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, 75653-75655 [2013-29606]
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maindgalligan on DSK5TPTVN1PROD with NOTICES
Federal Register / Vol. 78, No. 239 / Thursday, December 12, 2013 / Notices
changes to its Charter to replace each
supermajority voting requirement with a
‘‘majority of outstanding shares’’ voting
standard. NASDAQ OMX believes this
approach will strike an appropriate
balance between responding to
stockholder feedback and protecting the
Company and its investors against
hostile takeovers. In addition, the
clarifying changes to the Charter will
protect investors by making the Charter
more concise and easier to understand.
Both sets of changes to the Charter were
approved by NASDAQ OMX’s investors
at the most recent annual meeting of
stockholders.
NASDAQ OMX also proposes to
eliminate the Certificate of Designation
relating to the Series A Convertible
Preferred Stock, which is no longer
outstanding. This proposed change will
protect investors by enhancing the
clarity of NASDAQ OMX’s Charter.
Finally, NASDAQ OMX proposes
changes to its By-Laws: (i) To
implement a stockholder right to call a
special meeting; (ii) to enhance the
‘‘advance notice’’ procedures; (iii) to
require certain information and
agreements from director-nominees; (iv)
to remove and replace the supermajority
voting provisions to conform to the
Charter amendments; (v) to clarify the
procedures for filling Board vacancies;
(vi) to allow the use of electronic means
for certain notices and waivers; (vii) to
conform the composition requirements
for the Management Compensation
Committee of NASDAQ OMX’s Board
with the NASDAQ listing rules; (vii)
[sic] to prevent the Board from
amending or repealing By-Law
amendments approved by the
stockholders; and (viii) [sic] to make
other non-substantive changes.
The proposals relating to the
stockholder right to call a special
meeting and to remove and replace the
supermajority voting requirements are
responsive to feedback from NASDAQ
OMX’s stockholders. The additional
procedural requirements relating to
special and annual meetings will protect
investors by stating clearly and
explicitly the procedures stockholders
must follow to propose business at such
meetings. The requirement for certain
information and agreements from
director-nominees will enhance investor
protection by ensuring that nominees
provide adequate information about
themselves and also comply with
applicable law and certain NASDAQ
OMX policies and procedures relating to
the Board. The prohibition on the Board
amending or repealing By-Law
amendments approved by the
stockholders is a stockholder-friendly
provision that is intended to prevent the
VerDate Mar<15>2010
16:45 Dec 11, 2013
Jkt 232001
Board from subsequently overriding
stockholders’ wishes. Finally, the
remaining changes are clarifying in
nature, and they enhance investor
protection by conforming NASDAQ
OMX’s governance documents to
current practices and applicable rules
and by making them clearer and easier
to understand.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Because the proposed rule change
relates to the governance of NASDAQ
OMX and not to the operations of the
Exchange, the Exchange does not
believe that the proposed rule change
will impose any burden on competition
not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
75653
All submissions should refer to File
Number SR–BX–2013–057. 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 Number SR–BX–
2013–057, and should be submitted on
or before January 2, 2014.
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date 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 shall: (a) By order
approve or disapprove such proposed
rule change, or (b) institute proceedings
to determine whether the proposed rule
change should be disapproved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.41
Kevin M. O’Neill,
Deputy Secretary.
IV. Solicitation of Comments
[FR Doc. 2013–29610 Filed 12–11–13; 8:45 am]
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:
BILLING CODE 8011–01–P
Electronic Comments
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
• 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–
BX–2013–057 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.
PO 00000
Frm 00111
Fmt 4703
Sfmt 4703
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71007; File No. SR–CBOE–
2013–117]
December 6, 2013.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19b–4 thereunder,2
41 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\12DEN1.SGM
12DEN1
75654
Federal Register / Vol. 78, No. 239 / Thursday, December 12, 2013 / Notices
notice is hereby given that on November
27, 2013, the Chicago Board Options
Exchange, Incorporated (the ‘‘Exchange’’
or ‘‘CBOE’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
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
maindgalligan on DSK5TPTVN1PROD with NOTICES
1. Purpose
The Exchange has reevaluated the
current amount of the Options
Regulatory Fee (‘‘ORF’’) in connection
with its annual budget review. In light
of increased regulatory costs, including
the hiring of many new regulatory
employees, and expected volume levels
for 2014, the Exchange proposes to
increase the ORF from $.0074 per
contract to $.0095 per contract. The
proposed fee change would be operative
on January 1, 2014.
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
VerDate Mar<15>2010
16:45 Dec 11, 2013
Jkt 232001
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.
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
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.
PO 00000
Frm 00112
Fmt 4703
Sfmt 4703
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
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
fee change is reasonable because it
would help the Exchange offset
increased regulatory expenses, in
particular the hiring of many new
regulatory employees, but would not
result in total regulatory revenue
exceeding total regulatory costs. 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
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
5 15
E:\FR\FM\12DEN1.SGM
12DEN1
Federal Register / Vol. 78, No. 239 / Thursday, December 12, 2013 / Notices
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.
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:
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
SECURITIES AND EXCHANGE
COMMISSION
All submissions should refer to File
Number SR–CBOE–2013–117. 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–
2013–117 and should be submitted on
or before January 2, 2014.
[Release No. 34–71016; File No. SR–
NYSEArca–2013–136]
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–29606 Filed 12–11–13; 8:45 am]
BILLING CODE 8011–01–P
maindgalligan on DSK5TPTVN1PROD with NOTICES
• 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–2013–117 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
VerDate Mar<15>2010
16:45 Dec 11, 2013
Jkt 232001
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending the NYSE Arca
Options Fee Schedule To Raise the
Take Liquidity Fee for Lead Market
Maker and Market Maker Electronic
Executions in Penny Pilot Issues
December 6, 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
November 26, 2013, NYSE Arca, Inc.
(the ‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 selfregulatory 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
The Exchange proposes to amend the
NYSE Arca Options Fee Schedule (‘‘Fee
Schedule’’) to raise the Take Liquidity
fee for Lead Market Maker (‘‘LMM’’) and
Market Maker electronic executions in
Penny Pilot Issues. The Exchange
proposes to implement the fee change
effective December 1, 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.
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.
Electronic Comments
Permit Holder proprietary transactions if the
Exchange deems it advisable.
8 15 U.S.C. 78s(b)(3)(A).
9 17 CFR 240.19b–4(f).
75655
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
10 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00113
Fmt 4703
Sfmt 4703
E:\FR\FM\12DEN1.SGM
12DEN1
Agencies
[Federal Register Volume 78, Number 239 (Thursday, December 12, 2013)]
[Notices]
[Pages 75653-75655]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-29606]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71007; File No. SR-CBOE-2013-117]
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
December 6, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\
[[Page 75654]]
notice is hereby given that on November 27, 2013, the Chicago Board
Options Exchange, Incorporated (the ``Exchange'' or ``CBOE'') 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 connection with its annual budget review.
In light of increased regulatory costs, including the hiring of many
new regulatory employees, and expected volume levels for 2014, the
Exchange proposes to increase the ORF from $.0074 per contract to
$.0095 per contract. The proposed fee change would be operative on
January 1, 2014.
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 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 fee change is reasonable because
it would help the Exchange offset increased regulatory expenses, in
particular the hiring of many new regulatory employees, but would not
result in total regulatory revenue exceeding total regulatory costs.
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.
---------------------------------------------------------------------------
[[Page 75655]]
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.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-CBOE-2013-117 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-2013-117. 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-2013-117 and should be
submitted on or before January 2, 2014.
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\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. 2013-29606 Filed 12-11-13; 8:45 am]
BILLING CODE 8011-01-P