Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule, 3443-3452 [2014-00984]
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Federal Register / Vol. 79, No. 13 / Tuesday, January 21, 2014 / Notices
A proposed rule change filed under
Rule 19b–4(f)(6) 13 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),14 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest.
The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative upon filing. The
Exchange states that waiver of the
operative delay is consistent with the
protection of investors and the public
interest because it will permit the
Exchange to establish an administrative
billing practice consistent with current
billing practices employed by other
options exchanges. The Exchange also
notes that the regular 30-day operative
period is not necessary as, under the
terms of the proposed rule change,
members will have ninety calendar days
from the receipt of their next invoice to
dispute their bills. Based on the
Exchange representations above, the
Commission waives the 30-day
operative delay requirement and
designates the proposed rule change as
operative upon filing.15
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 16 of the Act to
determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
tkelley on DSK3SPTVN1PROD 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–
ISE–2014–02 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–ISE–2014–02. 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 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–ISE–
2014–02 and should be submitted on or
before February 11, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–00986 Filed 1–17–14; 8:45 am]
BILLING CODE 8011–01–P
13 17
CFR 240.19b–4(f)(6).
CFR 240.19b–4(f)(6)(iii).
15 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
16 15 U.S.C. 78s(b)(2)(B).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71295; File No. SR–CBOE–
2013–129]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the Fees
Schedule
January 14, 2014.
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 December
31, 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
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 its
Fees Schedule. 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 proposes to make a
number of changes to its Fees Schedule,
14 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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all to be effective January 1, 2014. First,
the Exchange proposes to increase the
fee for electronic Clearing Trading
Permit Holder Proprietary executions in
equity, ETF, ETN, and index options
classes (except SPX, SPXW, SPXpm,
SRO, OEX, XEO, VIX and VOLATILITY
INDEXES (the ‘‘Special Classes’’)) from
$0.25 per contract to $0.35 per
contract.3 The reason for the proposed
increase is to cover the increasing costs
associated with electronic executions
(including the upkeep and institution of
new systems) as well as to better align
with market rates for Clearing Permit
Holder Proprietary executions (CBOE
fees will still be lower than comparable
fees offered by some other exchanges).4
Next, the Exchange proposes to
amend the statement in Footnote 11 of
its Fees Schedule that reads ‘‘For
facilitation orders (other than SPX,
SPXpm, SRO, VIX or other volatility
indexes, OEX or XEO) (‘‘facilitation
orders’’ for this purpose to be defined as
any paired order in which a Clearing
Trading Permit Holder (F) origin code is
contra to any other origin code,
provided the same executing broker and
clearing firm are on both sides of the
order) executed electronically
(including in AIM), open outcry, or as
a QCC or FLEX transaction, CBOE will
assess no Clearing Trading Permit
Holder Proprietary transaction fees’’ to
add orders of a Non-Trading Permit
Holder Affiliate (‘‘L’’ origin code) into
this definition of ‘‘facilitation orders’’.5
This would mean that such ‘‘L’’ orders
would be assessed no fees for
facilitation orders (except as otherwise
stated). The purpose for this proposed
change is to attract and encourage the
Non-Trading Permit Holder Affiliates of
Clearing Trading Permit Holders.
Permitting them free facilitations
encourages them to concentrate more
3 Corresponding to this change, the Exchange
proposes to amend the listing of the Electronic
(non-AIM) fee from $0.25 per contract to $0.35 per
contract on its ‘‘Clearing Trading Permit Holder Fee
Cap’’ table.
4 For example, NASDAQ OMX PHLX LLC
(‘‘PHLX’’) assesses firm electronic fees of $0.45 or
$0.60 per contract for multiply-listed options (see
PHLX Pricing, Section II).
5 As proposed, the statement would read: ‘‘For
facilitation orders (other than SPX, SPXpm, SRO,
VIX or other volatility indexes, OEX or XEO)
(‘‘facilitation orders’’ for this purpose to be defined
as any paired order in which a Clearing Trading
Permit Holder (F) origin code or Non-Trading
Permit Holder Affiliate (‘‘L’’ origin code) is contra
to any other origin code, provided the same
executing broker and clearing firm are on both sides
of the order) executed electronically (including in
AIM), open outcry, or as a QCC or FLEX
transaction, CBOE will assess no Clearing Trading
Permit Holder Proprietary transaction fees.’’ The
Exchange would also add the origin code ‘‘L’’ into
the ‘‘Facilitation’’ line on the Equity Options, ETF
and ETN Options, and Index Options Products
Excluding the Special Classes Rate Tables.
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business on CBOE while putting the
Exchange on a similar competitive
position as other exchanges, including
those that offer free Broker-Dealer
facilitations that are contra to a
Customer.6
The Exchange also proposes to assess
no fee on Clearing Trading Permit
Holder Proprietary facilitation
transactions in Mini options. As Mini
options are merely 1⁄10 the size of
regular options contracts, and such
transactions in regular options contracts
are assessed no fee, it makes sense to
also assess no fee for these transactions
in Mini options.
The Exchange proposes to make some
reorganization of its Specified
Proprietary Index Options Rate Table—
SPX, SPXW, SPXpm, SRO, OEX, XEO,
VIX and VOLATILITY INDEXES (the
‘‘Proprietary Options Rate Table’’). First,
the Exchange proposes to re-order
alphabetically the Customer fees for the
different products listed in the table.
This means that OEX and XEO fees will
be at the top, followed by OEX Weeklys
and XEO Weeklys, then SPX (incl
SPXW), then SPXpm, then VIX (and
VOLATILITY INDEXES, as the
Exchange will also propose herein to
assess the same Customer fees for
VOLATIILITY INDEXES as are assessed
to VIX options transactions). The
amounts of these fees will not change
(unless otherwise described herein). The
second step in the re-organization of
this table is to separate fees based on the
option’s premium price. The amounts of
such fees will not change (unless
otherwise described herein). The
purpose of these proposed changes is to
make the Proprietary Options Rate Table
easier for market participants to read
and ascertain which fees apply.
The Exchange also proposes to amend
Customer fees for VIX options
transactions. Currently, when the
premium is greater than or equal to $1,
the fee is $0.45 per contract, and when
the premium is less than $1, the fee is
$0.25 per contract. The Exchange
proposes to amend VIX options
Customer fees such that when the
premium is (a) $1.00 or greater, the fee
will be $0.48 per contract, (b) $0.11–
$0.99, the fee will be $0.27, and (c)
$0.00–$0.10, the fee will be $0.10. The
purpose of these proposed changes is to
provide greater incentives for Customers
to trade VIX options. By providing for
more granular fee tiers based on the
premium, the Exchange can more
closely assess fees commensurate with
the premiums for such options. The
Exchange is attempting to reduce costs
6 See PHLX Pricing, Section II, bullet point
discussing facilitation orders executions.
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on low-priced VIX options to encourage
Customers to close and roll over
positions close to expiration at low
premium levels. Currently, such
Customers are less likely to do this
because the transaction fee is closer to
the premium level. The Exchange
believes that the lowered fees for VIX
options trading with a premium of
$0.00–$0.10 will encourage the trading
of such options. The slight increases of
the fees for Customer transactions in
VIX options whose premium is greater
than or equal to $1.00 as well as those
whose premium is $0.11–$0.99 are
being utilized in order to achieve some
level of revenue balance in connection
with the lowered fee for customer
transactions in VIX options whose
premium is $0.00–$0.10.
The Exchange proposes to amend the
Customer fees for all other VOLATILITY
INDEXES so that such fees are the same
as VIX options fees. VIX is itself a
Volatility Index, so it makes sense to
assess the same Customer fees to all
other VOLATILITY INDEXES as are
assessed to the Exchange’s most heavilytraded Volatility Index (VIX). The VIX
and VOLATILITY INDEXES fees that
apply to each other market participant
are already the same. CBOE seeks to
have a unified strategy for its volatility
complex, and since most CBOE
volatility products have an underlying
value that is generally in the same
range, the fees structure that has been
designed for VIX options also makes
sense for applicability for all other
VOLATILITY INDEXES.
The Exchange also proposes to
separate out the fees for VIX and
VOLATILITY INDEXES for CBOE
Market-Makers/DPMs/E–DPMs/LMMs
(‘‘Market-Makers’’) from those assessed
to SPX, SPXW, SPXpm, OEX and XEO.
Currently, Market-Maker transactions in
all those products are assessed a fee of
$0.20 per contract. The Exchange
proposes to assess a fee for MarketMaker transactions in VIX and
VOLATILITY INDEXES of $0.05 per
contract when the premium is $0.00–
$0.10 and $0.23 per contract when the
premium is $0.11 or greater. The
Exchange believes that the lowered fees
for VIX and VOLATILITY INDEXES
options trading with a premium of
$0.00–0.10 will encourage the trading of
such options. The slight increases of the
fees for Market-Maker transactions in
VIX options and VOLATILITY INDEXES
whose premium is greater than or equal
to $0.11 is being utilized in order to
achieve some level of revenue balance
in connection with the lowered fee for
Market-Maker transactions in VIX
options and VOLATILITY INDEXES
whose premium is $0.00–0.10. The
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Exchange institutes these new fees in
order to encourage Market-Makers to
provide liquidity to Customer orders in
VIX options and VOLATILITY
INDEXES.
The Exchange assesses a Hybrid 3.0
Execution Fee of $0.18 per contract for
all electronic executions in Hybrid 3.0
classes (with some exceptions).7 The
Exchange hereby proposes to increase
this fee to $0.20 per contract. The
purpose of this change is because at the
time that the Hybrid 3.0 Execution Fee
was adopted, most orders executed via
Hybrid 3.0 were simple orders. Now,
with the growing prevalence of complex
orders, the Exchange desires to increase
the Hybrid 3.0 Execution Fee to cover
the increased system complexity (and
use of resources necessary) due to the
trading of complex orders. The
Exchange also proposes to amend the
listing of the origin codes on the
Proprietary Options Rate Chart. When
the Proprietary Options Rate Chart was
created, the Exchange erroneously listed
only the ‘‘C’’ and ‘‘W’’ origin codes as
applicable to the Hybrid 3.0 Execution
Fee, which contradicts Footnote 21
(which describes the Hybrid 3.0
Execution Fee, and does not except out
other origin codes). As such, the
Exchange proposes to add the ‘‘F’’, ‘‘J’’,
‘‘L’’, ‘‘B’’, and ‘‘N’’ origin codes to the
table. The Exchange also proposes to
amend Footnote 21 to remove the listing
of the Hybrid 3.0 Execution Fee as being
$0.18 per contract, and simply state that
the Hybrid 3.0 Execution Fee will be
assessed to relevant executions in
Hybrid 3.0 classes.
The Exchange proposes to adopt two
Customer Priority Surcharges, which are
assessed on customer (C) contracts. The
Tier
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1
2
3
4
5
first is the SPXW (electronic only)
Customer Priority Surcharge of $0.05
per contract. The SPXW Customer
Priority Surcharge applies to all SPXW
customer contracts executed
electronically, except those contracts
traded on a PAR terminal. The second
Customer Priority Surcharge is to be
assessed on Customer VIX contracts
executed electronically that are Maker
and not Market Turner. This $0.05 per
contract fee will only be assessed on
such contracts that have a premium of
$0.11 or greater.
The purpose of the Customer Priority
Surcharges is to ensure that there is
reasonable cost equivalence between the
primary execution channels for the
products involved. Manual executions
are achieved using floor brokers (the
only market participants who can trade
contracts using a PAR terminal), who
assess a commission for Customer
executions. Electronic executions are
not assessed a commission, but more
heavily rely on the Exchange’s systems.
The proposed Customer Priority
Surcharges will minimize the cost
differentials between manual and
electronic executions, which is in the
interest of the Exchange as it must both
maintain robust electronic systems as
well as provide for economic
opportunity for floor brokers to continue
to conduct business, as they serve an
important function in achieving price
discovery and Customer executions.
Floor brokers ensure that the difficultto-execute orders (such as large and
complex orders) are able to be executed
manually by accessing the CBOE’s inperson market maker crowds, while also
helping to achieve price improvement.
SPX, SPXW and VIX are the only
products that execute a significant share
of their total volume on the trading
floor, and the Hybrid 3.0 Execution Fee
(which essentially acts as a customer
priority surcharge) already applies to
SPX. SPXW often has a lower premium
(as it is a weekly option with a lower
timeframe, as the options have less time
value than the regular SPX options), so
it makes sense to assess a lower SPXW
Customer Priority Surcharge than the
Hybrid 3.0 Execution Fee. VIX options
trade at a lower underlying value than
SPX and so also have a lower premium
value, so it also makes sense for the VIX
Customer Priority Surcharge to be lower
than the Hybrid 3.0 Execution Fee. As
described above, the Exchange wants to
encourage the execution of VIX options
Customer orders for options with a
premium of $0.00–$0.10, and therefore
is not proposing to assess the Customer
Priority Surcharge on such options.
The Exchange proposes to change the
different tier thresholds in its Liquidity
Provider Sliding Scale (which provides
for reduced fees for a CBOE MarketMaker based on the Market-Maker
executing a certain number of contracts
per month) from nominal contracts per
month thresholds (i.e. contracts
100,001–2,000,000) to a relative
contracts per month threshold (i.e.
above 0.05%–0.70%). These volume
thresholds are based on the MarketMaker’s percentage of total national
Market-Maker multiply-listed options
volume (where previously they had
merely been based on the total number
of multiply-list contracts executed by
the Market-Maker). Below is a table
demonstrating the proposed changes.
Old volume threshold
.....................
.....................
.....................
.....................
.....................
New volume thresholds
1–100,000 ..................................................................
100,001–2,000,000 ....................................................
2,000,001–4,000,000 .................................................
4,000,001–6,000,000 .................................................
6,000,000 + ................................................................
0.00%–0.05% .............................................................
Above 0.05%–0.70% ..................................................
Above 0.70%–1.40% ..................................................
Above 1.40%–2.00% ..................................................
Above 2.00% ..............................................................
The purpose of this change is to
control and account for changes in
national industry-wide multiply-listed
options volume. The new percentage
thresholds generally correspond to the
old nominal thresholds (based on
current total national Market-Maker
multiply-listed options volume). The
Exchange also proposes to amend the
‘‘Notes’’ section of this table to
capitalize the term ‘‘VOLATILITY
INDEXES’’ as this term is capitalized
elsewhere in the Fees Schedule, and the
Exchange desires consistency.
Due to the proposed change to a
relative percentage-based tier system for
the Liquidity Provider Sliding Scale, the
Exchange also must propose
amendments to Footnote 10 of the Fees
Schedule, which discusses the
prepayment necessary in order to be
eligible for the fees applicable to tiers 3–
7 See CBOE Fees Schedule, Footnote 21 for such
exceptions.
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Fee
(per contract)
8 $0.23
0.17
0.10
0.05
0.03
5 of the Liquidity Provider Sliding
Scale. Currently, a Liquidity Provider is
required to pre-pay the fees for the first
two tiers of the Liquidity Provider
Sliding Scale in order to be eligible for
the lower fees applicable to tiers 3–5.
This works out to $348,000 per month
(based on the current nominal volume
thresholds in the Liquidity Provider
Sliding Scale). However, with the
proposed change to make the tiers in the
8 Currently, the fee at this tier is $0.25 per
contract. However, the Exchange proposes to lower
this fee to $0.23 per contract, as described below.
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Liquidity Provider Sliding Scale based
on relative percentage-based volume
thresholds, it will be impossible to
know beforehand what amount per
month will be required to pay for the
first two tiers. As such, the Exchange
simply proposes to require a prepayment of $200,000 per month, or
$2,400,000 for the year (significantly
lower than the current prepay amounts).
Along with that change, the Exchange
proposes to make some other
amendments to Footnote 10, which
describes the prepayment, to (1) give
those desiring to prepay for the full year
until January 10 of the applicable year
to prepay, (2) add an example regarding
prepayment, (3) make clear that prepay
arrangements for less than the full year
must be paid before the calendar month
in which they are to begin, and (4) make
the Footnote easier to read and
understand.9
The Exchange also proposes to lower
from $0.25 per contract to $0.23 per
contract the transaction fee in Tier 1 of
the Liquidity Provider Sliding Scale.
The purpose of this change is to
incentivize Market-Makers at this first
tier to quote more and execute more
orders on the Exchange, as well as to
more effectively compete with pricing
on other exchanges.10
The Exchange proposes to amend its
CBOE Proprietary Products Sliding
Scale, under which Clearing Trading
Permit Holder Proprietary transaction
fees and transaction fees for NonClearing Trading Permit Holder
Affiliates in OEX, XEO, SPX, SPXpm
and volatility indexes are reduced
provided a Clearing Trading Permit
Holder reaches certain volume
thresholds in multiply-listed options on
the Exchange in a month. The Exchange
does not propose substantive changes to
the fee or structure of the CBOE
Proprietary Products Sliding Scale.
Instead, as with the Liquidity Provider
Sliding Scale, the Exchange proposes to
change the different tier thresholds from
nominal contracts per month thresholds
to relative contracts per month
thresholds (for the same reasons as the
Liquidity Provider Sliding Scale). The
new thresholds will be based on a
Clearing Trading Permit Holder
(Proprietary) executing different
percentages of total CBOE Clearing
Trading Permit Holder Proprietary
volume in OEX, XEO, SPX, SPXpm, VIX
and VOLATILITY INDEXES.11 The new
percentage thresholds generally
correspond to the old nominal
thresholds (based on current total CBOE
Clearing Trading Permit Holder
Proprietary volume in OEX, XEO, SPX,
SPXpm, VIX and VOLATILITY
INDEXES). Similarly (and
correspondingly), the Exchange
proposes to amend the different
multiply-listed options tiers from being
based on total monthly volume to an
Average Daily Volume (‘‘ADV’’)
threshold system (calculated monthly).
The new thresholds ADV thresholds
generally correspond with the old
monthly thresholds (depending on how
many trading days are in a given
month). The purpose of these changes is
to control and account for changes in
national industry-wide multiply-listed
options volume as well as the number
of trading days in a month. The
Exchange also proposes a number of
cosmetic changes to the CBOE
Proprietary Products Sliding Scale,
including (1) to renumber the tiers in
the CBOE Proprietary Products Sliding
Scale, (2) to fix an error that listed
‘‘SPXpm’’ as ‘‘SPXPm’’ in the Notes, (3)
clarify that VIX is included in the CBOE
Proprietary Products Sliding Scale
(previously, it had just said ‘‘volatility
indexes’’, and while VIX is a volatility
index, it can’t hurt to be more clear), (4)
capitalize the term ‘‘volatility indexes’’
in the ‘‘Notes’’ in order to achieve
consistency, (5) delete the term
‘‘volume’’ and replace it with ‘‘ADV’’ in
the ‘‘Notes’’ due to the change described
above, and (6) change the title of a
column from ‘‘Proprietary Products
Contracts Per Month’’ to ‘‘Proprietary
Products Volume Thresholds’’ due to
the changes described above. Once
again, no fees are being changed in the
CBOE Proprietary Products Sliding
Scale. The proposed changes are
detailed below.
Current
Tier
Proposed
Proprietary product contracts per month
Tier
≥ 375,000 < 1,500,000 contracts in multi list products
1 .................................
2 .................................
3 .................................
≥ 18,000 ADV ≤ 71,999 ADV in multi list products
First 750,000 ............................................................................................
Next 250,000 ...........................................................................................
Above 1,000,000 ......................................................................................
B3 ..............................
B2 ..............................
B1 ..............................
≥1,500,000 contracts in multi list products
1 .................................
2 .................................
Proprietary product
volume thresholds
0.00%–6.50%
6.51%–8.50%
Above 8.50%
≥ 72,000 ADV in multi list products
First 750,000 ............................................................................................
Above 750,000 .........................................................................................
A2 ..............................
A1 ..............................
0.00%–6.50%
Above 6.50%
tkelley on DSK3SPTVN1PROD with NOTICES
The Exchange proposes to delete its
Clearing Trading Permit Holder VIX
Options Sliding Scale (the ‘‘VIX Options
Sliding Scale’’) and any references in
the Fees Schedule to the VIX Options
Sliding Scale, as well as language that
9 As proposed, Footnote 10 will read: ‘‘The
Liquidity Provider Sliding Scale applies to
Liquidity Provider (CBOE Market-Maker, DPM,
e-DPM and LMM) transaction fees in all products
except mini-options, SPX, SPXpm, SRO, VIX or
other volatility indexes, OEX or XEO. A Liquidity
Provider’s standard per contract transaction fee
shall be reduced to the fees shown on the sliding
scale as the Liquidity Provider reaches the volume
thresholds shown on the sliding scale in a month.
The Exchange will aggregate the trading activity of
separate Liquidity Provider firms for purposes of
the sliding scale if there is at least 75% common
ownership between the firms as reflected on each
firm’s Form BD, Schedule A. A Liquidity Provider
shall be required to prepay, by January 10th,
$2,400,000 in order to be eligible for the fees
applicable to tiers 3–5 of the sliding scale for the
entire year. A Liquidity Provider can elect to prepay
$200,000 per month to be eligible for the fees
applicable to tiers 3–5 of the sliding scale for the
remainder of the year at any time during the year,
but such prepayment (and eligibility) will only be
applied prospectively for the remainder of the year.
A TPH that chooses, for example, in June 2014 to
prepay for the remainder of the year would pay
$1,200,000 for the months of July–December. All
prepay arrangements must be paid before the first
calendar month in which they are to begin. Contract
volume resulting from any of the strategies defined
in Footnote 13 will apply towards reaching the
sliding scale volume thresholds.’’
10 See PHLX Pricing, Section II.
11 To make this clear, the Exchange also proposes
adding to the ‘‘Notes’’ section of the table the
following statement: ‘‘Transaction fees in OEX,
XEO, SPX, SPXpm, VIX and VOLATILITY
INDEXES will be reduced based on reaching the
percentage thresholds in OEX, XEO, SPX, SPXpm,
VIX and VOLATILITY INDEXES listed in the
table.’’
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[sic] regarding the calculation of a
Clearing Trading Permit Holder’s total
proprietary transaction fees that will be
made irrelevant by the deletion of the
VIX Options Sliding Scale.12 The
12 Specifically, the Exchange proposes to delete
language in Footnote 11 that states: ‘‘For calculating
a Clearing Trading Permit Holder’s total proprietary
product transaction fees, CBOE will use the
following methodology: If using the VIX Options
Sliding Scale plus the Sliding Scale (minus VIX
volume) results in lower total Clearing Trading
Permit Holder proprietary transaction fees than just
using the Sliding Scale, CBOE will apply the new
VIX Options Sliding Scale plus the Sliding Scale,
and deduct the VIX options volume from the
Sliding Scale. If using the VIX Options Sliding
Scale plus the Sliding Scale (minus VIX options
volume) results in higher total Clearing Trading
Permit Holder proprietary transaction fees than just
using the Sliding Scale, CBOE will apply only the
Sliding Scale.’’
As amended, Footnote 11, in its entirety, will
read: The Clearing Trading Permit Holder Fee Cap
in all products except SPX, SPXpm, SRO, VIX or
other volatility indexes, OEX or XEO (the ‘‘Fee
Cap’’) and the CBOE Proprietary Products Sliding
Scale for Clearing Trading Permit Holder
Proprietary Orders (the ‘‘Sliding Scaleapply [sic] to
(i) Clearing Trading Permit Holder proprietary
orders (‘‘F’’ origin code), and (ii) orders of NonTrading Permit Holder Affiliates of a Clearing
Trading Permit Holder. A ‘‘Non-Trading Permit
Holder Affiliate’’ for this purpose is a 100% whollyowned affiliate or subsidiary of a Clearing Trading
Permit Holder that is registered as a United States
or foreign broker-dealer and that is not a CBOE
Trading Permit Holder. Only proprietary orders of
the Non-Trading Permit Holder Affiliate (‘‘L ’’
origin code) effected for purposes of hedging the
proprietary over-the-counter trading of the Clearing
Trading Permit Holder or its affiliates will be
included in calculating the Fee Cap and Sliding
Scale. Such orders must be marked with a code
approved by the Exchange identifying the orders as
eligible for the Fee Cap and Sliding Scale. Each
Clearing Trading Permit Holder is responsible for
notifying the TPH Department of all of its
affiliations so that fees and contracts of the Clearing
Trading Permit Holder and its affiliates may be
aggregated for purposes of the Fee Cap and Sliding
Scale. A Clearing Trading Permit Holder is required
to certify the affiliate status of any Non-Trading
Permit Holder Affiliate whose trading activity it
seeks to aggregate. In addition, each Clearing
Trading Permit Holder is required to inform the
Exchange immediately of any event that causes an
entity to cease to be an affiliate. The Exchange will
aggregate the fees and trading activity of separate
Clearing Trading Permit Holders for the purposes of
the Fee Cap and Sliding Scale if there is at least
75% common ownership between the Clearing
Trading Permit Holders as reflected on each
Clearing Trading Permit Holder’s Form BD,
Schedule A. A Clearing Trading Permit Holder’s
fees and contracts executed pursuant to a CMTA
agreement (i.e., executed by another clearing firm
and then transferred to the Clearing Trading Permit
Holder’s account at the OCC) are aggregated with
the Clearing Trading Permit Holder’s non-CMTA
fees and contracts for purposes of the Fee Cap and
Sliding Scale. Transaction fees resulting from any
of the strategies defined in Footnote 13 will apply
towards reaching the Fee Cap. For facilitation
orders (other than SPX, SPXpm, SRO, VIX or other
volatility indexes, OEX or XEO) (‘‘facilitation
orders’’ for this purpose to be defined as any paired
order in which a Clearing Trading Permit Holder (F)
origin code or Non-Trading Permit Holder Affiliate
(‘‘L ’’ origin code) is contra to any other origin code,
provided the same executing broker and clearing
firm are on both sides of the order) executed
electronically (including in AIM), open outcry, or
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Exchange instituted the VIX Options
Sliding Scale in an attempt to encourage
greater Clearing Trading Permit Holder
proprietary trading of VIX options.13
The Exchange now proposes to delete
the VIX Options Sliding Scale because
it is no longer competitively necessary.
The vast majority of CTPHs who qualify
do not avail themselves of it and
therefore it adds unnecessary
complexity to the Exchange’s alreadycomplex fees structure.
The Exchange proposes to amend its
Fees Schedule with regard to PULSe
Workstation routing (specifically, with
regard to routing from one PULSe
Workstation to another). By way of
background, the PULSe workstation is a
front-end order entry system designed
for use with respect to orders that may
be sent to the trading systems of CBOE.
In addition, the PULSe workstation
provides a user with the capability to
send options orders to other U.S.
options exchanges and/or stock orders
to other U.S. stock exchanges and
trading centers 14 (‘‘away-market
routing’’).15 PULSe Workstation users
also have the capability to send orders
between PULSe workstations. For
example, a user is able to send an order
from a PULSe workstation located in
New York to a PULSe workstation
located in Chicago. The ability to send
orders ‘‘PULSe-to-PULSe’’ is available
for use within a TPH (and any NonTPHs to whom the TPH makes the
PULSe workstation available) and
between TPHs that use the PULSe
workstation. A TPH may establish a
PULSe-to-PULSe connection with
another TPH by contacting CBOE, who
will permission [sic] the connection.
Before setting up the connection, both
as a QCC or FLEX transaction, CBOE will assess no
Clearing Trading Permit Holder Proprietary
transaction fees.
13 For more description regarding the VIX Options
Sliding Scale, see Securities Exchange Act Release
No. 68699 (January 18, 2013), 78 FR 5538 (January
18, 2013) (SR–CBOE–2013–003).
14 A ‘‘trading center,’’ as provided under Rule
600(b)(78) of Regulation NMS, 17 CFR
242.600(b)(78), means a national securities
exchange or national securities association that
operates an SRO trading facility, an alternative
trading system, an exchange market maker, an OTC
market maker, or any other broker or dealer that
executes orders internally by trading as principal or
crossing orders as agent.
15 For a more detailed description of the PULSe
workstation and its other functionalities, see, e.g.,
Securities Exchange Act Release Nos. 62286 (June
11, 2010), 75 FR 34799 (June 18, 2010) (SR–CBOE–
2010–051), 63244 (November 4, 2010), 75 FR 69148
(November 10, 2010) (SR–CBOE–2010–100), 63721
(January 14, 2011), 76 FR 3929 (January 21, 2011)
(SR–CBOE–2011–001), 65280 (September 7, 2011),
76 FR 56838 (September 14, 2011) (SR–CBOE–
2011–083), 65491 (October 6, 2011), 76 FR 63680
(October 13, 2011) (SR–CBOE–2011–092), and
69990 (July 16, 2013), 78 FR 43953 (July 22, 2013)
(SR–CBOE–2013–062).
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TPHs need to acknowledge in writing
(e.g., including via email) their
agreement to establish the mutual
connection.
The Exchange hereby proposes to
impose a monthly PULSe-to-PULSe
Routing fee of $50 for each receiving
TPH. This means that each TPH with a
PULSe Workstation that elects to receive
orders from another PULSe Workstation
will be assessed this fee. The Exchange
proposes to assess the fee to cover costs
associated with the development of
PULSe-to-PULSe routing, as well as the
upkeep of such systems. The Exchange
proposes to assess the fee to the
receiving TPH because, by electing to
receive PULSe-to-PULSe orders, the
receiving TPH then gets the ability to
execute those orders on the Exchange.
The Exchange also proposes a nonsubstantive change to the Fees Schedule
regarding PULSe Workstation fees.
Currently, there is a line under the
‘‘Trading Floor Terminal Rentals’’
section of the ‘‘Facility Fees’’ table that
lists PULSe On-Floor Workstation fees
as being $350 per login ID, and the note
for that fee is that ‘‘this fee is waived for
the first month of a new user of a TPH’’.
However, there are more PULSe
Workstation fees (including that fee)
listed in the ‘‘PULSe Workstation’’ fees
section of the ‘‘Facility Fees’’ table. To
avoid any potential confusion, the
Exchange proposes to delete the listing
of the $350 per login ID fee amount, as
well as the note, from the PULSe OnFloor Workstation line of the ‘‘Trading
Floor Terminal Rentals’’ section of the
‘‘Facility Fees’’ table and replace it with
the statement ‘‘See PULSe Workstation
fees below’’.
The Exchange proposes to lower its
Hybrid Agency Liaison (‘‘HAL’’) StepUp Rebate from $0.10 per contract to
$0.05 per contract, and also to delete
obsolete language in the ‘‘Notes’’
description of the HAL Step-Up
Rebate.16 The purpose of this proposed
change is because, as routing practices
have changed over the years, CBOE’s
competitive strategy is no longer based
on processing a notable amount of
Linkage traffic passing through the
Exchange. Therefore it no longer makes
economic sense to offer as strong an
incentive for Market-Makers to ‘‘step
up’’ and attract orders coming through
the Linkage.
16 Following the proposed changes, the ‘‘Notes’’
section would read: The Exchange shall rebate to
a market-maker against transaction fees generated
from a transaction on the HAL system in a penny
pilot class, provided that at least 70% of the marketmaker’s quotes in that class (excluding mini-options
and quotes in LEAPS series) in the prior calendar
month were on one side of the NBBO.
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The Exchange proposes to amend its
Linkage fees for Customers. Currently, a
different fees structure applies to
customer orders of 100 or more
contracts that is routed to one or more
exchanges in connection with the
Options Order Protection and Locked/
Crossed Market Plan referenced in Rule
6.80 (the ‘‘Linkage’’) than applies to
customer orders of 99 contracts or less
that are routed to one or more exchange
via Linkage. Those customer orders of
100 or more contracts are assessed the
actual transaction fee assessed by the
exchange(s) to which the order was
routed, while customer orders of 99
contracts or less are assessed the actual
transaction fee assessed by the
exchange(s) to which the order was
routed, minus $0.05 per contract. The
Exchange hereby proposes to eliminate
this distinction, and assess to all
customer orders sent through Linkage
the actual transaction fee assessed by
the exchange(s) to which the order was
routed. It has ceased to be economically
viable for the Exchange to ‘‘eat’’ $0.05
per contract on every customer order of
99 contracts or less that are routed away
via Linkage.17
The Exchange also proposes to
increase by $0.05, to $0.55, the percontract routing fee assessed to noncustomer orders routed through the
Linkage. The purpose of this proposed
change is to cover costs associated with
routing orders through Linkage and
paying the transaction fees for such
executions at other exchanges. The
amount of this fee is lower than
corresponding non-customer Linkage
fees assessed by other exchanges.18
The Exchange also proposes to amend
its Footnote 25. Currently, any Floor
Broker Trading Permit Holder that
executes an average of 15,000 customer
open-outcry contracts per day over the
course of a calendar month in multiplylisted options classes receives a rebate
of $7,500 on that Floor Broker Trading
Permit Holder’s Floor Broker Trading
Permit fees (the ‘‘Floor Broker Access
Rebate’’). The Exchange proposes to add
a second tier to this rebate, and add that
17 As proposed, the ‘‘note’’ regarding Customer
Linkage Fees will read as follows: In addition to the
customary CBOE execution charges, for each
customer order that is routed, in whole or in part,
to one or more exchanges in connection with the
Options Order Protection and Locked/Crossed
Market Plan referenced in Rule 6.80, CBOE shall
pass through the actual transaction fee assessed by
the exchange(s) to which the order was routed.
Multiple orders from the same executing firm for
itself or for a CMTA or correspondent firm in the
same series on the same side of the market that are
received within 500 milliseconds will be aggregated
for purposes of determining the order quantity.
18 See NASDAQ OMX PHLX LLC (‘‘PHLX’’)
Pricing, Non-Customer Routing Fee of $0.95 per
contract.
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‘‘Any Floor Broker Trading Permit
Holder that executes an average of
25,000 customer open-outcry contracts
per day over the course of a calendar
month in multiply-listed options classes
will receive a rebate of $15,000 on that
Floor Broker Trading Permit Holder’s
Floor Broker Trading Permit fees.’’ The
purpose of the proposed change is to
encourage Floor Brokers to execute
open-outcry customer trades in
multiply-listed options, and the
Exchange believes that giving Floor
Brokers a further break in their Floor
Broker Trading Permit fees will provide
such an incentive. The Exchange
recognizes the competitive nature of
maintaining a Floor Broker operation at
CBOE and wants to provide a credit to
Floor Brokers that engage in a
significant amount of Floor Broker open
outcry trading at CBOE. For purposes of
determining the rebate, the qualifying
volume of all Floor Broker Trading
Permit Holders affiliated with a single
TPH organization will be aggregated,
and, if such total meets or exceeds the
customer open-outcry contracts per day
thresholds in multiply-listed options
classes, that TPH organization will
receive a single rebate, regardless of the
number of Floor Broker Trading Permits
affiliated with that TPH organization.
Finally, the Exchange proposes to
amend its Footnote 26, which applies to
the Exchange’s Trading Permit and Tier
Appointment Fees, to state that
Affiliated TPHs (TPHs with at least 75%
common ownership between the firms
as reflected on each firm’s Form BD,
Schedule A) may share their allotted
bandwidth amongst each other. The
purpose is to allow for more efficient
use of bandwidth. If a TPH is not using
all of its bandwidth and an affiliated
TPH could use more, this will allow
them to share amongst each other
(instead of having to purchase more).
The proposed changes are to take
effect on January 1, 2014.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the Act
and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.19 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 20 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
19 15
20 15
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U.S.C. 78f(b)(5).
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in regulating, clearing, settling,
processing information with respect to,
and facilitation transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
Section 6(b)(4) of the Act,21 which
requires that Exchange rules provide for
the equitable allocation of reasonable
dues, fees, and other charges among its
Trading Permit Holders and other
persons using its facilities.
The Exchange believes that the
proposal to increase the fee for
electronic Clearing Trading Permit
Holder Proprietary executions in equity,
ETF, ETN, and index options classes
(except the Special Classes) from $0.25
per contract to $0.35 per contract is
reasonable, equitable and not unfairly
discriminatory because, while the percontract price is increasing, this new fee
amount is still within the range of fees
paid by other market participants for
such transactions.22 The Exchange
further believes this proposed change is
equitable and not unfairly
discriminatory because the proposed
new fee amount is still lower than the
fee assessed to Broker-Dealers and NonTrading Permit Holder Market-Makers
for such transactions, and Clearing
Trading Permit Holders have some
obligations (such as clearing trades) that
such market participants do not have.
Further, this fee is still lower than is
assessed for comparable executions on
other exchanges.23 Finally, this fee will
be assessed to all Clearing Trading
Permit Holder Proprietary transactions
in the relevant products.
The Exchange believes that the
proposal to add ‘‘L’’ orders to the
definition of ‘‘facilitation orders’’
(thereby making L facilitation orders
free (except as otherwise stated)) is
reasonable because such orders will no
longer be assessed a fee that they
otherwise would be assessed. The
Exchange believes this is equitable and
not unfairly discriminatory because
Non-Trading Permit Holder Affiliates of
Clearing Trading Permit Holders are a
functional subset of Clearing Trading
Permit Holders, and they domicile
customer accounts, so it makes sense to
put them in the same position as
21 15
U.S.C. 78f(b)(4).
example, Broker-Dealers and Non-Trading
Permit Holder Market-Makers pay either $0.45 per
contract or $0.60 per contract for such transactions
(See CBOE Fees Schedule, page 1).
23 For example, PHLX assesses firm electronic
fees of $0.45 or $0.60 per contract for multiplylisted options (see PHLX Pricing, Section II).
22 For
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Clearing Trading Permit Holders. NonTrading Permit Holder Affiliates of
Clearing Trading Permit Holders cannot
be proprietary trading firms (whereas
broker-dealers, for example, can). The
Exchange believes that the proposal to
assess no fees for Clearing Trading
Permit Holder Proprietary facilitation
transactions in Mini options is
reasonable because such transactions
that would otherwise be assessed a fee
will now be free. The Exchange believes
that this is equitable and not unfairly
discriminatory because Mini options are
merely 1/10 the size of regular options
contracts, and such transactions in
regular options contracts are assessed no
fee, so it makes sense to also assess no
fee for these transactions in Mini
options.
The Exchange believes that the
reorganization of the Proprietary
Options Rate Table will help avoid any
potential confusion on the part of
market participants regarding which
fees apply in different circumstances,
thereby removing impediments to and
perfecting the mechanism of a free and
open market and a national market
system.
The Exchange believes that the
proposed changes to the customer VIX
options transaction fees are reasonable
because the amounts of the new fees are
near the range of fees assessed for
customer transactions in other CBOE
proprietary products. Indeed, the fee for
customer transactions in SPX options
whose premium is less than $1.00 is
$0.35 per contract, and the fee for
customer transactions in SPX options
whose premium is greater than or equal
to $1.00 is $0.44 per contract. The
proposed changes to the customer VIX
options transaction fees are equitable
and not unfairly discriminatory because
they are designed to attract greater
customer order flow to the Exchange,
which will benefit all market
participants. Assessing different fees for
customer transactions in VIX options
depending on the premium is equitable
and not unfairly discriminatory because
the Exchange believes that the lowered
fees for VIX options trading with a
premium of $0.00–$0.10 will encourage
the trading of such options. The slight
increases of the fees for Customer
transactions in VIX options whose
premium is greater than or equal to
$1.00 as well as those whose premium
is $0.11–$0.99 is being utilized in order
to achieve some level of revenue
balance in connection with the lowered
fee for customer transactions in VIX
options whose premium is $0.00–$0.10.
Further, the Exchange currently offers
different fees depending on the
premium for customer transactions in
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SPX options (as described in the
previous paragraph). Finally, these fees
will be assessed to all Customer VIX
options transactions. The Exchange has
expended significant resources to
develop proprietary products such as
VIX options and must recoup such
costs.
The Exchange believes that assessing
the same Customer fees to other
VOLATILITY INDEXES as are assessed
to VIX options is reasonable, equitable
and not unfairly discriminatory because
VIX is itself a Volatility Index, and
therefore it makes sense to assess the
same Customer fees to all other
VOLATILITY INDEXES as are assessed
to the Exchange’s most heavily-traded
Volatility Index (VIX). The VIX and
VOLATILITY INDEXES fees that apply
to each other market participant are
already the same. This proposed change
will be applied equally to all Customer
VOLATILITY INDEX transactions.
The Exchange believes that the
proposed fees for CBOE Market-Maker
transactions in VIX and VOLATILITY
INDEXES are reasonable because they
are within the range of those assessed
for transactions in VIX and
VOLATILITY INDEXES by other market
participants, as well as those assessed to
CBOE Market-Makers for other
products.24 Indeed, while the proposed
change is a slight increase when the
premium is $0.11 or greater, the
proposed change is also a sizable
decrease when the premium is $0.00–
$0.10. The Exchange believes this
proposed change is equitable and not
unfairly discriminatory because it is
designed to attract greater customer
order flow to the Exchange, which will
benefit all market participants. Further,
while these fees are still lower than
assessed to other market participants for
transactions in VIX and other
VOLATILITY INDEXES, CBOE MarketMakers/DPMs/E–DPMs/LMMs take on
obligations, such as quoting obligations,
that other market participants do not.
There are different economic potentials
for market participants based on the
premium of a trade, and therefore it can
make sense to offer different fees for
different premiums in some products
(depending on the economics of trading
in such products).
The Exchange believes that the
proposed increase in the Hybrid 3.0
Execution Fee is reasonable because it is
merely an increase of $0.02 per contract,
and the Exchange uses this fee to cover
the costs of operating the Hybrid 3.0
system. The Exchange believes that this
proposed increase is equitable and not
24 See
CBOE Fees Schedule, Proprietary Options
Rate Table.
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3449
unfairly discriminatory because it
applies to all Hybrid 3.0 executions 25,
and because the increased fee will cover
the costs of operating the Hybrid 3.0
system. At the time that the Hybrid 3.0
Execution Fee was adopted, most orders
executed via Hybrid 3.0 were simple
orders. Now, with the growing
prevalence of complex orders, the
Exchange desires to increase the Hybrid
3.0 Execution Fee to cover the increased
system complexity (and use of resources
necessary) due to the trading of complex
orders. The Exchange believes that
adding the correct origin codes as
applicable to the Hybrid 3.0 Execution
Fee, and amending Footnote 21 to
remove the reference to the Hybrid 3.0
Execution Fee as being $0.18 per
contract, will help alleviate any
potential confusion regarding the
amount of the Hybrid 3.0 Execution Fee
and to whom it applies. This alleviation
of potential confusion serves to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system.
The Exchange believes that the
proposed Customer Priority Surcharges
are reasonable, equitable and not
unfairly discriminatory. The purpose of
the Customer Priority Surcharges is to
ensure that there is reasonable cost
equivalence between the primary
execution channels for the products
involved. Manual executions are
achieved using floor brokers (the only
market participants who can trade
contracts using a PAR terminal), who
assess a commission for Customer
executions. Electronic executions are
not assessed a commission, but more
heavily rely on the Exchange’s systems.
The proposed Customer Priority
Surcharges will minimize the cost
differentials between manual and
electronic executions, which is in the
interest of the Exchange as it must both
maintain robust electronic systems as
well as provide for economic
opportunity for floor brokers to continue
to conduct business, as they serve an
important function in achieving price
discovery and Customer executions.
Floor brokers ensure that the difficultto-execute orders (such as large and
complex orders) are able to be executed
manually by accessing the CBOE’s inperson market maker crowds, while also
helping to achieve price improvement.
SPX, SPXW and VIX are the only
products that execute a significant share
of their total volume on the trading
floor, and the Hybrid 3.0 Execution Fee
(which essentially acts as a customer
25 With the exception of those listed in Footnote
21 of the Fees Schedule; the Exchange does not
herein propose to amend such exceptions.
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priority surcharge) already applies to
SPX. SPXW often has a lower premium
(as it is a weekly option with a lower
timeframe, as the options have less time
value than the regular SPX options), so
it makes sense to assess a lower SPXW
Customer Priority Surcharge than the
Hybrid 3.0 Execution Fee. VIX options
trade at a lower underlying value than
SPX and so also have a lower premium
value, so it also makes sense for the VIX
Customer Priority Surcharge to be lower
than the Hybrid 3.0 Execution Fee. As
described above, the Exchange wants to
encourage the execution of VIX options
Customer orders for options with a
premium of $0.00–$0.10, and therefore
is not proposing to assess the Customer
Priority Surcharge on such options. The
Exchange believes that it is equitable
and not unfairly discriminatory to only
assess this surcharge to Maker NonTurners because VIX options is such a
unique product that we want to
continue to encourage market
participation and price improvement
with a low underlying (unlike SPX or
SPXW, which has a higher underlying).
Someone improving the market
(‘‘turning’’) has a much greater
proportional impact in a product with a
lower underlying, and the Exchange
wants to encourage such market
improvement.
The Exchange believes that converting
the qualification for the different fee
tiers in the Liquidity Provider Sliding
Scale from measuring by a nominal
contracts per month to measuring by the
relative contracts per month (based on
the percentage of national Market-Maker
volume in multiply-listed options) is
reasonable because it allows the
Exchange to control and account for
changes in national industry-wide
multiply-listed options volume. Further,
it will still allow Market-Makers to pay
lower fees for executing more orders in
multiply-listed options, just as prior to
this change. The Exchange believes that
the change is equitable and not unfairly
discriminatory because it will be
applied to all Market-Makers. The
change merely switches out the
measuring stick to use one that accounts
for changes in industry-wide volume.
Finally, Market-Makers must take on
certain obligations, such as quoting
obligations, that other market
participants do not have.
The Exchange believes that the
changes to the prepayment for the
Liquidity Provider Sliding Scale are
reasonable because they correspond
with the adoption of relative,
percentage-based tiers, and also because
the new prepayment amount will be
lower than previously (making it easier
to prepay). The Exchange believes that
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these changes are equitable and not
unfairly discriminatory because they
will apply to all market participants to
whom the Liquidity Provider Sliding
Scale applies.
Similar to the changes to the Liquidity
Provider Sliding Scale, the Exchange
believes that the changes to the CBOE
Proprietary Products Sliding Scale are
reasonable because they allow the
Exchange to control and account for
changes in national industry-wide
multiply-listed options volume, as well
as the differing number of days in a
month. The Exchange believes that
these changes are equitable and not
unfairly discriminatory because, first
and foremost, there are no substantive
changes to the fees in the CBOE
Proprietary Products Sliding Scale.
Indeed, these changes merely serve to
better standardize the CBOE Proprietary
Products Sliding Scale (as well as make
it easier to read). The changes merely
switch out the measuring stick to use
one that accounts for changes in
industry-wide volume. Further, the
changes will apply to all market
participants who qualify for the CBOE
Proprietary Products Sliding Scale.
Finally, Clearing Trading Permit
Holders must take on certain
obligations, such as clearing, that other
market participants do not have. The
Exchange believes that the cosmetic
changes to the CBOE Proprietary
Products Sliding Scale will prevent any
possible potential investor confusion,
thereby removing impediments to and
perfecting the mechanism of a free and
open market and a national market
system, and, in general, protecting
investors and the public interest.
The Exchange believes that lowering
the fee in Tier 1 of the Liquidity
Provider Sliding Scale is reasonable
because it will allow Market-Makers in
that tier to pay a lower fee for
transactions. The Exchange believes that
this is equitable and not unfairly
discriminatory because the lower fee is
designed to encourage Market-Makers to
execute more transactions, and the
resulting increased volume and trading
opportunities will benefit all market
participants (including Market-Makers
at the other tiers of the Liquidity
Provider Sliding Scale). Further,
Market-Makers take on obligations, such
as quoting obligations, that other market
participants do not have.
The Exchange believes that the
deletion of the VIX Options Sliding
Scale is reasonable, equitable and not
unfairly discriminatory because it will
merely result in Clearing Trading Permit
Holders being assessed the standard
Clearing Trading Permit Holder
Proprietary transaction fee for VIX
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Fmt 4703
Sfmt 4703
options transactions (instead of having
the fee amount for such transactions
change based on the number of VIX
options transactions the Clearing
Trading Permit Holder executes in a
month). As such, all Clearing Trading
Permit Holder Proprietary VIX options
transactions will be assessed the same
fee amount. As always, Clearing Trading
Permit Holders must take on certain
obligations, such as clearing, that other
market participants do not have.
The Exchange believes the imposition
of the PULSe-to-PULSe Routing Fee is
reasonable because it is intended to
cover the costs associated with the
development of PULSe-to-PULSe
routing, as well as the upkeep of such
systems. The Exchange believes that it
is equitable and not unfairly
discriminatory because it will be
assessed to all receiving TPHs that elect
to receive PULSe-to-PULSe orders. The
Exchange proposes to assess the fee to
the receiving TPH because, by electing
to receive PULSe-to-PULSe orders, the
receiving TPH then gets the ability to
execute those orders on the Exchange.
The Exchange believes that the proposal
to amend the listing of the fee and note
for the PULSe On-Floor Workstation in
the ‘‘Trading Floor Terminal Rentals’’
section of the ‘‘Facility Fees’’ table will
alleviate any potential confusion,
thereby removing impediments to and
perfecting the mechanism of a free and
open market and a national market
system, and, in general, protecting
investors and the public interest.
The Exchange believes that lowering
the HAL Step-Up Rebate is reasonable
because it will still allow MarketMakers to receive a rebate for trading
activity that they would not otherwise
receive (just a smaller rebate). The
Exchange believes that this proposed
change is equitable and not unfairly
discriminatory because it applies to all
Market-Makers who qualify for the HAL
Step-Up Rebate (only Market-Makers
can quote and therefore ‘‘step up’’).
Moreover, the proposed change does not
affect who may qualify for the HAL
Step-Up Rebate. Further, Market-Makers
have certain obligations, such as quoting
obligations, that other market
participants do not have.
The Exchange believes that its
proposal to charge all customer orders
routed via Linkage the actual
transaction costs assessed by the
exchange(s) to which the orders are
routed is reasonable, equitable and not
unfairly discriminatory because the
Exchange will merely be passing
through these execution costs to the
customer. Further, this pass-through
will be applied equally to all customer
orders, regardless of size.
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The Exchange believes that its
proposal to increase the non-customer
Linkage fee by $0.05, to $0.55 per
contract, is reasonable, equitable and
not unfairly discriminatory because
such increase will help offset the costs
associated with routing orders through
Linkage and paying the transaction fees
for such executions at other exchanges.
The amount of this fee is lower than
corresponding non-customer Linkage
fees assessed by other exchanges.26 This
fee amount will be assessed to all noncustomer orders routed via Linkage. The
Exchange notes that there exists in the
options industry a historical practice of
preferential pricing for customers,
whose orders are more attractive for
trading partners and who also often do
not have as sophisticated trading
systems as other market participants.
The Exchange believes that offering a
second tier of the Floor Broker Access
Rebate is reasonable because it allows
the qualifying Floor Brokers to pay
lower Floor Broker Trading Permit fees
than they otherwise would have. The
Exchange believes that it is equitable
and not unfairly discriminatory to offer
the second tier of the rebate to Floor
Brokers only, and only those who
execute 25,000 contracts per day (of
customer, open-outcry trading in
multiply-listed options classes) because
Floor Brokers serve an important
function in facilitating the execution of
orders via open outcry, which as a
price-improvement mechanism, the
Exchange wishes to encourage and
support. Further, the proposed change is
designed to encourage the execution of
orders via open outcry, which should
increase volume, which would benefit
all market participants (including Floor
Brokers who do not hit the 25,000
contracts-per-day threshold) trading via
open outcry (and indeed, this increased
volume could make it possible for some
Floor Brokers to hit the 25,000
contracts-per-day threshold). Also, only
Floor Brokers are assessed Floor Broker
Trading Permit fees. The Exchange
proposes limiting the rebate
qualification to open outcry trading
because Floor Brokers only engage in
open outcry trading (at least in their
capacities as Floor Brokers), and
because, as previously stated, the
Exchange wishes to support and
encourage open-outcry trading, which
allows for price improvement and has a
number of positive impacts on the
market system. The Exchange proposes
limiting the rebate qualification to
customer orders because market
participants generally prefer to trade
26 See PHLX Pricing, Non-Customer Routing Fee
of $0.95 per contract.
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3451
against customer trades, and
encouraging customer trading in this
manner should provide such market
participants with more customer orders
with which to trade. Further, the
options industry has a long history of
promoting customer orders through
rebates and other preferential fee
structures. The Exchange proposes
limiting the rebate qualification to
multiply-listed options classes because
the Exchange expended considerable
resources developing its proprietary,
singly-listed products and therefore
does not desire to offer this rebate
associated with such products.
The Exchange believes that the
proposed change to permit the sharing
of bandwidth between affiliated TPHs is
reasonable because it will allow such
TPHs more efficient use of bandwidth
without having to purchase more (if
they can share with each other). The
Exchange believes that this proposed
change is equitable and not unfairly
discriminatory because it will apply to
all groupings of affiliated TPHs.
CBOE does not believe that the
proposed rule change will impose any
burden on intermarket competition that
is not necessary or appropriate in
furtherance of the purposes of the Act
because the proposed changes are
intended to improve the Exchange’s
competitive position and make CBOE a
more attractive marketplace in order to
encourage market participants to bring
increased volume to the Exchange
(while still covering costs as necessary).
Further, the proposed changes only
affect trading on CBOE. To the extent
that the proposed changes make CBOE
a more attractive marketplace for market
participants at other exchanges, such
market participants are welcome to
become CBOE market participants.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
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. CBOE does
not believe that the proposed rule
change will impose any burden on
intramarket competition that is not
necessary or appropriate in furtherance
of the purposes of the Act because,
while different fees are assessed to
different market participants in some
circumstances, these different market
participants have different obligations
and different circumstances (as
described in the ‘‘Statutory Basis’’
section above). For example, Clearing
Trading Permit Holders have clearing
obligations that other market
participants do not have. Market-Makers
have quoting obligations that other
market participants do not have. There
is a history in the options markets of
providing preferential treatment to
Customers, as they often do not have as
sophisticated trading operations and
systems as other market participants,
which often makes other market
participants prefer to trade with
Customers. Further, the Exchange fees,
both current and those proposed to be
changed, are intended to encourage
market participants to bring increased
volume to the Exchange (which benefits
all market participants), while still
covering Exchange costs (including
those associated with the upgrading and
maintenance of Exchange systems).
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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.
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 27 and paragraph (f) of Rule
19b–4 28 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–2013–129 on the subject line.
27 15
28 17
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
21JAN1
3452
Federal Register / Vol. 79, No. 13 / Tuesday, January 21, 2014 / Notices
Small Business Administration.
ACTION: Notice of 30-day reporting
requirements submitted for OMB
review.
Chapter 35), agencies are required to
submit proposed reporting and
recordkeeping requirements to OMB for
review and approval, and to publish a
notice in the Federal Register notifying
the public that the agency has made
such a submission. This notice complies
with that requirement and provides an
additional 30 days for the public to
comment on the information collection.
DATES: Submit comments on or before
February 20, 2014. If you intend to
comment but cannot prepare comments
promptly, please advise the OMB
Reviewer and the Agency Clearance
Officer before the deadline.
Copies: Request for clearance (OMB
83–1), supporting statement, and other
documents submitted to OMB for
review may be obtained from the
Agency Clearance Officer.
ADDRESSES: Address all comments
concerning this notice to: Agency
Clearance Officer, Curtis Rich, Small
Business Administration, 409 3rd Street
SW., 5th Floor, Washington, DC 20416;
and OMB Reviewer, Office of
Information and Regulatory Affairs,
Office of Management and Budget, New
Executive Office Building, Washington,
DC 20503.
FOR FURTHER INFORMATION CONTACT:
Curtis Rich, Agency Clearance Officer,
(202) 205–7030, curtis.rich@sba.gov.
Abstract: Small businesses seeking
financing from specialized small
business investment companies
(SSBICs) are required to provide the
requested information to the SSBIC in
support of their eligibility for such
financing based on their ownership by
individuals who are either socially or
economically disadvantaged, as defined
in 13 CFR 124.103. Written certification
of eligibility is required by section
308(h) of the Small Business Investment
Act of 1958, as amended. The
information is retained by the SSBIC but
is reviewed periodically by an SBA
examiner as part of his/her on-site
examination of the SSBIC, which is
required by statute to occur at least
biennially (15 U.S.C. Section 687b(c)).
SUPPLEMENTARY INFORMATION:
Title: Financing Eligibility
Statement—Social Disadvantage/
Economic: Disadvantage.
Frequency: On Occasion.
SBA Form Numbers: 1941 A, B, C.
Description of Respondents: Small
Business Investment Companies and
Small Businesses.
Responses: 50.
Annual Burden: 100.
Under the provisions of the
Paperwork Reduction Act (44 U.S.C.
Yvonne K. Wilson,
Chief, Records Management Division.
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–2013–129. 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
available publicly. All submissions
should refer to File Number SR–CBOE–
2013–129, and should be submitted on
or before February 11, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.29
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–00984 Filed 1–17–14; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
Reporting and Recordkeeping
Requirements Under OMB Review
tkelley on DSK3SPTVN1PROD with NOTICES
AGENCY:
SUMMARY:
DEPARTMENT OF STATE
[Public Notice 8599]
Application for Employment;
Correction
AGENCY:
ACTION:
Department of State.
Notice; Correction.
The Department of State
published a document in the Federal
Register of January 13, 2014 concerning
the Information Collection ‘‘Application
for Employment’’. The address for the
public to make comments via the web
was omitted.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
Direct requests for additional
information regarding the collection
listed in this notice, including requests
for copies of the proposed collection
instrument and supporting documents,
to Diana M. Ossa, Bureau of Human
Resources, Recruitment Division,
Student Programs, U.S. Department of
State, Washington, DC 20522, who may
be reached on (202) 261–8931 or at
ossadm@state.gov.
Correction
In the Federal Register of January 13,
2014, in FR Volume number 79, page
number 2239, in the first paragraph
correct the title ‘‘60-Day Notice of
Proposed Information Collection: Form
DS–1950, Department of State
Application for Employment, OMB
Control Number 1405–0139’’ to read:
‘‘60-Day Notice of Proposed Information
Collection: Application for
Employment.’’
On page 2240, third paragraph, under
the header ADDRESSES:, insert a bullet
point above the ‘‘Email:’’ bullet point
with the following text:
• Web: Persons with access to the
Internet may use the Federal Docket
Management System (FDMS) to
comment on this notice by going to
www.Regulations.gov. You can search
for the document by entering ‘‘Public
Notice 8591’’ in the Search bar. If
necessary, use the Narrow by Agency
filter option on the Results page.
Dated: January 13, 2014.
Janet Freer,
Director, Office of Directives Management.
[FR Doc. 2014–00919 Filed 1–17–14; 8:45 am]
BILLING CODE 4710–15–P
[FR Doc. 2014–01064 Filed 1–17–14; 8:45 am]
29 17
CFR 200.30–3(a)(12).
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]]>Agencies
[Federal Register Volume 79, Number 13 (Tuesday, January 21, 2014)]
[Notices]
[Pages 3443-3452]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-00984]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71295; File No. SR-CBOE-2013-129]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend the Fees Schedule
January 14, 2014.
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 December 31, 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 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 the
Substance of the Proposed Rule Change
The Exchange proposes to amend its Fees Schedule. 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 proposes to make a number of changes to its Fees
Schedule,
[[Page 3444]]
all to be effective January 1, 2014. First, the Exchange proposes to
increase the fee for electronic Clearing Trading Permit Holder
Proprietary executions in equity, ETF, ETN, and index options classes
(except SPX, SPXW, SPXpm, SRO, OEX, XEO, VIX and VOLATILITY INDEXES
(the ``Special Classes'')) from $0.25 per contract to $0.35 per
contract.\3\ The reason for the proposed increase is to cover the
increasing costs associated with electronic executions (including the
upkeep and institution of new systems) as well as to better align with
market rates for Clearing Permit Holder Proprietary executions (CBOE
fees will still be lower than comparable fees offered by some other
exchanges).\4\
---------------------------------------------------------------------------
\3\ Corresponding to this change, the Exchange proposes to amend
the listing of the Electronic (non-AIM) fee from $0.25 per contract
to $0.35 per contract on its ``Clearing Trading Permit Holder Fee
Cap'' table.
\4\ For example, NASDAQ OMX PHLX LLC (``PHLX'') assesses firm
electronic fees of $0.45 or $0.60 per contract for multiply-listed
options (see PHLX Pricing, Section II).
---------------------------------------------------------------------------
Next, the Exchange proposes to amend the statement in Footnote 11
of its Fees Schedule that reads ``For facilitation orders (other than
SPX, SPXpm, SRO, VIX or other volatility indexes, OEX or XEO)
(``facilitation orders'' for this purpose to be defined as any paired
order in which a Clearing Trading Permit Holder (F) origin code is
contra to any other origin code, provided the same executing broker and
clearing firm are on both sides of the order) executed electronically
(including in AIM), open outcry, or as a QCC or FLEX transaction, CBOE
will assess no Clearing Trading Permit Holder Proprietary transaction
fees'' to add orders of a Non-Trading Permit Holder Affiliate (``L''
origin code) into this definition of ``facilitation orders''.\5\ This
would mean that such ``L'' orders would be assessed no fees for
facilitation orders (except as otherwise stated). The purpose for this
proposed change is to attract and encourage the Non-Trading Permit
Holder Affiliates of Clearing Trading Permit Holders. Permitting them
free facilitations encourages them to concentrate more business on CBOE
while putting the Exchange on a similar competitive position as other
exchanges, including those that offer free Broker-Dealer facilitations
that are contra to a Customer.\6\
---------------------------------------------------------------------------
\5\ As proposed, the statement would read: ``For facilitation
orders (other than SPX, SPXpm, SRO, VIX or other volatility indexes,
OEX or XEO) (``facilitation orders'' for this purpose to be defined
as any paired order in which a Clearing Trading Permit Holder (F)
origin code or Non-Trading Permit Holder Affiliate (``L'' origin
code) is contra to any other origin code, provided the same
executing broker and clearing firm are on both sides of the order)
executed electronically (including in AIM), open outcry, or as a QCC
or FLEX transaction, CBOE will assess no Clearing Trading Permit
Holder Proprietary transaction fees.'' The Exchange would also add
the origin code ``L'' into the ``Facilitation'' line on the Equity
Options, ETF and ETN Options, and Index Options Products Excluding
the Special Classes Rate Tables.
\6\ See PHLX Pricing, Section II, bullet point discussing
facilitation orders executions.
---------------------------------------------------------------------------
The Exchange also proposes to assess no fee on Clearing Trading
Permit Holder Proprietary facilitation transactions in Mini options. As
Mini options are merely \1/10\ the size of regular options contracts,
and such transactions in regular options contracts are assessed no fee,
it makes sense to also assess no fee for these transactions in Mini
options.
The Exchange proposes to make some reorganization of its Specified
Proprietary Index Options Rate Table--SPX, SPXW, SPXpm, SRO, OEX, XEO,
VIX and VOLATILITY INDEXES (the ``Proprietary Options Rate Table'').
First, the Exchange proposes to re-order alphabetically the Customer
fees for the different products listed in the table. This means that
OEX and XEO fees will be at the top, followed by OEX Weeklys and XEO
Weeklys, then SPX (incl SPXW), then SPXpm, then VIX (and VOLATILITY
INDEXES, as the Exchange will also propose herein to assess the same
Customer fees for VOLATIILITY INDEXES as are assessed to VIX options
transactions). The amounts of these fees will not change (unless
otherwise described herein). The second step in the re-organization of
this table is to separate fees based on the option's premium price. The
amounts of such fees will not change (unless otherwise described
herein). The purpose of these proposed changes is to make the
Proprietary Options Rate Table easier for market participants to read
and ascertain which fees apply.
The Exchange also proposes to amend Customer fees for VIX options
transactions. Currently, when the premium is greater than or equal to
$1, the fee is $0.45 per contract, and when the premium is less than
$1, the fee is $0.25 per contract. The Exchange proposes to amend VIX
options Customer fees such that when the premium is (a) $1.00 or
greater, the fee will be $0.48 per contract, (b) $0.11-$0.99, the fee
will be $0.27, and (c) $0.00-$0.10, the fee will be $0.10. The purpose
of these proposed changes is to provide greater incentives for
Customers to trade VIX options. By providing for more granular fee
tiers based on the premium, the Exchange can more closely assess fees
commensurate with the premiums for such options. The Exchange is
attempting to reduce costs on low-priced VIX options to encourage
Customers to close and roll over positions close to expiration at low
premium levels. Currently, such Customers are less likely to do this
because the transaction fee is closer to the premium level. The
Exchange believes that the lowered fees for VIX options trading with a
premium of $0.00-$0.10 will encourage the trading of such options. The
slight increases of the fees for Customer transactions in VIX options
whose premium is greater than or equal to $1.00 as well as those whose
premium is $0.11-$0.99 are being utilized in order to achieve some
level of revenue balance in connection with the lowered fee for
customer transactions in VIX options whose premium is $0.00-$0.10.
The Exchange proposes to amend the Customer fees for all other
VOLATILITY INDEXES so that such fees are the same as VIX options fees.
VIX is itself a Volatility Index, so it makes sense to assess the same
Customer fees to all other VOLATILITY INDEXES as are assessed to the
Exchange's most heavily-traded Volatility Index (VIX). The VIX and
VOLATILITY INDEXES fees that apply to each other market participant are
already the same. CBOE seeks to have a unified strategy for its
volatility complex, and since most CBOE volatility products have an
underlying value that is generally in the same range, the fees
structure that has been designed for VIX options also makes sense for
applicability for all other VOLATILITY INDEXES.
The Exchange also proposes to separate out the fees for VIX and
VOLATILITY INDEXES for CBOE Market-Makers/DPMs/E-DPMs/LMMs (``Market-
Makers'') from those assessed to SPX, SPXW, SPXpm, OEX and XEO.
Currently, Market-Maker transactions in all those products are assessed
a fee of $0.20 per contract. The Exchange proposes to assess a fee for
Market-Maker transactions in VIX and VOLATILITY INDEXES of $0.05 per
contract when the premium is $0.00-$0.10 and $0.23 per contract when
the premium is $0.11 or greater. The Exchange believes that the lowered
fees for VIX and VOLATILITY INDEXES options trading with a premium of
$0.00-0.10 will encourage the trading of such options. The slight
increases of the fees for Market-Maker transactions in VIX options and
VOLATILITY INDEXES whose premium is greater than or equal to $0.11 is
being utilized in order to achieve some level of revenue balance in
connection with the lowered fee for Market-Maker transactions in VIX
options and VOLATILITY INDEXES whose premium is $0.00-0.10. The
[[Page 3445]]
Exchange institutes these new fees in order to encourage Market-Makers
to provide liquidity to Customer orders in VIX options and VOLATILITY
INDEXES.
The Exchange assesses a Hybrid 3.0 Execution Fee of $0.18 per
contract for all electronic executions in Hybrid 3.0 classes (with some
exceptions).\7\ The Exchange hereby proposes to increase this fee to
$0.20 per contract. The purpose of this change is because at the time
that the Hybrid 3.0 Execution Fee was adopted, most orders executed via
Hybrid 3.0 were simple orders. Now, with the growing prevalence of
complex orders, the Exchange desires to increase the Hybrid 3.0
Execution Fee to cover the increased system complexity (and use of
resources necessary) due to the trading of complex orders. The Exchange
also proposes to amend the listing of the origin codes on the
Proprietary Options Rate Chart. When the Proprietary Options Rate Chart
was created, the Exchange erroneously listed only the ``C'' and ``W''
origin codes as applicable to the Hybrid 3.0 Execution Fee, which
contradicts Footnote 21 (which describes the Hybrid 3.0 Execution Fee,
and does not except out other origin codes). As such, the Exchange
proposes to add the ``F'', ``J'', ``L'', ``B'', and ``N'' origin codes
to the table. The Exchange also proposes to amend Footnote 21 to remove
the listing of the Hybrid 3.0 Execution Fee as being $0.18 per
contract, and simply state that the Hybrid 3.0 Execution Fee will be
assessed to relevant executions in Hybrid 3.0 classes.
---------------------------------------------------------------------------
\7\ See CBOE Fees Schedule, Footnote 21 for such exceptions.
---------------------------------------------------------------------------
The Exchange proposes to adopt two Customer Priority Surcharges,
which are assessed on customer (C) contracts. The first is the SPXW
(electronic only) Customer Priority Surcharge of $0.05 per contract.
The SPXW Customer Priority Surcharge applies to all SPXW customer
contracts executed electronically, except those contracts traded on a
PAR terminal. The second Customer Priority Surcharge is to be assessed
on Customer VIX contracts executed electronically that are Maker and
not Market Turner. This $0.05 per contract fee will only be assessed on
such contracts that have a premium of $0.11 or greater.
The purpose of the Customer Priority Surcharges is to ensure that
there is reasonable cost equivalence between the primary execution
channels for the products involved. Manual executions are achieved
using floor brokers (the only market participants who can trade
contracts using a PAR terminal), who assess a commission for Customer
executions. Electronic executions are not assessed a commission, but
more heavily rely on the Exchange's systems. The proposed Customer
Priority Surcharges will minimize the cost differentials between manual
and electronic executions, which is in the interest of the Exchange as
it must both maintain robust electronic systems as well as provide for
economic opportunity for floor brokers to continue to conduct business,
as they serve an important function in achieving price discovery and
Customer executions. Floor brokers ensure that the difficult-to-execute
orders (such as large and complex orders) are able to be executed
manually by accessing the CBOE's in-person market maker crowds, while
also helping to achieve price improvement. SPX, SPXW and VIX are the
only products that execute a significant share of their total volume on
the trading floor, and the Hybrid 3.0 Execution Fee (which essentially
acts as a customer priority surcharge) already applies to SPX. SPXW
often has a lower premium (as it is a weekly option with a lower
timeframe, as the options have less time value than the regular SPX
options), so it makes sense to assess a lower SPXW Customer Priority
Surcharge than the Hybrid 3.0 Execution Fee. VIX options trade at a
lower underlying value than SPX and so also have a lower premium value,
so it also makes sense for the VIX Customer Priority Surcharge to be
lower than the Hybrid 3.0 Execution Fee. As described above, the
Exchange wants to encourage the execution of VIX options Customer
orders for options with a premium of $0.00-$0.10, and therefore is not
proposing to assess the Customer Priority Surcharge on such options.
The Exchange proposes to change the different tier thresholds in
its Liquidity Provider Sliding Scale (which provides for reduced fees
for a CBOE Market-Maker based on the Market-Maker executing a certain
number of contracts per month) from nominal contracts per month
thresholds (i.e. contracts 100,001-2,000,000) to a relative contracts
per month threshold (i.e. above 0.05%-0.70%). These volume thresholds
are based on the Market-Maker's percentage of total national Market-
Maker multiply-listed options volume (where previously they had merely
been based on the total number of multiply-list contracts executed by
the Market-Maker). Below is a table demonstrating the proposed changes.
----------------------------------------------------------------------------------------------------------------
Fee (per
Tier Old volume threshold New volume thresholds contract)
----------------------------------------------------------------------------------------------------------------
1.................................... 1-100,000.................. 0.00%-0.05%............... \8\ $0.23
2.................................... 100,001-2,000,000.......... Above 0.05%-0.70%......... 0.17
3.................................... 2,000,001-4,000,000........ Above 0.70%-1.40%......... 0.10
4.................................... 4,000,001-6,000,000........ Above 1.40%-2.00%......... 0.05
5.................................... 6,000,000 +................ Above 2.00%............... 0.03
----------------------------------------------------------------------------------------------------------------
The purpose of this change is to control and account for changes in
national industry-wide multiply-listed options volume. The new
percentage thresholds generally correspond to the old nominal
thresholds (based on current total national Market-Maker multiply-
listed options volume). The Exchange also proposes to amend the
``Notes'' section of this table to capitalize the term ``VOLATILITY
INDEXES'' as this term is capitalized elsewhere in the Fees Schedule,
and the Exchange desires consistency.
---------------------------------------------------------------------------
\8\ Currently, the fee at this tier is $0.25 per contract.
However, the Exchange proposes to lower this fee to $0.23 per
contract, as described below.
---------------------------------------------------------------------------
Due to the proposed change to a relative percentage-based tier
system for the Liquidity Provider Sliding Scale, the Exchange also must
propose amendments to Footnote 10 of the Fees Schedule, which discusses
the prepayment necessary in order to be eligible for the fees
applicable to tiers 3-5 of the Liquidity Provider Sliding Scale.
Currently, a Liquidity Provider is required to pre-pay the fees for the
first two tiers of the Liquidity Provider Sliding Scale in order to be
eligible for the lower fees applicable to tiers 3-5. This works out to
$348,000 per month (based on the current nominal volume thresholds in
the Liquidity Provider Sliding Scale). However, with the proposed
change to make the tiers in the
[[Page 3446]]
Liquidity Provider Sliding Scale based on relative percentage-based
volume thresholds, it will be impossible to know beforehand what amount
per month will be required to pay for the first two tiers. As such, the
Exchange simply proposes to require a pre-payment of $200,000 per
month, or $2,400,000 for the year (significantly lower than the current
prepay amounts). Along with that change, the Exchange proposes to make
some other amendments to Footnote 10, which describes the prepayment,
to (1) give those desiring to prepay for the full year until January 10
of the applicable year to prepay, (2) add an example regarding
prepayment, (3) make clear that prepay arrangements for less than the
full year must be paid before the calendar month in which they are to
begin, and (4) make the Footnote easier to read and understand.\9\
---------------------------------------------------------------------------
\9\ As proposed, Footnote 10 will read: ``The Liquidity Provider
Sliding Scale applies to Liquidity Provider (CBOE Market-Maker, DPM,
e-DPM and LMM) transaction fees in all products except mini-options,
SPX, SPXpm, SRO, VIX or other volatility indexes, OEX or XEO. A
Liquidity Provider's standard per contract transaction fee shall be
reduced to the fees shown on the sliding scale as the Liquidity
Provider reaches the volume thresholds shown on the sliding scale in
a month. The Exchange will aggregate the trading activity of
separate Liquidity Provider firms for purposes of the sliding scale
if there is at least 75% common ownership between the firms as
reflected on each firm's Form BD, Schedule A. A Liquidity Provider
shall be required to prepay, by January 10th, $2,400,000 in order to
be eligible for the fees applicable to tiers 3-5 of the sliding
scale for the entire year. A Liquidity Provider can elect to prepay
$200,000 per month to be eligible for the fees applicable to tiers
3-5 of the sliding scale for the remainder of the year at any time
during the year, but such prepayment (and eligibility) will only be
applied prospectively for the remainder of the year. A TPH that
chooses, for example, in June 2014 to prepay for the remainder of
the year would pay $1,200,000 for the months of July-December. All
prepay arrangements must be paid before the first calendar month in
which they are to begin. Contract volume resulting from any of the
strategies defined in Footnote 13 will apply towards reaching the
sliding scale volume thresholds.''
---------------------------------------------------------------------------
The Exchange also proposes to lower from $0.25 per contract to
$0.23 per contract the transaction fee in Tier 1 of the Liquidity
Provider Sliding Scale. The purpose of this change is to incentivize
Market-Makers at this first tier to quote more and execute more orders
on the Exchange, as well as to more effectively compete with pricing on
other exchanges.\10\
---------------------------------------------------------------------------
\10\ See PHLX Pricing, Section II.
---------------------------------------------------------------------------
The Exchange proposes to amend its CBOE Proprietary Products
Sliding Scale, under which Clearing Trading Permit Holder Proprietary
transaction fees and transaction fees for Non-Clearing Trading Permit
Holder Affiliates in OEX, XEO, SPX, SPXpm and volatility indexes are
reduced provided a Clearing Trading Permit Holder reaches certain
volume thresholds in multiply-listed options on the Exchange in a
month. The Exchange does not propose substantive changes to the fee or
structure of the CBOE Proprietary Products Sliding Scale. Instead, as
with the Liquidity Provider Sliding Scale, the Exchange proposes to
change the different tier thresholds from nominal contracts per month
thresholds to relative contracts per month thresholds (for the same
reasons as the Liquidity Provider Sliding Scale). The new thresholds
will be based on a Clearing Trading Permit Holder (Proprietary)
executing different percentages of total CBOE Clearing Trading Permit
Holder Proprietary volume in OEX, XEO, SPX, SPXpm, VIX and VOLATILITY
INDEXES.\11\ The new percentage thresholds generally correspond to the
old nominal thresholds (based on current total CBOE Clearing Trading
Permit Holder Proprietary volume in OEX, XEO, SPX, SPXpm, VIX and
VOLATILITY INDEXES). Similarly (and correspondingly), the Exchange
proposes to amend the different multiply-listed options tiers from
being based on total monthly volume to an Average Daily Volume
(``ADV'') threshold system (calculated monthly). The new thresholds ADV
thresholds generally correspond with the old monthly thresholds
(depending on how many trading days are in a given month). The purpose
of these changes is to control and account for changes in national
industry-wide multiply-listed options volume as well as the number of
trading days in a month. The Exchange also proposes a number of
cosmetic changes to the CBOE Proprietary Products Sliding Scale,
including (1) to renumber the tiers in the CBOE Proprietary Products
Sliding Scale, (2) to fix an error that listed ``SPXpm'' as ``SPXPm''
in the Notes, (3) clarify that VIX is included in the CBOE Proprietary
Products Sliding Scale (previously, it had just said ``volatility
indexes'', and while VIX is a volatility index, it can't hurt to be
more clear), (4) capitalize the term ``volatility indexes'' in the
``Notes'' in order to achieve consistency, (5) delete the term
``volume'' and replace it with ``ADV'' in the ``Notes'' due to the
change described above, and (6) change the title of a column from
``Proprietary Products Contracts Per Month'' to ``Proprietary Products
Volume Thresholds'' due to the changes described above. Once again, no
fees are being changed in the CBOE Proprietary Products Sliding Scale.
The proposed changes are detailed below.
---------------------------------------------------------------------------
\11\ To make this clear, the Exchange also proposes adding to
the ``Notes'' section of the table the following statement:
``Transaction fees in OEX, XEO, SPX, SPXpm, VIX and VOLATILITY
INDEXES will be reduced based on reaching the percentage thresholds
in OEX, XEO, SPX, SPXpm, VIX and VOLATILITY INDEXES listed in the
table.''
----------------------------------------------------------------------------------------------------------------
Current Proposed
----------------------------------------------------------------------------------------------------------------
Proprietary product Proprietary product volume
Tier contracts per month Tier thresholds
----------------------------------------------------------------------------------------------------------------
>= 375,000 < 1,500,000 contracts in >= 18,000 ADV <= 71,999 ADV in multi list
products
----------------------------------------------------------------------------------------------------------------
1................................. First 750,000........ B3.................. 0.00%-6.50%
2................................. Next 250,000......... B2.................. 6.51%-8.50%
3................................. Above 1,000,000...... B1.................. Above 8.50%
----------------------------------------------------------------------------------------------------------------
>=1,500,000 contracts in multi li>= 72,000 ADV in multi list products
----------------------------------------------------------------------------------------------------------------
1................................. First 750,000........ A2.................. 0.00%-6.50%
2................................. Above 750,000........ A1.................. Above 6.50%
----------------------------------------------------------------------------------------------------------------
The Exchange proposes to delete its Clearing Trading Permit Holder
VIX Options Sliding Scale (the ``VIX Options Sliding Scale'') and any
references in the Fees Schedule to the VIX Options Sliding Scale, as
well as language that
[[Page 3447]]
[sic] regarding the calculation of a Clearing Trading Permit Holder's
total proprietary transaction fees that will be made irrelevant by the
deletion of the VIX Options Sliding Scale.\12\ The Exchange instituted
the VIX Options Sliding Scale in an attempt to encourage greater
Clearing Trading Permit Holder proprietary trading of VIX options.\13\
The Exchange now proposes to delete the VIX Options Sliding Scale
because it is no longer competitively necessary. The vast majority of
CTPHs who qualify do not avail themselves of it and therefore it adds
unnecessary complexity to the Exchange's already-complex fees
structure.
---------------------------------------------------------------------------
\12\ Specifically, the Exchange proposes to delete language in
Footnote 11 that states: ``For calculating a Clearing Trading Permit
Holder's total proprietary product transaction fees, CBOE will use
the following methodology: If using the VIX Options Sliding Scale
plus the Sliding Scale (minus VIX volume) results in lower total
Clearing Trading Permit Holder proprietary transaction fees than
just using the Sliding Scale, CBOE will apply the new VIX Options
Sliding Scale plus the Sliding Scale, and deduct the VIX options
volume from the Sliding Scale. If using the VIX Options Sliding
Scale plus the Sliding Scale (minus VIX options volume) results in
higher total Clearing Trading Permit Holder proprietary transaction
fees than just using the Sliding Scale, CBOE will apply only the
Sliding Scale.''
As amended, Footnote 11, in its entirety, will read: The
Clearing Trading Permit Holder Fee Cap in all products except SPX,
SPXpm, SRO, VIX or other volatility indexes, OEX or XEO (the ``Fee
Cap'') and the CBOE Proprietary Products Sliding Scale for Clearing
Trading Permit Holder Proprietary Orders (the ``Sliding Scaleapply
[sic] to (i) Clearing Trading Permit Holder proprietary orders
(``F'' origin code), and (ii) orders of Non-Trading Permit Holder
Affiliates of a Clearing Trading Permit Holder. A ``Non-Trading
Permit Holder Affiliate'' for this purpose is a 100% wholly-owned
affiliate or subsidiary of a Clearing Trading Permit Holder that is
registered as a United States or foreign broker-dealer and that is
not a CBOE Trading Permit Holder. Only proprietary orders of the
Non-Trading Permit Holder Affiliate (``L '' origin code) effected
for purposes of hedging the proprietary over-the-counter trading of
the Clearing Trading Permit Holder or its affiliates will be
included in calculating the Fee Cap and Sliding Scale. Such orders
must be marked with a code approved by the Exchange identifying the
orders as eligible for the Fee Cap and Sliding Scale. Each Clearing
Trading Permit Holder is responsible for notifying the TPH
Department of all of its affiliations so that fees and contracts of
the Clearing Trading Permit Holder and its affiliates may be
aggregated for purposes of the Fee Cap and Sliding Scale. A Clearing
Trading Permit Holder is required to certify the affiliate status of
any Non-Trading Permit Holder Affiliate whose trading activity it
seeks to aggregate. In addition, each Clearing Trading Permit Holder
is required to inform the Exchange immediately of any event that
causes an entity to cease to be an affiliate. The Exchange will
aggregate the fees and trading activity of separate Clearing Trading
Permit Holders for the purposes of the Fee Cap and Sliding Scale if
there is at least 75% common ownership between the Clearing Trading
Permit Holders as reflected on each Clearing Trading Permit Holder's
Form BD, Schedule A. A Clearing Trading Permit Holder's fees and
contracts executed pursuant to a CMTA agreement (i.e., executed by
another clearing firm and then transferred to the Clearing Trading
Permit Holder's account at the OCC) are aggregated with the Clearing
Trading Permit Holder's non-CMTA fees and contracts for purposes of
the Fee Cap and Sliding Scale. Transaction fees resulting from any
of the strategies defined in Footnote 13 will apply towards reaching
the Fee Cap. For facilitation orders (other than SPX, SPXpm, SRO,
VIX or other volatility indexes, OEX or XEO) (``facilitation
orders'' for this purpose to be defined as any paired order in which
a Clearing Trading Permit Holder (F) origin code or Non-Trading
Permit Holder Affiliate (``L '' origin code) is contra to any other
origin code, provided the same executing broker and clearing firm
are on both sides of the order) executed electronically (including
in AIM), open outcry, or as a QCC or FLEX transaction, CBOE will
assess no Clearing Trading Permit Holder Proprietary transaction
fees.
\13\ For more description regarding the VIX Options Sliding
Scale, see Securities Exchange Act Release No. 68699 (January 18,
2013), 78 FR 5538 (January 18, 2013) (SR-CBOE-2013-003).
---------------------------------------------------------------------------
The Exchange proposes to amend its Fees Schedule with regard to
PULSe Workstation routing (specifically, with regard to routing from
one PULSe Workstation to another). By way of background, the PULSe
workstation is a front-end order entry system designed for use with
respect to orders that may be sent to the trading systems of CBOE. In
addition, the PULSe workstation provides a user with the capability to
send options orders to other U.S. options exchanges and/or stock orders
to other U.S. stock exchanges and trading centers \14\ (``away-market
routing'').\15\ PULSe Workstation users also have the capability to
send orders between PULSe workstations. For example, a user is able to
send an order from a PULSe workstation located in New York to a PULSe
workstation located in Chicago. The ability to send orders ``PULSe-to-
PULSe'' is available for use within a TPH (and any Non-TPHs to whom the
TPH makes the PULSe workstation available) and between TPHs that use
the PULSe workstation. A TPH may establish a PULSe-to-PULSe connection
with another TPH by contacting CBOE, who will permission [sic] the
connection. Before setting up the connection, both TPHs need to
acknowledge in writing (e.g., including via email) their agreement to
establish the mutual connection.
---------------------------------------------------------------------------
\14\ A ``trading center,'' as provided under Rule 600(b)(78) of
Regulation NMS, 17 CFR 242.600(b)(78), means a national securities
exchange or national securities association that operates an SRO
trading facility, an alternative trading system, an exchange market
maker, an OTC market maker, or any other broker or dealer that
executes orders internally by trading as principal or crossing
orders as agent.
\15\ For a more detailed description of the PULSe workstation
and its other functionalities, see, e.g., Securities Exchange Act
Release Nos. 62286 (June 11, 2010), 75 FR 34799 (June 18, 2010) (SR-
CBOE-2010-051), 63244 (November 4, 2010), 75 FR 69148 (November 10,
2010) (SR-CBOE-2010-100), 63721 (January 14, 2011), 76 FR 3929
(January 21, 2011) (SR-CBOE-2011-001), 65280 (September 7, 2011), 76
FR 56838 (September 14, 2011) (SR-CBOE-2011-083), 65491 (October 6,
2011), 76 FR 63680 (October 13, 2011) (SR-CBOE-2011-092), and 69990
(July 16, 2013), 78 FR 43953 (July 22, 2013) (SR-CBOE-2013-062).
---------------------------------------------------------------------------
The Exchange hereby proposes to impose a monthly PULSe-to-PULSe
Routing fee of $50 for each receiving TPH. This means that each TPH
with a PULSe Workstation that elects to receive orders from another
PULSe Workstation will be assessed this fee. The Exchange proposes to
assess the fee to cover costs associated with the development of PULSe-
to-PULSe routing, as well as the upkeep of such systems. The Exchange
proposes to assess the fee to the receiving TPH because, by electing to
receive PULSe-to-PULSe orders, the receiving TPH then gets the ability
to execute those orders on the Exchange. The Exchange also proposes a
non-substantive change to the Fees Schedule regarding PULSe Workstation
fees. Currently, there is a line under the ``Trading Floor Terminal
Rentals'' section of the ``Facility Fees'' table that lists PULSe On-
Floor Workstation fees as being $350 per login ID, and the note for
that fee is that ``this fee is waived for the first month of a new user
of a TPH''. However, there are more PULSe Workstation fees (including
that fee) listed in the ``PULSe Workstation'' fees section of the
``Facility Fees'' table. To avoid any potential confusion, the Exchange
proposes to delete the listing of the $350 per login ID fee amount, as
well as the note, from the PULSe On-Floor Workstation line of the
``Trading Floor Terminal Rentals'' section of the ``Facility Fees''
table and replace it with the statement ``See PULSe Workstation fees
below''.
The Exchange proposes to lower its Hybrid Agency Liaison (``HAL'')
Step-Up Rebate from $0.10 per contract to $0.05 per contract, and also
to delete obsolete language in the ``Notes'' description of the HAL
Step-Up Rebate.\16\ The purpose of this proposed change is because, as
routing practices have changed over the years, CBOE's competitive
strategy is no longer based on processing a notable amount of Linkage
traffic passing through the Exchange. Therefore it no longer makes
economic sense to offer as strong an incentive for Market-Makers to
``step up'' and attract orders coming through the Linkage.
---------------------------------------------------------------------------
\16\ Following the proposed changes, the ``Notes'' section would
read: The Exchange shall rebate to a market-maker against
transaction fees generated from a transaction on the HAL system in a
penny pilot class, provided that at least 70% of the market-maker's
quotes in that class (excluding mini-options and quotes in LEAPS
series) in the prior calendar month were on one side of the NBBO.
---------------------------------------------------------------------------
[[Page 3448]]
The Exchange proposes to amend its Linkage fees for Customers.
Currently, a different fees structure applies to customer orders of 100
or more contracts that is routed to one or more exchanges in connection
with the Options Order Protection and Locked/Crossed Market Plan
referenced in Rule 6.80 (the ``Linkage'') than applies to customer
orders of 99 contracts or less that are routed to one or more exchange
via Linkage. Those customer orders of 100 or more contracts are
assessed the actual transaction fee assessed by the exchange(s) to
which the order was routed, while customer orders of 99 contracts or
less are assessed the actual transaction fee assessed by the
exchange(s) to which the order was routed, minus $0.05 per contract.
The Exchange hereby proposes to eliminate this distinction, and assess
to all customer orders sent through Linkage the actual transaction fee
assessed by the exchange(s) to which the order was routed. It has
ceased to be economically viable for the Exchange to ``eat'' $0.05 per
contract on every customer order of 99 contracts or less that are
routed away via Linkage.\17\
---------------------------------------------------------------------------
\17\ As proposed, the ``note'' regarding Customer Linkage Fees
will read as follows: In addition to the customary CBOE execution
charges, for each customer order that is routed, in whole or in
part, to one or more exchanges in connection with the Options Order
Protection and Locked/Crossed Market Plan referenced in Rule 6.80,
CBOE shall pass through the actual transaction fee assessed by the
exchange(s) to which the order was routed. Multiple orders from the
same executing firm for itself or for a CMTA or correspondent firm
in the same series on the same side of the market that are received
within 500 milliseconds will be aggregated for purposes of
determining the order quantity.
---------------------------------------------------------------------------
The Exchange also proposes to increase by $0.05, to $0.55, the per-
contract routing fee assessed to non-customer orders routed through the
Linkage. The purpose of this proposed change is to cover costs
associated with routing orders through Linkage and paying the
transaction fees for such executions at other exchanges. The amount of
this fee is lower than corresponding non-customer Linkage fees assessed
by other exchanges.\18\
---------------------------------------------------------------------------
\18\ See NASDAQ OMX PHLX LLC (``PHLX'') Pricing, Non-Customer
Routing Fee of $0.95 per contract.
---------------------------------------------------------------------------
The Exchange also proposes to amend its Footnote 25. Currently, any
Floor Broker Trading Permit Holder that executes an average of 15,000
customer open-outcry contracts per day over the course of a calendar
month in multiply-listed options classes receives a rebate of $7,500 on
that Floor Broker Trading Permit Holder's Floor Broker Trading Permit
fees (the ``Floor Broker Access Rebate''). The Exchange proposes to add
a second tier to this rebate, and add that ``Any Floor Broker Trading
Permit Holder that executes an average of 25,000 customer open-outcry
contracts per day over the course of a calendar month in multiply-
listed options classes will receive a rebate of $15,000 on that Floor
Broker Trading Permit Holder's Floor Broker Trading Permit fees.'' The
purpose of the proposed change is to encourage Floor Brokers to execute
open-outcry customer trades in multiply-listed options, and the
Exchange believes that giving Floor Brokers a further break in their
Floor Broker Trading Permit fees will provide such an incentive. The
Exchange recognizes the competitive nature of maintaining a Floor
Broker operation at CBOE and wants to provide a credit to Floor Brokers
that engage in a significant amount of Floor Broker open outcry trading
at CBOE. For purposes of determining the rebate, the qualifying volume
of all Floor Broker Trading Permit Holders affiliated with a single TPH
organization will be aggregated, and, if such total meets or exceeds
the customer open-outcry contracts per day thresholds in multiply-
listed options classes, that TPH organization will receive a single
rebate, regardless of the number of Floor Broker Trading Permits
affiliated with that TPH organization.
Finally, the Exchange proposes to amend its Footnote 26, which
applies to the Exchange's Trading Permit and Tier Appointment Fees, to
state that Affiliated TPHs (TPHs with at least 75% common ownership
between the firms as reflected on each firm's Form BD, Schedule A) may
share their allotted bandwidth amongst each other. The purpose is to
allow for more efficient use of bandwidth. If a TPH is not using all of
its bandwidth and an affiliated TPH could use more, this will allow
them to share amongst each other (instead of having to purchase more).
The proposed changes are to take effect on January 1, 2014.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\19\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \20\ requirements that the rules
of an exchange be designed to prevent fraudulent and manipulative acts
and practices, to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitation transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
Additionally, the Exchange believes the proposed rule change is
consistent with Section 6(b)(4) of the Act,\21\ which requires that
Exchange rules provide for the equitable allocation of reasonable dues,
fees, and other charges among its Trading Permit Holders and other
persons using its facilities.
---------------------------------------------------------------------------
\19\ 15 U.S.C. 78f(b).
\20\ 15 U.S.C. 78f(b)(5).
\21\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes that the proposal to increase the fee for
electronic Clearing Trading Permit Holder Proprietary executions in
equity, ETF, ETN, and index options classes (except the Special
Classes) from $0.25 per contract to $0.35 per contract is reasonable,
equitable and not unfairly discriminatory because, while the per-
contract price is increasing, this new fee amount is still within the
range of fees paid by other market participants for such
transactions.\22\ The Exchange further believes this proposed change is
equitable and not unfairly discriminatory because the proposed new fee
amount is still lower than the fee assessed to Broker-Dealers and Non-
Trading Permit Holder Market-Makers for such transactions, and Clearing
Trading Permit Holders have some obligations (such as clearing trades)
that such market participants do not have. Further, this fee is still
lower than is assessed for comparable executions on other
exchanges.\23\ Finally, this fee will be assessed to all Clearing
Trading Permit Holder Proprietary transactions in the relevant
products.
---------------------------------------------------------------------------
\22\ For example, Broker-Dealers and Non-Trading Permit Holder
Market-Makers pay either $0.45 per contract or $0.60 per contract
for such transactions (See CBOE Fees Schedule, page 1).
\23\ For example, PHLX assesses firm electronic fees of $0.45 or
$0.60 per contract for multiply-listed options (see PHLX Pricing,
Section II).
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The Exchange believes that the proposal to add ``L'' orders to the
definition of ``facilitation orders'' (thereby making L facilitation
orders free (except as otherwise stated)) is reasonable because such
orders will no longer be assessed a fee that they otherwise would be
assessed. The Exchange believes this is equitable and not unfairly
discriminatory because Non-Trading Permit Holder Affiliates of Clearing
Trading Permit Holders are a functional subset of Clearing Trading
Permit Holders, and they domicile customer accounts, so it makes sense
to put them in the same position as
[[Page 3449]]
Clearing Trading Permit Holders. Non-Trading Permit Holder Affiliates
of Clearing Trading Permit Holders cannot be proprietary trading firms
(whereas broker-dealers, for example, can). The Exchange believes that
the proposal to assess no fees for Clearing Trading Permit Holder
Proprietary facilitation transactions in Mini options is reasonable
because such transactions that would otherwise be assessed a fee will
now be free. The Exchange believes that this is equitable and not
unfairly discriminatory because Mini options are merely 1/10 the size
of regular options contracts, and such transactions in regular options
contracts are assessed no fee, so it makes sense to also assess no fee
for these transactions in Mini options.
The Exchange believes that the reorganization of the Proprietary
Options Rate Table will help avoid any potential confusion on the part
of market participants regarding which fees apply in different
circumstances, thereby removing impediments to and perfecting the
mechanism of a free and open market and a national market system.
The Exchange believes that the proposed changes to the customer VIX
options transaction fees are reasonable because the amounts of the new
fees are near the range of fees assessed for customer transactions in
other CBOE proprietary products. Indeed, the fee for customer
transactions in SPX options whose premium is less than $1.00 is $0.35
per contract, and the fee for customer transactions in SPX options
whose premium is greater than or equal to $1.00 is $0.44 per contract.
The proposed changes to the customer VIX options transaction fees are
equitable and not unfairly discriminatory because they are designed to
attract greater customer order flow to the Exchange, which will benefit
all market participants. Assessing different fees for customer
transactions in VIX options depending on the premium is equitable and
not unfairly discriminatory because the Exchange believes that the
lowered fees for VIX options trading with a premium of $0.00-$0.10 will
encourage the trading of such options. The slight increases of the fees
for Customer transactions in VIX options whose premium is greater than
or equal to $1.00 as well as those whose premium is $0.11-$0.99 is
being utilized in order to achieve some level of revenue balance in
connection with the lowered fee for customer transactions in VIX
options whose premium is $0.00-$0.10. Further, the Exchange currently
offers different fees depending on the premium for customer
transactions in SPX options (as described in the previous paragraph).
Finally, these fees will be assessed to all Customer VIX options
transactions. The Exchange has expended significant resources to
develop proprietary products such as VIX options and must recoup such
costs.
The Exchange believes that assessing the same Customer fees to
other VOLATILITY INDEXES as are assessed to VIX options is reasonable,
equitable and not unfairly discriminatory because VIX is itself a
Volatility Index, and therefore it makes sense to assess the same
Customer fees to all other VOLATILITY INDEXES as are assessed to the
Exchange's most heavily-traded Volatility Index (VIX). The VIX and
VOLATILITY INDEXES fees that apply to each other market participant are
already the same. This proposed change will be applied equally to all
Customer VOLATILITY INDEX transactions.
The Exchange believes that the proposed fees for CBOE Market-Maker
transactions in VIX and VOLATILITY INDEXES are reasonable because they
are within the range of those assessed for transactions in VIX and
VOLATILITY INDEXES by other market participants, as well as those
assessed to CBOE Market-Makers for other products.\24\ Indeed, while
the proposed change is a slight increase when the premium is $0.11 or
greater, the proposed change is also a sizable decrease when the
premium is $0.00-$0.10. The Exchange believes this proposed change is
equitable and not unfairly discriminatory because it is designed to
attract greater customer order flow to the Exchange, which will benefit
all market participants. Further, while these fees are still lower than
assessed to other market participants for transactions in VIX and other
VOLATILITY INDEXES, CBOE Market-Makers/DPMs/E-DPMs/LMMs take on
obligations, such as quoting obligations, that other market
participants do not. There are different economic potentials for market
participants based on the premium of a trade, and therefore it can make
sense to offer different fees for different premiums in some products
(depending on the economics of trading in such products).
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\24\ See CBOE Fees Schedule, Proprietary Options Rate Table.
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The Exchange believes that the proposed increase in the Hybrid 3.0
Execution Fee is reasonable because it is merely an increase of $0.02
per contract, and the Exchange uses this fee to cover the costs of
operating the Hybrid 3.0 system. The Exchange believes that this
proposed increase is equitable and not unfairly discriminatory because
it applies to all Hybrid 3.0 executions \25\, and because the increased
fee will cover the costs of operating the Hybrid 3.0 system. At the
time that the Hybrid 3.0 Execution Fee was adopted, most orders
executed via Hybrid 3.0 were simple orders. Now, with the growing
prevalence of complex orders, the Exchange desires to increase the
Hybrid 3.0 Execution Fee to cover the increased system complexity (and
use of resources necessary) due to the trading of complex orders. The
Exchange believes that adding the correct origin codes as applicable to
the Hybrid 3.0 Execution Fee, and amending Footnote 21 to remove the
reference to the Hybrid 3.0 Execution Fee as being $0.18 per contract,
will help alleviate any potential confusion regarding the amount of the
Hybrid 3.0 Execution Fee and to whom it applies. This alleviation of
potential confusion serves to remove impediments to and perfect the
mechanism of a free and open market and a national market system.
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\25\ With the exception of those listed in Footnote 21 of the
Fees Schedule; the Exchange does not herein propose to amend such
exceptions.
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The Exchange believes that the proposed Customer Priority
Surcharges are reasonable, equitable and not unfairly discriminatory.
The purpose of the Customer Priority Surcharges is to ensure that there
is reasonable cost equivalence between the primary execution channels
for the products involved. Manual executions are achieved using floor
brokers (the only market participants who can trade contracts using a
PAR terminal), who assess a commission for Customer executions.
Electronic executions are not assessed a commission, but more heavily
rely on the Exchange's systems. The proposed Customer Priority
Surcharges will minimize the cost differentials between manual and
electronic executions, which is in the interest of the Exchange as it
must both maintain robust electronic systems as well as provide for
economic opportunity for floor brokers to continue to conduct business,
as they serve an important function in achieving price discovery and
Customer executions. Floor brokers ensure that the difficult-to-execute
orders (such as large and complex orders) are able to be executed
manually by accessing the CBOE's in-person market maker crowds, while
also helping to achieve price improvement. SPX, SPXW and VIX are the
only products that execute a significant share of their total volume on
the trading floor, and the Hybrid 3.0 Execution Fee (which essentially
acts as a customer
[[Page 3450]]
priority surcharge) already applies to SPX. SPXW often has a lower
premium (as it is a weekly option with a lower timeframe, as the
options have less time value than the regular SPX options), so it makes
sense to assess a lower SPXW Customer Priority Surcharge than the
Hybrid 3.0 Execution Fee. VIX options trade at a lower underlying value
than SPX and so also have a lower premium value, so it also makes sense
for the VIX Customer Priority Surcharge to be lower than the Hybrid 3.0
Execution Fee. As described above, the Exchange wants to encourage the
execution of VIX options Customer orders for options with a premium of
$0.00-$0.10, and therefore is not proposing to assess the Customer
Priority Surcharge on such options. The Exchange believes that it is
equitable and not unfairly discriminatory to only assess this surcharge
to Maker Non-Turners because VIX options is such a unique product that
we want to continue to encourage market participation and price
improvement with a low underlying (unlike SPX or SPXW, which has a
higher underlying). Someone improving the market (``turning'') has a
much greater proportional impact in a product with a lower underlying,
and the Exchange wants to encourage such market improvement.
The Exchange believes that converting the qualification for the
different fee tiers in the Liquidity Provider Sliding Scale from
measuring by a nominal contracts per month to measuring by the relative
contracts per month (based on the percentage of national Market-Maker
volume in multiply-listed options) is reasonable because it allows the
Exchange to control and account for changes in national industry-wide
multiply-listed options volume. Further, it will still allow Market-
Makers to pay lower fees for executing more orders in multiply-listed
options, just as prior to this change. The Exchange believes that the
change is equitable and not unfairly discriminatory because it will be
applied to all Market-Makers. The change merely switches out the
measuring stick to use one that accounts for changes in industry-wide
volume. Finally, Market-Makers must take on certain obligations, such
as quoting obligations, that other market participants do not have.
The Exchange believes that the changes to the prepayment for the
Liquidity Provider Sliding Scale are reasonable because they correspond
with the adoption of relative, percentage-based tiers, and also because
the new prepayment amount will be lower than previously (making it
easier to prepay). The Exchange believes that these changes are
equitable and not unfairly discriminatory because they will apply to
all market participants to whom the Liquidity Provider Sliding Scale
applies.
Similar to the changes to the Liquidity Provider Sliding Scale, the
Exchange believes that the changes to the CBOE Proprietary Products
Sliding Scale are reasonable because they allow the Exchange to control
and account for changes in national industry-wide multiply-listed
options volume, as well as the differing number of days in a month. The
Exchange believes that these changes are equitable and not unfairly
discriminatory because, first and foremost, there are no substantive
changes to the fees in the CBOE Proprietary Products Sliding Scale.
Indeed, these changes merely serve to better standardize the CBOE
Proprietary Products Sliding Scale (as well as make it easier to read).
The changes merely switch out the measuring stick to use one that
accounts for changes in industry-wide volume. Further, the changes will
apply to all market participants who qualify for the CBOE Proprietary
Products Sliding Scale. Finally, Clearing Trading Permit Holders must
take on certain obligations, such as clearing, that other market
participants do not have. The Exchange believes that the cosmetic
changes to the CBOE Proprietary Products Sliding Scale will prevent any
possible potential investor confusion, thereby removing impediments to
and perfecting the mechanism of a free and open market and a national
market system, and, in general, protecting investors and the public
interest.
The Exchange believes that lowering the fee in Tier 1 of the
Liquidity Provider Sliding Scale is reasonable because it will allow
Market-Makers in that tier to pay a lower fee for transactions. The
Exchange believes that this is equitable and not unfairly
discriminatory because the lower fee is designed to encourage Market-
Makers to execute more transactions, and the resulting increased volume
and trading opportunities will benefit all market participants
(including Market-Makers at the other tiers of the Liquidity Provider
Sliding Scale). Further, Market-Makers take on obligations, such as
quoting obligations, that other market participants do not have.
The Exchange believes that the deletion of the VIX Options Sliding
Scale is reasonable, equitable and not unfairly discriminatory because
it will merely result in Clearing Trading Permit Holders being assessed
the standard Clearing Trading Permit Holder Proprietary transaction fee
for VIX options transactions (instead of having the fee amount for such
transactions change based on the number of VIX options transactions the
Clearing Trading Permit Holder executes in a month). As such, all
Clearing Trading Permit Holder Proprietary VIX options transactions
will be assessed the same fee amount. As always, Clearing Trading
Permit Holders must take on certain obligations, such as clearing, that
other market participants do not have.
The Exchange believes the imposition of the PULSe-to-PULSe Routing
Fee is reasonable because it is intended to cover the costs associated
with the development of PULSe-to-PULSe routing, as well as the upkeep
of such systems. The Exchange believes that it is equitable and not
unfairly discriminatory because it will be assessed to all receiving
TPHs that elect to receive PULSe-to-PULSe orders. The Exchange proposes
to assess the fee to the receiving TPH because, by electing to receive
PULSe-to-PULSe orders, the receiving TPH then gets the ability to
execute those orders on the Exchange. The Exchange believes that the
proposal to amend the listing of the fee and note for the PULSe On-
Floor Workstation in the ``Trading Floor Terminal Rentals'' section of
the ``Facility Fees'' table will alleviate any potential confusion,
thereby removing impediments to and perfecting the mechanism of a free
and open market and a national market system, and, in general,
protecting investors and the public interest.
The Exchange believes that lowering the HAL Step-Up Rebate is
reasonable because it will still allow Market-Makers to receive a
rebate for trading activity that they would not otherwise receive (just
a smaller rebate). The Exchange believes that this proposed change is
equitable and not unfairly discriminatory because it applies to all
Market-Makers who qualify for the HAL Step-Up Rebate (only Market-
Makers can quote and therefore ``step up''). Moreover, the proposed
change does not affect who may qualify for the HAL Step-Up Rebate.
Further, Market-Makers have certain obligations, such as quoting
obligations, that other market participants do not have.
The Exchange believes that its proposal to charge all customer
orders routed via Linkage the actual transaction costs assessed by the
exchange(s) to which the orders are routed is reasonable, equitable and
not unfairly discriminatory because the Exchange will merely be passing
through these execution costs to the customer. Further, this pass-
through will be applied equally to all customer orders, regardless of
size.
[[Page 3451]]
The Exchange believes that its proposal to increase the non-
customer Linkage fee by $0.05, to $0.55 per contract, is reasonable,
equitable and not unfairly discriminatory because such increase will
help offset the costs associated with routing orders through Linkage
and paying the transaction fees for such executions at other exchanges.
The amount of this fee is lower than corresponding non-customer Linkage
fees assessed by other exchanges.\26\ This fee amount will be assessed
to all non-customer orders routed via Linkage. The Exchange notes that
there exists in the options industry a historical practice of
preferential pricing for customers, whose orders are more attractive
for trading partners and who also often do not have as sophisticated
trading systems as other market participants.
---------------------------------------------------------------------------
\26\ See PHLX Pricing, Non-Customer Routing Fee of $0.95 per
contract.
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The Exchange believes that offering a second tier of the Floor
Broker Access Rebate is reasonable because it allows the qualifying
Floor Brokers to pay lower Floor Broker Trading Permit fees than they
otherwise would have. The Exchange believes that it is equitable and
not unfairly discriminatory to offer the second tier of the rebate to
Floor Brokers only, and only those who execute 25,000 contracts per day
(of customer, open-outcry trading in multiply-listed options classes)
because Floor Brokers serve an important function in facilitating the
execution of orders via open outcry, which as a price-improvement
mechanism, the Exchange wishes to encourage and support. Further, the
proposed change is designed to encourage the execution of orders via
open outcry, which should increase volume, which would benefit all
market participants (including Floor Brokers who do not hit the 25,000
contracts-per-day threshold) trading via open outcry (and indeed, this
increased volume could make it possible for some Floor Brokers to hit
the 25,000 contracts-per-day threshold). Also, only Floor Brokers are
assessed Floor Broker Trading Permit fees. The Exchange proposes
limiting the rebate qualification to open outcry trading because Floor
Brokers only engage in open outcry trading (at least in their
capacities as Floor Brokers), and because, as previously stated, the
Exchange wishes to support and encourage open-outcry trading, which
allows for price improvement and has a number of positive impacts on
the market system. The Exchange proposes limiting the rebate
qualification to customer orders because market participants generally
prefer to trade against customer trades, and encouraging customer
trading in this manner should provide such market participants with
more customer orders with which to trade. Further, the options industry
has a long history of promoting customer orders through rebates and
other preferential fee structures. The Exchange proposes limiting the
rebate qualification to multiply-listed options classes because the
Exchange expended considerable resources developing its proprietary,
singly-listed products and therefore does not desire to offer this
rebate associated with such products.
The Exchange believes that the proposed change to permit the
sharing of bandwidth between affiliated TPHs is reasonable because it
will allow such TPHs more efficient use of bandwidth without having to
purchase more (if they can share with each other). The Exchange
believes that this proposed change is equitable and not unfairly
discriminatory because it will apply to all groupings of affiliated
TPHs.
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. CBOE does not believe that the
proposed rule change will impose any burden on intramarket competition
that is not necessary or appropriate in furtherance of the purposes of
the Act because, while different fees are assessed to different market
participants in some circumstances, these different market participants
have different obligations and different circumstances (as described in
the ``Statutory Basis'' section above). For example, Clearing Trading
Permit Holders have clearing obligations that other market participants
do not have. Market-Makers have quoting obligations that other market
participants do not have. There is a history in the options markets of
providing preferential treatment to Customers, as they often do not
have as sophisticated trading operations and systems as other market
participants, which often makes other market participants prefer to
trade with Customers. Further, the Exchange fees, both current and
those proposed to be changed, are intended to encourage market
participants to bring increased volume to the Exchange (which benefits
all market participants), while still covering Exchange costs
(including those associated with the upgrading and maintenance of
Exchange systems).
CBOE does not believe that the proposed rule change will impose any
burden on intermarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act because the proposed changes
are intended to improve the Exchange's competitive position and make
CBOE a more attractive marketplace in order to encourage market
participants to bring increased volume to the Exchange (while still
covering costs as necessary). Further, the proposed changes only affect
trading on CBOE. To the extent that the proposed changes make CBOE a
more attractive marketplace for market participants at other exchanges,
such market participants are welcome to become CBOE market
participants.
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 \27\ and paragraph (f) of Rule 19b-4 \28\
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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\27\ 15 U.S.C. 78s(b)(3)(A).
\28\ 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-2013-129 on the subject line.
[[Page 3452]]
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-2013-129. 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 available publicly. All
submissions should refer to File Number SR-CBOE-2013-129, and should be
submitted on or before February 11, 2014.
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\29\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-00984 Filed 1-17-14; 8:45 am]
BILLING CODE 8011-01-P
