by MDX.\5\ The proposed waiver of the Data Fee for the COB Data Feed
would allow a Customer of the COB Data Feed who is also a Customer of
the BBO Data Feed to redistribute the COB Data Feed for no additional
charge.\6\
---------------------------------------------------------------------------
\4\ The BBO Data Feed is a real-time, low latency data feed that
includes CBOE BBO data, consisting of all outstanding quotes and
standing orders at the best available price level on each side of
the market, with aggregate size and last sale data. The BBO Data
Feed includes the data included in the COB Data Feed, among other
data. See Securities Exchange Act Release No. 69438 (April 23,
2013), 78 FR 25334 (April 30, 2013).
\5\ Id.
\6\ Such Customers would still be subject to User Fees as
described below.
---------------------------------------------------------------------------
In addition, MDX would charge a Customer ``User Fees'' of $25 per
month per Device \7\ or user ID for receipt of the data by
``Professional Users'' \8\ and $1 per month for receipt of the data by
``Non-Professional Users''.\9\ User Fees would be subject to a cap of
$2,000 per month, i.e., a Customer would pay no more than $2,000 in
User Fees in a month.
---------------------------------------------------------------------------
\7\ A ``Device'' means any computer, workstation or other item
of equipment, fixed or portable, that receives, accesses and/or
displays data in visual, audible or other form.
\8\ A ``Professional User'' is any natural person recipient of
the COB Data Feed who is not a Non-Professional User. User Fees for
Professional Users are payable for both ``internal'' Professional
Users (Devices or user IDs of employees of a Customer) and
``external'' Professional Users (Devices or user IDs of Professional
Users who receive the Data from a Customer and are not employed by
the Customer). (Non-Professional Users must be external since a
person who uses the COB Data Feed for a commercial purpose cannot be
a Non-Professional User.)
\9\ A ``Non-Professional User'' is a natural person who uses the
COB Data Feed only for personal purposes and not for any commercial
purpose and who, if he or she works in the United States, is not:
(i) Registered or qualified in any capacity with the Securities and
Exchange Commission, the Commodities Futures Trading Commission, any
state securities agency, any securities exchange or association, or
any commodities or futures contract market or association; (ii)
engaged as an ``investment adviser'' as that term is defined in
Section 201(11) of the Investment Advisors Act of 1940 (whether or
not registered or qualified under that Act); or (iii) employed by a
bank or other organization exempt from registration under federal or
state securities laws to perform functions that would require
registration or qualification if such functions were performed for
an organization not so exempt; or, if he or she works outside of the
United States, does not perform the same functions as someone who
would qualify as a Non-Professional User if he or she worked in the
United States.
---------------------------------------------------------------------------
The Exchange also proposes to make several formatting and clean up
changes to the MDX fee schedule. The Exchange proposes to create three
separate sections on the MDX fee schedule for the BBO Data Feed, COB
Data Feed and FLEX Options Data Feed\10\ and include the definitions
applicable to each data feed within its respective section. The
Exchange proposes to renumber the section on Systems Fees and move the
definition of Port Fee within that section. Finally, the Exchange
proposes to delete the Definitions section of the MDX fee schedule,
including the provisions on invoicing and late payments which are
included within MDX's written agreement for the data.
---------------------------------------------------------------------------
\10\ The FLEX Options Data Feed is currently made available to
all market participants free of charge. See Securities Exchange Act
Release No. 68696 (January 18, 2013), 78 FR 5527 (January 25, 2013).
---------------------------------------------------------------------------
The proposed fees would be effective on October 1, 2013.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the requirements of Section 6(b) of the Securities Exchange Act of 1934
(``Act'') \11\ in general, and, in particular, with Section 6(b)(4) of
the Act \12\ in that it provides for the equitable allocation of
reasonable dues, fees and other charges among users and recipients of
the Data, and with Section 6(b)(5) \13\ of the Act in that it is not
designed to permit unfair discrimination between them. The Exchange
believes the proposed Data Fee and User Fees are equitable and not
unfairly discriminatory because they would apply equally to all
Customers of the COB Data Feed except the Data Fee would be waived for
Customers of the COB Data Feed who are also Customers of the BBO Data
Feed. The Exchange notes that the fee structure of differentiated
professional and nonprofessional fees has long been used by other
exchanges for their products and by the Options Price Reporting
Authority (``OPRA'') Plan in order to reduce the price of data to
retail investors and make it more broadly available.\14\
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(4).
\13\ 15 U.S.C. 78f(b)(5).
\14\ See, e.g., Securities Exchange Act Release No. 67589
(August 2, 2012), 77 FR 47459 (August 8, 2012) (revising OPRA's
definition of the term ``Nonprofessional'').
---------------------------------------------------------------------------
[[Page 62800]]
The Exchange believes the proposed waiver of the Data Fee is
equitable and not unfairly discriminatory because it would apply
equally to all Customers of the COB Data Feed who are also Customers of
the BBO Data Feed. Customers of the BBO Data Feed already pay MDX
$5,000 for the right to use and redistribute the data in the BBO Data
Feed. The BBO Data Feed includes the data in the COB Data Feed. The
proposed waiver of the Data Fee would allow a Customer of the COB Data
Feed who is also a Customer of the BBO Data Feed to redistribute the
COB Data Feed for no additional charge, thereby incentivizing further
redistribution of the data in the COB Data Feed. The Exchange notes
other exchanges offer similar fee waivers.\15\
---------------------------------------------------------------------------
\15\ The Exchange believes the NASDAQ Options Market charges
only one distributor fee to allow a subscriber access to its
``NASDAQ ITCH-to-Trade Options'' (ITTO) and ``Best of NASDAQ
Options'' (BONO) products. The Exchange believes NASDAQ OMX BX
charges only one distributor fee to allow a subscriber access to its
``BX Options Depth of Market'' (BX Depth) and ``BX Options Top of
Market'' (BX Top) products.
---------------------------------------------------------------------------
The Exchange also believes the proposed fees are equitable because
the COB Data Feed is purely optional. Only those Customers that deem
the product to be of sufficient overall value and usefulness would
purchase it.
The Exchange believes the proposed fees are reasonable because they
compare favorably to fees that other markets charge for similar
products. For example, the Exchange believes The International
Securities Exchange (``ISE'') offers a ``Spread Feed'', which like the
COB Data Feed includes order and quote data for complex strategies. The
Exchange believes ISE charges distributors of its Spread Feed $3,000
per month and a monthly controlled device fee of $25 per controlled
device for Professionals.
The Exchange notes that the COB Data Feed also competes with
products offered by NASDAQ OMX PHLX and NYSE. NASDAQ OMX PHLX offers a
market data product entitled ``TOPO Plus Orders'', which like the COB
Data Feed includes order and last sale information for complex
strategies and other market data. NYSE offers market data products
entitled ``NYSE ArcaBook for Amex Options'' and ``NYSE ArcaBook for
Arca Options'' that include top-of-book and last sale data for complex
strategies similar to the data in the COB Data Feed.
The Exchange believes that the proposed cap on User Fees is
reasonable because it may encourage more vendors to choose to offer the
COB Data Feed, thereby expanding the distribution of this market data
for the benefit of investors.
The proposed formatting and clean-up changes to the MDX fee
schedule will benefit Customers and users by making the fee schedule
clearer and easier to understand.
For the reasons cited above, the Exchange believes the proposed
fees for the COB Data Feed are equitable, reasonable and not unfairly
discriminatory. In addition, the Exchange believes that no substantial
countervailing basis exists to support a finding that the proposed fees
for the COB Data Feed fails to meet the requirements of the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\16\ 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. An exchange's ability to price its proprietary
data feed products is constrained by (1) the existence of actual
competition for the sale of such data, (2) the joint product nature of
exchange platforms, and (3) the existence of alternatives to
proprietary data.
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
The Existence of Actual Competition. The Exchange believes
competition provides an effective constraint on the market data fees
that the Exchange, through MDX, has the ability and the incentive to
charge. CBOE has a compelling need to attract order flow from market
participants in order to maintain its share of trading volume. This
compelling need to attract order flow imposes significant pressure on
CBOE to act reasonably in setting its fees for market data,
particularly given that the market participants that will pay such fees
often will be the same market participants from whom CBOE must attract
order flow. These market participants include broker-dealers that
control the handling of a large volume of customer and proprietary
order flow. Given the portability of order flow from one exchange to
another, any exchange that sought to charge unreasonably high data fees
would risk alienating many of the same customers on whose orders it
depends for competitive survival. CBOE currently competes with eleven
options exchanges (including CBOE's affiliate, C2 Options Exchange) for
order flow.\17\
---------------------------------------------------------------------------
\17\ The Commission has previously made a finding that the
options industry is subject to significant competitive forces. See,
e.g., Securities Exchange Act Release No. 59949 (May 20, 2009), 74
FR 25593 (May 28, 2009) (SR-ISE-2009-97) (order approving ISE's
proposal to establish fees for a real-time depth of market data
offering).
---------------------------------------------------------------------------
In addition, in the case of products that are distributed through
market data vendors, the market data vendors themselves provide
additional price discipline for proprietary data products because they
control the primary means of access to certain end users. These vendors
impose price discipline based upon their business models. For example,
vendors that assess a surcharge on data they sell are able to refuse to
offer proprietary products that their end users do not or will not
purchase in sufficient numbers. Internet portals, such as Google,
impose price discipline by providing only data that they believe will
enable them to attract ``eyeballs'' that contribute to their
advertising revenue. Similarly, Customers will not offer the COB Data
Feed unless this product will help them maintain current users or
attract new ones. For example, a broker-dealer will not choose to offer
the COB Data Feed to its retail customers unless the broker-dealer
believes that the retail customers will use and value the data and the
provision of such data will help the broker-dealer maintain the
customer relationship, which allows the broker-dealer to generate
profits for itself. Professional Users will not request the COB Data
Feed from Customers unless they can use the data for profit-generating
purposes in their businesses. All of these operate as constraints on
pricing proprietary data products.
Joint Product Nature of Exchange Platform. Transaction execution
and proprietary data products are complementary in that market data is
both an input and a byproduct of the execution service. In fact, market
data and trade executions are a paradigmatic example of joint products
with joint costs. The decision whether and on which platform to post an
order will depend on the attributes of the platforms where the order
can be posted, including the execution fees, data quality, and price
and distribution of their data products. The more trade executions a
platform does, the more valuable its market data products become. The
costs of producing market data include not only the costs of the data
distribution infrastructure, but also the costs of designing,
maintaining, and operating the exchange's transaction execution
platform and the cost of regulating the exchange to ensure its fair
operation and maintain investor confidence. The total return that a
trading platform earns reflects the
[[Page 62801]]
revenues it receives from both products and the joint costs it incurs.
Moreover, an exchange's broker-dealer customers view the costs of
transaction executions and market data as a unified cost of doing
business with the exchange.
Analyzing the cost of market data product production and
distribution in isolation from the cost of all of the inputs supporting
the creation of market data and market data products will inevitably
underestimate the cost of the data and data products. Thus, because it
is impossible to obtain the data inputs to create market data products
without a fast, technologically robust, and well-regulated execution
system, system costs and regulatory costs affect the price of both
obtaining the market data itself and creating and distributing market
data products. It would be equally misleading, however, to attribute
all of an exchange's costs to the market data portion of an exchange's
joint products. Rather, all of an exchange's costs are incurred for the
unified purposes of attracting order flow, executing and/or routing
orders, and generating and selling data about market activity. The
total return that an exchange earns reflects the revenues it receives
from the joint products and the total costs of the joint products.
The level of competition and contestability in the market is
evident in the numerous alternative venues that compete for order flow,
including 12 options self-regulatory organization (``SRO'') markets, as
well as internalizing broker-dealers (``BDs'') and various forms of
alternative trading systems (``ATSs''), including dark pools and
electronic communication networks (``ECNs''). Competition among trading
platforms can be expected to constrain the aggregate return that each
platform earns from the sale of its joint products, but different
platforms may choose from a range of possible, and equally reasonable,
pricing strategies as the means of recovering total costs. For example,
some platforms may choose to pay rebates to attract orders, charge
relatively low prices for market data products (or provide market data
products free of charge), and charge relatively high prices for
accessing posted liquidity. Other platforms may choose a strategy of
paying lower rebates (or no rebates) to attract orders, setting
relatively high prices for market data products, and setting relatively
low prices for accessing posted liquidity. In this environment, there
is no economic basis for regulating maximum prices for one of the joint
products in an industry in which suppliers face competitive constraints
with regard to the joint offering.
The Existence of Alternatives. CBOE is constrained in pricing the
COB Data Feed by the availability to market participants of
alternatives to purchasing the COB Data Feed. CBOE must consider the
extent to which market participants would choose one or more
alternatives instead of purchasing the exchange's data. Other options
exchanges can and have produced their own complex strategies market
data products, and thus are sources of potential competition for MDX.
As noted above, ISE, NASDAQ OMX PHLX and NYSE offer market data
products that compete with the COB Data Feed. The large number of SROs,
BDs, and ATSs that currently produce proprietary data or are currently
capable of producing it provides further pricing discipline for
proprietary data products. Each SRO, ATS, and BD is currently permitted
to produce proprietary data products, and many currently do.
Further, data products are valuable to professional users only if
they can be used for profit-generating purposes in their businesses and
valuable to non-professional users only insofar as they provide
information that such users expect will assist them in tracking prices
and market trends and making trading decisions. The Exchange believes
that the proposed waiver of the Data Fee and the cap on User Fees,
which may permit wider distribution of the COB Data Feed at a lower
cost to Customers with a large number of Professional and Non-
professional Users, may encourage more users to demand and more
Customers to choose to offer the COB Data Feed, thereby benefitting
Professional and Non-professional Users, including public investors.
The existence of numerous alternatives to the Exchange's products,
including proprietary data from other sources, ensures that the
Exchange cannot set unreasonable fees, or fees that are unreasonably
discriminatory, when vendors and subscribers can elect these
alternatives or choose not to purchase a specific proprietary data
product if its cost to purchase is not justified by the returns any
particular vendor or subscriber would achieve through the purchase.
The COB Data Feed is voluntary on the part of the Exchange, which
is not required to offer such services, and voluntary on the part of
prospective Customers that are not required to use it. The Exchange
believes the COB Data Feed offered by MDX will help attract new users
and new order flow to the Exchange, thereby improving the Exchange's
ability to compete in the market for options order flow and executions.
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 \18\ and paragraph (f) of Rule 19b-4 \19\
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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\18\ 15 U.S.C. 78s(b)(3)(A).
\19\ 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-2013-087 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-2013-087. 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
[[Page 62802]]
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
the 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 available publicly. All submissions should refer to
File Number SR-CBOE-2013-087 and should be submitted on or before
November 12, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24674 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P
