Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Increase Its Options Regulatory Fee, 5506-5508 [2014-01970]
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Federal Register / Vol. 79, No. 21 / Friday, January 31, 2014 / Notices
proposed rule change is consistent with
the Section 6(b)(5)6 requirement that the
rules of an exchange not be designed to
permit unfair discrimination between
customers, issuers, brokers, or dealers.
In particular, for purposes of an
uncontested election, the proposed
amendments adopt a majority vote
standard for director elections for the
Exchange’s parent company, which
would enable its directors to be elected
in a manner that the Board of Directors
believes is reflective of the desires of
shareholders and provide a mechanism
to protect against the election of
directors by less than the majority vote
of the shareholders.
The proposed rule change to amend
CBOE Holdings’ Bylaws to adopt a
majority vote standard for uncontested
elections is consistent with the Act
because the proposed change is
designed to allow the members of the
Board of Directors to be elected in a
manner that the Board of Directors
believes closely reflects the desires of its
shareholders (as well as a manner in
which uncontested Board of Director
elections are conducted for the majority
of large public companies in the United
States), while also providing a process
for addressing the circumstance when a
director fails to receive a majority of the
votes in an uncontested election. The
plurality standard would continue to
apply in contested elections.
The proposed non-substantive
changes to the Bylaws are intended to
enhance clarity and prevent 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.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
tkelley on DSK3SPTVN1PROD with NOTICES
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed change does not impact either
intermarket or intramarket competition,
but instead is intended to enhance the
governance of the Exchange’s parent
company.
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.
6 Id.
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22:42 Jan 30, 2014
Jkt 232001
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 7 and Rule
19b–4(f)(6) thereunder.8 Because the
foregoing proposed rule change does
not: (1) Significantly affect the
protection of investors or the public
interest; (2) impose any significant
burden on competition; and (3) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective
pursuant to Section 19(b)(3)(A) of the
Act 9 and Rule 19b–4(f)(6) 10 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 SRC2-2014-0001 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–C2–2014–001. This file
number should be included on the
7 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
9 15 U.S.C. 78s(b)(3)(A).
10 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
8 17
PO 00000
Frm 00139
Fmt 4703
Sfmt 4703
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–C2–
2014-001 and should be submitted on or
before February 21, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–01961 Filed 1–30–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71410; File No. SR–
NYSEMKT–2014–09]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Increase Its Options
Regulatory Fee
January 27, 2014.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on January
22, 2014, NYSE MKT LLC (the
‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with
the Securities and Exchange
11 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
E:\FR\FM\31JAN1.SGM
31JAN1
Federal Register / Vol. 79, No. 21 / Friday, January 31, 2014 / Notices
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to increase its
Options Regulatory Fee. The Exchange
proposes to implement this change on
February 3, 2014. The text of the
proposed rule change is available on the
Exchange’s Web site at www.nyse.com,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
tkelley on DSK3SPTVN1PROD with NOTICES
1. Purpose
The Exchange proposes to increase its
Options Regulatory Fee (‘‘ORF’’),
effective February 3, 2014.
Background
The ORF, which is currently $0.005
per contract, is assessed by the
Exchange on each ATP Holder for all
options transactions executed or cleared
by the ATP Holder that are cleared by
The Options Clearing Corporations
(‘‘OCC’’) in the customer range, i.e.,
transactions that clear in the customer
account of the ATP Holder’s clearing
firm at OCC, regardless of the
marketplace of execution.4 In other
words, the Exchange imposes the ORF
on all customer-range transactions
executed by an ATP Holder even if the
transactions do not take place on the
Exchange. In the case where an ATP
4 See Securities Exchange Act Release No. 34–
68183 (November 8, 2012), 77 FR 68186 (November
15, 2012) (SR–NYSEMKT–2012–54).
VerDate Mar<15>2010
22:42 Jan 30, 2014
Jkt 232001
Holder executes a transaction and a
different ATP Holder clears the
transaction, the ORF would be assessed
to the ATP Holder that executes the
transaction. In the case where a nonATP Holder executes a transaction and
an ATP Holder clears the transaction,
the ORF would be assessed to the ATP
Holder that clears the transaction.
The dues and fees paid by ATP
Holders go into the general funds of the
Exchange, a portion of which is used to
help pay the costs of regulation. In
particular, the ORF is designed to
recover a material portion of the costs to
the Exchange of the supervision and
regulation of ATP Holders, including
performing routine surveillances and
investigations, as well as policy,
rulemaking, interpretive, and
enforcement activities. The Exchange
monitors the amount of revenue
collected from the ORF to ensure that
this revenue, in combination with other
regulatory fees and fines, does not
exceed regulatory costs. The ORF is
collected indirectly from ATP Holders
through their clearing firms by OCC on
behalf of the Exchange.
Proposed Change
The Exchange proposes to increase
the ORF from $0.005 per contract to
$0.0055 per contract in order to recoup
increased regulatory expenses while
also ensuring that the ORF will not
exceed such expenses. Transaction
volumes across the industry have
increased moderately since the ORF was
last changed in December 2012, but the
Exchange’s regulatory expenses have
increased at a faster rate. The Exchange
believes that revenue generated from the
proposed ORF, when combined with all
of the Exchange’s other regulatory fees,
will cover a material portion but not all
of the Exchange’s regulatory costs. The
Exchange will continue to monitor the
amount of revenue collected from the
ORF to ensure that it, in combination
with its other regulatory fees and fines,
does not exceed regulatory costs. If the
Exchange determines that regulatory
revenues exceed regulatory costs, the
Exchange will adjust the ORF by
submitting a fee filing change to the
Commission.5 The Exchange proposes
to implement this fee change on
February 3, 2014.
5 The Exchange notes that its regulatory
responsibilities with respect to member compliance
with options sales practice rules have been
allocated to FINRA under an SEC Rule 17d–2
agreement; the ORF is not designed to cover the
cost of options sales practice regulation. See
Securities Exchange Act Release No. 34–64400
(May 4, 2011), 76 FR 27118 (May 10, 2011) (SR–
NYSEAmex–2011–27).
PO 00000
Frm 00140
Fmt 4703
Sfmt 4703
5507
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Securities Exchange
Act of 1934 (the ‘‘Act’’),6 in general, and
furthers the objectives of Section 6(b)(4)
and (5) of the Act,7 in particular,
because it provides for the equitable
allocation of reasonable dues, fees, and
other charges among its members and
issuers and other persons using its
facilities and does not unfairly
discriminate between customers,
issuers, brokers, or dealers.
The Exchange believes that the
proposed fee change is reasonable
because the Exchange’s revenue from
the collection of the ORF has not kept
pace with Exchange’s regulatory
expenses. As described above, the ORF
seeks to recover the costs of supervising
and regulating members, including
performing routine surveillances and
investigations, as well as policy,
rulemaking, interpretive and
enforcement activities. The proposed
ORF increase will help to offset these
regulatory expenses, but would not
result in total regulatory revenue
exceeding total regulatory costs. The
Exchange further notes that another
options exchange has raised its options
regulatory fee to $0.0095 per contract
and thus the Exchange’s ORF of $0.0055
per contract will still be below that
level.8
The Exchange believes that the
proposed ORF increase is equitable and
not unfairly discriminatory because it is
objectively allocated to all ATP Holders
on all of their transactions that clear in
the customer range at OCC. Moreover,
the Exchange believes the ORF ensures
fairness by assessing higher fees to those
member firms that require more
Exchange regulatory services based on
the amount of customer options
business they conduct. Regulating
customer trading activity is more labor
intensive and requires greater
expenditure of human and technical
resources than regulating non-customer
trading activity. Surveillance and
regulation of non-customer trading
activity generally tends to be more
automated and less labor intensive. As
a result, the costs associated with
administering the customer component
of the Exchange’s overall regulatory
program are anticipated to be higher
than the costs associated with
administering the non-customer
6 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
8 See Securities Exchange Act Release No. 34–
71007 (December 6, 2013), 78 FR 75653 (December
12, 2013) (SR–CBOE–2013–117).
7 15
E:\FR\FM\31JAN1.SGM
31JAN1
5508
Federal Register / Vol. 79, No. 21 / Friday, January 31, 2014 / Notices
component of its regulatory program. As
such, the Exchange proposes assessing
higher fees to those firms that will
require more Exchange regulatory
services based on the amount of
customer options business they
conduct.9
The Exchange believes that the ORF
will continue to be equitable and not
unfairly discriminatory because the fee
increase is objectively allocated to all
ATP Holders. As noted above, the
Exchange will continue to monitor the
amount of revenue collected from the
ORF to ensure that it, in combination
with its other regulatory fees and fines,
does not exceed regulatory costs. If the
Exchange determines that regulatory
revenues exceed regulatory costs, the
Exchange will adjust the ORF by
submitting a fee filing change to the
Commission.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed fee change is not designed to
address any competitive issues. Rather,
the proposed change is designed to help
the Exchange adequately fund its
regulatory activities while seeking to
ensure that total regulatory revenues do
not exceed total regulatory costs.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
tkelley on DSK3SPTVN1PROD with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A) 10 of the Act and
subparagraph (f)(2) of Rule 19b–4 11
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
9 The ORF is not charged for orders that clear in
categories other than the customer range (e.g.,
market maker orders) because members incur the
costs of owning memberships and through their
memberships are charged transaction fees, dues and
other fees that go into the general funds of the
Exchange, a portion of which is used to help pay
the costs of regulation. See supra note 4.
10 15 U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(2).
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22:42 Jan 30, 2014
Jkt 232001
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 12 of the Act 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–
NYSEMKT–2014–09 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–NYSEMKT–2014–09. 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
12 15
PO 00000
U.S.C. 78s(b)(2)(B).
Frm 00141
Fmt 4703
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEMKT–2014–09, and should be
submitted on or before February 21,
2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–01970 Filed 1–30–14; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #13865 and #13866]
Alaska Disaster #AK–00030
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
This is a Notice of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of Alaska (FEMA—4161—DR),
dated 01/16/2014.
Incident: Flooding.
Incident Period: 10/27/2013 through
10/28/2013.
DATES: Effective Date: 01/16/2014.
Physical Loan Application Deadline
Date: 03/17/2014.
Economic Injury (EIDL) Loan
Application Deadline Date: 10/16/2014.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing And
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
01/16/2014, Private Non-Profit
organizations that provide essential
services of governmental nature may file
disaster loan applications at the address
listed above or other locally announced
locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Kenai Peninsula
Borough.
The Interest Rates are:
SUMMARY:
13 17
Sfmt 4703
E:\FR\FM\31JAN1.SGM
CFR 200.30–3(a)(12).
31JAN1
]]>Agencies
[Federal Register Volume 79, Number 21 (Friday, January 31, 2014)]
[Notices]
[Pages 5506-5508]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-01970]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71410; File No. SR-NYSEMKT-2014-09]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change to Increase Its Options
Regulatory Fee
January 27, 2014.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on January 22, 2014, NYSE MKT LLC (the ``Exchange'' or
``NYSE MKT'') filed with the Securities and Exchange
[[Page 5507]]
Commission (the ``Commission'') the proposed rule change as described
in Items I, II, and III below, which Items have been prepared by the
self-regulatory organization. The Commission is publishing this notice
to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C.78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange proposes to increase its Options Regulatory Fee. The
Exchange proposes to implement this change on February 3, 2014. The
text of the proposed rule change is available on the Exchange's Web
site at www.nyse.com, at the principal office of the Exchange, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to increase its Options Regulatory Fee
(``ORF''), effective February 3, 2014.
Background
The ORF, which is currently $0.005 per contract, is assessed by the
Exchange on each ATP Holder for all options transactions executed or
cleared by the ATP Holder that are cleared by The Options Clearing
Corporations (``OCC'') in the customer range, i.e., transactions that
clear in the customer account of the ATP Holder's clearing firm at OCC,
regardless of the marketplace of execution.\4\ In other words, the
Exchange imposes the ORF on all customer-range transactions executed by
an ATP Holder even if the transactions do not take place on the
Exchange. In the case where an ATP Holder executes a transaction and a
different ATP Holder clears the transaction, the ORF would be assessed
to the ATP Holder that executes the transaction. In the case where a
non-ATP Holder executes a transaction and an ATP Holder clears the
transaction, the ORF would be assessed to the ATP Holder that clears
the transaction.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 34-68183 (November
8, 2012), 77 FR 68186 (November 15, 2012) (SR-NYSEMKT-2012-54).
---------------------------------------------------------------------------
The dues and fees paid by ATP Holders go into the general funds of
the Exchange, a portion of which is used to help pay the costs of
regulation. In particular, the ORF is designed to recover a material
portion of the costs to the Exchange of the supervision and regulation
of ATP Holders, including performing routine surveillances and
investigations, as well as policy, rulemaking, interpretive, and
enforcement activities. The Exchange monitors the amount of revenue
collected from the ORF to ensure that this revenue, in combination with
other regulatory fees and fines, does not exceed regulatory costs. The
ORF is collected indirectly from ATP Holders through their clearing
firms by OCC on behalf of the Exchange.
Proposed Change
The Exchange proposes to increase the ORF from $0.005 per contract
to $0.0055 per contract in order to recoup increased regulatory
expenses while also ensuring that the ORF will not exceed such
expenses. Transaction volumes across the industry have increased
moderately since the ORF was last changed in December 2012, but the
Exchange's regulatory expenses have increased at a faster rate. The
Exchange believes that revenue generated from the proposed ORF, when
combined with all of the Exchange's other regulatory fees, will cover a
material portion but not all of the Exchange's regulatory costs. The
Exchange will continue to monitor the amount of revenue collected from
the ORF to ensure that it, in combination with its other regulatory
fees and fines, does not exceed regulatory costs. If the Exchange
determines that regulatory revenues exceed regulatory costs, the
Exchange will adjust the ORF by submitting a fee filing change to the
Commission.\5\ The Exchange proposes to implement this fee change on
February 3, 2014.
---------------------------------------------------------------------------
\5\ The Exchange notes that its regulatory responsibilities with
respect to member compliance with options sales practice rules have
been allocated to FINRA under an SEC Rule 17d-2 agreement; the ORF
is not designed to cover the cost of options sales practice
regulation. See Securities Exchange Act Release No. 34-64400 (May 4,
2011), 76 FR 27118 (May 10, 2011) (SR-NYSEAmex-2011-27).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Securities Exchange Act of 1934 (the
``Act''),\6\ in general, and furthers the objectives of Section 6(b)(4)
and (5) of the Act,\7\ in particular, because it provides for the
equitable allocation of reasonable dues, fees, and other charges among
its members and issuers and other persons using its facilities and does
not unfairly discriminate between customers, issuers, brokers, or
dealers.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Exchange believes that the proposed fee change is reasonable
because the Exchange's revenue from the collection of the ORF has not
kept pace with Exchange's regulatory expenses. As described above, the
ORF seeks to recover the costs of supervising and regulating members,
including performing routine surveillances and investigations, as well
as policy, rulemaking, interpretive and enforcement activities. The
proposed ORF increase will help to offset these regulatory expenses,
but would not result in total regulatory revenue exceeding total
regulatory costs. The Exchange further notes that another options
exchange has raised its options regulatory fee to $0.0095 per contract
and thus the Exchange's ORF of $0.0055 per contract will still be below
that level.\8\
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 34-71007 (December
6, 2013), 78 FR 75653 (December 12, 2013) (SR-CBOE-2013-117).
---------------------------------------------------------------------------
The Exchange believes that the proposed ORF increase is equitable
and not unfairly discriminatory because it is objectively allocated to
all ATP Holders on all of their transactions that clear in the customer
range at OCC. Moreover, the Exchange believes the ORF ensures fairness
by assessing higher fees to those member firms that require more
Exchange regulatory services based on the amount of customer options
business they conduct. Regulating customer trading activity is more
labor intensive and requires greater expenditure of human and technical
resources than regulating non-customer trading activity. Surveillance
and regulation of non-customer trading activity generally tends to be
more automated and less labor intensive. As a result, the costs
associated with administering the customer component of the Exchange's
overall regulatory program are anticipated to be higher than the costs
associated with administering the non-customer
[[Page 5508]]
component of its regulatory program. As such, the Exchange proposes
assessing higher fees to those firms that will require more Exchange
regulatory services based on the amount of customer options business
they conduct.\9\
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\9\ The ORF is not charged for orders that clear in categories
other than the customer range (e.g., market maker orders) because
members incur the costs of owning memberships and through their
memberships are charged transaction fees, dues and other fees that
go into the general funds of the Exchange, a portion of which is
used to help pay the costs of regulation. See supra note 4.
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The Exchange believes that the ORF will continue to be equitable
and not unfairly discriminatory because the fee increase is objectively
allocated to all ATP Holders. As noted above, the Exchange will
continue to monitor the amount of revenue collected from the ORF to
ensure that it, in combination with its other regulatory fees and
fines, does not exceed regulatory costs. If the Exchange determines
that regulatory revenues exceed regulatory costs, the Exchange will
adjust the ORF by submitting a fee filing change to the Commission.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed fee change is
not designed to address any competitive issues. Rather, the proposed
change is designed to help the Exchange adequately fund its regulatory
activities while seeking to ensure that total regulatory revenues do
not exceed total regulatory costs.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \10\ of the Act and subparagraph (f)(2) of Rule
19b-4 \11\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \12\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\12\ 15 U.S.C. 78s(b)(2)(B).
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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-NYSEMKT-2014-09 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-NYSEMKT-2014-09. 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-NYSEMKT-2014-09, and should
be submitted on or before February 21, 2014.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-01970 Filed 1-30-14; 8:45 am]
BILLING CODE 8011-01-P
