Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend the Single-Sided Order Fees and Credits, 78424-78426 [2013-30758]
Download as PDF
78424
Federal Register / Vol. 78, No. 248 / Thursday, December 26, 2013 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71142; File No. TP 14–03]
Order Granting a Limited Exemption
From Rule 102(a) of Regulation M to
Certain Business Development
Companies Pursuant to Rule 102(e) of
Regulation M
December 19, 2013.
emcdonald on DSK67QTVN1PROD with NOTICES
By letter dated December 19, 2013
(‘‘letter’’), as supplemented by
conversations with the staff of the
Division of Trading and Markets
¯
(‘‘Staff’’), counsel for CION Investment
Corporation (‘‘Company’’), an unlisted
business development company
(‘‘BDC’’),1 requested on behalf of the
Company that the Securities and
Exchange Commission (‘‘Commission’’)
issue an exemption from Rule 102 of
Regulation M.2 Specifically, the letter
requests that the Commission exempt
the Company from the requirements of
Rule 102(a) so that the Company may
conduct a periodic share repurchase
program during the course of the
continuous offering of shares of the
Company (‘‘Shares’’).
Rule 102(a) of Regulation M
specifically prohibits issuers, selling
security holders, and any of their
affiliated purchasers from directly or
indirectly bidding for, purchasing, or
attempting to induce another person to
bid for or purchase a ‘‘covered security’’
until the applicable restricted period
has ended. As a consequence of the
continuous offering of the Shares, the
Company will be engaged in a
distribution of the Shares pursuant to
Rule 102. As a result, bids for or
purchases of Shares or any reference
security by the Company or any
affiliated purchaser of the Company are
prohibited during the restricted period
specified in Rule 102, unless
specifically excepted by or exempted
from Rule 102. As the Company seeks
to engage in periodic repurchases of
Shares during the applicable restricted
period, absent an exception these
repurchases would violate Rule 102(a).
The request is similar to a number of
requests from unlisted BDCs for
conditional exemptive relief from Rule
102 that were granted pursuant to
delegated authority.3 Like other BDC
1 See Section 2(a)(48) of the Investment Company
Act of 1940 (‘‘1940 Act’’) (defining ‘‘business
development company’’).
2 17 CFR 242.102.
3 See, e.g., Order Granting Business Development
Corporation of America a Limited Exemption from
Rule 102(a) of Regulation M Pursuant to Rule
102(e), Exchange Act Rel. No. 67620 (August 8,
2012); Order Granting FS Investment Corporation II
a Limited Exemption from Rule 102(a) of Regulation
VerDate Mar<15>2010
18:06 Dec 24, 2013
Jkt 232001
repurchase programs that have been
given exemptive relief from Rule 102,
the repurchase program is designed to
provide a limited source of liquidity for
the Company’s shareholders as there is
no trading market for the Shares. In
addition, like other BDC repurchase
programs, the repurchase program is
fully disclosed to shareholders in the
prospectus so the existence of the
repurchase program should be known
by investors, thus minimizing potential
manipulative effects. The relief
requested is also similar to that
extended to unlisted real estate
investment trusts to permit similar
repurchase programs.4 Based on our
experience with these prior requests, we
believe that it is appropriate to extend
exemptive relief for all BDC repurchase
programs that meet the same criteria.
Accordingly, we find that it is
appropriate in the public interest and is
consistent with the protection of
investors to grant a conditional
exemption from Rule 102(a) to permit
any unlisted company, including the
Company, that has elected to be treated
as a BDC under the 1940 Act to engage
in periodic repurchases of their shares
during the applicable restricted period,
subject to the conditions described
below.
Pursuant to the conditions to this
exemptive relief, any BDC seeking to
rely on this exemption must terminate
their repurchase program should a
secondary trading market for its
common stock develop. As a result, the
repurchase programs being given
exemptive relief in this order should not
have a manipulative effect on the
applicable distribution. This exemptive
relief is further conditioned on the
repurchase program purchasing shares
of common stock at a price that does not
exceed the then current public offering
price of such securities. This should
help ensure that the repurchase
programs being extended relief in this
order do not have a manipulative effect
on the price of such distributions as the
purchases should not improve the
offering price.
Conclusion
It is hereby ordered, pursuant to Rule
102(e), that any unlisted company that
has elected to be treated as a BDC under
the 1940 Act is exempt from Rule 102(a)
M Pursuant to Rule 102(e), Exchange Act Rel. No.
67163 (June 7, 2012); and Letter from Josephine J.
Tao, Assistant Director, to Steven B. Boehm,
Sutherland Asbill and Brennan LLP regarding FS
Investment Corporation (April 20, 2009).
4 Letter from James A. Brigagliano, Associate
Director, to Dennis O. Garris, Alston & Bird LLP
regarding Class Relief for REIT Share Redemption
Programs (October 22, 2007).
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
for the limited purpose of engaging in
periodic repurchases of their shares
during the applicable restricted period,
subject to the following conditions:
• Any company relying upon this
exemption shall terminate its
repurchase program if a secondary
market for the shares being repurchased
develops; and
• Any repurchase pursuant to this
exemption will be made at a price that
does not exceed the then current public
offering price for such securities.
This exemptive relief is subject to
modification or revocation at any time
the Commission determines that such
action is necessary or appropriate in
furtherance of the purposes of the
Exchange Act. In addition, persons
relying on this exemption are directed
to the anti-fraud and anti-manipulation
provisions of the federal securities laws,
particularly Section 10(b) of the
Exchange Act, and Rule 10b–5
thereunder. Responsibility for
compliance with these and any other
applicable provisions of the federal
securities laws must rest with the
persons relying on this exemption. This
order should not be considered a view
with respect to any other question that
the transactions may raise, including,
but not limited to the adequacy of the
disclosure concerning, and the
applicability of other federal or state
laws to, such transactions.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.5
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–30763 Filed 12–24–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71137; File No. SR–CHX–
2013–22]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change to Amend
the Single-Sided Order Fees and
Credits
December 19, 2013.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on December
18, 2013, the Chicago Stock Exchange,
Inc. (‘‘CHX’’ or ‘‘Exchange’’) filed with
5 17
CFR 200.30–3(a)(6).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
E:\FR\FM\26DEN1.SGM
26DEN1
Federal Register / Vol. 78, No. 248 / Thursday, December 26, 2013 / Notices
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
CHX proposes to amend its Schedule
of Participant Fees and Assessments
(the ‘‘Fee Schedule’’) to amend the
Single-Sided Order Fees and Credits
and the Order Cancellation Fee. The
Exchange proposes to implement the fee
changes on January 2, 2014. The text of
this proposed rule change is available
on the Exchange’s Web site at https://
www.chx.com/rules/proposed_
rules.htm, 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.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
emcdonald on DSK67QTVN1PROD with NOTICES
1. Purpose
The Exchange proposes to amend
Section E.1 of the Fee Schedule,
effective January 2, 2014. Specifically,
the Exchange proposes to amend
Section E.1 to set the Liquidity
Providing Credit for all single-sided
orders of 100 or more shares executed
in the Matching System in Tape A, B,
and C securities priced greater than or
equal to $1.00/share at $0.0020/share.
The Exchange does not propose to make
any other amendments to the Fee
Schedule.
Current Section E.1
On July 1, 2013, the Exchange
adopted current Section E.1 of the Fee
VerDate Mar<15>2010
18:06 Dec 24, 2013
Jkt 232001
Schedule,4 which applies to all singlesided orders of 100 or more shares
executed in the CHX Matching System.
Specifically, the Exchange set the
Liquidity Providing Credit for all Tape
A, B, and C securities priced greater
than or equal to $1.00/share at
$0.00250/share and set the
corresponding Liquidity Removing Fee
at $0.0030/share. In doing so, the
Exchange unified pricing across all
Tapes, eliminated the distinction
between Derivative Securities Products
and Non-Derivative Securities Products
throughout the Fee Schedule and
eliminated the distinction between
‘‘Regular Trading Session’’ and ‘‘Early
or Late Trading Session’’ in Section E.1
of the Fee Schedule.5
Proposed Section E.1
The Exchange now proposes to reduce
the Liquidity Providing Credit for all
single-sided orders of 100 shares or
more executed in the Matching System
in Tape A, B, and C securities priced
greater than or equal to $1.00/share from
$0.00250/share to $0.0020/share. As
such, the Exchange proposes to amend
paragraph (b) under Section E.1 to
replace ‘‘$0.00250/share’’ with
‘‘$0.0020/share.’’
However, the Exchange does not
propose to change the corresponding
Liquidity Removing Fee, which is
currently $0.0030/share. In addition, for
all single-sided orders of 100 or more
shares executed in the CHX Matching
System in securities priced less than
$1.00/share, the Exchange will maintain
the current Liquidity Providing Credit of
$0.00009/share and the Liquidity
Removing Fee of 0.30% of the trade
value.
Despite the proposed decrease in the
Liquidity Providing Credit, the
Exchange believes that a combination of
the proposed Liquidity Providing Credit
and the Exchange’s recently-adopted
Market Data Revenue Rebates program 6
will continue to incentivize activity by
Participants on the Exchange’s trading
facilities, encourage order flow, and
allow the Exchange to remain
4 See Securities Exchange Act Release No. 69903
(July 1, 2013), 78 FR 40788 (July 8, 2013) (SR–CHX–
2013–12) (‘‘Notice of Filing and Immediate
Effectiveness of Proposed Rule Change to Amend
the Single-Sided Order Fees and Credits and the
Order Cancellation Fee’’); see also Securities
Exchange Act Release No. 69903A (August 13,
2013), 78 FR 49308 (August 13, 2013).
5 Id.
6 See Section P of the Fee Schedule; see also
Securities Exchange Act Release No. 70546 (October
3, 2013), 78 FR 61413 (September 27, 2013)
(‘‘Notice of Filing and Immediate Effectiveness of
Proposed Rule Change to Adopt a Market Data
Revenue Rebates Program’’).
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
78425
competitive in today’s orders
marketplace.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act 7 in general, and
furthers the objectives of Section 6(b)(4)
of the Act 8 in particular, in that it
provides for the equitable allocation of
reasonable dues, fees and other charges
among members and other persons
using any facility or system which the
Exchange operates or controls, and does
not unfairly discriminate between
customers, issuers, or broker dealers.
Specifically, since the proposed
Liquidity Providing Credit will continue
to apply to all single-sided orders of 100
or more shares executed in the CHX
Matching System and the corresponding
Liquidity Removing Fee will remain
unchanged, the Exchange believes that
the proposed Section E.1 will equitably
allocate credits and fees among
Participants in a non-discriminatory
nature. Furthermore, the proposed
Liquidity Providing Credit of $0.0020/
share is reasonable, where the proposed
value is similar to liquidity credits
offered by other exchanges, such as
NASDAQ.9
The Exchange notes that it operates in
a highly competitive market in which
market participants can readily favor
competing venues. In such an
environment, the Exchange must
continually review, and consider
adjusting, its fees and credits to remain
competitive with other exchanges. For
the reasons described above, the
Exchange believes that the proposed
rule change reflects this competitive
environment.
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 purposes of the Act. Specifically,
the proposed Liquidity Providing Credit
will contribute to the protection of
investors and the public interest by
maintaining the simplified schedule of
credits paid and fees assessed by the
Exchange, as it will be applied to all
single-sided orders of 100 shares or
more executed in the Matching System
in Tape A, B, and C securities priced
greater than or equal to $1.00/share.
Moreover, the combination of the
proposed Liquidity Providing Credit
7 15
U.S.C. 78f.
U.S.C. 78f(b)(4).
9 NASDAQ ‘‘Rebate to Add Displayed Liquidity,
Shares Executed at or Above $1.00’’ ranges from
$0.0020/share to $0.00305/share.
8 15
E:\FR\FM\26DEN1.SGM
26DEN1
78426
Federal Register / Vol. 78, No. 248 / Thursday, December 26, 2013 / Notices
and Market Data Revenue Rebates will
continue to incentivize order senders to
submit orders to the Exchange, which
will, in turn, enhance competition
amongst competing trading centers and
contribute to the production of investors
and the public interest.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A)(ii) of the Act 10 and
subparagraph (f)(2) of Rule 19b–4
thereunder 11 because it establishes or
changes a due, fee, or other charge
imposed by the Exchange.
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 shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
As fully discussed above, the
Exchange believes that the proposed Fee
Schedule will create equable credit and
fee amounts to incent activity among all
Participants within the Exchange’s
trading facilities.
emcdonald on DSK67QTVN1PROD with NOTICES
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–CHX–2013–22. 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 20549–1090, 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 CHX. 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–CHX–
2013–22, and should be submitted on or
before January 16, 2014.
[Release No. 34–71146; File No. SR–
NYSEArca–2013–141]
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–30758 Filed 12–24–13; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–CHX–2013–22 on the
subject line.
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change To Adopt New NYSE Arca
Equities Rule 7.25 in Order To Create
a Crowd Participant Program To Incent
Competitive Quoting and Trading
Volume in Exchange-Traded Products
by Market Makers Qualified With the
Exchange as CPs
December 19, 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 December
6, 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 and II below, which Items have
been prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to proposes to
[sic] adopt new NYSE Arca Equities
Rule 7.25 (‘‘Rule 7.25’’) in order to
create a Crowd Participant (‘‘CP’’)
program (the ‘‘CP Program’’) to incent
competitive quoting and trading volume
in exchange-traded products (‘‘ETPs’’)
by Market Makers qualified with the
Exchange as CPs. 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,
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
1 15
10 15
U.S.C. 78s(b)(3)(A)(ii).
11 17 CFR 240.19b–4(f)(2).
VerDate Mar<15>2010
18:06 Dec 24, 2013
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
12 17
Jkt 232001
PO 00000
CFR 200.30–3(a)(12).
Frm 00102
Fmt 4703
Sfmt 4703
E:\FR\FM\26DEN1.SGM
26DEN1
Agencies
[Federal Register Volume 78, Number 248 (Thursday, December 26, 2013)]
[Notices]
[Pages 78424-78426]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-30758]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71137; File No. SR-CHX-2013-22]
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to
Amend the Single-Sided Order Fees and Credits
December 19, 2013.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on December 18, 2013, the Chicago Stock Exchange, Inc. (``CHX'' or
``Exchange'') filed with
[[Page 78425]]
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 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\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
CHX proposes to amend its Schedule of Participant Fees and
Assessments (the ``Fee Schedule'') to amend the Single-Sided Order Fees
and Credits and the Order Cancellation Fee. The Exchange proposes to
implement the fee changes on January 2, 2014. The text of this proposed
rule change is available on the Exchange's Web site at https://www.chx.com/rules/proposed_rules.htm, 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.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Section E.1 of the Fee Schedule,
effective January 2, 2014. Specifically, the Exchange proposes to amend
Section E.1 to set the Liquidity Providing Credit for all single-sided
orders of 100 or more shares executed in the Matching System in Tape A,
B, and C securities priced greater than or equal to $1.00/share at
$0.0020/share. The Exchange does not propose to make any other
amendments to the Fee Schedule.
Current Section E.1
On July 1, 2013, the Exchange adopted current Section E.1 of the
Fee Schedule,\4\ which applies to all single-sided orders of 100 or
more shares executed in the CHX Matching System. Specifically, the
Exchange set the Liquidity Providing Credit for all Tape A, B, and C
securities priced greater than or equal to $1.00/share at $0.00250/
share and set the corresponding Liquidity Removing Fee at $0.0030/
share. In doing so, the Exchange unified pricing across all Tapes,
eliminated the distinction between Derivative Securities Products and
Non-Derivative Securities Products throughout the Fee Schedule and
eliminated the distinction between ``Regular Trading Session'' and
``Early or Late Trading Session'' in Section E.1 of the Fee
Schedule.\5\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 69903 (July 1,
2013), 78 FR 40788 (July 8, 2013) (SR-CHX-2013-12) (``Notice of
Filing and Immediate Effectiveness of Proposed Rule Change to Amend
the Single-Sided Order Fees and Credits and the Order Cancellation
Fee''); see also Securities Exchange Act Release No. 69903A (August
13, 2013), 78 FR 49308 (August 13, 2013).
\5\ Id.
---------------------------------------------------------------------------
Proposed Section E.1
The Exchange now proposes to reduce the Liquidity Providing Credit
for all single-sided orders of 100 shares or more executed in the
Matching System in Tape A, B, and C securities priced greater than or
equal to $1.00/share from $0.00250/share to $0.0020/share. As such, the
Exchange proposes to amend paragraph (b) under Section E.1 to replace
``$0.00250/share'' with ``$0.0020/share.''
However, the Exchange does not propose to change the corresponding
Liquidity Removing Fee, which is currently $0.0030/share. In addition,
for all single-sided orders of 100 or more shares executed in the CHX
Matching System in securities priced less than $1.00/share, the
Exchange will maintain the current Liquidity Providing Credit of
$0.00009/share and the Liquidity Removing Fee of 0.30% of the trade
value.
Despite the proposed decrease in the Liquidity Providing Credit,
the Exchange believes that a combination of the proposed Liquidity
Providing Credit and the Exchange's recently-adopted Market Data
Revenue Rebates program \6\ will continue to incentivize activity by
Participants on the Exchange's trading facilities, encourage order
flow, and allow the Exchange to remain competitive in today's orders
marketplace.
---------------------------------------------------------------------------
\6\ See Section P of the Fee Schedule; see also Securities
Exchange Act Release No. 70546 (October 3, 2013), 78 FR 61413
(September 27, 2013) (``Notice of Filing and Immediate Effectiveness
of Proposed Rule Change to Adopt a Market Data Revenue Rebates
Program'').
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \7\ in general, and furthers the
objectives of Section 6(b)(4) of the Act \8\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and other persons using any facility or
system which the Exchange operates or controls, and does not unfairly
discriminate between customers, issuers, or broker dealers.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f.
\8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
Specifically, since the proposed Liquidity Providing Credit will
continue to apply to all single-sided orders of 100 or more shares
executed in the CHX Matching System and the corresponding Liquidity
Removing Fee will remain unchanged, the Exchange believes that the
proposed Section E.1 will equitably allocate credits and fees among
Participants in a non-discriminatory nature. Furthermore, the proposed
Liquidity Providing Credit of $0.0020/share is reasonable, where the
proposed value is similar to liquidity credits offered by other
exchanges, such as NASDAQ.\9\
---------------------------------------------------------------------------
\9\ NASDAQ ``Rebate to Add Displayed Liquidity, Shares Executed
at or Above $1.00'' ranges from $0.0020/share to $0.00305/share.
---------------------------------------------------------------------------
The Exchange notes that it operates in a highly competitive market
in which market participants can readily favor competing venues. In
such an environment, the Exchange must continually review, and consider
adjusting, its fees and credits to remain competitive with other
exchanges. For the reasons described above, the Exchange believes that
the proposed rule change reflects this competitive environment.
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 purposes of the Act. Specifically, the proposed
Liquidity Providing Credit will contribute to the protection of
investors and the public interest by maintaining the simplified
schedule of credits paid and fees assessed by the Exchange, as it will
be applied to all single-sided orders of 100 shares or more executed in
the Matching System in Tape A, B, and C securities priced greater than
or equal to $1.00/share. Moreover, the combination of the proposed
Liquidity Providing Credit
[[Page 78426]]
and Market Data Revenue Rebates will continue to incentivize order
senders to submit orders to the Exchange, which will, in turn, enhance
competition amongst competing trading centers and contribute to the
production of investors and the public interest.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A)(ii) of the Act \10\ and subparagraph (f)(2) of Rule
19b-4 thereunder \11\ because it establishes or changes a due, fee, or
other charge imposed by the Exchange.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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 shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
As fully discussed above, the Exchange believes that the proposed
Fee Schedule will create equable credit and fee amounts to incent
activity among all Participants within the Exchange's trading
facilities.
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-CHX-2013-22 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-CHX-2013-22. 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 20549-1090, 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 CHX.
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-CHX-2013-22,
and should be submitted on or before January 16, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------
\12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-30758 Filed 12-24-13; 8:45 am]
BILLING CODE 8011-01-P